Tesla has withdrawn its threat to terminate a graphite supply agreement with Australian company Syrah Resources. The decision came after Syrah demonstrated that its active anode material (AAM) samples, produced at its Vidalia facility in Louisiana, now meet Tesla's quality standards. This development resolves a dispute that began in July 2025 when Tesla first issued a default notice over conformity issues.
The agreement, originally signed in 2021, involves Syrah supplying 8,000 metric tons of natural graphite AAM over four years. Securing this deal is important for Tesla as it helps diversify its supply chain and reduce reliance on China for critical battery components. While Syrah's stock saw a significant positive reaction, Tesla still reserves the right to terminate the deal if the materials do not pass final qualification.