Antidumping investigation could more than double cost of U.S. EV battery, energy storage

Anti-dumping, countervailing duties on battery materials could have serious effects on the EV and energy storage markets, as the battery material and manufacturing markets in the U.S. are still in very early stages.

December 19, 2024 Anne Fischer

Image: RPI

The American Active Anode Material Producers (AAAMP), a coalition of U.S. graphite producers, filed a petition for the imposition of antidumping and countervailing duties (AD/CVD) on imports of active anode materials from China.

The petition filed with the Department of Commerce and International Trade Commission (ITC) seeks to initiate a trade investigation and impose tariffs as high as 920% on materials used in the manufacturing of lithium-ion batteries.

An industry note Roth from Roth Capital Partners indicates that such a tariff could have “disruptive, far reaching impacts,” stating that the petition covers active anode material whether it’s imported to the U.S. separately, in a compound or in a battery.

“We believe the anode typically represents ~10-15% of the cost of a battery, or ~$15/kWh for a DC block priced at $120/kWh,” said Justin Clare, Roth Capital Partners in an industry note. “If a 900% tariff were assessed on the anode, we estimate the incremental cost could be ~$135/kWh, representing a ~125% increase in the DC-block to ~$255/kWh.”

“AAAMP is filing this case to help protect the North American graphite industry, which is at risk of being smothered by China’s malicious trade practices. There is overwhelming evidence that China dumps artificially cheap graphite into global markets, which is made possible by state-sponsored policies and massive subsidies,” said Erik Olson, AAAMP spokesperson.

“Without trade relief from the U.S. government, the domestic graphite industry is in peril. China’s anticompetitive actions make it challenging for graphite producers to find secure financial footing, which prevents them from becoming established players in the global market,” Olson said.

AAAMP reports that graphite from China is currently subject to 25% tariffs, but the group believes that the duty should be far greater.

A statement released by the AAAMP says that “Fueled by state-sponsored industrial policies, low or no wage protections, and lack of environmental stewardship, recent data shows China’s overcapacity in the battery industry has quadrupled demand.” It refers to Chinese battery materials as a “glut” that has “roiled markets and significantly impacted prices,” indicating that China is overproducing due to government subsidies.

Such tariffs, however, may have serious effects on the EV and energy storage markets, as the battery material and manufacturing markets in the U.S. are still in very early stages. Until a strong U.S. battery supply chain is established, the industry will need to rely on imports.

A hearing is scheduled for January 7, 2025 for the ITC preliminary investigation with a vote scheduled for January 31, 2025. A Commerce preliminary antidumping determination is scheduled for May 26, 2025 and a preliminary countervailing determination set for March 12, 2025.

Petitioners include American Active Anode Material Producers, Anovion Technologies, Syrah Technologies, Novonix Anode Materials, Epsilon Advanced Materials, and SKI US. Representing the petitioners is Buchanan Ingersoll & Rooney of Washington, DC.

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