Lithium-ion battery enhancer Novonix (ASX: NVX) has struck a cornerstone deal with one of the world’s leading battery manufacturers Samsung SDI.
The company develops and sells materials that improve battery operation in electric vehicles, phones, laptops, cordless equipment and renewable energy storage systems.
Earlier today, Novonix announced that it had reached a conditional agreement to supply lithium-ion battery anode material to Samsung SDI, thereby positioning the company as a new supplier in the specialised battery materials market.
Despite the significance of the deal, both companies have remained tight-lipped about the pricing and other commercial details with Novonix saying that such information is strictly confidential.
However, the company did admit that the financial implications of the deal are “material” with sales under the agreement matching the initial production capacity currently being installed at the PUREgraphite facility in Tennessee.
According to the terms of the deal, Novonix will supply its proprietary “PUREgraphite Anode” product as part of a multi-phase deal commencing with an initial batch of 500 metric tons in 2020, with first deliveries forecast to commence in October 2020.
Larger volumes will be “considered each year” and will be subject to supply performance, market conditions and Samsung’s requirements, the company said.
Novonix confirmed that its graphite anode material will be manufactured at its facility in the US and then exported to Samsung’s battery manufacturing facilities in other countries.
In addition to the supply agreement, Samsung and Novonix have agreed to explore other opportunities for the supply of new graphite anode materials for electric vehicle use in Samsung’s products under a parallel research and development collaboration scheme.
This could potentially lead to Novonix supplying other materials it develops or supplemental joint ventures within the energy and materials market.
Last month, Novonix’s subsidiary Novonic BTS scooped an innovation award at the Annual Discovery Awards held in Halifax, Nova Scotia with Novonix managing director Philip St Baker hailing the achievement as a demonstration of how ongoing development is benefitting the group as a whole.
“Novonix BTS is our centre of excellence which we are encouraging to continue to develop and evaluate new materials, work with major battery makers and OEMs and potentially incubate new technologies for commercialisation, all while continuing to provide industry-leading charger equipment to companies around the world,” he said.
The supply deal with Samsung could serve as a potentially huge boost for Novonix as it seeks to grow its suite of products alongside sales globally.
Samsung SDI is currently one of the leading manufacturers of rechargeable batteries for the IT industry, automobiles and energy storage systems (ESS), as well as cutting-edge materials used to produce semiconductors, displays and solar panels.
The Korean company has been selected as a core battery supplier for over 30 vehicle electrification projects and the first vehicles already on the road with Samsung SDI batteries currently being used in the Fiat 500e, BMW i3 and BMW i8 electric vehicles.
“Novonix is extremely honoured to supply Samsung SDI and we look forward to supporting them in delivering higher performance batteries to the global market,” said Mr St Baker.