When China, the world’s biggest graphite producer, introduced tough restrictions on exporting the mineral in December 2023, Graphjet Technology spotted an opportunity. It was time to accelerate its plans to tap into the US. 

The Malaysian firm’s patented technology converts biomass into an artificial form of graphite, a key component in electric vehicle (EV) batteries and semiconductors. 

“The December announcement was a real surprise. We thought they might introduce the ban, but not until the end of this year or next year,” Graphjet’s CEO, Aiden Lee, told fDi at the Select USA Investment summit in June. “But looking at the opportunity, it’s actually to our company’s advantage.” 

Graphite is a missing piece of the US’s EV battery supply chain, relying on China for more than 40% of its graphite demand, according to Statista. Despite government efforts to boost critical mineral industries, no graphite is mined in the country today. Seeing itself to be part of this solution, Graphjet announced plans in April to build a $200m first-of-its-kind artificial graphite plant in Nevada.  

Palm oil to batteries

Founded in 2019, the Kuala Lampa-headquartered firm produces artificial graphite from palm kernel shells, a byproduct of the country’s palm oil industry which is the world’s second-biggest after Indonesia. Even in its home market, Graphjet is still in its early stages. Its first plant, in the state of Pahang, will reach industrial-scale production in the third quarter of 2024 and will produce 13,000 tons of graphite per annum by 2026.

Graphjet has a strong business case for investing in the US. At a time when the country is clamping down on investors with ties to China, Mr Lee boasts that Graphjet is “not affiliated with any [entities]” in Asia’s biggest economy. It claims its artificial graphite’s carbon footprint and costs are some 80% less than the traditional form dug out of the ground. And while graphite has thousands of applications, Graphjet’s early ambition is EV batteries in which graphite accounts for more than 90% of the anode. 

Accordingly, Graphjet announced on April 8 that its first US facility will be in Nevada, a state with a growing EV value chain anchored by Tesla’s gigafactory and $5bn battery joint venture with Panasonic, and the Thacker Pass mine’s large lithium deposit. 

Graphjet’s Nevada facility aims to come online in 2026, hire some 500 workers and produce 10,000 tons of graphite per year, enough to power 100,000 EVs.

One challenge has been feedstock. Without a local source of biomass in sufficient quantities, and given trade restrictions on shipping unprocessed palm shell kernels from Malaysia to the US, Graphjet will perform the first stage of production — converting shells into hard carbon — at its Pahang facility before sending them to be refined in Nevada. 

By removing this first step, Mr Lee believes Graphjet has a headstart on cracking the US market before the country’s handful of other artificial graphite projects being developed by the likes of New York’s Anovion and Australia’s Novonix. “We’re setting up a US R&D team to look at what source of local feedstock we could potentially use long-term,” Mr Lee adds. 

The long view

Indeed, Graphjet is taking the long view on the US. It has identified Texas and Arkansas as locations of future graphite plants, and in March the firm listed on Nasdaq. As a foreign, early-stage cleantech firm, the world’s biggest economy is not without risks. A local US law firm is investigating Graphjet for securities fraud (an allegation Graphjet denies) after its late filing of a quarterly statement. And Donald Trump has promised to slam the brakes on EVs if elected in November.

But Mr Lee is focused on the opportunity. Even if a Republican government tried rolling back the EV movement, “there are a lot of jobs, production and investment relying on this whole industry … the whole supply chain would have to move on. You have to carry on”.

This interview, which took place on June 25, has been edited for clarity and brevity

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This article first appeared in the August/September 2024 print edition of fDi Intelligence.