Betting on battery tech? Forget about lithium...

Last week, we hosted our first event – Turning Biomass into Batteries – at the Clean Energy Institute in Seattle, WA… and the energy in the room was electrifying (pun intended)

Good news: We recorded the entire thing!

Click here to watch the opening remarks from Grayson Shor (PNW Battery Collaborative) and Devon Mortensen (Clean Energy Institute). We’ll be rolling out the lighting talks from all five speakers this week.

Now, without further ado, let’s get into todays issue of The Regenerative Industrialist.

-Jake Hoffberg
CEO, Regenerative Industrial

P.S. Every Friday @ 11am PST, I host a 60-minute “invite only” call for founders, investors, policy makers, and generally cool people working in what I call “PNW CleanSpaceDefenseTech.”

Basically, all of the deep tech people who are working on anything other than Enterprise SaaS.

The primary purpose of the group is to drive ecosystem level growth through coalition building and joint funding opportunities (i.e., lets team up and go after revenue/grant opportunities together).

Want to come to our next call? Hit reply and I’ll send you an invite.

In order to secure the grid and defend the homeland, we need more batteries.

But to make batteries, you almost always need battery-grade carbon materials.

Like graphite – a critical material in battery anodes.

Until 1982, graphite was considered a low-profit resource due to its primary usage in foundries, refractories, and lubricants. 

Today, graphite is found in all EV battery anodes, mostly in powder form (known as spherical graphite). Despite the notoriety of lithium, graphite is actually the largest component in lithium ion batteries by weight, with each battery containing 20-30% graphite. 

That’s why analysts are projecting graphite demand to quadruple from 2023 - 2030.

And whoever controls the supply of critical battery materials (like graphite) will control the future of energy technology. 

In case you missed it…

China dominates the $140 billion global battery market by owning not just cathode and electrolyte manufacturing, but nearly the entire anode supply chain—including the refining of graphite.

Why? Graphite is often found in small, scattered deposits, making large-scale mining expensive and inefficient. It’s completely unlike mining iron ore or coal. 

Over the last five decades, most countries outside China have wound down their graphite production, leaving Western firms reliant on Chinese refiners who captured the value chain early.

Even worse: with battery manufacturing capacity in China 2–3x larger than global demand, their infrastructure alone creates a self-reinforcing lead.

But what if it were possible for America to leap frog China and quickly secure a massive supply of non-China graphite… and do it without having to open any additional mines?

If the United States wants to compete in next generation energy technology, it needs to secure a stable supply of graphite (among other things).

Today, the United States imports 100% of its natural graphite, with annual consumption ranging from 60,000–91,000 metric tons depending on the year.

To meet the projected demand for electric vehicles and stationary batteries, more than 300 new graphite mines will need to be built before 2035.

The U.S. government has already begun writing massive checks to try and fix the problem.

• Novonix’s (NASDAQ: NVX, ASX: NVX) Chattanooga facility received a $755 million conditional loan commitment from the U.S. Department of Energy. 

The site is expected to begin production next year at 31,500 metric tons annually, with expansion plans up to 75,000 tons. Novonix has binding offtake agreements with Panasonic, Stellantis, and VW’s PowerCo for North American cell manufacturing.

• Graphite One (TSX‐V: GPH; OTCQX: GPHOF) was awarded $37.5 million from the U.S. Department of Defense. The funds support feasibility studies for a vertically integrated supply chain from the Graphite Creek mine in Alaska to a secondary treatment plant (STP) to be built in Ohio.

The total price tag to build the all-American graphite supply chain comes in at a cool $5.05 billion. 

As early as 2030, the high-grade graphite concentrate will be dried and shipped to Ohio, where it will be upgraded to anode material for EV batteries, as well as other products for industrial, commercial, and military applications.

• Westwater Resources (NYSE-A:WWR) secured an offtake agreement valued at 34,000 metric tons with SK On, a leading electric vehicle battery manufacturer, supplying electric vehicle batteries to Ford, Hyundai, Volkswagen, and others. 

