Short dive:
- Volkswagen Group subsidiary PowerCo SE has signed a five-year agreement to supply battery raw materials with Australia-based Novonix, according to a Press release of November 24th.
- Under the agreement, Novonix will supply PowerCo with at least 32,000 tons of synthetic graphite material for the production of electric vehicle batteries, starting in 2027.
- All materials will be produced at Novonix’s Riverside facility in Chattanooga, Tennessee, which is expected to begin commercial production in 2025.
Diving information:
The agreement with Novonix is yet another step towards Volkswagen’s electrification goals.
PowerCo was founded by the automaker in 2022 with the intention of increasing battery cell production globally. The company oversees international factory operations, development of cellular technology and vertical integration of the battery value chain, according to the press release.
The Volkswagen subsidiary plans to open three gigafactory locations in Germany, Spain and Canada with a combined capacity of up to 200 GWh/year. The factory in Germany is expected to be operational for the first time in 2025.
The automaker has also secured other strategic partnerships to advance electric vehicle development, including with Rivian Automotive.
In November, the two companies launched a joint venture called Rivian and VW Group Technology to develop a shared electrical/electronic architecture and software for electric vehicles. Also in February, PowerCo and battery startup QuantumScape signed an agreement mass produce batteries for Volkswagen electric vehicles.
Automakers are pushing to increase battery production to meet electric vehicle assembly needs, causing a boom in battery material and electric vehicle projects in the United States despite a slowdown in consumer demand for electric vehicles.
With the Biden administration finalizing tariffs on Chinese-made goods in September – including electric vehicle components and battery raw materials – along with the possibility of additional tariffs under the incoming Trump administration, domestic sourcing incentives of batteries have done nothing but increase.
In addition to the Riverside plant, Novonix is planning to build a second battery materials plant in the Southeast to meet customer demand, with an initial capacity of 30,000 tons per year. According to the press release, production will eventually be expanded to 75,000 tons per year
Also Novonix he signed a four-year contract with Panasonic Energy in February for 10,000 tons of synthetic graphite, starting in 2025.