Why the Tesla Syrah graphite deal Keeps Getting Delayed

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Australian company Syrah Resources and American electric car manufacturer Tesla Syrah graphite deal have again extended the deadline for their graphite supply deal. This news came to November 17, 2025. Both companies are working on the supply of battery materials. Graphite plays a vital role in electric vehicle batteries. This deal is intended to strengthen Tesla’s supply chain. However, due to some issues, the deadline has been repeatedly extended. In this article, we will explain all the details of this topic in Hindi. We will discuss the history, current situation, causes, and effects. This article is approximately 2,500 words long. We will use simple language so that everyone can understand. We will use the active voice more often, keep sentences short, and paragraphs short, and use subheadings.

Background of Syrah Resources

Syrah Resources is an Australian mining company specializing in graphite production. Headquartered in Melbourne, it operates the Balama Mine in Mozambique. Balama is one of the world’s largest graphite mines. The company began production in 2017, and now operates the Vidalia plant in the United States. This plant converts graphite into active anode material. Syrah aims to increase graphite supply outside of China, which dominates the graphite market. Syrah is also attempting to support the US market. The company’s shares, which trade on the ASX, have recently fallen. However, the Tesla deal offers hope, as Tesla’s graphite needs are met. Tesla is the world’s leading electric car company, with Elon Musk as its CEO. Tesla uses graphite for its batteries. Graphite is used in the anode part of the battery, increasing battery capacity.

Recalling the history of the deal:

The deal began in 2021. Syrah announced it in December 2021. Tesla will purchase graphite anode material from Vidalia. Details of the deal were revealed in January 2022. Syrah’s stock price rose. In April 2022, the US Department of Energy approved a $107 million loan for the Vidalia plant, which began production in 2023. However, quality issues arose. Tesla conducted testing, and some samples failed. In July 2025, Tesla issued a default notice, but Syrah refused to accept the default. However, the two sides discussed the matter, and Tesla does not want to remain dependent on China.

Therefore, it is looking for other suppliers. In 2021, Tesla signed a deal with Syrah. This four-year deal will see Tesla purchase 8,000 metric tons of graphite from the Vidalia plant. Tesla cars like the Model 3 and Model Y will use this material, and the company is diversifying its supply chain. This is in line with US government policy.

Vidalia Plant Details of Tesla Syrah graphite deal

The Vidalia plant is located in Louisiana. This is America’s first large anode material plant, which Syrah began construction on in 2021. The plant imports graphite from Balama, processes it, and can produce 11,250 tons per year. However, expansion plans are underway, up to 45,000 tons. The plant creates jobs. Despite US government support, the DFC loan is $150 million. Recently, $8.5 million was received. However, there are some defaults. A waiver has been granted.

The plant’s quality is important. Tesla’s standards are high. Recent problems and default notice: Tesla sent a default notice in July 2025. The reason was Syrah did not provide conforming AAM samples. AAM stands for Active Anode Material. It is not suitable for Tesla’s batteries. Syrah stated that it was not in default, but both parties agreed. A cure date was set. The original deadline was September 16, 2025. If not corrected, the company could be terminated. Sairah said, “We are working. We are collaborating with Tesla.”

First Extension of Tesla Syrah graphite deal

The first extension was granted in September 2025. The deadline was extended to November 15, 2025. Sairah announced that it does not accept default, but needs time. Tesla agreed. If qualification is not achieved by February 9, 2026, termination will occur. This extension was beneficial for both parties. Sairah gained time, and Tesla gained supply security. Sairah’s shares fell in the market. But hope remained, and the latest extension was announced on November 17, 2025. Now, the deadline is January 16, 2026, making this the second extension. Sairah stated, “We are not in default, but the parties are extending the terms. The final qualification deadline is February 9, 2026. If not met by then, Tesla could terminate the deal.” Reuters reported that both companies are working to resolve the issue. Tesla declined to comment. Syrah’s subsidiary received $8.5 million for its Balama operations.

Discussing market reactions

Despite the extension, Syrah shares fell. Down 3% on November 17th. Price 29.5 cents. The reason was Battery Materials Industry Week. Graphite prices were low due to Chinese competition. Tesla’s stock was at 404.35, up 0.59%. Although the deal didn’t have a major impact, investors are still concerned. If the deal is terminated, Syrah will suffer losses. Investment in the Vidalia plant will be wasted. However, the extension has provided time. Analysts say there are industry challenges and the impact on the EV industry, which makes this deal crucial to the EV supply chain 95% of graphite comes from China.

Tesla wants to diversify. Local supplies from the US plant. But delays pose a problem. Tesla may seek other suppliers. Syrah’s success will inspire other companies. Nevertheless, a successful deal will enhance US independence. Good for climate change, which accelerates EV growth. EV sales are expected to be high in 2025. But there’s a risk of material shortages.