At a time when sustainability and independence have become foundational to companies everywhere, battery tech company Novonix (ASX: NVX) is being recognised by the U.S. Department of Energy (DOE), as it gets selected to enter negotiations to receive US$150 million in grant funding. With the money, it aims to expand its domestic production of high-performance, synthetic graphite anode materials.
The award was announced by US President Joe Biden to encourage local production and strengthen the North American battery supply chain as demand grows. This project will reduce the country’s dependence on importing material. Currently, China commands the synthetic and natural graphite markets, holding a 98% and 77% market share respectively. The rest comes from Japan and Korea. This award aims to change that.
On this notable feat, NOVONIX Co-Founder and CEO, Dr Chris Burns, commented “We are proud to have been selected to negotiate this funding in recognition of our readiness to accelerate the domestic battery supply chain and meet growing global demand from the electric vehicle and stationary grid storage markets.”
The negotiations will comprise total project costs, operational milestones, and timing of access to grant funds. Under the terms of the grant, government funds must be at least matched by the recipient.
This is the first set of projects funded by President Biden’s Bipartisan Infrastructure Law to expand domestic manufacturing of batteries for electric vehicles and the electrical grid. The law is driven by the agenda to encourage domestic processing of materials and rely less on imports, especially given the growing political and economic tensions between countries (from the US-China trade war to the Russia-Ukraine war).
Responsible and sustainable domestic sourcing and processing of the critical materials used to make lithium-ion batteries will strengthen American supply chains, accelerate battery production to meet increased demand, and secure the nation’s economic competitiveness, energy independence, and national security.
This funding by DOE is the first phase of over US$7 billion in total that the law will provide particularly for the battery supply chain. It supports NOVONIX’s strategic growth plan for synthetic graphite anode materials produced in the US. Specifically, the grant funds will be dedicated to the construction of a 30,000 tonnes per annum (tpa) US manufacturing facility, which includes site selection, plant layout, and engineering design with capability for additional expansion.
Burns added, “Since inception, our mission has been to enhance batteries through innovation and pave the way for the clean energy transformation. We are excited to partner with the DOE to further our mission of establishing a domestic supply chain for synthetic graphite used in lithium-based batteries and creating long-term sustainable value for our stakeholders.”
As of now, the Company is working on reaching an annual production capacity of 10,000 tpa of synthetic graphite in 2023 at its existing Riverside facility in Chattanooga, Tennessee. It plans on expanding its annual production capacity to 40,000 tpa in 2025 and 150,000 tpa in 2030. With the funding, Novonix will build the facility to enable subsequent expansion which will support up to 75,000 tpa.
Finally, it will continue casting around for other potential government funding opportunities to access more funding.
Alinda is a Business Reporter for The Sentiment
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