Cabot Corporation Selected for Award Negotiation for $50 Million from the U.S. Department of Energy to Support Domestic Battery Supply Chain

Rhea-AI Summary

Cabot (NYSE: CBT) has been selected for an award negotiation of up to $50 million by the U.S. Department of Energy to support the development of a new U.S.-based manufacturing facility for battery-grade carbon nanotubes (CNTs) and conductive additive dispersions. This grant will cover nearly 30% of the total $181 million investment for the project.

The facility, to be located in Wayne County, Michigan, will be the first commercial-scale production site for these critical materials in the U.S., enhancing the domestic lithium-ion battery supply chain for electric vehicles and the electrical grid. Cabot plans to revitalize a former automotive site, creating hundreds of new construction and full-time manufacturing jobs. The company has partnered with several trade unions to support this project.

This investment aligns with Cabot's role in the energy transition, showcasing its commitment to providing innovative material solutions for battery technologies and the broader energy storage and management ecosystem.

Positive

• Awarded $50 million grant from U.S. Department of Energy
• Developing first U.S. commercial-scale facility for battery-grade CNTs and conductive additive dispersions
• Total project investment of $181 million
• Creation of hundreds of new construction and full-time manufacturing jobs
• Enhancing domestic lithium-ion battery supply chain for EVs and electrical grid
• Partnering with major trade unions for project support

Negative

• None.

Insights

Financial Analyst

The $50 million DOE grant for Cabot (NYSE: CBT) is a significant boost, covering 30% of the $181 million project cost. This public-private partnership reduces Cabot's financial risk and demonstrates government confidence in the project's strategic importance. The investment in a U.S.-based CNT facility positions Cabot to capitalize on the growing EV battery market, potentially leading to increased revenue streams and market share. However, investors should note that the remaining $131 million investment represents a substantial capital commitment. The project's success will depend on Cabot's ability to execute efficiently and capture market demand, which could impact short-term profitability but offer long-term growth potential in a critical industry sector.

Tech Expert

Cabot's move to establish the first U.S. commercial-scale CNT and conductive additive dispersions facility is technologically significant. CNTs are important for enhancing battery performance, offering improved conductivity and durability. This facility will enable Cabot to provide localized, tailor-made solutions for specific battery chemistries, a key advantage in the rapidly evolving EV market. The company's 15-year experience in conductive additives gives it a strong foundation, but the challenge lies in scaling up production while maintaining quality. The success of this venture could position Cabot as a leader in advanced battery materials, potentially driving innovation in energy density and charging speeds – critical factors for EV adoption.

Market Research Analyst

This development aligns with the growing trend of reshoring critical industries, particularly in the EV supply chain. The U.S. government's support through the Bipartisan Infrastructure Law underscores the strategic importance of domestic battery production. For Cabot, this presents a first-mover advantage in the U.S. market for battery-grade CNTs. The partnership with labor unions is likely to ensure smooth operations and positive community relations. However, the success of this venture hinges on the rate of EV adoption and the ability of U.S. battery manufacturers to compete globally. Investors should monitor EV sales trends, battery technology advancements and potential policy changes that could impact the domestic EV supply chain's competitiveness.

First-Ever Commercial-Scale Carbon Nanotube and Conductive Additive Dispersions Facility in the U.S. for Batteries

BOSTON--(BUSINESS WIRE)-- Cabot Corporation (NYSE: CBT), a global specialty chemicals and performance materials company, announced it has been selected for an award negotiation of up to $50 million by the U.S. Department of Energy’s (DOE) Office of Manufacturing and Energy Supply Chains. This grant, part of the Bipartisan Infrastructure Law, will support Cabot’s development of a new U.S.-based manufacturing facility to produce battery-grade carbon nanotubes (CNTs) and conductive additive dispersions at commercial scale. These materials are critical to the domestic lithium-ion battery supply chain for electric vehicles (EVs) and the electrical grid, helping to reduce reliance on imports. The DOE grant will cover nearly 30 percent of the total projected $181 million investment required for the project.

