Novonix celebrates U.S. tariffs up to 721% on Chinese graphite | Chattanooga Times Free Press

Novonix celebrates U.S. tariffs up to 721% on Chinese graphite

1 hour, 42 minutes ago by Daniel Dassow

Novonix, an Australian battery materials company with a large plant in Chattanooga and another planned, celebrated Wednesday a plan from the U.S. Department of Commerce to place tariffs up to 721% on graphite from China.

"We are encouraged by the decision of the Department of Commerce today," Novonix CEO Michael O'Kronley said in a news release. "This decision is an important step in supporting the United States' goal of developing critical mineral supply domestically for increased energy independence."

Novonix operates a riverside plant at the former Alstom facility on Chattanooga's Westside, where the company plans to begin commercial production of synthetic graphite in 2026, primarily for electric vehicle batteries.

(READ MORE: Development board approves Novonix tax break)

The plant could become the first major production site dedicated to synthetic graphite in North America, the company said in its news release on the tariffs.

Novonix announced plans last year to expand Chattanooga operations with a $1 billion second facility at the Enterprise South Industrial Park near the Volkswagen plant.

The expansion would be funded through a $750 million loan from the U.S. Department of Energy granted under President Joe Biden that was conditional on Novonix securing the 182-acre site.

Novonix finalized the land purchase in April after getting unanimous approval from the Chattanooga City Council, Hamilton County Commission and the Chattanooga Industrial Development Board for a $54 million, 15-year tax break in exchange for creating 500 jobs.

The company laid off around a fifth of its Chattanooga workforce at the same time it sought the tax break.

Novonix said it plans to scale up Chattanooga production to 50,000 tons per year, split between 20,000 tons at its riverside facility and 31,500 tons at the Enterprise South facility by 2028.

Steep tariffs on the world's dominant supplier of graphite could increase domestic demand for the product Novonix seeks to produce in Chattanooga.

The tariffs target two companies in particular, Huzhou Kaijin New Energy Technology Corp. and Shanghai Shoasheng Knitted Sweat, according to the International Trade Administration.

China produced 78% of the world's natural graphite in 2024, and the U.S. produced none, according to the U.S. Geological Survey.

(READ MORE: Novonix disclosed 'significant challenges' while seeking tax breaks)

The International Trade Commission determined in February that China suppressed the U.S. graphite industry by exporting subsidized and artificially cheap graphite, a key ingredient of electric vehicle batteries.

The Commerce Department is conducting its own investigation into possible additional tariffs on Chinese graphite, with final decisions on both rounds of tariffs expected in December, Novonix said.

A group of battery material companies with North American projects, including Novonix, filed the trade case in December.