The Dept. of Commerce today revealed its preliminary antidumping (AD) rates in the trade case involving battery anode material from China. Mostly every significant battery exporter to the United States, including Canadian Solar, LG Energy Solution, Panasonic, Saft, Samsung and Tesla, was given a 93.5% AD rate. The China-wide rate (for those who did not respond to the Commerce petition request) is 102.72%. A full list of exporters and producers under the tariff order can be found here.

The AD rates are well below the 800%+ rates requested by petitioner American Active Anode Material Producers (AAAMP). Commerce also released relatively modest CVD rates of 11.58% for most respondents, including dominant battery producer Panasonic. When the AD and CVD rates are combined, the preliminary duty reaches a range between 105.08% and 114.4%. Industry analyst Roth Capital Partners estimates this combined rate could add 11-12% to the cost of a lithium-ion cell and 5-6% to the cost of a DC block — amounts that are manageable and unlikely to impact industry demand.

The AAAMP requested the AD/CVD investigation, asking the government to look at active anode material (AAM) used in lithium-ion energy storage and EV batteries. AAAMP claimed that China’s dominance on AAM production has prohibited the domestic market from establishing competitive operations. The U.S. International Trade Commission (ITC) made a preliminary affirmative determination in January that imported active anode material from China was harming the U.S. industry.

The ITC indicated that the U.S. AAM industry has been “materially retarded” by dumped and subsidized imports from China. Whereas previous AD/CVD cases in the solar panel space could prove a clear “before” and “after” level of harm once dumped Chinese product entered the United States, the AAM industry does not yet have significant product output to compare.

But the Commerce Dept. has found that the injury was not that significant, based on the low preliminary AD/CVD rates that have been revealed.

What are battery active anode materials?

A battery needs both a cathode and anode to facilitate the flow of electric charge. During battery charging, electrons move from the positive cathode to the negative anode, and that electrical difference is what translates to stored energy. The stated “chemistry” of a battery is its active cathode materials — lithium iron phosphate (LFP) or lithium nickel manganese cobalt (NMC), for example. Active anode materials are typically carbon-based — like graphite powder or silicon oxide. The materials are mined, ground to a fine powder and then coated on the anode (usually copper foil).

AAAMP claims that it represents the only domestic manufacturers of active anode materials. Membership consists of Anovion Technologies (Georgia), Syrah Technologies (Louisiana), NOVONIX Anode Materials (Tennessee), Epsilon Advanced Materials 5060 (North Carolina) and SKI US/Birla Carbon (Georgia/South Carolina). Most of these companies are still considered to be in the startup stage. AAAMP claims in its petition that the domestic AAM industry is struggling to get off the ground because of China’s oversupply.

Next steps

Customs and Border Protection has been collecting CVD on imported AAM since May and will now begin collecting the AD duties, in addition to the existing 40.9% tariffs already imposed on lithium battery imports from China.

Commerce clarified that EVs and completed battery energy storage system containers for both utility-scale and residential applications are excluded from the scope of the investigation. But raw active anode material, battery cells and battery modules are within the scope and subject to tariffs. Domestic battery manufacturers will feel the tariff burden while BESS importers will not.

Commerce should next release its final determinations in September/October, and the ITC is expected to issue its final determination around Nov. 13.