Cabot plans to revitalize, retrofit, and restore a former automotive site located in Wayne County, Michigan into the first U.S. production facility for battery-grade CNTs and conductive additive dispersions. Cabot has partnered with the North American Building Trades Union (NABTU), the International Chemical Workers Union Council (ICWUC), and the Michigan Building and Construction Trades Council (MBCTC) to support this project which is expected to create hundreds of new construction and full-time manufacturing jobs. This new manufacturing operation will enhance the domestic supply chain for critical battery materials and thereby reduce reliance on foreign imports.

With a 140-year history of manufacturing excellence in the automotive supply chain, including over 15 years of experience supplying conductive additives to the battery industry, and with established relationships with leading battery makers, Cabot is well-positioned to help strengthen U.S. battery manufacturing capabilities. In addition to its existing production of battery-grade conductive additives and carbon nanostructures in the U.S., this investment in CNT and dispersion production will further enable Cabot to deliver localized, tailor-made solutions that meet the specific requirements of customers’ chosen battery chemistries, including domestic EV manufacturers.

“We are honored to have been selected for award negotiation by the U.S. Department of Energy, which will enable us to further our commitment and capabilities to supply critical materials for the EV battery market and will ultimately strengthen the U.S. battery supply chain,” said Sean Keohane, president and CEO, Cabot Corporation. “As a trusted materials innovator at the center of the energy transition, our conductive additives, along with our broader portfolio of advanced materials, play a key role in enabling this transition. This investment will not only help us scale our production of critical battery materials, but it will also benefit the community by creating high-quality green energy jobs. We look forward to working closely with the DOE and our partners to ensure the success of this important project.”

This investment highlights Cabot’s role as a critical player in the energy transition, providing innovative material solutions not only in battery technologies but also across the entire energy storage and management ecosystem. Cabot’s contributions extend beyond conductive additives, including aerogels for improved thermal management, metal oxides for cathode durability, and advanced carbons for fuel cell optimization, all vital for the next generation of sustainable energy technologies.

To learn more about Cabot’s battery materials technology, visit: cabotcorp.com/batteries.

About Cabot Corporation
Cabot Corporation (NYSE: CBT) is a global specialty chemicals and performance materials company headquartered in Boston, Massachusetts. The company is a leading provider of reinforcing carbons, specialty carbons, battery materials, engineered elastomer composites, inkjet colorants, masterbatches and conductive compounds, fumed metal oxides and aerogel. For more information on Cabot, please visit the company’s website at cabotcorp.com.

About DOE’s Office of Manufacturing and Energy Supply Chains
MESC plays a critical and unique role in catalyzing investments in America’s energy future to support the re-shoring, skilling, and scaling of U.S. manufacturing across energy supply chains. MESC serves as the frontline of clean energy deployment and accelerates America’s transition to a resilient, equitable energy future through data-driven investments in manufacturing capacity and workforce development. Learn more at: www.energy.gov/mesc or LinkedIn.

Forward Looking Statement
Safe Harbor Statement under the Private Securities Litigation Reform Act of 1995: Statements in the press release regarding Cabot's business that are not historical facts are forward looking statements that involve risks and uncertainties. For a discussion of such risks and uncertainties, which could cause actual results to differ from those contained in the forward-looking statements, see "Risk Factors" in the Company's Annual Report on Form 10-K for the fiscal year ended September 30, 2023.

View source version on businesswire.com: https://www.businesswire.com/news/home/20240920444389/en/

Emily Moran

Corporate Communications

emily.moran@cabotcorp.com

(617) 460-4517

Steve Delahunt

Investor Relations

steve.delahunt@cabotcorp.com

(617) 342-6255

Source: Cabot Corporation

FAQ

What is the value of the DOE grant awarded to Cabot (CBT)?

Cabot (CBT) has been selected for an award negotiation of up to $50 million by the U.S. Department of Energy.

Where will Cabot (CBT) build its new manufacturing facility?

Cabot (CBT) plans to build its new manufacturing facility in Wayne County, Michigan, by revitalizing a former automotive site.

What will Cabot (CBT) produce at the new facility?

The new facility will produce battery-grade carbon nanotubes (CNTs) and conductive additive dispersions at commercial scale.

How much is the total projected investment for Cabot 's (CBT) new facility?

The total projected investment for Cabot 's (CBT) new facility is $181 million.

How will Cabot 's (CBT) new facility impact the U.S. battery supply chain?

The facility will enhance the domestic supply chain for critical battery materials, reducing reliance on foreign imports for electric vehicles and the electrical grid.