Novonix Secures Major Synthetic Graphite Supply Deal with Volkswagen's PowerCo

Australian battery materials supplier Novonix has signed a binding offtake agreement with PowerCo, the battery company founded by German automotive giant Volkswagen. The agreement will see Novonix supply at least 32,000 metric tons of high-performance synthetic graphite to PowerCo between 2027 and 2031. This deal positions Novonix as a key player in the North American battery supply chain and marks a significant milestone in the growing market for materials critical to the electric vehicle (EV) and energy storage sectors.

The synthetic graphite will be produced at Novonix’s Riverside facility in Chattanooga, Tennessee, which is scheduled to begin commercial production in 2025. This facility will initially have a capacity to produce 20,000 metric tons per annum (tpa), with plans to increase production as demand for EV batteries rises. Additionally, Novonix is planning to build a second facility in the southeastern United States. This plant will initially have a capacity of 30,000 tpa, with the goal of scaling up to 75,000 tpa to meet the growing demand for high-quality graphite for battery anodes.

Novonix’s partnership with PowerCo follows a similar deal with Stellantis, signed earlier this year, to supply up to 115,000 metric tons of synthetic graphite. The deal with PowerCo is part of Volkswagen’s broader strategy to secure the supply of critical materials for its expanding battery production network. PowerCo’s gigafactories in Germany, Spain, and Canada aim to achieve a combined battery production capacity of up to 200 GWh annually, with the goal of supporting Volkswagen’s transition to electric mobility.

The agreement is contingent upon Novonix meeting specific production milestones, securing the necessary financing, and complying with regulatory requirements. PowerCo retains the option to terminate the deal if Novonix fails to meet these conditions. However, the deal highlights Novonix’s pivotal role in the clean energy transition and its ability to meet the growing demand for synthetic graphite, a critical material used in lithium-ion batteries.

In recognition of its strategic importance, Novonix has secured substantial backing from the U.S. Department of Energy. The company was awarded a $100 million grant and a $103 million tax credit to support its operations, further underscoring the U.S. government’s commitment to securing a domestic supply chain for critical battery materials.

As electric vehicle production accelerates globally, the demand for high-quality graphite, particularly for anodes, is expected to grow substantially. Novonix’s new agreements with both Volkswagen’s PowerCo and Stellantis position the company as a vital supplier in the rapidly expanding EV ecosystem, and the company’s investments in production facilities are expected to play a key role in meeting the growing demands of the battery market.