NOVONIX (ASX:NVX,NASDAQ:NVX) announced on Sunday (November 10) that it has signed a binding offtake agreement with automotive company Stellantis (NYSE:STLA) for synthetic graphite material.
NOVONIX said that starting in 2026, it will provide a minimum of 86,250 tonnes of the material to Stellantis over a period of six years. The maximum amount NOVONIX will provide is 115,000 tonnes.
The high-performance synthetic graphite material will be sent to Stellantis’ cell manufacturing partners in North America from NOVONIX’s Riverside facility in Tennessee, US, and a planned expansion site.
NOVONIX will use an agreed-upon market-based formula to price the synthetic graphite material.
Stellantis describes itself as one of the world’s leading carmakers, and notes on its website that it is aiming for 100 percent of its passenger cars in Europe to be battery electric vehicles by the end of 2030. In the US, its target is for 50 percent of its passenger cars and light-duty trucks to be battery electric vehicles by the same deadline.
It plans to invest more than 50 billion euros in electrification over the course of the decade to meet its goals.
‘We are excited to have Stellantis’ commitment, now as our largest customer, to support their North American EV growth plans,’ said NOVONIX CEO Dr. Chris Burns. ‘This contract allocates the remainder of our available volumes at our Riverside facility and a portion of volumes to be produced at our planned greenfield facility.’
He added that the company’s agreement with Stellantis accelerates the adoption of clean energy and solidifies NOVONIX’s position as a leader in onshoring the synthetic graphite supply chain.
Located in Tennessee, the Riverside facility is owned by NOVONIX and is slated to become the first large-scale production site for high-performance synthetic graphite in North America. NOVONIX was previously awarded a US$100 million grant from an office of the US Department of Energy, and also received a US$103 million investment tax credit.
The facility plans to grow output to 20,000 tonnes per year. Commercial production is set to begin in 2025.
NOVONIX will also be building a new production facility in the Southeastern US with an initial capacity of 30,000 tonnes per year, expandable to 75,000 tonnes per year. The company is currently in discussions with the Department of Energy’s Loan Program Office for a loan that would support the construction of this new facility.
Looking forward, NOVONIX must meet final mass production qualifications and certain compliance criteria.
Securities Disclosure: I, Gabrielle de la Cruz, hold no direct investment interest in any company mentioned in this article.