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Novonix seals $153m EV battery deal with Panasonic in US
Novonix has sealed its biggest ever deal in the burgeoning $65bn North American electric vehicle market that will see it supply tonnes of battery material to Japanese electronics giant Panasonic.
Glen Norris
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2 min read
February 9, 2024 - 1:52PM
The Australian Business Network
Global demand for electric vehicles and battery materials continues to grow
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Novonix has sealed its biggest ever deal in the burgeoning $65bn North American electric vehicle market that will see it supply tonnes of battery material to Japanese electronics giant Panasonic Energy.
Under the three-year deal that could be worth as much as $153m, 10,0000 tonnes of high-performance synthetic graphite anode material will be shipped to Panasonic Energy’s North American EV battery operations from Novonix’s Riverside facility in Chattanooga, Tennessee. 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. The Biden administration is moving to wean the US electric vehicle battery chain away from China as it strengthens local supply chain in key sectors.
Shares in Novonix, whose board includes former Dow Chemical boss Andrew Liveris, surged more than 10 per cent in afternoon trade on the ASX to 68 cents.
Novonix chief executive Chris Burns said the binding agreement with Panasonic Energy cemented the Brisbane company’s position in the rapidly expanding North American market. “Off-take agreements with high-quality partners such as Panasonic Energy solidify our position as a leader in onshoring the supply chain of synthetic graphite and accelerating the adoption of clean energy in the industry,” said Dr Burns. “We look forward to expanding our longstanding relationship with Panasonic Energy.”
Novonix chief executive Dr Chris Burns. Jane Dempster/The Australian
Electric vehicle sales were forecast to hit a record 9 per cent of all passenger vehicles in the US last year, according to Atlas Public Policy. It was the first time more than 1 million EVs were sold in the United States in one calendar year, probably reaching between 1.3 million and 1.4 million cars. Panasonic Energy president Shoichiro Watanabe said the company would need to build four more factories to reach its target for a sharp boost in annual capacity of batteries for electric vehicles by 2031. Japanese companies are looking to boost their investment in the United States EV market, after a deal the two countries struck last March to widen access for Japanese manufacturers to tax credits.
Panasonic is moving to establish a sustainable supply and reduce the carbon footprint of its entire lithium-ion battery supply chain for EVs by 50 per cent in 2031 compared to 2022.
Dr Burns said Panasonic’s reputation, their quality standards, and growth plans represented a huge opportunity for Novonix. “Panasonic Energy is building a new facility in Kansas, very close to Chattanooga,” said Mr Burns. “They also operate the gigafactory in tandem with Tesla in Reno, Nevada and all of this is focused on local consumption and local production of the materials. Panasonic has a long term vision, both in localisation and decreasing the carbon footprint in their supply chain.”
Novonix, which counts Queensland billionaire Trevor St Baker as one of its major investors, last year sealed a $44.9m deal with South Korea’s LG Energy Solution allowing the firms to research and develop battery materials for electric vehicles and storage systems.
Dr Burns said he was not concerned that the possible election of Donald Trump as president would wind back incentives, including tax credits, for electric vehicles. “The political landscape has an important role to play in the growth of our sector but I think it is important to understand there’s a lot of alignment in the goals between different administrations.” he said. ”The government programs are great, but it’s a short term solution and there are different tactics to achieve the same outcome. Consumer sentiment is going to drive vehicle adoption. The technology in the market, the ability to bring a more diverse fleet of consumer vehicles to the market at lower cost points, is really what people need to see.”
A Tesla Model Y charges at a EV charge station in Lane Cove,