Panasonic Energy and NOVONIX Sign Binding Off-Take Agreement
- NOVONIX and Panasonic Energy signed a binding off-take agreement for high-performance synthetic graphite.
- The agreement is for 10,000 tonnes of synthetic graphite from 2025-2028.
- The U.S. Department of Energy awarded US$100 million in grant funding towards the expansion of Riverside through the Bipartisan Infrastructure Law.
- None.
Insights
The agreement between NOVONIX and Panasonic Energy is a strategic move within the rapidly expanding electric vehicle (EV) battery market. The commitment to purchase 10,000 tonnes of synthetic graphite anode material over four years can be seen as a significant boost to NOVONIX's revenue streams and a vote of confidence in its product quality. Given the increasing demand for EVs, this deal may have a positive ripple effect on NOVONIX's stock valuation due to the anticipated stability and growth in sales.
Furthermore, the alignment with the Inflation Reduction Act's incentives for local supply chain development enhances the investment appeal of both companies. Investors would be keen to monitor how the Advanced Manufacturing Production Credit under Section 45X might positively impact NOVONIX's financials and Panasonic Energy's cost efficiencies. This agreement could also serve as a precedent for future deals within the industry, potentially influencing stock prices of other companies in the EV battery supply chain.
The off-take agreement highlights the strategic importance of securing raw materials, such as synthetic graphite, that are critical for battery production. As the first large-scale North American producer of high-performance synthetic graphite for batteries, NOVONIX is positioning itself as a key player in the EV battery supply chain. This could have broader implications for the energy sector, as companies like NOVONIX could benefit from increased bargaining power and long-term contracts, which tend to stabilize supply chains and may reduce volatility in the market.
The deal also underscores the trend towards sustainability and reducing carbon footprints in the energy sector. Panasonic Energy's objective to cut the carbon footprint of its lithium-ion battery supply chain by 50% by 2031 aligns with broader industry and consumer trends favoring environmentally responsible practices. Companies that lead in sustainability efforts may gain competitive advantages, potentially attracting ESG-focused investors and positively influencing their stock market performance.
The financial implications of the off-take agreement for both NOVONIX and Panasonic Energy must be considered. For NOVONIX, the agreement provides a clear revenue projection from 2025 to 2028, which can be factored into financial forecasting and may improve credit ratings due to the secured future income. Additionally, the $100 million grant from the U.S. Department of Energy to expand NOVONIX's Riverside facility could be a substantial factor in reducing capital expenditure, thereby improving profit margins and potentially leading to upward revisions in earnings estimates.
For Panasonic Energy, sourcing from a local supplier not only supports compliance with the Inflation Reduction Act but may also result in cost savings on logistics and import tariffs, improving the company's bottom line. Investors should assess the long-term cost benefits against the initial investment in the partnership and consider the potential for increased market share for Panasonic Energy as it boosts production capacity to meet the growing demand for EV batteries in North America.
- Off-take for NOVONIX’s high-performance synthetic graphite to be supplied to Panasonic Energy’s North American facilities -
- Agreement for 10,000 tonnes of synthetic graphite from 2025-2028 -
BRISBANE, Australia, Feb. 09, 2024 (GLOBE NEWSWIRE) -- NOVONIX Limited (NASDAQ: NVX, ASX: NVX) (“NOVONIX” or the “Company”), 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
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
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.”
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.
This announcement has been authorized for release by NOVONIX Chairman, Admiral Robert J. Natter, USN Ret.
About NOVONIX
NOVONIX is a leading battery technology company revolutionizing the global lithium-ion battery industry with innovative, sustainable technologies, high-performance materials, and more efficient production methods. The Company manufactures industry-leading battery cell testing equipment, is growing its high-performance synthetic graphite anode material manufacturing operations, and has developed an all-dry, zero-waste cathode synthesis process. Through advanced R&D capabilities, proprietary technology, and strategic partnerships, NOVONIX has gained a prominent position in the electric vehicle and energy storage systems battery industry and is powering a cleaner energy future. To learn more, visit us at www.novonixgroup.com or on LinkedIn and X.
About Panasonic Energy
Panasonic Energy Co., Ltd., established in April 2022 as part of the Panasonic Group's switch to an operating company system, provides innovative battery technology-based products and solutions globally. Through its automotive lithium-ion batteries, storage battery systems and dry batteries, the company brings safe, reliable, and convenient power to a broad range of business areas, from mobility and social infrastructure to medical and consumer products. Panasonic Energy is committed to contributing to a society that realizes happiness and environmental sustainability, and through its business activities the company aims to address societal issues while taking the lead on environmental initiatives. For more details, please visit https://www.panasonic.com/global/energy/.
For NOVONIX Limited
Scott Espenshade, ir@novonixgroup.com (investors)
Valerie Malone, media@novonixgroup.com (media)
For Panasonic Energy
energy-pr@ml.jp.panasonic.com
Forward-Looking Statements
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FAQ
What is the off-take agreement between NOVONIX and Panasonic Energy about?
How much synthetic graphite is agreed to be supplied under the off-take agreement?
What grant funding was awarded to NOVONIX for the expansion of Riverside?
