Currently, the production of battery active anode materials (AAM) is dominated by China, Japan, and South Korea, accounting for 73%, 16%, and 9% respectively. Synthetic graphite is the most widely used material, representing 63% of global production in 2022, followed by natural graphite at 35%, and silicon at 1%. However, by 2030, market dynamics are expected to shift, with synthetic graphite projected to hold a 41% market share, natural graphite 50%, and silicon 5%. This change reflects growing concerns over the carbon footprint of synthetic graphite production and the emergence of silicon anodes.
In Europe, natural graphite has been recognized as a critical raw material, with the European Union aiming to have 10% of the material sourced domestically and 40% processed within the EU by 2030. To achieve these targets, the EU will need to increase its anode production capacity and develop graphite mining operations. However, establishing new mining operations is a time-consuming process, taking several years due to feasibility studies and obtaining environmental permits.
From an economic standpoint, anodes account for approximately 12% of the total battery cell cost, significantly less than the cost of cathodes. The price of anodes depends on the type of active material used, with synthetic graphite priced at around $1,400 per tonne and natural flake graphite at $815 per tonne in late 2022. The demand for batteries is driving up graphite prices, particularly due to limited supply. While synthetic graphite has been the preferred option for many producers, offering reliable quality and high availability, natural graphite and synthetic graphite produced using renewable energy are gaining traction due to more stringent environmental standards in battery production.
Silicon anodes, although still at a nascent stage, are being adopted by leading EV manufacturers such as Tesla and Porsche. The addition of silicon oxide additives in small fractions (3-8%) mixed with graphite enhances the energy and power density of the battery cells. It is expected that this percentage will grow to 10-20% by 2025. The cost of silicon itself is not a concern due to its abundance, but additional processing expenses, such as silicon nanowires, need to be considered. On the other hand, lithium metal anodes, while promising, are anticipated to be more expensive initially due to complex processing techniques.
As the demand for electric vehicles continues to surge, the anode market is experiencing significant growth. Stakeholders are focusing on diversifying the supply of anode materials, exploring alternatives to synthetic graphite, and adopting more sustainable and cost-effective solutions. With the evolving market dynamics, it is expected that advancements in anode technology will play a vital role in shaping the future of the EV industry and sustainable battery production.
Source: Key developments influencing the EV battery landscape | Bax & Company
