The Biden Administration Has Approved $107 Million in Loan Money for One of Tesla's Main Suppliers

The Tesla supplier, Syrah Resources, just scored $107 million in loan money from the Biden Administration. Find out how this money could help Tesla and other U.S.-based carmakers produce more affordable EVs and tighten the U.S.’s grip on the automotive supply chain.
Written by Jason Crosby
Reviewed by Kathleen Flear
Graphite is a primary component in many EV batteries, and for
Tesla
, arguably the most popular EV producer in the U.S., graphite is about to get a whole lot easier to get. The Biden Administration just dropped some serious cash on Tesla’s graphite supplier. But for those of us outside Tesla headquarters—and outside of the Oval Office, too—we may wonder: why is a graphite company receiving over a $100 million loan to expand its operations? 

Who is the lucky Tesla supplier, anyway? 

As reported by
Automotive News
, the graphite company receiving the generous loan is Syrah Resources Ltd., which, surprisingly, is based in Australia. The deal has some terms, though: Syrah will need to ramp up production to produce enough natural graphite-based active anode material for approximately 2.5 million electric vehicles by the year 2040, according to The Energy Department. 
The loan comes as the Biden Administration seeks to create a domestic supply chain for electric-vehicle batteries, a smart move for the U.S., which has been badly affected by a heavy reliance on imported goods in order to produce vehicles sold on American soil. 
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How is graphite used in a car battery?

Graphite may not seem like the first material that comes to mind when you think of a car battery, but unbeknownst to many of us, it plays an essential role in powering an EV. There are few alternatives that can be swapped out for graphite in battery production, mainly because graphite is used to negatively charge one anode (or end) of the battery in order to create an electrical current. 
According to
Research World
, graphite usage is growing at a rate of 20% per year, which means if the U.S. doesn’t want to get left behind, we’ll have to get ahead of the curve now. Why? Because most of the world’s graphite is found in China, as
Statista
points out, the U.S.’s main economic opponent. It’s not just batteries that use graphite—it’s in lubricant sprays, carbon brushes for engines, and even in fire extinguishers. 
MORE: What Is Joe Biden's Relationship to the Delaware Auto Industry?

How will the loan affect Tesla’s operations?

The $107 million dollar loan will be a blessing for Tesla, which is already leading the pack in the U.S. as far as EV sales are concerned. Because their main graphite supplier will be getting backed by the U.S.,
Tesla stock
may notice an increase, and those concerned about EV affordability (something Tesla has been struggling to tackle) can breathe easy. 
After all, having the ability to easily access graphite could help Tesla keep their production costs down, which is likely to lower their vehicle prices, too. 
MORE: Tesla is Breaking Records Despite Industry Challenges

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The U.S.-backed loan given to Syrah may help you save money on your next EV, but if you want to save money on car insurance, the
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