Just when it seemed like America’s hostility toward electric vehicles had bottomed out, things have taken another turn for the worse. The Commerce Department has now proposed steep tariffs on graphite—a critical material used in the anodes of lithium-ion batteries—imported from China.
While this move will eventually push automakers to diversify their supply chains, it could deliver a short-term blow to EV prices. After all, more than 90% of the world’s graphite is processed in China.
Welcome to the Friday edition of Critical Materials, your daily round up of news and events shaping the world of electric cars and technology.
Also on today’s deck: Mitsubishi is planning to launch new hybrids in the U.S. and Canada by the end of this year. Plus, the voice assistant in the new, electric Mercedes-Benz CLA will use AI from an American company. Let’s begin.
30%: Why Battery Prices Could Increase Even More
Photo by: Panasonic Energy
Lithium may be the “oil” of the 21st century, but critical materials like graphite, cobalt, nickel and manganese are the real workhorses. Without graphite, the lithium ions in a battery have nowhere to go. The graphite anode is where the charge gets deposited when you plug in your EV.
Yet as of 2023, the U.S. had no domestic mine production capacity for graphite, according to the U.S. Geological Survey. Most of it came from China, with smaller amounts from Mexico, Canada and Madagascar.
Now, the Trump administration has proposed a 93.5% tariff on graphite imported from China—the latest escalation in a resource war that could have ripple effects across the EV industry. With the federal EV tax credits ending soon and fuel economy standards nullified, EV makers are dealing with multiple headwinds.
American companies are indeed trying to bring graphite production home. There are at least half a dozen companies exploring or developing local graphite production in Alabama, Alaska, Montana, and New York—they have received billions of dollars of federal support under the Inflation Reduction Act.
But China’s graphite industry is already mature. It was producing 1.2 million tons of graphite annually in 2023. Industry groups in the U.S. have long accused the country of “dumping” graphite into the U.S. at prices cheaper than their home markets.
“China can flood global markets with cheap, highly subsidized graphite and drive down prices, domestic graphite manufacturers have difficulty securing the investments necessary to bolster production capacity to the levels needed to meet domestic demand,” the North American Graphite Alliance, a group representing graphite producers, wrote in a letter to the Department of Treasury last year.
Other groups are also actively trying to block off Chinese graphite from entering the U.S. The American Active Anode Material Producers brought the petition to tariff Chinese-origin graphite. Automakers, including Tesla, have fought back.
Here’s more from The New York Times this morning.
Tesla said in a letter to administration officials in February that it had already agreed to buy graphite from U.S. suppliers, but “they have not yet shown the technical ability to produce commercial quantities” of battery-grade graphite “at the quality and purity required by Tesla and other battery cell manufacturers.”
This is, in many ways, inflicting self-harm. The original goal of Biden-era policies was to reduce America’s reliance on China for critical materials. Now, with that same goal in mind, the Trump administration is tightening those restrictions—but also dismantling the clean energy policies that made local supply chains possible in the first place.
60%: Mercedes-Benz CLA To Use U.S. Company’s AI Voice Assistant
Photo by: Andrei Nedelea
Automakers believe that their customers really want ChatGPT-like AI voice assistants in their cars for conversational commands. The new electric CLA, which InsideEVs recently drove and reviewed in Denmark, will use a voice assistant developed by American company Cerence AI.
The CLA will be the first Mercedes model to get it, followed by other electric and gas Mercedes vehicles.
Here’s more from Automotive News:
“We offer a conversational experience so that you can talk to the system in a natural and human-like way and it responds in a chatty way, so you feel like you are talking to a human,” said Nils Schanz, chief technology and product officer at Cerence. “The system is very capable of understanding you.”
The system, which is available in 25 languages, will launch in Europe with Mercedes before expanding globally.
I don’t use in-car voice commands all that often. Google Assistant handles my Spotify and navigation requests pretty well. But in today’s software-defined vehicles, where everything from climate control to seat adjustment has migrated to a touchscreen, a well-executed voice assistant could save a lot of taps and distractions.
90%: Mitsubishi Hybrids Are Coming To The U.S.
2025 Mitsubishi Outlander PHEV
Photo by: Mitsubishi
Mitsubishi wants to benefit from the surge of hybrid sales in North America. The automaker will change the Outlander from a gasoline-only SUV into a hybrid model year in 2026 onwards for the U.S. and Canada, Nikkei reported on Friday.
It already sells the Outlander plug-in hybrid in the U.S. In the first six months of 2025, it has sold over 3,000 units of the Outlander PHEV stateside, marking a 6% year-over-year growth. But the more conventional hybrids could be cheaper than the PHEV and drive more sales volumes.
The automaker also planning to launch an EV in the U.S. next summer—that’s expected to be the rebadged version of the Nissan Leaf that’s due to go on sale in the U.S. this fall.
100%: Do Cars Need AI Voice Assistants?
Back in the day, automakers designed the engine and powertrain first—then built the rest of the car around that hardware. It was a mechanical-first mindset. Now, that’s flipped to a software-first approach. Automakers figure out the vehicle’s brains first and then see how they can build an EV around it.
This computerization of EVs also unlocks many possibilities, like ChatGPT integration and over-the-air updates that can add extra horsepower or improve braking performance.
But do we really need AI voice assistants to roll down windows or answer random trivia while we’re driving? What’s that line between being functional and gimmicky? And what do you think AI should actually do in your car? Leave your thoughts in the comments.
Have a tip? Contact the author: suvrat.kothari@insideevs.com
