Syrah Resources has announced that Tesla has withdrawn its notice of intent to terminate the companies’ graphite supply agreement, acknowledging that Syrah is now delivering samples that meet required specifications. Under a 2021 contract, Syrah agreed to supply 8,000 metric tons of active anode material from its Vidalia, Louisiana, facility over four years.
In July 2025, Tesla issued a default notice alleging that the active anode material (AAM) samples provided by Syrah did not conform to quality standards. The Vidalia plant is the only vertically integrated, large-scale producer of anode materials outside China. Syrah and Tesla subsequently agreed in March to extend the deadline for resolving the dispute to June 1.
In its latest statement, Syrah said Tesla now accepts that the company has demonstrated conforming AAM production and has made sufficient progress toward final qualification. However, Tesla retains the right to terminate the supply agreement if the Vidalia product does not meet the final approval criteria.
Following the announcement, Syrah’s shares rose sharply, marking their strongest session in several months. The broader Australian market index saw modest declines during the same trading period. Despite the positive development, some analysts caution that risks remain until Syrah secures final qualification for its AAM product.
Craig Sidney, senior investment adviser at Shaw and Partners, noted that while the withdrawal of the termination notice represents a positive step, the stock may continue to experience volatility in the near term. He highlighted that trading volumes are high and some investors may be exiting positions ahead of the end of the financial year, potentially triggering tax loss selling.
The resolution of this dispute is closely watched by both industry observers and investors, as consistent supply of high-quality graphite is critical to electric vehicle and battery manufacturers. Syrah’s ability to maintain its contract with Tesla would reinforce its position in the global anode materials market and support ongoing demand from the growing electric vehicle sector.
Source: Reuters
