Lucid Motors and Graphite One have signed a new non-binding supply agreement for synthetic anode active materials. This agreement aims to enhance Lucid Motors’ BEV supply chain with more locally sourced materials.
Lucid Motors’ current lineup and future plans
Lucid Motors ($LCID), a California-based BEV automaker, is currently selling its flagship model, the Air sedan. In 2024, the company is gaining momentum as it approaches mass production of its all-electric SUV, the Gravity. While several variants of the Air are considered out of budget for many American consumers, Lucid has a long-term plan to deliver more affordable options that maintain high performance standards.
Lucid has already delivered the most efficient car in the world with the 2025 RWD Air Pure and has plans for a third model, codenamed “Mid-size.” Higher efficiency means fewer battery cells are needed, reducing production costs and making new EVs more affordable for consumers.
The new supply agreement with Graphite One
Localizing supply chains is a strategy that automakers like Lucid Motors use to cut costs and potentially qualify for Federal tax credits. Lucid announced a supply chain agreement with Graphite One, marking a first-of-its-kind collaboration. The non-binding agreement with Lucid is the first synthetic graphite agreement between a US graphite developer and a US-based EV company.
The US currently imports 100% of its natural and synthetic graphite, a critical material in BEV battery technology. Graphite One aims to domesticate this supply chain by tapping into the Graphite Creek deposit, recognized as the largest graphite deposit in the US. Graphite One is setting up an anode active materials (AAM) manufacturing facility in Warren, Ohio, with a “Phase 1” production target of 25,000 tons per year of battery-ready anode material.
Benefits of the agreement
Lucid Motors stands to benefit significantly from this agreement. As Lucid CEO and CTO Peter Rawlinson stated:
“We are committed to accelerating the transition to sustainable vehicles and the development of a robust domestic supply chain ensures the United States, and Lucid, will maintain technology leadership in this global race. Through work with partners like Graphite One, we will have access to American-sourced critical raw materials, helping power our award-winning vehicles made with pride in Arizona.”
Details of the agreement
The non-binding agreement with Lucid includes the supply of 5,000 tons per annum (TPA) of synthetic graphite once production begins. The initial term of the agreement is five years, with the possibility of early termination. Sales will be based on an agreed price formula linked to future market pricing and satisfying base case pricing agreeable to both parties.
Looking ahead
Graphite One’s progress in commencing AAM production is subject to project financing and an existing grant from the US Department of Defense. The company expects to generate revenue by 2027. By sourcing more battery materials locally, Lucid Motors has the opportunity to deliver new BEV models that could qualify for the full $7,500 Federal tax credit, provided other parameters, including lower MSRPs, are met.
