US Gets High-Volume Synthetic Graphite For EV Supply Chain

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After outgoing President Joe Biden cleans out his desk in January, he’ll depart behind fairly a multitude for fossil power stakeholders to untangle. Exhibit A is a brand new — and increasing — artificial graphite manufacturing facility 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 because the early 2000’s. Solid state batteries and different alternative battery formulas are starting to emerge, however slowly. The transition to a extra diversified EV provide chain shall be an extended one.

Within the meantime, issues have been raised over the focus of graphite mining and refining in China. “Battery manufacturers are currently dependent on China for graphite, as the country extracts around 70% of the world’s natural graphite and controls almost 100% of the refining process, according to the International Energy Agency,” the agency S&P International reported final 12 months.

“A boom in EV sales is expected to help raise graphite demand by more than four times by 2030 as compared to 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 sources to help a brand new, home artificial graphite business. Particularly, the US has lots of coal and petroleum on its arms, and these are the principle precursors to artificial graphite.

The standard 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 12 months, 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 synthetic graphite production process. The venture is one amongst a set of EV battery supplies and battery recycling chosen by the US Division of Vitality and funded by the BIL.

“The Project will be the first commercially active synthetic graphite facility in North America, allowing for future cost improvements and providing a base for product qualification to scale production significantly in the United States,” the Vitality Division explains, noting that it anticipates a 60% discount in carbon depth in comparison with typical artificial graphite sourced from China.

For the document, NOVONIX and its new facility additionally profit from a $103 million 48C federal tax credit score. Initially established by way of the American Restoration and Reinvestment Act of 2009, the 48C credit score was renewed and expanded throughout the Biden administration by way of the 2022 Inflation Discount Act.

EV Provide Chain Stakeholders Are Piling On

In Might of this 12 months, NOVONIX introduced the completion of an impartial engineering evaluation of the Chattanooga facility, confirming that it’s on monitor for an preliminary commercial-scale manufacturing capability of 3,000 tonnes of synthetic graphite yearly (about 3,307 US tons) by the tip of this 12 months.

When the ability is absolutely up and working, NOVONIX expects to pour 20,000 tonnes of artificial graphite into the North American EV provide chain every year.

“At the targeted capacity for Riverside, NOVONIX anticipates achieving operating margins in the range of 23-30%, with an operating cost range of US$6-8/kg and an anticipated selling price 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.

“Synthetic graphite offers enhanced battery durability, allowing for reliable performance during 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 no less than 86,250 tonnes of artificial graphite, with an eventual goal of 115,000 tonnes over a six-year interval starting in 2026.

NOVONIX slipped slightly one thing additional into the announcement as nicely. “The Company is also progressing plans to build a new production facility (in the southeastern United States) that will have an initial capacity of 30,000 tpa (tonnes per annum) and plans to expand that facility to 75,000 tpa,” NOVONIX said.

Between the 2 amenities, NOVONIX is an output of 150,000 tonnes per 12 months, and that’s simply the ground.

The ceiling might rely on negotiations with the Mortgage Packages Workplace of the Vitality Division. Within the November 10 announcement, NOVONIX mentions that it “remains in discussions” for a mortgage in help of the brand new facility, underneath the LPO’s Superior Expertise Autos Manufacturing Program.

It Takes A Village Of Federal Help

If the DOE Mortgage Packages Workplace rings a bell, there’s a superb purpose 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 companies which have new applied sciences underneath growth are additionally focused for mortgage help (see extra Loan Programs Office background here).

The workplace was established underneath the 2005 Vitality Coverage Act, throughout the Bush administration. It kicked into excessive gear throughout the Obama administration in 2010, when it offered a mortgage of $456 million to the EV maker Tesla Motors (now Tesla), aimed toward growing an reasonably priced electrical automobile for on a regular basis drivers. On the time, Tesla Motors was spinning its wheels within the rarified world of costly, zero emission sports activities vehicles. 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 bought 3,000 models within the first 12 months and the remainder is historical past.

After a semi-hiatus throughout the 4 years after Obama left workplace, the LPO acquired a brand new shot of adrenaline underneath the Biden-Harris administration. In a recap final 12 months, LPO Director Jigar Shah famous underscored the impression of the Superior Applied sciences Autos Manufacturing program on the home EV provide chain.

“It’s one of our oldest programs,” Shah stated, “And it’s a program that was made popular by our loan to Tesla, Ford, and Nissan.”

“The goal of the program is to onshore and reshore a lot of the supply chain for the automotive sector as we decarbonize it in this country,” he added, noting that the LPO obtained a further $40 billion in mortgage authority from the Inflation Discount Act to help this system.

If NOVONIX needs to get its arms on a few of that new mortgage cash, it higher act quick. January 21 is simply across the nook.

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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).