Lucid Motors to further localize supply chain under materials agreement with Graphite One

Lucid Motors and Graphite One have signed a new non-binding supply agreement that involves synthetic anode active materials. Through the agreement, the American automaker looks to cater its BEV supply chain to more locally sourced materials.

As you probably already know, Lucid Motors ($LCID) is a California-based BEV automaker currently selling one flagship model – the Air sedan. The relatively young automaker is gaining momentum in 2024 as it approaches mass production of its all-electric encore, an SUV called the Gravity.

While several variants of the Air are considered out of the budget for many American consumers, Lucid has a long term plan in place to deliver additional options that are more affordable but still up to its high performance standards.

The automaker has already delivered the most efficient car in the world in its 2025 RWD Air Pure but has also shared plans for a third model in the works, currently codenamed “Mid-size.” Higher efficiency means less need for battery cells, which equates to a lower overall cost in production, which trickles down to consumers shopping for a new EV.

Furthermore, localizing supply chains is another way automakers like Lucid Motors are utilizing to cut costs and potentially qualify for Federal tax credits. Today, Lucid announced a supply chain agreement with Graphite One, touting it as a first-of-its-kind collaboration.

Lucid inks new supply agreement with Graphite One

Details of the non-binding supply agreement with Lucid came from Graphite One, whose CEO Anthony Huston described as “historic,” as it is the first synthetic graphite agreement between a US graphite developer and a US-based EV company.

The United States currently imports 100% of its natural and synthetic graphite – a critical material in BEV battery technology. Graphite One is on a mission to domesticate that supply chain by tapping into the Graphite Creek deposit, recognized by the US Geological Survey as the largest graphite deposit in the US and “among the largest in the world.”

This past March, Graphite One chose Warren, Ohio, as the home of its incoming anode active materials (AAM) manufacturing facility, which has a “Phase 1” production target of 25,000 tons per year (TPY) of battery-ready anode material.

As the materials acquisition specialist revamps that existing footprint for synthetic graphite production, it has garnered a non-binding supply agreement from Lucid Motors, which looks to capitalize on that local supply. Per Lucid CEO and CTO Peter Rawlinson:

We are committed to accelerating the transition to sustainable vehicles and the development of a robust domestic supply chain ensures the United States, and Lucid, will maintain technology leadership in this global race. Through work with partners like Graphite One, we will have access to American-sourced critical raw materials, helping power our award-winning vehicles made with pride in Arizona.

According to Graphite One, the non-binding agreement with Lucid includes the supply of 5,000 TPA of synthetic graphite once it begins production. The initial term of the agreement is 5 years, but it is subject to early termination.  The companies state that sales are based on an agreed price formula linked to future market pricing as well as satisfying base case pricing agreeable to both parties.

Looking ahead, Graphite One’s progress in commencing AAM production remains subject to project financing and an existing grant from the US Department of Defense. The company expects to generate revenue by 2027.

By sourcing more battery materials locally, Lucid Motors has the opportunity to deliver new BEV models that could qualify for the full $7,500 Federal tax credit, although it must follow plenty of other parameters, including lower MSRPs.