Lucid Strengthens US Supply Chain with New Graphite Material Supply Agreement with Graphite One

Rhea-AI Summary

Lucid Group (LCID) has signed a multi-year supply agreement with Graphite One for American-sourced natural graphite, strengthening its domestic supply chain. The agreement, starting in 2028, will source natural graphite from Alaska's Graphite Creek deposit. This builds upon their 2024 agreement for synthetic graphite from Graphite One's Ohio facility. Additionally, Lucid secured a three-year agreement with Syrah Resources to supply natural graphite AAM from Louisiana starting in 2026. These partnerships aim to localize critical material supply chains, enhance US manufacturing independence, and reduce vehicle carbon footprint. Graphite, crucial for Lithium-Ion batteries and fast-charging performance, represents a significant component in EV battery production.

Positive

• Secures long-term domestic supply of critical battery materials, reducing dependency on foreign sources
• Strategic partnerships with multiple suppliers (Graphite One and Syrah Resources) diversify supply chain risk
• Vertical integration through US-based production facilities enhances supply chain control
• Potential cost advantages and tax benefits from domestic sourcing under IRA guidelines

Negative

• Production from Graphite One won't begin until 2028, indicating a significant wait time for domestic supply
• Significant capital investment and infrastructure development required for new graphite production facilities
• Dependency on successful development and operation of supplier facilities

Insights

Supply Chain Strategist

Lucid's US graphite deals strengthen local supply chain, reducing geopolitical risks and potentially qualifying for tax credits, though real benefits won't materialize until 2026-2028.

Lucid's multi-year agreements with Graphite One and Syrah Resources mark a strategic shift toward localizing critical battery material supply chains. This move addresses several challenges facing EV manufacturers. First, graphite is essential for lithium-ion battery performance, particularly for fast-charging capabilities—a key competitive differentiator in the premium EV segment where Lucid operates.

The staggered implementation timeline reveals a methodical approach: Syrah Resources will begin supplying natural graphite active anode material (AAM) in 2026, while both natural and synthetic graphite from Graphite One won't come online until 2028. This represents a medium to long-term strategy rather than an immediate solution to supply chain challenges.

These agreements likely position Lucid to better qualify for Inflation Reduction Act tax credits, which increasingly require domestic sourcing of critical minerals. By securing US-based graphite—both natural (from Alaska) and synthetic (from Ohio)—Lucid is reducing exposure to supply chain disruptions from dominant producers like China, which controls approximately 70-80% of global graphite processing.

The deal structure, involving "directed supply agreements with battery cell suppliers," indicates Lucid is taking an active role in second-tier supplier management rather than leaving material sourcing entirely to its direct battery suppliers. This approach gives Lucid more control over its supply chain but also requires more sophisticated supplier management capabilities.

While the press release emphasizes sustainability benefits, the primary drivers appear to be supply security, regulatory compliance, and protection against geopolitical risks. Investors should note that the full benefits won't materialize for 2-4 years, making this a forward-looking strategic move rather than one with immediate financial impact.

NEWARK, Calif., June 4, 2025 /PRNewswire/ -- Lucid Group, Inc. (NASDAQ: LCID), maker of the world's most advanced electric vehicles, today announced the signing of a multi-year supply agreement with Graphite One for American-sourced natural graphite, further strengthening the company's supply chain for American raw materials and resources. Following other recent agreements with Syrah Resources and Graphite One, future Lucid vehicles will increasingly utilize natural and high-performance synthetic graphite materials mined and produced at each company's facilities in the United States as a part of directed supply agreements with the company's battery cell suppliers.

"A supply chain of critical materials within the United States drives our nation's economy, increases our independence against outside factors or market dynamics, and supports our efforts to reduce the carbon footprint of our vehicles," said Marc Winterhoff, Interim CEO at Lucid. "These partnerships are another example of our commitment to powering American innovation and manufacturing with localized supply chains."

Today's multi-year agreement with Graphite One will supply Lucid and its battery cell suppliers with natural graphite, which is expected to begin production in 2028. Graphite One's natural graphite will be sourced from the Graphite Creek deposit north of Nome, Alaska. This agreement builds on last year's announcement with Graphite One to provide Lucid and its battery cell suppliers with synthetic graphite for future vehicles starting in 2028, which will be sourced from Graphite One's proposed active anode material (AAM) facility in Warren, Ohio.

"This agreement complements the deal we struck with Lucid in 2024 – which marked the first synthetic graphite agreement between a U.S. graphite developer and a U.S. EV company," said Anthony Huston, CEO at Graphite One. "We made history then – and we're continuing to make history now as we build momentum for our efforts to develop a fully domestic graphite supply chain, to meet market demands and strengthen U.S. industry and national defense." 

