Material Insights · Understanding the Material World

Graphite and Lithium iron phosphate batteries

LFP cells, like other lithium-ion cells, store their lithium in a graphite anode, and with LFP at over 55% of EV batteries in 2025 it is now a major call on graphite. Almost all anode material is made in China, which has used export licensing since December 2023, so graphite is the main supply risk in an otherwise abundant LFP chain.

Graphite (commodity) and Lithium iron phosphate batteries (energy): 4 relationships.

How they are linked

1. Material need: graphite anode

Physical flow · Strong · Graphite to LFP cell anodes

Lithium ions are held between graphite layers when an LFP cell is charged, and no other anode material is yet made at comparable scale and cost.

  • 36% LFP share of EV battery graphite deployed, January to October 2023 (Adamas)
  • over 55% LFP share of EV batteries deployed, 2025

LFP's share of graphite demand rises with its share of EV and storage batteries, because the anode is broadly the same across chemistries. LFP removes nickel and cobalt from the cathode but not graphite from the anode, so the switch to LFP does not reduce graphite risk. Sodium-ion cells use hard carbon instead of graphite and are the main route to avoiding it.

Sources: IEA; Charged EVs (Adamas Intelligence data)

2. Chokepoint: Chinese anode supply

Shared risk · Strong · China controls graphite processing

China mines most natural graphite and makes nearly all spherical graphite and anode material, so LFP cell makers anywhere depend on Chinese processing.

  • 1.4 of 1.8 Mt China's natural graphite mine output, 2025 estimate
  • over 90% China's share of anode active material, 2023
  • 85% China's share of world anode production, 2022

Concentration is higher in processing than in mining: graphite mined in Mozambique or Madagascar is still mostly shaped and purified in China. Synthetic graphite, made from petroleum or coal tar coke, is also dominated by Chinese plants. Building an LFP chain outside China therefore needs anode plants, not only mines.

Sources: USGS; US Energy Information Administration; Minor Metals Trade Association

3. China export controls

Policy · Strong · Chinese licensing governs graphite flows

From 1 December 2023 China required export licences for flake and spherical graphite and high-purity synthetic graphite, giving it a lever over anode supply for battery makers abroad.

  • about 94% fall in China's flake graphite exports, November to December 2023
  • about 92% fall in spherical graphite exports over the same month

Flake graphite exports to Japan fell from 6,138 tonnes in November 2023 to zero in December, as permit processing stretched to 30 to 40 days. The IEA notes that further controls on battery components announced in October 2025 were paused for one year, so the policy risk remains open.

Sources: IEA; Fastmarkets; Minor Metals Trade Association

4. Price link: battery demand

Cost and price · Weak · Both ways

Battery output pulls on graphite demand, but the US battery index and the graphite products index are broad measures that barely move together.

  • 0.03 monthly change correlation
  • 0.19 12-month change correlation
  • 0.91 fitted elasticity

Graphite is a small share of an LFP cell's cost, so even large graphite price moves have little effect on cell prices. The relationship that matters is availability under export licensing rather than price, which these indices do not capture.

Sources: Material Insights (World Bank, FRED, IMF data)

For investors

Key learnings

  1. Switching from NMC to LFP removes nickel and cobalt risk but leaves graphite risk unchanged, because both use graphite anodes.
  2. China's dominance of anode material, over 90% in 2023, matters more than its share of mining, which is why export licensing is effective.
  3. Graphite is cheap relative to the cell, so the investment case for non-Chinese anode plants rests on policy-driven demand, not on price.

What to track

  • China graphite and anode export volumes: Sharp falls signal licensing delays and supply risk for non-Chinese cell makers (Monthly · China customs data via price reporting agencies)
  • Status of Chinese export control measures: New or reinstated controls raise the value of non-Chinese anode supply (As announced · Ministry of Commerce of China)
  • Non-Chinese anode capacity: Growth reduces dependence on licensing (Annual · IEA Global Critical Minerals Outlook)

For policymakers

Key learnings

  1. An LFP strategy built on domestic cathodes still depends on Chinese anode material unless anode capacity is built too.
  2. Export licensing, not an outright ban, was enough to cut China's flake graphite exports by about 94% from November to December 2023.
  3. India mines some graphite, about 17,000 tonnes in 2025, but would need processing into spherical and anode grades to supply cells.

What to track

  • Anode material import dependence of domestic cell plants: Shows exposure of battery manufacturing schemes to Chinese controls (Annual · industry and ministry reports)
  • Domestic graphite mine output: Indicates feedstock available for local anode plants (Annual · USGS Mineral Commodity Summaries; Indian Bureau of Mines)

India

India produced about 17,000 tonnes of natural graphite in 2025 against China's 1.4 million, so Indian LFP cell plants will rely on imported anode material unless domestic processing is built.

Sources

  1. Mineral Commodity Summaries 2026: Graphite (natural), USGS (2026)
  2. Global EV Outlook 2026: electric vehicle batteries, IEA (2026)
  3. China's graphite exports plunge in December after introduction of export controls, Fastmarkets (2024)
  4. China dominates critical minerals supply chains, US Energy Information Administration (2025)
  5. China imposes graphite export restrictions, Minor Metals Trade Association (2024)
  6. LFP batteries responsible for 36% of global EV graphite demand, Charged EVs (Adamas Intelligence data) (2024)
  7. Price correlation, Material Insights, Material Insights (World Bank, FRED, IMF data) (2026)