Novonix are ready to scale their next generation cathode technology but lack of capital to fund multiple projects is the obvious restriction, Fed funding will help but add the benefits of a JV and it could rapidly progress the process to production in 2026. Their tech is obviously worth considering if you’re a company looking to invest in tooling a factory for cathode production using the older more expensive co precipitation method especially if the proposed operation was to be within the U.S where there’s possible access to Fed funding that supports these new gen environmentally friendly & energy efficient technologies.
Overall LGES would still continue using well known trusted older methods but in the U.S consider also using new tech on a smaller scale (Don’t forget battery CO’s use numerous chemistries & technologies). LGES has a focus on High Nickel cathode tech which is the chemistry that Novonix specialise in, just using a dry processing method.
My logic is that if there is a Battery co large enough to make a JV worthwhile & in the position plus was already within the Novonix anode ecosystem then LGES was a probable candidate especially if their current Tennessee cathode facility plans have been delayed. LG’s proposed Tennessee cathode plant has no recent updates, the last was earlier this year reporting a delay in construction but nothing since. Yes it’s possible LGES could be reconsidering their Clarksville plans based on a decision to investigate adopting Novonix’s cathode tech. LGES have already invested in Novonix’s AAM for a potential 10y offtake supply starting in 2026 so there could be plans to use their cathode tech side by side. Riverside will help provide AAM product for testing or qualification processes until the planned new greenfield site is built to support that contract.
If Novonix require roughly 10acres to produce 20kt of AAM then the proposed VW site of 82 acres seems excessive for just an Anode materials facility with a max capacity of 75kt but multiple facilities & projects including JV’s are a possibility. My logic to that was why use VW’s Chattanooga site if the biggest Contract was possibly to supply LGES when LGES have an approx 400 acre site in neighbouring Clarksville.
As for Novonix SG & AAM in general, if I was a gambling man I’d say there will be an offtake or JV announcement within the next 2 weeks, either Panasonic or Samsung, possibly to help secure material to meet Teslas requirements for full tax credits for 2025 onwards. (I’m still unaware of a contract between Tesla & and a U.S or FTA partner for synthetic graphite other than China).
Wednesday is predominantly a favourite announcement day for NVX & with the fiscal year coming to a close there’s a possibility there will be one last important announcement to cap off 2023 so the 13th or 20th lol - take that in complete lighthearted dreamland predictions, not financial advice.
In reality & most likely Panasonic & Samsung will enter into AAM supply contracts or JV’s with Novonix early next year but I’m also confident there will be a JV or JDA using Novonix dry processing methods for cathode production. LGES are a likely candidate in my opinion.
NVX Price at posting:
67.5¢ Sentiment: Buy Disclosure: Held
(20min delay)