Syrah Resources Secures Multi-Year Graphite Supply Agreement with Lucid Motors
February 24, 2025
Harry Minnis
Key Highlights
- Syrah Resources has signed a three-year supply agreement with Lucid, ensuring a stable flow of natural graphite active anode material (AAM) from Syrah’s Vidalia facility in Louisiana, USA.
- Lucid and its battery suppliers will purchase approximately 7,000 tonnes of AAM, beginning in early 2026, to support Lucid’s EV production.
- Pricing will follow a floating mechanism, adjusted quarterly based on a natural flake graphite index.
- Vidalia’s vertically integrated supply chain positions it as a critical non-Chinese alternative for graphite anode material, aligning with U.S. Inflation Reduction Act (IRA) tax credit requirements.
Syrah Resources (ASX: SYR) has secured a significant three-year binding supply agreement with Lucid Group, Inc., a leading electric vehicle manufacturer, to supply natural graphite active anode material (AAM) from its Vidalia facility in Louisiana.
The agreement, which commences in early 2026, will see Lucid and its battery suppliers purchase approximately 7,000 tonnes of AAM over the contract term, ensuring a stable and diversified supply chain for Lucid’s EV production. The deal represents a crucial step in reducing the industry’s dependence on China for anode materials, as Vidalia remains one of the few natural graphite AAM suppliers in North America.
Vidalia: A Strategic Graphite Hub for the U.S.
Syrah’s Vidalia facility, which integrates with its Balama graphite mine in Mozambique, is a key part of North America’s push for critical mineral security. The facility’s 11.25ktpa AAM production capacity ensures a steady pipeline of domestically processed natural graphite, which qualifies under the U.S. Inflation Reduction Act’s (IRA) Section 30D consumer tax credit requirements.
The floating pricing structure in the agreement allows for quarterly adjustments based on changes in an independent natural flake graphite (-100 mesh) price index, providing flexibility in a fluctuating market.
Lucid’s Growing Demand for Natural Graphite AAM
Lucid, a Nasdaq-listed company known for pushing the boundaries of EV performance and efficiency, has been expanding its production capacity. The company’s Arizona-based EV manufacturing facility produces the Lucid Air sedan and will soon launch the Lucid Gravity SUV.
With demand for lithium-ion batteries increasing, securing a reliable, U.S.-based supplier of AAM is crucial for Lucid and its battery manufacturing partners. This agreement ensures that Lucid’s battery supply chain remains compliant with IRA regulations, a major advantage in the competitive EV sector.
Credit: Lucid Motors
Market Impact and Future Outlook
This deal further solidifies Syrah’s position as a leading supplier of natural graphite anode material in North America. With auto manufacturers and battery makers seeking alternatives to China-dominated supply chains, Syrah’s Vidalia facility is emerging as a key solution for the U.S. EV industry.
However, the agreement is subject to Lucid’s battery suppliers completing the qualification process by January 2027, and Lucid retains the option to terminate the contract if Vidalia’s AAM fails to meet IRA compliance requirements.
The partnership marks another milestone in Syrah’s efforts to commercialise Vidalia’s production capacity, positioning the company as a long-term supplier of graphite-based anode materials for EVs.
As the EV market continues to expand and regulatory frameworks evolve, agreements like this will play a pivotal role in shaping a secure and independent North American battery supply chain.
Read the full release here