Novonix has entered into a major agreement to supply Panasonic Energy with battery materials, marking its largest deal within the $65 billion North American electric vehicle (EV) market. The contract, valued at up to $153 million over three years, involves the delivery of 10,000 tonnes of high-performance synthetic graphite anode material from Novonix’s Riverside facility in Chattanooga, Tennessee, to Panasonic Energy’s EV battery operations in North America.
This partnership aims to bolster Panasonic Energy’s efforts to scale up its EV battery production in North America to cater to the growing demand and to increase the proportion of locally sourced materials. This move is in line with the Biden administration’s strategy to reduce the US electric vehicle battery chain’s dependence on China and to strengthen the local supply chain in critical sectors.
Following the announcement of the deal, Novonix’s shares experienced a surge of more than 10% on the ASX. Chris Burns, CEO of Novonix, highlighted the significance of the agreement with Panasonic Energy, stating that it reinforces Novonix’s position in the North American market and its role in advancing the adoption of clean energy.
The deal comes at a time when electric vehicle sales in the US are reaching new heights, with forecasts predicting EVs to account for 9% of all passenger vehicle sales last year, marking the first time sales surpassed 1 million vehicles in a single year in the United States.
Panasonic Energy’s president, Shoichiro Watanabe, noted the company’s ambitious plans to significantly increase its annual battery production capacity for electric vehicles by 2031, requiring the construction of additional factories. Panasonic aims to halve the carbon footprint of its lithium-ion battery supply chain for EVs by 2031 compared to 2022 levels.
The agreement also underscores Novonix’s ongoing collaboration with Panasonic Energy, with Burns mentioning Panasonic’s new facility in Kansas, close to Chattanooga, and their gigafactory in Reno, Nevada, operated jointly with Tesla, as key components of Panasonic’s strategy for local production and consumption of materials.
In addition to the Panasonic deal, Novonix last year secured a $44.9 million agreement with South Korea’s LG Energy Solution for the research and development of battery materials for EVs and storage systems. Burns also commented on the political landscape’s impact on the EV sector, expressing confidence in the continued growth of the industry regardless of potential shifts in government policies or incentives.