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After outgoing President Joe Biden cleans out his desk in January, he’ll depart behind fairly a large number for fossil power stakeholders to untangle. Exhibit A is a brand new — and increasing — artificial graphite manufacturing unit in Tennessee, funded partly by the 2021 Bipartisan Infrastructure Regulation. The enterprise has already attracted home EV provide chain stakeholders, with Stellantis being the most recent instance.
Graphite And The EV Provide Chain
Graphite has been a key materials for EV battery electrodes for the reason that early 2000’s. Strong state batteries and different various battery formulation are starting to emerge, however slowly. The transition to a extra diversified EV provide chain might be a protracted one.
Within the meantime, issues have been raised over the focus of graphite mining and refining in China. “Battery producers are at the moment depending on China for graphite, because the nation extracts round 70% of the world’s pure graphite and controls virtually 100% of the refining course of, in accordance with the Worldwide Vitality Company,” the agency S&P International reported final yr.
“A increase in EV gross sales is anticipated to assist increase graphite demand by greater than 4 instances by 2030 as in comparison with 2022,” S&P added for good measure.
Artificial Graphite And The Home EV Provide Chain
Artificial graphite gives one technique of relieving the EV provide chain from the grasp of worldwide geopolitics. The US has plentiful assets to help a brand new, home artificial graphite trade. Particularly, the US has lots of coal and petroleum on its palms, and these are the principle precursors to artificial graphite.
The traditional course of for synthesizing graphite from needle coke is an costly, time-consuming, energy-sucking endeavor, and innovators have been in sizzling pursuit of less expensive, lower-carbon alternate options. Amongst them is the Australian firm NOVONIX, and that’s the place the Bipartisan Infrastructure Regulation is available in.
Final yr, the corporate’s NOVONIX Anode Supplies department received a $100 million cost-sharing grant carved out of the Bipartisan Infrastructure Regulation to equip an present facility in Chattanooga, Tennessee for a brand new artificial graphite manufacturing course of. The venture is one amongst a collection of EV battery supplies and battery recycling chosen by the US Division of Vitality and funded by the BIL.
“The Venture would be the first commercially energetic artificial graphite facility in North America, permitting for future value enhancements and offering a base for product qualification to scale manufacturing considerably in america,” the Vitality Division explains, noting that it anticipates a 60% discount in carbon depth in comparison with standard artificial graphite sourced from China.
For the file, NOVONIX and its new facility additionally profit from a $103 million 48C federal tax credit score. Initially established by the American Restoration and Reinvestment Act of 2009, the 48C credit score was renewed and expanded through the Biden administration by the 2022 Inflation Discount Act.
EV Provide Chain Stakeholders Are Piling On
In Might of this yr, NOVONIX introduced the completion of an unbiased engineering evaluation of the Chattanooga facility, confirming that it’s on monitor for an preliminary commercial-scale manufacturing capability of three,000 tonnes of artificial graphite yearly (about 3,307 US tons) by the tip of this yr.
When the ability is totally up and working, NOVONIX expects to pour 20,000 tonnes of artificial graphite into the North American EV provide chain every year.
“On the focused capability for Riverside, NOVONIX anticipates attaining working margins within the vary of 23-30%, with an working value vary of US$6-8/kg and an anticipated promoting value of US$7-10/kg,” the corporate additionally reported.
Panasonic, for one, was not ready round for the EV provide chain mud to settle. Predating the engineering evaluation by 4 months, in February the corporate’s Panasonic Vitality department introduced an off-take settlement with NOVONIX from the Chattanooga facility starting in 2025, for a complete of 10,000 tons over a four-year interval.
“Artificial graphite presents enhanced battery sturdiness, permitting for dependable efficiency throughout repeated charging and discharging cycles,” Panasonic Vitality famous.
Right here Comes Stellantis … And Extra Artificial Graphite, Too
One other EV stakeholder to hook up with the brand new provide of artificial graphite is Stellantis. On November 10, NOVONIX introduced that the automaker has signed up for at least 86,250 tonnes of artificial graphite, with an eventual goal of 115,000 tonnes over a six-year interval starting in 2026.
NOVONIX slipped a bit one thing further into the announcement as properly. “The Firm can be progressing plans to construct a brand new manufacturing facility (within the southeastern United States) that may have an preliminary capability of 30,000 tpa [tonnes per annum] and plans to develop that facility to 75,000 tpa,” NOVONIX said.
Between the 2 amenities, NOVONIX is an output of 150,000 tonnes per yr, and that’s simply the ground.
The ceiling could rely upon negotiations with the Mortgage Packages Workplace of the Vitality Division. Within the November 10 announcement, NOVONIX mentions that it “stays in discussions” for a mortgage in help of the brand new facility, below the LPO’s Superior Expertise Automobiles Manufacturing Program.
It Takes A Village Of Federal Help
If the DOE Mortgage Packages Workplace rings a bell, there’s a great motive for that. The LPO has performed a key position in kickstarting the clear tech motion within the US, with the EV provide chain being only one instance. LPO prioritizes clear tech startups, although legacy corporations which have new applied sciences below growth are additionally focused for mortgage help (see extra Mortgage Packages Workplace background right here).
The workplace was established below the 2005 Vitality Coverage Act, through the Bush administration. It kicked into excessive gear through the Obama administration in 2010, when it supplied a mortgage of $456 million to the EV maker Tesla Motors (now Tesla), aimed toward growing an inexpensive electrical automobile for on a regular basis drivers. On the time, Tesla Motors was spinning its wheels within the rarified world of pricey, zero emission sports activities automobiles. The corporate launched in 2006 and produced about 2,500 models of its two-seater sports activities automobile earlier than ultimately halting manufacturing.
With the mortgage in hand Tesla started producing the Mannequin S sedan in 2012. It offered 3,000 models within the first yr and the remaining is historical past.
After a semi-hiatus through the 4 years after Obama left workplace, the LPO acquired a brand new shot of adrenaline below the Biden-Harris administration. In a recap final yr, LPO Director Jigar Shah famous underscored the impression of the Superior Applied sciences Automobiles Manufacturing program on the home EV provide chain.
“It’s certainly one of our oldest packages,” Shah mentioned, “And it’s a program that was made widespread by our mortgage to Tesla, Ford, and Nissan.”
“The aim of this system is to onshore and reshore lots of the provision chain for the automotive sector as we decarbonize it on this nation,” he added, noting that the LPO obtained an extra $40 billion in mortgage authority from the Inflation Discount Act to help this system.
If NOVONIX needs to get its palms on a few of that new mortgage cash, it higher act quick. January 21 is simply across the nook.
Comply with me through LinkTree, or @tinamcasey on Threads, LinkedIn, and Bluesky.
Picture (cropped): Stellantis is the most recent US electrical automobile stakeholder to agency up its home EV provide chain with artificial graphite produced in Tennessee (Fiat 550e electrical automobile courtesy of Stellantis).
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