Novonix (ASX) has secured a significant offtake agreement with global automotive manufacturer Stellantis NV. Under this binding deal, Novonix will supply at least 86,250 tonnes of high-performance synthetic graphite, with the possibility of increasing volumes to 115,000 tonnes, over a six-year period from 2026 to 2031. This graphite will be essential for supporting Stellantis’ North American battery cell production as the company advances its strategy to transition fully to battery-electric passenger vehicles.
Based in Brisbane, Australia, Novonix develops and produces critical anode materials for lithium-ion batteries. The company’s technologies aim to enhance battery performance, lifespan and sustainability. Novonix’s operations include the Riverside facility in Chattanooga, Tennessee, which is slated to commence commercial production in 2025. This plant, initially targeting an output of 20,000 tonnes annually, will be North America’s first large-scale synthetic graphite production site dedicated to the battery sector. This project is supported by a $100m grant from the US Department of Energy and a $103m investment tax credit.
Stellantis NV, formed by the 2021 merger of PSA Group and Fiat Chrysler Automobiles, is one of the world’s largest automotive manufacturers. With renowned brands such as Jeep, Dodge, Peugeot and Citroën, the company is aggressively investing in its electrification roadmap as part of its target to achieve carbon neutrality by 2038. Stellantis has committed over €30bn to electrification and software development by 2025.
Dr Chris Burns, CEO of Novonix, highlighted the partnership’s impact: “We are excited to have Stellantis’ commitment, now as our largest customer, to support their North American EV growth plans. This contract allocates the remainder of our available volumes at our Riverside facility and a portion of volumes to be produced at our planned greenfield facility.”
To meet increasing demand, Novonix is also pursuing additional funding from the US Department of Energy’s Loan Program Office for the development of a new greenfield production facility in the southeastern United States. This facility is projected to start with an annual production capacity of 30,000 tonnes, scalable to 75,000 tonnes.
The agreement with Stellantis is based on a market-driven pricing structure and includes clauses that require Novonix to meet production milestones and comply with specific standards. If Novonix fails to meet these conditions, Stellantis holds the right to terminate the contract.
Shares in Novonix are trading 17.36% higher at 84 cents.