A U.S. Department of Energy document that unveiled a $150 million award to battery material maker Novonix for a new factory identifies Chattanooga as the future home for the proposed $1 billion plant.
The document, in which Novonix was one of 20 companies that last October received awards as part of the Bipartisan Infrastructure Law, said the project would employ 1,000 people making synthetic graphite used in the electric vehicle and energy storage sectors.
"The project will build a new plant in Chattanooga to produce 30,000 metric tons per year of graphite targeted at the electric vehicle industry," the document said about the effort by Novonix's anode materials unit. "It will directly create 1,000 clean-energy, good-paying jobs while demonstrating the company's commitment to uplifting every corner of Chattanooga."
Should the Australian-based company make the investment, the location for the proposed factory is a 182-acre vacant tract at Enterprise South industrial park near Chattanooga's Volkswagen auto assembly plant, a separate document said.
The company declined to answer emailed questions about the proposed project. But a Novonix quarterly activity report on its website dated July 31 said it's in continued negotiations with the Department of Energy on terms and conditions related to the $150 million grant.
Novonix said it "remains in active discussions with the DOE Office of Manufacturing and Energy Supply Chains regarding the scope and use of this grant funding."
The discussions come as the parent company's stock price has slid over the past year, even sitting below $1 per share earlier this month, as some analysts raise questions about Novonix' business plans.
Still, about two months ago, Volkswagen Group of America agreed to give up an option on a 182-acre tract at Ferdinand Piech Way near Highway 58 at Enterprise South, and an official said then that plans were to market the land potentially to a company involved in the electric vehicle space.
"We're actively kind of marketing that," Chattanooga Area Chamber of Commerce Chief Executive Charles Wood said in an interview at the time. "Ideally it aligns with what VW is doing over time in the EV sector and that sort of thing."
The Volkswagen plant last year started production of a battery-powered SUV.
Earlier this month, Wood declined to talk about any potential Novonix project when specifically asked.
But he said in an email that the city and Hamilton County have approved clearing the property that was released from VW's option to prepare for future economic development projects. Work at the site has been underway.
Staff Photo by Mike Pare / Work to clear a large tract of land at the Enterprise South industrial park in Chattanooga is shown Aug. 8. Volkswagen gave up its option on the property earlier this year."Until McDonald Farm is ready, Hamilton County and Chattanooga have very few shovel-ready sites, and this site work will make our community more competitive for jobs and investment," Wood said.
Riverfront plant
Novonix already operates a factory on Riverfront Parkway in Chattanooga, where it's ramping up production of synthetic graphite for use in lithium-ion batteries for electric vehicles.
That plant at the former Alstom campus now called The Bend is to manufacture up to 10,000 tons per year of the material and employ nearly 300 workers when fully operational, the company has said.
In November 2021, U.S. Secretary of Energy Jennifer Granholm said at the inauguration of the $160 million Novonix plant that the factory is helping create "a whole ecosystem" related to the production of EVs and the batteries that power them.
Novonix officials had previously said in public meetings that it aimed to build another larger factory on a greenfield site to meet a growing need for the project.
In the past, company officials have said they were evaluating several sites for the plant that would initially have capacity to produce 30,000 metric tons annually, and Chattanooga officials indicated they were pursuing the project.
In the company's July 31 quarterly report, Novonix said it plans to reach production capacity of 10,000 tons of its material at the Riverfront Parkway location and begin deliveries to a customer, battery cell developer Kore Power, in 2024.
Novonix plans to add an incremental 30,000 tons annually from its proposed greenfield plant, with mass production expected to start in 2026, the company has said.
Shares fall
But over the past year and a half, the parent company's stock has plunged, from $12.10 per share Dec. 2, 2021, to $1.08 per share Tuesday on the Australian Securities Exchange. Shares were less than $1 earlier this month.
A report on the company's activities by financial news service Seeking Alpha earlier this year said while Novonix has locked down a key supplier to make its product, a major customer in Kore and the Department of Energy grant, the company has what Seeking Alpha called a revised production schedule for its key material.
Seeking Alpha said that while investors were expecting to see production of 10,000 tons per year in 2023, they'll now have to wait until the fourth quarter of next year for the first sales revenues from Novonix' synthetic graphite division.
Motley Fool, another financial services news company, said earlier this month that top on the list concerns about Novonix "would arguably be the lack of proof that the company can operate at scale."
"Its facility at Chattanooga, Tennessee, exists. The furnaces required to produce EV-grade synthetic graphite are said to have 'fully met specification targets.' However, we will only know if commercial scale is viable once Novonix attempts it," the Motley Fool report said.
Novonix also said in its July 31 update that the company last October formally submitted an application related to a Department of Energy loan that, if received, would contribute a large component of the funding needed for the company's current expansion plans for its growth.
Novonix said it's in continued discussions with the Energy Department's Loan Programs Office and has been invited to "progress to the next stage ... of the loan approval process."
In addition, the company and LG Energy Solution, one of the world's biggest battery makers, said in June they've agreed to jointly work toward developing artificial graphite anode material for lithium-ion batteries.
The agreement is intended to lead to the option for LG Energy Solutions to purchase up to 50,000 tons of the anode material from Novonix' U.S.-based facility over a 10-year period from the start of mass production, according to the companies.
Novonix agreed to issue $30 million worth of unsecured convertible notes to LG Energy Solutions as part of the deal.
According to Novonix, production at the proposed plant would significantly reduce U.S. reliance on imported synthetic graphite, which it said is currently almost exclusively sourced from China by battery manufacturers.
In addition, the material can be used to support growth of grid-scale energy storage systems, according to Novonix.
Contact Mike Pare at mpare@timesfreepress.com or 423-757-6318.
Staff Photo by Robin Rudd / From left, Andrew Liveris, a Novonix board member and chair of Lucid Motors; U.S. Energy Secretary Jennifer Granholm; and Novonix CEO Chris Burns in 2021 count down to pull the switch that will change a Novonix sign to "Riverside Recharged." Granholm and others attended an event marking the retrofitting of a former Alstom manufacturing plant for use by Novonix, which makes materials for lithium-ion batteries for electric vehicles.