Novonix secures DOE’s $754.8m loan commitment for Chattanooga graphite facility

Novonix, a leading player in the battery materials and technology industry, saw its shares soar 33% to $2.07 in after-hours trading following a significant announcement of a conditional loan commitment from the U.S. Department of Energy (DOE). The direct loan of up to $754.8 million is aimed at partially funding the construction of a state-of-the-art synthetic graphite production facility in Chattanooga, Tennessee. This development marks a critical milestone for Novonix as it advances its role in strengthening the electric vehicle battery supply chain within North America.

What Is Novonix Building in Chattanooga, Tennessee?

The proposed facility will focus on synthetic graphite production, a key material used in electric vehicle batteries. At full capacity, the plant is expected to produce 31,500 tonnes per year, sufficient to support the manufacturing of lithium-ion batteries for approximately 325,000 electric vehicles annually. This move addresses a strategic need to localize battery-grade graphite production in the United States as China currently dominates over 95% of this critical market.

Novonix’s CEO, Dr. Chris Burns, emphasized the importance of this initiative, particularly in light of recent restrictions imposed by China on the export of battery-grade graphite. He noted that domestic production of synthetic graphite is essential to reduce dependence on foreign supply chains and secure U.S. energy independence.

Why Is Synthetic Graphite Production Important?

Synthetic graphite plays an indispensable role in the production of electric vehicle batteries, which are crucial to the ongoing global transition toward clean energy. As electric vehicle adoption accelerates, demand for battery-grade materials has surged. However, disruptions in global supply chains and geopolitical risks—such as China’s export policies—have underscored the urgent need for domestic production solutions.

Novonix’s Chattanooga Tennessee facility aims to fill this gap, aligning with the U.S. government’s broader strategy to build a sustainable, resilient battery supply chain under the Advanced Technology Vehicles Manufacturing (ATVM) Loan Program. The DOE loan marks a strong federal commitment to fostering innovation and domestic manufacturing of materials critical to the electric vehicle sector.

Job Creation and Economic Impact

The Chattanooga project is expected to deliver significant economic benefits, creating approximately 500 construction jobs and 450 full-time operational roles. As part of Novonix’s long-term growth strategy, the plant’s capacity could eventually expand to 75,000 tonnes per year, depending on market demand and additional financing opportunities.

This facility complements Novonix’s existing Riverside plant in Chattanooga, which is set to begin commercial production in 2025 with an annual capacity of 20,000 tonnes. Together, these facilities position Novonix as a key player in supplying high-performance synthetic graphite to the North American market.

How Will Novonix Use the DOE Loan?

The conditional loan commitment from the U.S. Department of Energy is structured in phases:

The first tranche will fund infrastructure development and initial production capacity of 21,000 tonnes per year.

The second tranche will support an additional 10,500 tonnes per year of capacity, bringing the total output to 31,500 tonnes.

An additional segment of the loan, linked to tax credit monetization, will cover eligible project costs.

While this conditional commitment signals the DOE’s intent to finance the project, Novonix must meet certain requirements before the loan becomes final. These include environmental reviews, financial evaluations, and approvals from the company’s board.

Partnerships and Strategic Demand

Novonix’s growth is backed by multiple offtake agreements signed earlier this year with leading global battery manufacturers, including Panasonic Energy, Stellantis, and PowerCo. These partnerships highlight the strong demand for synthetic graphite production to support the booming electric vehicle battery market.

The Chattanooga facility represents a significant step toward onshoring critical material production, reinforcing the United States’ position as a leader in clean energy technology. The project aligns with both industry needs and the federal government’s agenda to build a more resilient and sustainable battery supply chain.

A Strategic Leap for Novonix and the U.S. Battery Sector

Novonix’s conditional $754.8 million loan from the U.S. Department of Energy marks a transformative moment for the company and the U.S. electric vehicle battery supply chain. By establishing a cutting-edge synthetic graphite production facility in Chattanooga, Tennessee, Novonix is not only creating jobs but also reducing reliance on overseas markets.

As the demand for electric vehicle batteries continues to rise, investments in domestic production like Novonix’s Chattanooga project will play a pivotal role in achieving energy independence and supporting the clean energy transition. With strong partnerships and growing federal backing, Novonix is poised to become a cornerstone of North America’s battery materials industry.