GrafTech International and the EV Energy Storage Revolution: A Q3 2025 Earnings Outlook

The global transition to clean energy and electric vehicles (EVs) is accelerating, driven by policy mandates, technological innovation, and shifting consumer preferences. At the heart of this transformation lies a critical material: graphite. GrafTech International (NYSE:EAF), a leading producer of graphite electrodes and petroleum needle coke, sits at the intersection of two high-growth sectors-steel decarbonization and energy storage. As the company prepares to report its Q3 2025 earnings on October 24, the question is whether its financial performance will reflect the tailwinds of these emerging markets or reveal vulnerabilities in its business model.

The EV and Energy Storage Tailwinds

The demand for graphite-based materials in EV batteries and energy storage systems is surging. According to the International Energy Agency (IEA)'s Global EV Outlook 2025, global EV battery demand reached 1 terawatt-hour (TWh) in 2024, with projections of over 3 TWh by 2030. Electric cars account for 85% of this demand, while energy storage applications, including grid-scale projects, are gaining traction. GrafTech's petroleum needle coke, a key component in lithium-ion battery anodes, is poised to benefit from this trend. The company's Seadrift facility in Texas, which produces nearly 20% of the global (ex-China) needle coke supply, is a strategic asset in this context, as noted in a Timothy Sykes article.

Moreover, GrafTech's vertically integrated production model-spanning raw material sourcing, electrode manufacturing, and advanced purification processes-positions it to capitalize on the shift toward low-carbon steelmaking. Electric arc furnace (EAF) steel production, which relies on graphite electrodes, is expected to grow as the industry decarbonizes. This creates a dual demand driver for GrafTech: one from the steel sector and another from the EV battery market.

Q3 2025 Earnings: A Mixed Picture

Analysts expect GrafTech to report a loss of $1.20 per share in Q3 2025, with revenue rising 6.4% year-over-year to $139.33 million, according to a Seeking Alpha preview. While this revenue growth aligns with the broader industry trend of increasing graphite electrode demand, the earnings forecast suggests ongoing cost pressures. The Zacks Consensus Estimate, which projects a $1.24 per share loss and $141.75 million in revenue, reflects a bearish shift among analysts, underscored by an Earnings ESP of -3.23%, according to a Yahoo Finance article.

Historically, GrafTech has demonstrated resilience, beating consensus estimates in three of the last four quarters. However, its most recent quarterly report fell short by -33.33%, highlighting volatility in its earnings performance. That Yahoo Finance piece highlighted this inconsistency and the challenges in translating demand into consistent profitability, particularly as the company navigates pricing pressures and supply chain challenges.

Strategic Initiatives and Market Positioning

GrafTech's long-term strategy hinges on leveraging its technical expertise to expand into high-margin segments of the EV and energy storage markets. The company has announced plans to develop next-generation electrode compositions and graphene-enhanced materials, which could improve energy density and reduce costs for battery manufacturers, according to a Chemical Research Insight piece. Additionally, GrafTech has secured a strategic partnership with a leading EV manufacturer to supply high-purity graphite for next-generation battery technology, as reported in a GlobeNewswire release.

However, the company faces headwinds. The U.S. energy storage market, for instance, is grappling with high import tariffs on Chinese-sourced materials, which have driven up battery costs and slowed deployment, according to a BloombergNEF analysis. GrafTech's reliance on global supply chains and its exposure to pricing volatility in the steel sector further complicate its path to profitability.

Investment Implications

For investors, GrafTech's Q3 2025 earnings will serve as a critical test of its ability to balance near-term challenges with long-term opportunities. While the company's strategic positioning in the EV and energy storage sectors is compelling, its financial performance must demonstrate consistent progress in cost management and margin expansion. The recent $175 million first lien term loan and $100 million delayed draw term loan-secured to preserve liquidity-highlight the urgency of stabilizing its balance sheet, as noted in an Investeepedia analysis.

If GrafTech can navigate these challenges and deliver on its innovation roadmap, it may emerge as a key player in the clean energy transition. However, the path to profitability remains fraught with risks, including geopolitical uncertainties and competitive pressures from lower-cost producers.

Conclusion

GrafTech International stands at a crossroads. Its expertise in graphite and needle coke positions it to benefit from the EV and energy storage boom, but its financial performance must align with these opportunities. The Q3 2025 earnings report will offer valuable insights into whether the company can transform its strategic advantages into sustainable profitability. For now, investors should monitor both the company's operational execution and the broader macroeconomic environment that shapes its markets.