Australian synthetic graphite producer Novonix saw its shares soar following the announcement of a conditional $755-million loan from the US Department of Energy (DOE) to support the construction of a new manufacturing plant in Tennessee.
The company’s shares rose as much as 16% on Tuesday, closing 9.4% higher at A$0.64 per share by 11:03 a.m. Sydney time, giving Novonix a market valuation of A$361 million ($230 million).
The upcoming Tennessee facility is expected to produce 31,500 tons of synthetic graphite annually, a critical material for manufacturing lithium-ion batteries used in electric vehicles (EVs) and smart devices. T
he production will primarily target North American EV makers, helping to reduce reliance on imported battery materials.
Synthetic graphite, which can either be mined or manufactured, is vital for battery performance. Currently, China dominates 95% of the global market for battery-grade graphite.
However, recent Chinese policies to tighten graphite export controls have prompted Western nations to bolster local supply chains.
“China’s recent moves to scrutinize exports of battery-grade graphite underscore the importance of domestic production,” said Novonix CEO Chris Burns, highlighting the urgency of securing a reliable supply for the US market.
The DOE funding is subject to the completion of a binding loan agreement and due diligence. The department noted that the commitment is not final and could be reversed if not completed by the upcoming presidential administration.
Novonix has already secured binding offtake agreements to supply major clients, including Panasonic Energy, Stellantis, and PowerCo. These partnerships further solidify its position as a key supplier for the growing North American EV market.
The Tennessee plant represents a significant step toward diversifying battery material supply chains and strengthening US energy independence. The development is a timely response to escalating geopolitical tensions and a growing global demand for EVs.
