Novonix Shares Spike 16% Higher Thanks to US Government Funding

2021 has been very kind to Novonix Ltd [ASX:NVX].

Just like the broader lithium sector, they’ve been riding high on the battery boom. Catapulted into the investment limelight as EV demand takes off.

However, what makes Novonix unique is the type of material they supply.

The company has a keen focus on graphite. A critical resource that is used in lithium battery anodes. One of two halves which provide the electrical current inside said batteries.

And today, Novonix revealed that US Department of Energy (DoE) is willing to fund their development of this graphite anode material. News that has sent the NVX share price soaring by 16.83%.

Critical minerals, critical gains

Novonix’s US subsidiary — PUREgraphite — has been selected for a US$5.58 million grant. Money that was awarded under the ‘Advanced Manufacturing Office FY20 Critical Minerals’ decree.

What that means is that the DoE has decided to help fund Novonix’s development. Particularly their synthetic graphite material for batteries. Making them the only graphite-based supplier to be selected under this grant.

That is a ringing endorsement for this tiny company. Highlighting just how valuable their assets and technology may be especially as EVs continue to surge in demand.

Which is obviously why the stock has gone absolutely nuts this year.

And with this government support, Novonix may be on the verge of an even greater breakthrough. As CEO Dr Chris Burns comments:

This award demonstrates the commitment by the Government to support the establishment of a domestic supply of high-performance battery materials. It also highlights the expertise, progress, partners and technology we have assembled at PUREgraphite.

The new furnace technology to be developed under this award will be industry leading and state of the art in energy efficiency, environmental impact, and capital cost. This is part of our roadmap for continued innovation to make the highest performance material at globally competitive costs, all based in the United States.

So if they can manage that, Novonix may be a pioneer for an entire industry. One that could see production of these anode materials become synonymous with the US.

That is if the production lives up to the hype…

What’s next for Novonix?

With their graphite plant already ramping up in output, Novonix’s focus is no doubt on scale. Ensuring that they will be able to meet current and future demand.

On top of this, with the DoE’s funding, they can now begin working on the new furnace tech too. An upgrade that should deliver even better products for the market.

As for when we can expect the final roll out of said tech, well Novonix didn’t share any details. Only referring to it as a ‘multi-year project’. Meaning shareholders may have to be patient if they hope to reap some serious gains.

But if this year’s performance is any indication, Novonix shareholders have plenty to look forward to.

If you missed the boat on Novonix though, don’t fret. The amount of disruption in energy markets right now is opening up dozens of opportunities. Many of which can be invested in via a slew of promising stocks.

Find out more in our full report, right here.


Ryan Clarkson-Ledward
For Money Morning


Ryan Clarkson-Ledward is an Editor at Money Morning.

Ryan holds degrees in both communication and international business. He helps bring Money Morning readers the latest market updates, both locally and abroad. Ryan tackles all the issues investors need to know about that the mainstream media neglects.

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