The U.S. Commerce Department has imposed preliminary anti-dumping duties of 93.5% on Chinese graphite imports, a critical material used in electric vehicle (EV) batteries, after determining the product was being unfairly subsidized. Combined with existing tariffs, the effective rate now stands at 160%, according to the American Active Anode Material Producers, the group that initiated the complaint.
The decision is expected to deepen tensions in the global EV supply chain already rattled by China’s export controls on key minerals. Shares of U.S. graphite producers surged, while battery makers took a hit in response to the announcement.
Erik Olson, spokesperson for the trade group, said the Commerce ruling confirms that Chinese companies are undercutting U.S. markets by selling active anode material (AAM) below fair value.
Consultancy CRU Group estimates the 160% tariff adds roughly $7 per kilowatt-hour to EV battery production costs—wiping out profits for Korean battery manufacturers for up to two quarters. “It’s a major blow to battery makers,” said CRU’s head of battery materials, Sam Adham.
Tesla and Panasonic, among others, had lobbied against the tariffs, citing heavy dependence on Chinese graphite due to lack of comparable domestic capacity and quality. Tesla shares dipped 0.7% Thursday following the news.
Graphite, a key component of battery anodes, remains largely controlled by China, which supplied about two-thirds of the 180,000 metric tons of graphite the U.S. imported last year, according to BloombergNEF. The International Energy Agency (IEA) recently flagged graphite as one of the most vulnerable materials in the battery supply chain and urged diversification.
While silicon-based alternatives may emerge after 2030, the IEA says graphite will remain the dominant anode material in the medium term.
The Commerce Department’s final determination on the duties is expected by December 5.
Supporters of the tariff, including domestic graphite producers like Westwater Resources, praised the move. Jon Jacobs, Westwater’s chief commercial officer, said the decision brings much-needed “policy clarity” and encourages U.S. investment. Westwater, which has a pilot facility producing 12,500 metric tons annually and plans to expand to 50,000 by 2028, saw its shares jump 15% on Thursday. Canadian firms Nouveau Monde Graphite and Northern Graphite also rallied.
However, analysts warn the tariff could raise costs for companies like Fluence Energy and Enphase Energy. Both saw modest share declines—0.4% and 0.7%, respectively.
Although President Donald Trump’s recent budget preserved key clean energy tax credits from the Inflation Reduction Act, Treasury rules restricting Chinese-made battery components continue to complicate compliance for energy developers. Industry analysts at Wood Mackenzie caution that rising costs and sourcing challenges may slow the pace of battery storage deployment across the U.S. power grid.
