The US government has announced plans to impose a 93.5% tariff on imports of Chinese graphite, a crucial element in the production of lithium-ion batteries. This move is expected to have significant implications for the industry.
What Happened
The US Commerce Department has concluded that Chinese graphite is being “unfairly subsidized”, leading to the imposition of anti-dumping tariffs. This decision comes after a trade group, American Active Anode Material Producers, filed petitions with federal agencies to investigate Chinese companies for possible violations of anti-dumping laws.
Impact on the Industry
The new tariffs will be added to existing tariffs on graphite, resulting in a total tariff of over 160%. This increase is expected to exacerbate supply chain issues faced by automakers, particularly as China has imposed restrictions on the export of critical materials used in EV battery production.
Cost Implications
Experts estimate that the tariff will add over $7 per kilowatt-hour in costs for producing EV batteries. This increase will likely be felt by companies such as Tesla, which has pushed against the tariffs, citing the lack of a developed domestic supply chain.
Broader Implications
The news comes as the US government has recently ended the $7,500 EV credit as part of the Big Beautiful Bill law. The administration has also announced plans to impose new tariffs on automakers to boost domestic production. These moves are expected to pose significant challenges for the auto industry, with potential impacts on the used car market and the overall cost of EVs.
Key Players Affected
- Tesla
- General Motors
- Ford
- American Active Anode Material Producers
Next Steps
The imposition of the tariff is expected to have far-reaching implications for the industry. As the situation continues to evolve, it will be important to monitor the responses of key players and the potential impacts on the market.