In this work, a novel hybrid reinforcement Ni@Gr was successfully synthesized by graphene in-situ grown on the surface of Ni particles, and the Ag-10 wt%Ni@Gr contact material was prepared by the combined methode of wet mixing and spark plasma sintering. The effect of graphene incorporation on the electrical performance of Ag-10 wt%Ni@Gr contact material was investigated, and the arc erosion mechanism was discussed as well. As compared to the Ag-10 wt%Ni contact material, the make-arc energy, break-arc energy and the maximum welding force of the Ag-10 wt%Ni@Gr contact material are decreased by 13.2 %, 4.9 %, and 23.1 %, respectively. Moreover, the Ag-10 wt%Ni@Gr contact material displays smaller erosion area, lower surface roughness and less mass loss. It can be ascribed to the increased elastic modulus of the contact surface, reduced bounce effect, lowered make-arc energy and shortened the make-arc duration that are stemmed from the incorporation of graphene. In addition, the incorporation of graphene contributes to the enhanced molten pool viscosity, which can effectively restrain Ag splashing, thereby enhancing arc erosion resistance and welding resistance.