Epsilon Advanced Materials (EAM), an India-based battery materials company, has announced plans to invest $650 million to establish a synthetic graphite anode manufacturing facility in the U.S. with a 50,000 tons per annum production capacity.

Epsilon plans to utilize green technologies to produce high-capacity anode materials at this facility, which would be crucial in powering over 1 million electric vehicles (EVs).

The company said the proposed synthetic graphite anode processing facility represents the largest Indian investment in the U.S. EV battery industry to date.

Additionally, the investment seeks to strengthen the trade relationship between the two countries.

In their recent joint statement from the White House, President Joe Biden, and Prime Minister Narendra Modi have also acknowledged Epsilon Advanced Materials’ investment in the U.S., the company mentioned.

Epsilon is evaluating multiple locations across the U.S. for the proposed facility, subject to regulatory approvals, environmental permits, and state and local incentive agreements.

The company has already signed strategic supply agreements with local raw material suppliers and transport partners to establish an efficient supply chain network with a focus on minimizing carbon emissions and reducing transportation costs.

The company aims to commission the facility by 2026 and is expected to generate revenue exceeding $500 million at full capacity by 2031.

Vikram Handa, the Founder and Managing Director of Epsilon Advanced Materials, said, “Our investment in the USA is driven by the intent of Energizing the World with clean energy solutions. The battery value chain is a critical enabler to electric mobility adoption, and we are channelizing our efforts to localize the battery manufacturing ecosystem.”

The U.S. government has set an ambitious goal to achieve 50% EV sales by 2030 and generate 1,000 GWh of battery capacity.

Epsilon’s facility is expected to contribute to the U.S.’s EV roadmap by establishing a local supply chain for EV batteries and supporting the government’s mandate for critical mineral security.

In its statement, the company hailed the U.S. Inflation Reduction Act (IRA) as a significant opportunity for India’s chemical industry to transform minerals into battery materials and reduce dependence on China.

The act stipulates that sourcing critical battery materials from China will not qualify for the $7,500 credit per EV. Consequently, U.S. automakers have sought alternative countries to acquire these essential battery materials.

Epsilon aims to capitalize on this opportunity by supporting energy transitions in the U.S. and India.

Last November, Epsilon Advanced Materials signed a memorandum of understanding with the government of Karnataka to invest around ₹90 billion (~$1.1 billion) to establish battery manufacturing plants in the state over ten years.

In March this year, the U.S. and the EU reached an agreement on sourcing critical minerals used in EV batteries.