Novonix Secures $754.8M Loan for Tennessee Synthetic Graphite Plant

In a significant development for the battery materials industry, Novonix has received a conditional commitment for a $754.8 million loan from the U.S. Department of Energy (DOE) to finance the construction of a new synthetic graphite manufacturing facility in Chattanooga, Tennessee. This strategic investment will not only bolster Novonix's production capacity but also support the domestic supply chain for electric vehicle (EV) batteries, a critical component in the transition to sustainable transportation.

The loan, offered under the DOE's Advanced Technology Vehicles Manufacturing (ATVM) Loan Program, will be structured in two tranches, aligning with Novonix's phased production capacity expansion plans. The first tranche, with a 15-year term, will support the site and infrastructure for the New Facility and 21,000 tpa of production capacity. The second tranche, with a 10-year term, will fund an additional 10,500 tpa of production capacity. This two-tranche structure allows Novonix to manage its capital expenditure and cash flow more effectively, allocating funds as needed for construction and production line development.

The new facility is expected to reach full production capacity by the end of 2028, creating 450 full-time operational jobs and 500 construction jobs. At full capacity, the plant will produce approximately 31,500 tpa of synthetic graphite, supporting the production of lithium-ion batteries for around 325,000 EVs each year. This investment comes at a time when China holds over 95% of the market share for battery-grade graphite, highlighting the importance of domestic production in the U.S.

Novonix's CEO, Dr. Chris Burns, expressed his enthusiasm about the conditional commitment, stating that it underscores the focus on localizing critical materials in the battery supply chain. The company has already signed binding offtake agreements with strong partners such as Panasonic Energy, Stellantis, and PowerCo, further strengthening its leadership in onshoring the synthetic graphite supply chain in North America.

The loan's 15-year and 10-year terms allow Novonix to spread out its debt obligations and interest expenses over a longer period, reducing the immediate financial burden. This structure enables the company to manage its cash flow more effectively and invest in its growth strategy, ultimately supporting the U.S. energy independence and the transition to a more sustainable future.