NOVONIX and Panasonic Energy Sign Binding Off-Take Agreement
Sydney, Feb 9, 2024 AEST (ABN Newswire) - NOVONIX Limited (NASDAQ:NVX) (ASX:NVX), a leading battery materials and technology company, and Panasonic Energy Co., Ltd. ("Panasonic Energy"), a leading manufacturer of electric vehicle ("EV") batteries in North America, today announced the signing of a binding off-take agreement for high-performance synthetic graphite anode material to be supplied to Panasonic Energy's North American operations from NOVONIX's Riverside facility in Chattanooga, Tennessee.
Under the off-take agreement, Panasonic Energy has agreed to purchase at least 10,000 tonnes of anode material for use in their U.S. 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.
As a leading battery cell provider, Panasonic Energy is working to expand its production of EV batteries in North America to meet increased demand while also increasing the percentage of materials procured locally. 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.
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.
NOVONIX and Panasonic Energy began 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 U.S. plants.
NOVONIX's Riverside facility is set to become the first large-scale production site dedicated to high-performance synthetic graphite for the battery sector in North America and is slated to begin production in late 2024, with plans to grow output to 20,000 tonnes per annum (tpa) to meet anticipated customer demand. Recently, the Company announced the U.S. Department of Energy Office of Manufacturing and Energy Supply Chains ("MESC") awarded US$100 million in grant funding towards the expansion of Riverside through the Bipartisan Infrastructure Law to strengthen the local supply chain. The MESC grant funding will support the installation and commissioning of equipment to produce the targeted 20,000 tpa of capacity from Riverside.
Dr. Shoichiro Watanabe, CTO of Panasonic Energy, said, "As we continue to grow as an EV battery leader in North America, we are thrilled about the partnership with NOVONIX, which will bring innovative technologies to key anode material. In addition, I believe this collaboration will help us achieve our medium-to-long-term management goals to strengthen the local supply chain and reduce our carbon footprint." A separate announcement by Panasonic Energy is attached for reference.
Dr. Chris Burns, CEO of NOVONIX, said, "We are excited to announce the finalization of a binding off-take agreement with Panasonic Energy to become a supplier of key anode material for its North American based facilities. Off-take agreements with high-quality partners such as Panasonic Energy solidify NOVONIX's position as a leader in onshoring the supply chain of synthetic graphite and accelerating the adoption of clean energy in the industry. We look forward to expanding our long-standing relationship with Panasonic Energy to support its growth efforts in North America."
KEY DEAL TERMS
- The 10,000 tonne off-take volume commitment is subject to NOVONIX achieving agreed upon milestones regarding final mass production qualification timelines prior to Q4 2025.
- Panasonic Energy has the right to reduce the 10,000 tonne off-take volume (up to 20%) if these milestones are not achieved by the required dates or terminate the agreement if there is a substantial delay to achieving these milestones.
- The mutually agreed upon pricing structure incorporates a mechanism for adjusting the price in response to significant changes in NOVONIX's raw material costs.
*To view the Panasonic Energy Press Release, please visit:
About NOVONIX Limited
NOVONIX Limited (ASX:NVX) (FRA:GC3) (OTCMKTS:NVNXF) is an integrated developer and supplier of high-performance materials, equipment and services for the global lithium-ion battery industry with operations in the USA and Canada and sales in more than 14 countries. NOVONIX's mission is to support the global deployment of lithium-ion battery technologies for a cleaner energy future.