Increased US tariffs on Chinese graphite foster business prospects for India's Epsilon
Epsilon Advanced Materials, based in Mumbai, India, is making a significant move to supply critical components to battery makers in the United States, aiming to challenge China's dominance in the global EV battery market.
In October 2023, Epsilon announced plans for a $650 million factory in North Carolina, set to produce 30,000 tonnes of anode materials. The factory is expected to be operational by mid-2027. This move comes in response to the 93.5% tariff imposed by the U.S. on the import of graphite anode materials from China, implemented in July.
The U.S. requires 500,000 tonnes of anode materials annually for its EV and energy storage battery needs. With the disruptions caused by the higher levies, U.S.-based battery makers are eager to secure alternative suppliers.
Vikram Handa, managing director of Epsilon, expressed confidence over the new supply deals and expects to close contracts within the next 60 to 80 days. He stated that the numbers now start making sense for customers to buy from the U.S.
Handa is also trying to persuade Indian companies to buy at least 20% from Epsilon as an alternative supplier to China. He mentioned low Chinese prices as a draw for Indian companies, but he is trying to convince them to diversify their suppliers. However, Epsilon has not seen serious interest in India for its anode materials facility.
The anode is one of the four components of an EV battery, contributing to fast-charging and vehicle range. China refines over 90% of the world's graphite into the material used in almost all EV battery anodes. Handa expressed concern about the potential for a "rare earth story" to play out for battery materials, given Indian companies' dependence on them.
In addition to the North Carolina factory, Epsilon also plans to invest over $1.1 billion in a 100,000-tonne anode materials facility in India's Karnataka state. Handa questioned the feasibility of building a plant if there is currently no demand for Epsilon's anodes.
Epsilon makes graphite anode materials for EV batteries. The company is now moving to supply these materials to Japanese and South Korean battery makers in the U.S., aiming to break Beijing's monopoly on supplies of the key battery component.
