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Graphex Group (NYSE: GRFX), a multinational entity with a U.S. subsidiary, Graphex Technologies, in Royal Oak, Michigan, is playing a pivotal role in the rapidly growing electric vehicle (EV) and renewable energy sectors. Specializing in the production of spherical graphite for Li-Ion battery anodes, Graphex is equipping the green energy revolution with superior technology and visionary strategies.
As a leading volume producer of purified spherical graphite anode material, Graphex manufactures 10,000 metric tonnes per annum, a capacity set to double to 30,000 metric tonnes within the next 18 months and ultimately reach 55,000 metric tonnes within the next three years. This bold expansion strategy stems from a commitment to support energy transition and electrification efforts worldwide, particularly amid the exponential growth in the EV sector. Their processing technology and innovative products underscore their position as a crucial player in EVs/lithium-ion batteries production.
In North America, the competitive landscape for Graphex is sparse with few, if any, head-to-head competitors that possess anywhere near the same level of commercial-scale experience in the refining of natural graphite for Li-ion batteries. Although companies like Syrah Resources (SYAAF) and Nouveau Monde (NMG) enjoy significant market capitalization of US $450M and Nouveau Monde’s US $200M respectively, Graphex stands poised for growth with a market cap of US$40M, 50M in revenue, and a solid growth plan to scale its revenue 3-4x in the next 12-24 months. Unlike some of its competitors, Graphex boasts positive cash flow, proven scaled production, and growing partnerships with mines and experienced players in the EV infrastructure, positioning it ideally for market dominance.
The electric vehicle battery contains a significant volume of graphite, accounting for 95-99% of the anode in each cell and about 25% of the entire battery mass – sometimes 15X the amount of lithium. With the continued surge in the demand for EVs, industry experts, including Wood Mackenzie, forecast an imminent shortage in the supply of natural, battery-grade graphite to power those batteries beginning in 2023.
Increasing geopolitical tensions are driving a growing need for EV battery supply chains less dependent on Asia, spurred on by legislation like the US’ Inflation Reduction Act which mandates that 50% of critical minerals used in EV batteries come from North America or US allies by 2024.
To support this mandate, EV pioneer Tesla (NASDAQ:TSLA) signed graphite supply deals with Australia’s Magnis Energy (ASX:MNS) and Syrah Resources (ASX:SYR), highlighting a growing need for securing graphite supply chains.
Graphex’s growth strategy is not limited to increasing its production capacity; it extends to forming partnerships with mines and experienced players in the EV infrastructure. Such partnerships ensure steady raw material supply, collaborative innovation, and increased ability to meet growing market demands. The company’s expansion plans further entail becoming one of the first experienced graphite processors on American soil, providing a significant boost to the domestic EV sector.
Graphex’s strategic approach in the EV and renewable energy sectors puts it in a commanding position to navigate the rapidly expanding EV market. Its growth strategy and innovative graphite and graphene technologies promise a sustainable and greener future. In an era of increasing demand for EVs and a global shift towards renewable energy, Graphex presents an attractive prospect for investors, EV producers, and drivers, making it a central player in the march towards a sustainable world.
