NOVONIX (ASX:NVX, NASDAQ:NVX) – Momentum seems to be picking up…perhaps influenced by the upcoming US election as politicians frequent NVX's synthetic graphite facility in Chattanooga Tennessee.
**The US Government supports development of local supply chains**
To date, NVX has been awarded a US$100m grant and more recently a US$103m of IRA tax credits under Section 48C. This US Government support for ~US$200m is not repayable and is intended to incentivse investment and onshoring of synthetic graphite in the US.
In December 2023, China imposed export restrictions on synthetic and natural graphite anode materials to the US. The US Government responded to disrupted supply into the US by removing a tariff exemption on China’s synthetic graphite effective mid-June 2024. Technically, the 25% 301 tariffs could add US$1.5-2/kg to the landed price of synthetic graphite into the US.
This is timely as Hatch recently completed an engineering report into the expansion of the Riverside facility from 10kt to 20kt/year. They agreed with NVX guidance that operating margins could be expected to fall between 23-30%. However, the inclusion of the 301 tariffs could be expected to further improve project economics and in so doing help underwrite a sizeable low cost DOE loan that is well advanced.
Media Watch - NVX related, page-14355
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