Its Kellyton processing facility, grounded in the Coosa Graphite Project in Alabama, targets the supply of battery-grade graphite from 2027 to 2031 at 99.95% purity.

• Syrah Resources (ASX: SYR) has been awarded a $165 million tax credit under the U.S. Inflation Reduction Act Section 48C. 

The company’s Vidalia plant in Louisiana is scaling up battery-grade natural graphite processing, with plans for a capacity of 45,000 metric tons per year and IRA program support aimed to boost domestic anode material production.

For investors looking for a way to potentially profit from this growing graphite demand, you could certainly invest in any of these publicly traded companies…

But each of these “hero projects” involves billion-dollar capex, multi-year permitting gauntlets, and complex mining or import dependencies. 

They are the industrial dinosaurs of graphite — important to mention, but far too slow to solve the immediate bottleneck.

• Too slow to scale. Every project above is a 5–10 year build. By the time they’re online, U.S. demand will have already quadrupled. That’s a perpetual game of catch-up.
  

• Too capital-intensive. $5B here, $1B there. These megaprojects lock up scarce capital in long-cycle bets with uncertain returns.
  

• Still China-dependent. Even if you mine graphite in Alaska or Alabama, you still need Chinese purification, shaping, and coating tech to get to true “battery grade.” Without solving those steps, U.S. players are still captive to Beijing’s chokehold.
  

• Wrong format. Anode powders for EVs are sexy, but they aren’t the only or even the fastest-moving niche in the U.S. battery market. Fuel cells and flow batteries demand plates, felts, and papers — and that’s where U.S. buyers are screaming for supply today.
  

• Miss the near-term market. Hydrogen and stationary storage are growing now. DOE’s own Hydrogen Program targets call for $80/kW stacks costs by 2030, with an ultimate target of $60/kW stack cost reductions required by 2030. These niches need spec-grade carbons immediately, not a decade from now.

The “Generic Solutions” are big, slow, and expensive — they’re trying to brute-force their way into China’s domain by playing the same game, just 10 years too late.

Besides, the legacy graphite supply chain faces significant environmental challenges – including carbon emissions, the use of strong acids and bases during purification, and pollution caused by graphite micro-particles during spheroidization. 

It takes 30 days at 3000℃ to turn petroleum coke into synthetic graphite. And yet buyers pay top dollar for it because they aren’t buying “carbon” by the pound, they’re buying an engineered product designed to specification.

And for US manufacturers who are unable to supply non-Chinese supply of graphite, it’s about to get a whole lot more expensive. U.S. preliminary anti-dumping duty ~93.5% on Chinese graphite (with companion subsidy findings) pushes Chinese supply to a potential 160% increase in landed costs.

But what if there was a nearly bottomless supply of domestic carbon materials that could be fine tuned to meet specification, made cheaply, and shipped quickly?

We skip the billion-dollar graphite mines, energy intensive purification and upgrading cycles, and supply chain risk thanks to this one weird trick…

Graphite powder can be used for much more than EV battery anodes. In fact, almost every advanced battery chemistry — whether lithium-ion, sodium-ion, or hydrogen-bromine — relies on a suite of engineered carbon products.

Hydrogen fuel cells are the perfect example. They’re already a $1.4 billion U.S. market and climbing fast, with DOE targets calling for rapid cost-downs and large-scale deployments across trucks, buses, backup power, and grid storage by 2030. 

And while most headlines focus on catalysts and membranes, ask any stack manufacturer where the real bottleneck is and you’ll get the same answer: carbon papers, felts, and plates.

This is why our technology is a gamechanger. 

By turning waste wood into battery-grade carbons that can be pressed and machined into plates, felts, and papers, we cut costs by an order of magnitude, shorten lead times, and give U.S. buyers a truly domestic option.