Panasonic Energy Co., Ltd., a Panasonic Group Company, signed a binding off-take agreement with the battery materials and technology company NOVONIX Limited for the supply of synthetic graphite, the main component of the anodes of lithium-ion batteries used in electric vehicles (EVs).

In line with Panasonic Energy’s medium- to long-term strategy to strengthen its North America-focused supply chain and reduce its environmental impact, the synthetic graphite will be utilized by Panasonic Energy’s EV battery manufacturing facilities in the US, with shipments scheduled to start in 2025 from NOVONIX’s facility in Tennessee.

By 2031, Panasonic Energy aims to reduce the carbon footprint of the entire lithium-ion battery supply chain for EVs by 50% compared to 2022 levels. The majority of emissions arise from resource mining, raw material processing, and logistics. Therefore, in addition to reducing the carbon footprint generated during battery manufacturing through the carbon neutralization of all factories, Panasonic Energy actively addresses environmental impact reduction in the upstream supply chain.

This agreement will allow Panasonic Energy to leverage NOVONIX’s innovative environmental technology and procure at least 10,000 tons of graphite from NOVONIX’s North American operations over a period of four years (2025-2028), a strategically important step in the reduction of the environmental impact of its supply chain.

During the term, if additional volumes are requested by Panasonic Energy, NOVONIX shall use its best efforts to deliver the increased volumes.

There are two types of graphite for lithium-ion batteries: natural graphite and synthetic graphite. Synthetic graphite offers enhanced battery durability, allowing for reliable performance during repeated charging and discharging cycles. Synthetic graphite is traditionally produced by means of lengthy high-temperature treatment in an Acheson furnace, lasting 30 days per production cycle, with temperatures reaching up to 3,000 ˚C. However, this production method poses challenges due to its high energy consumption and resulting CO₂ emissions, and companies are actively developing innovative production methods to overcome these drawbacks.

NOVONIX’s proprietary graphitization furnaces are the first of their kind for large-scale production, enabling efficient mass production of synthetic graphite in just around three days per cycle. This innovation is expected to reduce the levels of CO₂ emitted during the production of synthetic graphite compared to conventional Acheson furnaces.

NOVONIX’s Riverside facility is set to become the first large-scale production site dedicated to high-performance synthetic graphite for the battery sector in North America and is slated to begin production in late 2024, with plans to grow output to 20,000 tonnes per annum (tpa) to meet anticipated customer demand.

Recently, the company announced the US Department of Energy Office of Manufacturing and Energy Supply Chains (MESC) awarded US$100 million in grant funding towards the expansion of Riverside through the Bipartisan Infrastructure Law to strengthen the local supply chain. The MESC grant funding will support the installation and commissioning of equipment to produce the targeted 20,000 tpa of capacity from Riverside.