Metals

LG Energy, Novonix join hands for US EV battery material

CBCIE Time:Jun 07, 2023 17:21 Source:kedglobal

LG Energy Solution Ltd., the world’s third-largest electric vehicle battery maker, teamed up with Novonix Ltd., an Australian cell ingredient maker, for the joint research and development of artificial graphite anode material to benefit from the US measures that favor products made in North America or its trading partners.

LG Energy also agreed to invest $30 million in unsecured convertible notes issued by Novonix, both companies said on Wednesday.

Upon successful completion of specific development work under the joint R&D deal, LG Energy and Novonix are set to seek a separate agreement under which the South Korean cell maker will have the option to buy up to 50,000 tons of artificial graphite anode material, a core ingredient for lithium-ion batteries, over 10 years from the start of mass production.

The material will be developed at Novonix’s current facilities in Chattanooga, Tennessee, for mass production from 2026 at the company’s proposed US-based plant with an initial annual production capacity of 30,000 tons of active anode material.

“Our partnership with Novonix once again demonstrates LG Energy Solution’s determination to establish a solid battery supply chain in the US, complementing our local manufacturing network to meet our customer’s needs for lRA-compliant batteries,” said Kim Dongsoo, LG Energy’s senior vice president of procurement center, in a statement.

TO MAXIMIZE BENEFITS FROM IRA

Shares of LG Energy and Novonix advanced in local stock markets in the day. LG Energy gained up to 1.9% in Seoul’s main stock market where the Kospi rose as much as 0.6%. Novonix surged up to 15.5% in the Australian market which rose up to 0.6%.

The Inflation Reduction Act grants up to $7,500 per EV if the eco-friendly automobile is assembled in the US and the battery's minerals are mined or processed in the country or nations with free trade agreements with Washington.

LG Energy is operating and building two stand-alone and five joint venture plants in the US to take advantage of the tax credits. The company aims to maximize the benefits by expanding local battery production, as well as establishing a domestic supply chain for battery components.

Novonix will produce IRA-compliant materials for its customers in the US. The company said it was selected for a $150 million grant by the US Department of Energy to support its expansion, which demonstrates the government’s commitment to the battery supply chain sector.

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