Electric vehicle manufacturers will play a key role in global efforts to cut carbon emissions and fight climate change. With around one-fifth of global carbon dioxide coming from the transport segment, replacing traditional gasoline and diesel-powered cars with cleaner alternatives will go a long way toward curbing global emissions.
As such, battery electric vehicles (BEV) are poised to replace fossil fuel cars on the world’s roads, and automakers are investing billions into electrifying their lineups to keep in line with national and global climate change efforts. To keep in line with increasing EV demand and production in an increasingly competitive market, EV battery makers will likely have to secure graphite resources before they are even extracted from the ground.
Graphite is used to build battery anodes because of its superior conductivity and extreme heat resistance. It makes up close to 50% of the weight of the raw material needed for typical batteries. Furthermore, synthetic graphite is predicted to account for up to two-thirds of the EV battery anode market by 2025, indicating just how critical graphite will be to the burgeoning electric vehicle industry.
Increasing demand for EVs will most likely surpass the supply of available graphite in the near future, meaning battery manufacturers interested in maintaining their supply chains for the long-term will have to secure graphite supplies before they are mined. With that in mind, governments and large investment banks have invested billions of dollars into the construction of EV battery manufacturing factories in countries such as Poland, Sweden, Portugal, Germany and even Canada.
Unfortunately, even with numerous manufacturing facilities coming online across the world, the global supply of mined and available graphite won’t be enough to meet market demand. Slowdowns in the graphite supply chain have the potential to reduce or even halt electric vehicle production as the mineral nearly comprises the entire EV battery anode.
While discussions about potential shortages in the EV battery supply chain often involve lithium, graphite shortages present an equally dire existential crisis for the nascent electric vehicle industry. The caveat is that while most of the world’s lithium comes from the West, around 69% of natural graphite is in China, followed by Madagascar at 8%, then Brazil, Mozambique and India.
Conversely, Canada is responsible for less than 1% of worldwide graphite production, Mexico produces only 0.15% of the world’s graphite, and the United States doesn’t have a single graphite mine, meaning EV battery makers will have to rely on foreign graphite suppliers to meet demand.
Synthetic graphite may be used as an alternative to natural graphite while the U.S., Canada, Australia and Europe expand their virtually nonexistent graphite supply chain. However, the substance is four to 10 times more expensive to produce.
Companies such as Reflex Advanced Materials Corp. (CSE: RFLX) (OTCQB: RFLXF) have the enviable opportunity, through their mining lease holdings in Montana, to be among the first to bring locally mined graphite to supply the growing EV industry in the U.S.
NOTE TO INVESTORS: The latest news and updates relating to Reflex Advanced Materials Corp. (CSE: RFLX) (OTCQB: RFLXF) are available in the company’s newsroom at https://ibn.fm/RFLXF
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