Consecutive binding offtake agreements reported by NOVONIX evoked strong interest of investors. The share jumped by 30% in a single day.
NOVONIX Limited (ASX: NVX
NOVONIX Limited (ASX: NVX) is a leading player in the battery materials and technology sector and has made significant progress in the supply of synthetic graphite, particularly for the EV battery industry. The company recently signed two major binding offtake agreements which will enlarge significantly its role in the growing battery supply chain. The first, signed on November 25, 2024, with PowerCo SE, Volkswagen's battery division, commits NOVONIX to supply a minimum of 32,000 tonnes of high-performance synthetic graphite over a five-year term from 2027 to 2031. The material will serve PowerCo's battery cell production for its gigafactories in Europe and North America which includes locations in Germany, Spain and Canada. This deal builds on a prior non-exclusive testing and development agreement and signals NOVONIX’s growing influence in the global battery materials sector.
In addition, NOVONIX signed another significant deal on November 11, 2024, with Stellantis, a leading automotive manufacturer. This agreement focuses on supplying up to 115,000 tonnes of synthetic graphite to Stellantis’ cell manufacturing partners in North America over six years, starting in 2026. This deal positions NOVONIX as a key supplier for Stellantis’ rapidly expanding EV production, which will be critical as the automotive giant aims to increase its EV output across North America. Both offtake agreements, combined with NOVONIX’s ongoing facility expansions, underscore the company's growing capacity to meet rising demand for battery-grade materials essential for EV battery production.
NOVONIX has been aggressively increasing production capacity, with a significant increase being at its Riverside facility in the United States. This facility is set to become the first large-scale production site dedicated to synthetic graphite in North America. With plans to begin commercial production by late 2025, NOVONIX is on track to produce 20,000 tonnes per year of synthetic graphite to meet commitments from customers like Panasonic Energy and KORE Power. The company also plans to build additional production facilities, including a greenfield site in the southeastern U.S., with an initial capacity of 30,000 tonnes per year, scalable up to 75,000 tonnes per year. This initiative has had significant financial support, with a $100 million grant by the U.S. Department of Energy and a $103 million investment tax credit.
Another innovative space for NOVONIX is in battery technology. It has entered into joint development agreements with CBMM, a leading producer of niobium products, and ICoNiChem, a specialist in cobalt and nickel compounds. These collaborations will look at developing efficient and sustainable cathode materials, which are critical components of a lithium-ion battery. NOVONIX's R&D, focused on sustainable processes of manufacture, is responding to the rapid growth in clean energy efficiency. Discussions with the U.S. Department of Energy's Loan Program have also been ongoing in securing additional funding for the new production facilities in order to be positioned better in the North American supply chain in battery materials.
Source: Company’s Report
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