Graphite is the largest material in a lithium-ion cell by weight, and almost nobody talks about it. We name battery chemistries after the cathode, so LFP and NMC enter the conversation while the anode stays out of it. China produces around 95% of the world's anode material.
Vikram Handa has spent six years trying to change the second of those facts. His account of what it takes is the most concrete answer I have heard to the question of why building battery materials outside China is hard, and it has very little to do with the chemistry.
Starting from waste
Epsilon began fifteen years ago taking a waste product from a steel plant and turning it into inputs for the aluminium and tyre industries. In 2021 it integrated forward into carbon black. Today it is India's third largest carbon black producer at 215,000 tonnes.
That history matters because of what it left lying around. Epsilon Carbon distils coal tar. Coal tar pitch can be converted into coke. Handa's team developed a process to make a particular kind, bulk meso-coke, and started qualifying it with anode producers.
The customers were Chinese tier-one anode companies, and what came back was more interesting than a pass mark. They were getting unusual properties out of the coke: fast charging, high capacity. They could build differentiated products from it.
Which raised the obvious question. If the coke is what makes the anode good, why sell coke?
Epsilon Advanced Materials started in 2019 to answer that. A pilot line for synthetic graphite, then qualification through 2021, 2022 and 2023, with a commercial plant going up in parallel rather than afterwards. Handa is candid that this broke the normal sequence, where you finish the A sample before building toward the B sample. He was confident enough about the A sample to build ahead of it, and thinks that decision is what compressed the timeline.
Where the performance actually comes from
The detail most likely to surprise people who do not work in anodes is the coating.
After graphitisation, synthetic graphite needs a surface treatment. It is a small line in the bill of materials and it determines the last increment of performance. Most producers buy two or three coatings off the shelf from other companies.
Epsilon makes all of them, because it was already a coal tar distillation business. It has developed more than twenty, and has built up an iterative understanding of which one produces which behaviour. Handa calls this genuinely unique, and it is hard to argue: the companies buying coatings cannot tune what they did not develop.
The backward integration does something else too, and it is his most persuasive argument. Customers set a high bar on specification, but the thing that actually causes them pain is variation. A stable raw material gives you a stable finished product. When your feedstock comes from a refinery where coke is a bottom-of-the-barrel byproduct and customers blend several cokes to a recipe, you inherit that variability. When you make the coke deliberately, tuned to the end application, you do not.
He has also qualified cokes from Europe and the United States, which turns out to matter commercially. Some customers want a US supply chain end to end. Some are happy with Indian coke shipped over. Some want the flexibility to swap if something breaks. Owning the backward integration lets Epsilon offer all three.
Why synthetic overtook natural
In 2021 and 2022 the received view was that natural graphite would win. It was cheaper, abundant, and there were mines everywhere. Handa's counter is that mines take five to seven years to mature, and that customers kept moving the goalposts on specification. Higher energy, longer range, faster charging, more capacity in the same cell.
Synthetic graphite can be manipulated in production to hit those targets. Natural graphite cannot, in the same way.
The constraint on synthetic was coke supply. Western refineries make good coke, but nobody is investing in more of it. In China, Handa watched merchant refiners put up billion-dollar plants to make petroleum coke and nothing else. He asked what they intended to do with it. The answer was EVs.
They were right about the direction and wrong about the quantity. The capacity overshot, coke prices fell, and synthetic graphite fell with them. His current estimate is that 70 to 75% of the market will be synthetic, simply because the raw material exists today while mines still have to be built.
The part about cost that gets misread
Here Handa says something that cuts against the standard Western explanation.
The assumption is that Chinese graphite is cheap because of scale. He does not think that is the case. Scale helps, but the prices being quoted today are below marginal cost. The coke producer is probably losing money. So is the graphite producer.
His evidence is straightforward: most of these companies are publicly listed, so the numbers are there. Everybody in the value chain is losing money right now, and they are all right with that, because the plants need to run.
Once you accept that, the strategic picture changes. You are not competing against a structurally cheaper production method. You are competing against a price that reflects overcapacity and infrastructure that was provided rather than paid for.
He is also generous about what China has done well, which is worth noting from someone competing with it. Visiting Chinese companies, he sees R&D centres with a scale of resource and a pace of iteration that is ten or twenty times anyone else's. His verdict: it is amazing to see what they have done for the industry, and there is a lot to be learned.
