A 920% tariff on anode materials from China “would throw the economics of U.S. storage out of whack”

The threat of significant cost increases in batteries for stationary applications in the U.S. looms large. Increased duties are expected to be imposed after the Department of Commerce and International Trade Commission (ITC) adjudicates an anti-dumping, countervailing duties (AD/CVD) complaint, regarding the Active Anode Materials (AAM) used in the lithium ion battery cell production.
In December 2024, a coalition of US battery materials producers petitioned for duties to be imposed on Chinese AAM imports. The petitioners are seeking duties of up to 920% on AAM, which would significantly increase the cost of lithium-ion batteries in the country.
In its ESS Price Forecasting Report, Clean Energy Associates forecast that containerized batteries will increase in price in 2025, primarily as a result of tariffs and AD/CVD duties.
A preliminary ruling to continue investigations on active anode material from China was issued on Friday.

Source: CEA
Stationary implications
Lithium iron phosphate (LFP) batteries account for more than 90% of stationary applications in the US, reports battery analysts Rho Motion. With very limited LFP production footprint outside of China, AAM duties are likely to have a significant impact on battery packs and systems in the U.S.
Iola Hughes, the head of research at Rho Motion told ESS News that if imposed at the 920% level proposed by the petitioners LFP battery prices could soar. “A 920% tariff is a crazy level and would throw the economics of storage applications out of whack,” said Hughes. However, at present AAM accounts for only 10-15% of LFP battery system cost, she noted.
“Within a standard LFP battery, if the tariff was applied to the AAM within the cell, at 150% tariff level it would increase that to 22% of the cost, and a 920% level it would increase to 55%.” She added that general industry consensus is that the tariff will likely come in at 150%.
AAM supply chain
Lithium ion battery production can use either synthetic or natural graphite material. Both supply chains are dominated by Chinese producers. Hughes said that on average across both synthetic and natural graphite AAM supply chains, China accounts for 92%.
Chinese AAM suppliers have been establishing production in Southeast Asia, including in Malaysia and Indonesia. Both Japanese and South Korean suppliers are pursuing plans to establish integrated production facilities and have seen a surge of interest in offtake agreements, reports Benchmark Mineral Intelligence.
Speaking at a webinar hosted by investment bank Roth Capital Partners, Benchmark’s Tony Alderson said that despite these efforts, certain parts of the AAM supply chain remain dominated by Chinese producers. Up to 86% of natural spherical graphite for anode usage is produced in China, and manufacturers in Japan and Korea frequently use the material in their production.
“It will be very difficult to get enough commercial [active anode] material that won’t have any material touched by China throughout the supply chain,” said Alderson, a senior analyst in anode and cathode material for Benchmark. “All [anode] chemistries are dominated by the Chinese domestic market currently and are expected to dominate through 2030.”

Source: Benchmark Mineral Intelligence
Synthetic graphite
With growth in synthetic graphite AAM production, the marketplace is currently in oversupply, Alderson reports. 97% of synthetic graphite AAM end product comes from China – aligning with LFP battery production.
Rho Motion’s Hughes said that establishing synthetic graphite AAM production outside of China would take two-to-three years, while setting up a mine and processing operation for natural graphite AAM could extend beyond five years.
As most AAM for stationary products would be embedded in LFP cells and packs, Hughes raised questions as to whether challenges would arise when enforcing the tariffs.
A Department of Commerce preliminary antidumping determination is scheduled for May 26, 2025 and a preliminary countervailing determination is set for March 12, 2025.