Novonix (ASX:NVX) has secured a binding agreement with Volkswagen subsidiary PowerCo SE to supply a minimum of 32,000 tonnes of high-performance synthetic graphite from 2027 to 2031. The deal strengthens Novonix’s position as a significant player in the North American battery supply chain.
Novonix develops and produces materials and technologies for lithium-ion batteries, focusing on synthetic graphite anodes, battery cell testing equipment, and zero-waste cathode synthesis. The company operates manufacturing facilities in North America and explores graphite resources to ensure a sustainable supply chain for its battery materials.
PowerCo, established by Volkswagen in 2022, oversees battery cell production for the automotive giant. It operates gigafactories in Germany, Spain, and Canada, with a combined capacity target of up to 200 GWh annually. The agreement with Novonix follows a Testing and Development Agreement signed earlier this year.
Novonix’s Riverside facility in Tennessee, expected to commence production in 2025, will supply the synthetic graphite. The facility is projected to scale up to 20,000 tonnes per annum initially, with additional capacity planned through a second site in the southeastern United States. Total production is forecast to reach 150,000 tonnes annually to meet growing demand from electric vehicle and energy storage sectors.
The deal is contingent on Novonix achieving production milestones, securing financing, and meeting compliance criteria. PowerCo retains the option to terminate the agreement if these conditions are not met.
Previously, Novonix was awarded a US$100m grant and a US$103m tax credit from the US Department of Energy to support its operations, highlighting its role in advancing the clean energy transition.
Shares in Novonix are trading 14.86% higher at 85 cents.