NOVONIX Limited (NASDAQ: NVX, ASX: NVX) (“NOVONIX” or the “Company”), a leading battery materials and technology company, and PowerCo SE (“PowerCo”), announced the signing of a binding offtake agreement for a minimum of 32,000 tonnes of high-performance synthetic graphite material. The material will be supplied to PowerCo over a five-year term starting in 2027.
Established by Volkswagen in 2022, PowerCo is committed to ramp-up global battery cell production. PowerCo oversees international factory operations, advances in cell technology, and vertical integration of the battery value chain. PowerCo has identified three gigafactory locations – Salzgitter in Germany, Valencia in Spain, and St. Thomas in Canada – with a combined capacity of up to 200 GWh/year. NOVONIX and PowerCo previously announced the signing of a non-exclusive Testing and Development Agreement in March 2024.
NOVONIX’s Riverside facility is poised to become the first large-scale production site dedicated to high-performance synthetic graphite for the battery sector in North America and is slated to begin commercial production in 2025, with plans to grow output to 20,000 tonnes per annum (“tpa”) to meet current customer commitments. Previously, the Company announced the U.S. Department of Energy (“DOE”) Office of Manufacturing and Energy Supply Chains (“MESC”) awarded the Company a US$100 million grant and was selected for a US$103 million investment tax credit towards the funding of the Riverside facility.
The Company is also progressing plans to build a second production facility, in the southeastern United States, that will have an initial capacity of 30,000 tpa and plans to expand that facility to 75,000 tpa. NOVONIX remains in discussions with the DOE Loan Program Office (“LPO”) for an Advanced Technology Vehicles Manufacturing Program loan to support the construction of this new production facility. NOVONIX’s current plans call for total production to increase to at least 150,000 tpa of synthetic graphite material to accommodate anticipated customer demand.
Key Deal Terms
- Offtake commitment is for a minimum of 32,000 tonnes over the five-year term of the agreement.
- Products will be priced under a pricing structure that has been agreed between the parties.
- The start of commercial supply is targeted to commence in 2027, subject to NOVONIX achieving agreed upon milestones regarding final mass production qualification and satisfying certain compliance criteria. NOVONIX must also secure financing commitments for the production facilities that will supply PowerCo product. If these milestones or requirements have not been satisfied, then PowerCo may terminate the agreement.
