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Volkswagen Group subsidiary PowerCo SE inked a five-year battery raw materials supply deal with Australia-based Novonix, according to a Nov. 24 press release.
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Under the agreement, Novonix will supply PowerCo with at least 32,000 tonnes of synthetic graphite material for EV battery production, starting in 2027.
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All materials will be manufactured from Novonix’s Riverside facility in Chattanooga, Tennessee, which is slated to begin commercial production in 2025.
The agreement with Novonix is yet another step toward Volkswagen’s electrification goals.
PowerCo was established by the automaker in 2022 with the intention of boosting battery cell production globally. The company oversees international factory operations, cell technology development and the 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 slated to go online first in 2025.
The automaker has also secured other strategic partnerships to advance EV development, including with Rivian Automotive.
In November, the two companies launched a joint venture named Rivian and VW Group Technology to develop shared electrical/electronic architecture and software for EVs. Additionally, in February, PowerCo and battery startup QuantumScape signed an agreement to mass produce batteries for Volkswagen EVs.
Automakers are pushing to boost battery production to meet electric vehicle assembly needs, prompting a boom of battery material and EV projects in the U.S. despite a slowdown in consumer demand for EVs.
With the Biden administration finalizing tariffs in September for China-made goods — including components for EVs and raw materials for batteries — along with the possibility of additional tariffs under the incoming Trump administration, incentives for domestic battery sourcing have only heightened.
In addition to its Riverside facility, Novonix is planning to build a second battery materials plant in the Southeast to meet customer demand, with a initial capacity of 30,000 tonnes annually. Production will eventually be expanded to 75,000 tonnes a year, according to the press release
Novonix also signed a four-year deal with Panasonic Energy in February for 10,000 tons of synthetic graphite, starting in 2025.
