Tesla stock rose early Friday as investors weighed new import duties on an electric vehicle battery material from China.
Shares of the car company led by CEO Elon Musk rose 3%. Tesla stock started the week at about $313.51, so shares are poised for a weekly gain.
Getting there could depend on the reaction to a new import levy on an EV battery material. The Commerce Department on Thursday ruled that China is illegally dumping graphite into the U.S. An anti-dumping duty, which is similar to a tariff, of 93.5% was placed on certain graphite imports.
Dumping refers to the practice of selling a product or service in a foreign country at prices lower than those charged domestically.
The effective tariff rate for graphite materials from China is up to 160% when adding countervailing duty tariffs of 11.5%, President Donald Trump’s 30% reciprocal tariffs on China, and 25% Section 301 tariffs implemented by U.S. Trade Representative.
China is the largest producer of graphite. The world mined about 1.6 million metric tons in 2024. China accounted for about three-quarters of that, according to the United States Geological Survey (USGS).
As for EVs, graphite is used in batteries. Tariffs on imported materials, and higher battery prices resulting from tariffs, will raise costs for battery makers and battery buyers. Most EV makers, including Tesla, are both battery makers and buyers.
Tesla didn’t respond to a request for comment about graphite sourcing.
The overall impact on the cost of an EV, however, should be small. An EV might have 100 to 200 pounds of graphite in its batteries, according to Barron’s estimates.
Graphite products can cost $1,000 to $2,000 per metric ton. A 160% price increase could add roughly $200 to the price of an EV. No car company likes cost increases. Neither do car buyers. But the graphite impact is small and looks manageable.
