Novonix Ltd., a leading battery materials and technology company, has signed a binding off-take agreement with Panasonic Energy Co. Ltd. to supply high-performance synthetic graphite anode material to Panasonic’s battery plants in North America from its Riverside facility in Chattanooga, Tenn., the two companies said in a joint announcement Feb. 9.
Under the off-take agreement, Panasonic Energy has agreed to purchase at least 10,000 metric tons of anode material for use in its US plants over the term of 2025-2028. During the term, if additional volumes are requested by Panasonic Energy, Novonix shall use its best efforts to deliver the increased volumes.
The deal comes at a time when Panasonic is aggressively working to expand its EV battery production capacity in North America to meet increased demand while also increasing the percentage of materials procured locally.
To this end, Panasonic Energy is establishing a sustainable supply and working to meet the objective to reduce the carbon footprint of their entire lithium-ion battery supply chain for EVs by 50% in 2031 compared to 2022 levels.
Notably, Novonix and Panasonic Energy had begun working together on product sampling and testing after signing a memorandum of understanding with subsidiary, Sanyo Electric Co. Ltd., in 2019. As Panasonic Energy expands its cell manufacturing presence in North America, Novonix’s product development and sampling have been focused on Panasonic Energy’s product requirements for its US plants.
“The Inflation Reduction Act provides significant potential benefits to companies building the local supply chain for batteries and battery materials. These benefits, under the Section 45X Advanced Manufacturing Production Credit, support the production of key critical minerals and battery materials such as synthetic graphite, for which Novonix will be eligible, and for local manufacturing of battery cells, for which Panasonic Energy’s North American plants will be eligible,” the two companies said in their joint press statement.
According to Novonix, its Riverside facility in Chattanooga is expected to become the first large-scale production site dedicated to high-performance synthetic graphite for the battery industry in North America and is slated to begin production in late 2024, with plans to grow output to 20,000 metric tons per annum to meet anticipated customer demand.
Novonix has recently announced that it has received $100 million in grant funding from the US Department of Energy Office of Manufacturing and Energy Supply Chains (MESC) toward the expansion of Riverside facility through the Bipartisan Infrastructure Law to strengthen the local supply chain. To this end, the MESC grant funding will support the installation and commissioning of equipment to produce the targeted 20,000 metric tons per annum of capacity from Riverside.
