Novonix announced it has signed a binding offtake agreement with Volkswagen’s battery company PowerCo for a minimum of 32,000 tonnes of high-performance synthetic graphite material over a five-year term starting in 2027.
Established by Volkswagen in 2022, PowerCo is committed to building six battery cell gigafactories by 2030 with a combined annual volume of 240 GWh – enough for about 3 million electric vehicles.
Construction has already commenced on two sites with the first of these, in Germany, due to start production in 2025 with initial capacity of 40 GWh per year with potential for further expansion.
Novonix, which is headquartered in Brisbane but has its production facilities in Canada and the United States, develops and produces anode materials for lithium-ion batteries. The company’s technologies aim to enhance battery performance, lifespan and sustainability.
The offtake commitment with PowerCo is for a minimum of 32,000 tonnes over the five-year term of the agreement.
Novonix said the start of commercial supply is targeted to commence in 2027, subject to it achieving agreed upon milestones regarding mass production capabilities and satisfying certain compliance criteria. Novonix must also secure financing commitments for the production facilities that will supply PowerCo product.
Novonix’s operations include the Riverside facility being developed in the United States. The plant, in the state of Tennessee, is slated to commence commercial production in 2025 with an initial output of 20,000 tonnes annually. This project is supported by a $152.7 million (USD 100 million) grant from the US Department of Energy and a $157.3 investment tax credit.
The company is also progressing plans to build a second production facility in the southeast of the US. This facility is projected to start with an annual production capacity of 30,000 tonnes, scalable to 75,000 tonnes.
Novonix’s deal with PowerCo follows on from the supply agreement with European and US carmaker Stellantis announced last week.
Under that agreement, Novonix will supply at least 86,250 tonnes of high-performance synthetic graphite, with the possibility of increasing volumes to 115,000 tonnes, over a six-year period from 2026 to 2031.
This graphite will support Stellantis’ North American battery cell production as the company advances its strategy to transition fully to battery-electric passenger vehicles.
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