Graphite Powder Market Trends

Growth Drivers

• Proliferation of electric vehicles: The aspects of customer adoption and governmental mandates are driving huge investments in giga factories, which are directly enhancing the need for battery-grade graphite. The International Energy Agency (IEA) is playing a vital role in ensuring record-breaking electric vehicle sales year-over-year (YoY), which is fueling the graphite powder market globally. According to a data report published by the IEA Organization in 2025, electric car sales accounted for 17 million internationally as of 2024, denoting a rise by over 25%. In addition, 3.5 million cars were purchased in the same year, in comparison to 2023. Besides, China readily maintained its lead, with sales increasing by 11 million, which is creating an optimistic outlook for the overall graphite powder market across different nations.
• Expansion in energy storage systems: The growth in renewable energy, including wind and solar, is also driving the residential and grid-scale battery storage, which has created an effective secondary market for lithium-ion batteries. In this regard, the 2023 IEA Organization data report indicated that automotive lithium-ion batteries have increased by almost 65% to 550 GWh as of 2022. This is due to a surge in electric passenger car sales, with the newest registrations increasing by 55% in the same year. Meanwhile, the battery demand in the U.S. for vehicles grew by nearly 80%, despite electric vehicle sales increasing only by 55% in 2022. Likewise, the average battery size grew only by 7%, while the average battery electric car battery size accounted for 40% growth, thus making it suitable for the graphite powder market development.
• Increased demand for sustained industries: The presence of established markets, such as metallurgy, friction products, and refractories, continues to offer a volume-driven and stabilized base for the graphite powder market, which further supports producers focused on industrial-based graphite. As per a report published by the ECGA in August 2022, 50% of the weight in a lithium-ion battery comprises graphite. Likewise, based on the battery type, approximately 25% is synthetic, 25% is natural graphite, denoting a suitable substitution for supply security and financially, along with cost reasons. Besides, the graphite industry is poised to secure its place as a cornerstone, since it is the ultimate choice for almost 90% of overall lithium-ion battery anode materials, thereby creating a positive impact on the market globally.

Challenges

• Regulatory and environmental obstacles: The battery-grade graphite production, especially synthetic graphite, is considered an energy-intensive and potentially polluting process. This particular graphite requires graphitization at temperatures that exceed 3000 degrees Celsius. Meanwhile, purifying natural flake graphite into spherical graphite frequently comprises the utilization of strong acids, which leads to a risk of hazardous waste and water pollution if not effectively and timely managed with strict controls. These environmental impacts are significantly attracting enhanced scrutiny from environmentally-based customers and regulators, especially in Europe under its very own Carbon Border Adjustment Mechanism (CBAM). Besides, investments effectively raise production expenses when the industry is witnessing intense pressure to diminish battery prices, which causes a hindrance in the graphite powder market internationally.
• Performance pressure and technological substitution: The long-lasting need for the graphite powder market experiences a non-trivial threat from technological advancement in battery chemistry. While graphite is regarded as the incumbent anode material, worldwide research and development are readily focused on creating cutting-edge alternative options that provide rapid charging and high energy density. Besides, silicon-based anodes are considered the most prominent contender, with some progressive batteries already using silicon-graphite composites. The potential for an outstanding development to a silicon-dominant or even lithium-metal anode poses a tactical challenge to graphite producers, which has negatively impacted the graphite powder market globally.