Dive Brief:
- Panasonic Energy and Australia-based battery materials company Novonix have signed a synthetic graphite supply deal, the companies announced last week.
- The four-year deal includes a commitment from Panasonic to purchase 10,000 tons of graphite from Novonix. Financial terms of the agreement were not disclosed.
- Novonix will produce the graphite at its facility in Chattanooga, Tennessee, and will ship the material to Panasonic's U.S. facilities beginning in 2025. That’s the same year the battery maker is slated to begin production at its site in De Soto, Kansas.
Dive Insight:
Panasonic Energy, a subsidiary of Japan-based conglomerate Panasonic Group, is in the midst of building its $4 billion battery factory, which is expected to supply Tesla. The battery maker recently named its senior leadership for the factory, including two VPs of supply chain.
The company is also lining up other customers for the factory. In June, Panasonic announced formal discussions with Mazda to supply the automaker with batteries from its Japan and North America factories beginning in 2025.
Novonix, meanwhile, scored federal funding to help it expand and capitalize on increased demand for its battery materials. The company finalized a $100 million grant from the Energy Department in November to expand domestic synthetic graphite production.
Novonix is scheduled to begin production at its new production site later this year, with plans to grow output to 20,000 tons annually, up from an original estimate of 10,000 tons per year.
The increased capacity will help the company to meet supply demands from not only Panasonic, but also customers like battery company Kore Power. Novonix and Kore Power signed a five-year supply deal for graphite anode material beginning in 2024.
Automakers are pushing to find domestic sources of graphite amid not only federal limitations on foreign battery material sources, but export restrictions on the mineral from China. The country produces roughly 67% of the world's natural graphite.
The Biden administration has taken note of the potential for synthetic graphite to help solve possible supply constraints of the critical battery component. In October 2022, when Novonix first entered talks with the Energy Department for federal funding, the company was one of three synthetic graphite producers to receive money for domestic production of the material.
Since then, companies like France-based Mersen and Anovian Technologies, which also received Energy Department funds, have announced plans to build synthetic graphite facilities in the U.S.
