Novonix, a battery materials and technology company, has received a conditional commitment from the US Department of Energy for a direct loan of up to $754.8 million for a proposed graphite facility in Chattanooga, Tennessee.

If finalized, the financing from the DOE’s Loan Programs Office would be applied towards partially financing the construction of the new facility to manufacture synthetic graphite primarily for use in EV batteries.

The new facility is expected to produce approximately 31,500 tonnes of synthetic graphite annually, supporting the production of lithium-ion batteries for approximately 325,000 EVs each year. The plant is expected to reach full production capacity by the end of 2028.

Novonix has previously discussed plans to build a new facility in the southeastern US that could expand up to 75,000 tonnes of annual production capacity.

The proposed loan is being offered under the LPO’s Advanced Technology Vehicles Manufacturing (ATVM) Loan Program. It would be structured in two tranches based on a phased completion of infrastructure and production lines from a total eligible investment of $943.6 million. The first tranche would support the site and infrastructure for the new facility and 21,000 tonnes per year of production capacity, while the second tranche will support an additional 10,500 tonnes.

This year, Novonix signed binding offtake agreements to supply synthetic graphite to Panasonic Energy, Stellantis and Volkswagen’s PowerCo. The company’s Riverside facility, also located in Chattanooga, is scheduled to start commercial production in 2025, with plans to increase output to 20,000 tonnes annually to meet current customer commitments. Expansion of the new plant would depend on customer demand and access to additional financing.

Novonix has been awarded a $100-million grant and $103-million investment tax credit by the DOE’s Office of Manufacturing and Energy Supply Chains (MESC) towards the funding of the Riverside facility.

“This conditional commitment from the government to invest in our new facility continues to underscore the focus on localizing critical materials in the battery supply chain, such as graphite. Recent announcements from China to further scrutinize the export of battery-grade graphite to the United States highlight the importance of domestic production of high-performance, battery-grade synthetic graphite,” said Novonix CEO Chris Burns.

Source: Novonix