Where to build, and what it costs
Epsilon is building in three places, and the order in which they became viable is instructive.
Finland came first, in 2021, because customers in Italy, France and Germany were pulling Epsilon toward Europe and the power requirement pushed it north. GigaVaasa offers 100% green power and a good industrial ecosystem. The environmental impact hearings are done and the permitting is still running, with maybe another year to go.
Then the IRA redirected attention to the United States, pulling Korean and Japanese cell makers with it. Those customers told Epsilon plainly that they wanted to work with it but needed a clear roadmap to a US plant. Epsilon looked at close to a hundred sites and announced Brunswick County, North Carolina in October 2023.
Handa says Epsilon is the only synthetic graphite producer currently permitted to build in the United States, and treats that as validation of the technology and of its approach to safety and ESG in a high-temperature process. Ground breaks early next year, with start of production around mid-2027. India follows on a similar schedule, engineering complete, ground breaking mid next year, finishing late 2027.
The deciding factor on the American site was not tax or workforce. It was power. Data centres are absorbing the available grid infrastructure, and building more takes time. North Carolina had the power.
Whether localisation is actually affordable
This is the number worth carrying away from the conversation.
Graphite is large by volume but roughly 12 to 14% of a battery's value. So a 100% duty adds something like USD 700 to a USD 60,000 car. Handa contrasts that with steel, lithium or cathode, where the same treatment lands much harder. Localising graphite is a cost that automakers can absorb.
The trade case concluded recently put around 160% duty on Chinese graphite into the United States. Something priced at ten dollars arrives at twenty-six. Handa does not frame that as protection so much as levelling: it makes a large US investment financeable, because the customer can now look at domestic supply and find it cheaper.
Layered on top, the 45X credit pays customers around USD 35 per kilowatt hour for buying locally, with clear rules about what and when. He calls that close to a must-have, and the reason the business case for local sourcing now exists at all.
The carbon footprint argument nobody makes
The conventional wisdom is that natural graphite has the lower footprint. Handa disputes the framing rather than the arithmetic.
CO2 is not the only axis. Purifying natural graphite means chemical leaching, and you have to count the water consumed per tonne. China has mastered that process at very low cost. Replicating it elsewhere means large effluent treatment plants and handling hydrofluoric acid, which is difficult in the United States. These are the reasons the industry has not been rebuilt outside China, and they are not reasons of cost alone.
For synthetic graphite the dominant emission is power, which is a variable you can change. Epsilon runs a lifecycle analysis before committing to a site. Its India project comes out around 75% below Chinese synthetic graphite, the US project around 70%, driven almost entirely by the power mix.
His honest addendum: customers want this and are not paying for it yet. He expects that to change as recycling and traceability requirements tighten, and thinks it will separate companies that designed for it from companies that did not.
Buying an LFP business
In 2023 Epsilon acquired Johnson Matthey's German LFP cathode technology centre. Around thirty people, more than a hundred patents, and a pilot line.
The logic is process rather than chemistry. Cathode production uses similar furnaces, similar powder handling, similar coating, minus the thermal purification. Handa saw no route into NMC that made sense, since the established players are strong and several are backward integrated into mines. What struck him was that mature LFP technology existed almost nowhere outside China, and that LFP was not leaving China while everyone else focused on NMC.
Epsilon has since pushed the material to a Gen 3 LFP and has a commercialisation roadmap, with a 30,000 tonne plant planned in India and iron and phosphate secured domestically. It also runs a recycling business in India handling end-of-life material and production scrap.
The destination he describes is a battery materials solution provider with anode and cathode under one roof and its own recycled feedstock going back in. Explicitly not a cell maker.
The thing he tells everyone
Handa's advice to people looking at this sector is the least glamorous part of the conversation and the part most worth repeating.
The day you decide to enter battery materials, you are ten years from cash flow. R&D, pilot line, scale up, qualification, large plant, then cash. You need patient capital and you need to be committed for the long run.
And you cannot licence your way past it. His view is that by the time you have built something under licence, the industry has moved on. The know-how has to sit inside the company, which means spending heavily on R&D and equipment and building the capability in-house.
Fast growth, he says, does not make you a winner. It takes hard work and a good team to deliver something as a business.
This piece draws on the full conversation, which is available with a complete transcript on the episode page.