Tesla Rival Lucid Signs Deal To Secure Domestic Supply Of Graphite Amid China's Rare Earth Export Ban

Lucid Group Inc. LCID has signed a multi-year agreement with Graphite One as ongoing restrictions on exports of critical materials by the Chinese government pose supply chain disruptions.

What Happened: "A supply chain of critical materials within the United States drives our nation’s economy," Lucid's Interim CEO Marc Winterhoff said in a statement released by the automaker on Wednesday.

The agreement stipulates Graphite One will supply Lucid and the EV maker's battery suppliers with natural graphite, "which will begin production in 2028," the statement notes.

Lucid has also reached an agreement with Syrah Resources to supply synthetic graphite to the automaker in 2026. These agreements "continue Lucid’s focus on strengthening its US-based supply chain and establishing local supply for critical minerals." the statement said.

Why It Matters: The ongoing trade tensions between Washington and Beijing have hit the global automotive industry hard, with several automakers warning that China's restrictions on critical minerals and rare earth metal exports could significantly impact production.

Tesla Inc. TSLA CEO Elon Musk also recently highlighted the importance of a domestic supply chain, which the billionaire said could help mitigate geopolitical risks.

Amid the back and forth between the two superpowers, the Trump administration has accused Beijing of violating the Geneva Trade Agreement, which China firmly denies and has vowed retaliation.