Battery materials maker Novonix plans to redirect a $100 million federal grant to boost production at its existing Chattanooga plant at the former Alstom site along the Tennessee River, according to the company.
"The ability to deploy $100 million towards Riverside's recently increased production targets will have an immediate beneficial impact on the company's plans and the battery materials supply chain here in North America," Novonix Chief Executive Officer Chris Burns said in a statement.
In October 2022, Novonix was selected by the U.S. Department of Energy for a $150 million grant to build a planned separate new facility. Department of Energy documents identified Chattanooga as the possible future home for that plant.
The company said last week it has negotiated with the department for a "resized" $100 million grant for use on its current Riverside facility, where it plans to double production to 20,000 tons annually of synthetic graphite anode materials used in electric vehicles and energy storage.
(READ MORE: Novonix expects to double initial production in Chattanooga)
Charles Wood, the Chattanooga Area Chamber of Commerce's CEO, said in an interview Novonix is ramping up capacity at its renovated facility off Riverfront Parkway in the mixed-use development called The Bend.
"We'd love to see them grow," he said.
Novonix said in an email it has not updated its labor requirements for the facility at The Bend. The company earlier said it plans to employ nearly 300 workers when the Riverside plant is fully operational.
According to Novonix, the Energy Department grant funding will support installation and commissioning of equipment to produce the targeted 20,000 tons of capacity at Riverside. Under the terms of the grant, government funds must be matched by the recipient, the company said.
In addition to the $100 million grant, the company expects its cash position, customer revenues, additional government programs, strategic partners and other capital sources to fund planned growth, according to Novonix.
Novonix's Riverside facility is due to begin production in late 2024, the company said.
Novonix also continues to advance plans for a new production facility with an initial target of at least 30,000 tons annually, the manufacturer said. The engineering and design of this facility will leverage the updated work specific to Riverside, which is to be completed in the first quarter of next year, according to Novonix.
The company has applied for funding support under the Department of Energy Loan Programs Office, Novonix said. Such a loan may provide leverage up to 80% of eligible project costs of the company's next facility.
(READ MORE: DOE documents say Novonix eyes Chattanooga plant)
The timing of the next facility and Novonix's plans to reach 150,000 tons annually of production in North America will be based on the timelines of potential customer demand, the company said.
Should the company make the investment, Department of Energy documents earlier identified Enterprise South industrial park in Chattanooga as a potential location for the new plant. Burns said in September that Chattanooga is "high up on that list" of sites for a possible 1,000-worker plant, though the company is still looking at different locations.
About four 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 industrial park, and Wood said then that plans were to market the land potentially to a company involved in the electric vehicle space. The city and county are preparing the site for a future use, Wood said.
"We're actively kind of marketing that," he 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.
Contact Mike Pare at mpare@timesfreepress.com or 423-757-6318.