Key Highlights:
- NOVONIX to supply a minimum of 32,000 tonnes of synthetic graphite to PowerCo SE between 2027 and 2031.
- The agreement strengthens NOVONIX’s position as a leading supplier of advanced battery materials in North America.
- PowerCo, Volkswagen’s battery-focused subsidiary, continues its global expansion with significant commitments to sustainable and localized supply chains.
The Deal at a Glance
NOVONIX Limited (NASDAQ: NVX, ASX: NVX), a leader in battery materials and technology, has signed a binding offtake agreement with PowerCo SE, Volkswagen’s battery subsidiary. This agreement underscores NOVONIX’s critical role in the emerging North American battery supply chain and positions the company to support PowerCo’s ambitious growth plans.
Under the agreement, NOVONIX will supply at least 32,000 tonnes of its high-performance synthetic graphite over a five-year period starting in 2027. Pricing has been pre-determined under a mutually agreed structure.
The Strategic Importance of Synthetic Graphite
Synthetic graphite is a critical component for the anodes of lithium-ion batteries, which power everything from electric vehicles (EVs) to renewable energy storage systems. As demand for EVs and sustainable energy grows, localized and secure supply chains for battery materials have become paramount.
NOVONIX’s Riverside facility, slated to commence production in 2025, will be the first large-scale North American producer of synthetic graphite dedicated to the battery sector. With production capacity of 20,000 tpa initially and plans for a second facility capable of scaling to 75,000 tpa, NOVONIX is on track to meet increasing customer demand.
PowerCo’s Expansion Plans
PowerCo, established by Volkswagen in 2022, is spearheading the automaker’s global push into battery cell production. With gigafactories planned in Germany, Spain, and Canada, PowerCo aims for a combined production capacity of up to 200 GWh/year.
This agreement aligns with PowerCo’s commitment to integrating a sustainable battery value chain and securing partnerships with localized suppliers like NOVONIX.
Financing and Conditions
The agreement’s execution is contingent upon NOVONIX meeting several milestones, including:
- Achieving mass production qualification for its synthetic graphite.
- Securing financing commitments for its production facilities.
Notably, NOVONIX has already received substantial support from the U.S. Department of Energy, including a $100 million grant and a $103 million tax credit to fund the Riverside facility. Additionally, discussions with the DOE Loan Program Office are ongoing to secure further funding for NOVONIX’s second production facility in the southeastern United States.
Leadership Perspectives
Dr. Chris Burns, CEO of NOVONIX:
“This agreement with PowerCo marks a significant milestone in NOVONIX’s journey to become a leading supplier of synthetic graphite in North America. PowerCo’s commitment to a sustainable battery supply chain aligns perfectly with our vision to deliver high-performance, locally sourced materials.”
Frank Blome, CEO of PowerCo SE:
“Securing a reliable, high-quality synthetic graphite supplier is critical to achieving PowerCo’s ambitious battery production goals. NOVONIX’s expertise and advanced production capabilities make them an ideal partner as we scale up our global operations.”
Outlook for NOVONIX
With this agreement, NOVONIX is solidifying its position as a critical player in the EV supply chain. The company’s plans to scale production to 150,000 tpa reflect growing confidence in its ability to meet the demands of leading global manufacturers like PowerCo.
This partnership not only provides a secure revenue stream but also reinforces NOVONIX’s strategic importance as North America moves towards battery material self-sufficiency.
