Demand for graphite to increase strongly amidst EV boom
As more Electric Vehicles need to be equipped with batteries, prices for graphite are likely to rise.
Jackson Chen (J_C)May 8, 2025
Graphite is a soft, black to steel-gray colored mineral that is naturally formed by the metamorphosis of carbon-rich rock, which leads to the formation of either crystalline flake graphite, fine-grained amorphous graphite, or crystalline vein or lump graphite. It occurs most often in metamorphic rocks such as crystalline limestones, slate and gneiss. Graphite has many industrial uses in lubricants, carbon brushes for electric motors, flame retardants, and steel making, to name a few. Its use in the lithium-ion battery industry is growing at over 20% per year due to the proliferation of cell phones, cameras, laptops, power tools, and other handheld devices. While the automotive industry has traditionally used graphite for brake pads, seals, and clutch materials, its use in electric vehicle (EV) batteries is of growing importance. Graphite is the anode material in the battery and there are no substitutes. Recently, the growth of hybrid and all-electric vehicles, as well as grid storage, have contributed to sustained strong growth in demand. Many governments around the world are legislating for the ultimate end of internal combustion engines. Car manufacturers are now gradually turning off gas- and diesel-powered vehicles and switching completely to electric drives. An average HEV (hybrid) contains up to 10 kilograms of graphite and an EV up to 100 kilograms. As the fear of range subsides and more and more charging stations appear, car buyers are switching to e-vehicles, while various government subsidies have helped shoulder the more expensive e-vehicles. This is particularly true in Norway, where government incentives have resulted in more e-vehicles being sold than combustion-engine vehicles. Motor Trend magazine reports that they expect more than a dozen new EV models to be added to the 20 models already on the market. The market research company IHS Markit predicts that by 2025 more than 100 automakers will offer a battery-electric option. IHS said the EV market share could more than triple from 1.8% of U.S. registrations in 2020 to 9% in 2025 and 15% by 2030. Motor Trend added that approximately 2.5 million EVs were sold in 2020, including 1.1 million in China, up 10% from 2019. The publication noted that EV sales in Europe are projected to be 19% by 2025 and 30% by 2020. These EV sales predictions represent a monumental change in automotive production. A little over a hundred years ago, gasoline and electric cars vied for market share, but the affordable, rugged, and simple Model T won the race. Today we are on the cusp of a giant leap towards electric cars, and as flake graphite production needs to more than double by 2025 to meet growing demand, graphite companies will be a big beneficiary. Northern Graphite Corp. \[NGC-TSXV; NGPHF-OTCQB\] is a mineral development and technology company developing its flagship Bissett Creek graphite deposit in Northern Ontario. The company is also focused on refining mine concentrates into high-quality components used in lithium-ion batteries, electric vehicles, fuel cells, graphene and other advanced technologies. The company's goal is to become a leading supplier of graphite, an industrial mineral that has long been associated with steelmaking, pencils and golf clubs, but is now an important part of the production of electric vehicles. Graphite is the anode material in a lithium-ion battery and is the largest component in terms of weight. There is no substitute, and almost everything comes from China. So when electric vehicle manufacturers like Tesla Motors Ltd. \[TSLA-NASDAQ\] and Volkswagen manage to hit even a fraction of their heralded sales targets, it goes without saying that more graphite leads are needed to support the required lithium-ion battery production. This puts a company like Northern Graphite in an extremely favorable position as its flagship Bissett Creek project is arguably the leading undeveloped graphite project outside of China, with a resource of 80 million tons, located in a mining-friendly area and just 15 kilometers from TransCanada Hwy .