Additionally, beginning in 2026, Syrah Resources will also supply natural graphite AAM to Lucid. Under the agreement, Syrah will collaborate with Lucid or its battery suppliers to purchase the materials over a three-year term. Syrah's natural graphite AAM will be sourced from its vertically integrated AAM production facility in Vidalia, Louisiana.

Together, these agreements to source natural and synthetic graphite continue Lucid's focus on strengthening its US-based supply chain and establishing local supply for critical minerals. Graphite, both synthetic and natural, composes a significant amount of the material within Lithium-Ion batteries and is essential for fast-charging performance.

About Lucid Group

Lucid (NASDAQ: LCID) is a Silicon Valley-based technology company focused on creating the most advanced EVs in the world. The award-winning Lucid Air and new Lucid Gravity deliver best-in-class performance, sophisticated design, expansive interior space and unrivaled energy efficiency. Lucid assembles both vehicles in its state-of-the-art, vertically integrated factory in Arizona. Through its industry-leading technology and innovations, Lucid is advancing the state-of-the-art of EV technology for the benefit of all.

Investor Relations Contact

investor@lucidmotors.com 

Media Contact

media@lucidmotors.com 

Trademarks 
This communication contains trademarks, service marks, trade names and copyrights of Lucid Group, Inc. and its subsidiaries and other companies, which are the property of their respective owners.

Forward-Looking Statements
This communication includes "forward-looking statements" within the meaning of the "safe harbor" provisions of the United States Private Securities Litigation Reform Act of 1995. Forward-looking statements may be identified by the use of words such as "estimate," "plan," "project," "forecast," "intend," "will," "shall," "expect," "anticipate," "believe," "seek," "target," "continue," "could," "may," "might," "possible," "potential," "predict" or other similar expressions that predict or indicate future events or trends or that are not statements of historical matters. These forward-looking statements include, but are not limited to, statements regarding plans and expectations with respect to Lucid's supply agreements with Graphite One and Syrah Resources Limited, including the volumes and sourcing of materials, the potential benefits to Lucid, and Lucid's commitment to strengthening its US-based supply chain. These statements are based on various assumptions, whether or not identified in this communication, and on the current expectations of Lucid's management. These forward-looking statements are not intended to serve as and must not be relied on by any investor as a guarantee, an assurance, or a definitive statement of fact or probability. Actual events and circumstances are difficult or impossible to predict and may differ from these forward-looking statements. Many actual events and circumstances are beyond the control of Lucid. These forward-looking statements are subject to a number of risks and uncertainties, including those factors discussed under the heading "Risk Factors" in Part II, Item 1A of Lucid's Quarterly Report on Form 10-Q for the quarter ended March 31, 2025, as well as other documents Lucid has filed or will file with the Securities and Exchange Commission. If any of these risks materialize or Lucid's assumptions prove incorrect, actual results could differ materially from the results implied by these forward-looking statements. There may be additional risks that Lucid currently does not know or that Lucid currently believes are immaterial that could also cause actual results to differ from those contained in the forward-looking statements. In addition, forward-looking statements reflect Lucid's expectations, plans or forecasts of future events and views as of the date of this communication. Lucid anticipates that subsequent events and developments will cause Lucid's assessments to change. However, while Lucid may elect to update these forward-looking statements at some point in the future, Lucid specifically disclaims any obligation to do so. These forward-looking statements should not be relied upon as representing Lucid's assessments as of any date subsequent to the date of this communication. Accordingly, undue reliance should not be placed upon the forward-looking statements.

 

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SOURCE Lucid Group

FAQ

When will Lucid (LCID) start receiving graphite supplies from Graphite One?

Graphite One will begin supplying natural graphite to Lucid starting in 2028 from their Alaska facility.

What is the significance of Lucid's (LCID) graphite supply agreements?

The agreements strengthen Lucid's domestic supply chain, reduce foreign dependency, and support US manufacturing independence while potentially qualifying for IRA benefits.

How many graphite suppliers has Lucid (LCID) partnered with?

Lucid has partnerships with two main suppliers: Graphite One for both natural and synthetic graphite, and Syrah Resources for natural graphite AAM.

When will Syrah Resources begin supplying graphite to Lucid (LCID)?

Syrah Resources will begin supplying natural graphite AAM to Lucid in 2026 under a three-year agreement.

Where will Lucid's (LCID) domestic graphite supplies come from?

The supplies will come from Alaska (Graphite One's natural graphite), Ohio (Graphite One's synthetic graphite), and Louisiana (Syrah Resources' natural graphite AAM).