Novonix Ltd (ASX: NVX) shares are having a strong finish to the week.
In morning trade, the battery materials technology company's shares are up 20% to 74 cents.
This compares favourably to the ASX 200 index, which is currently up by a modest 0.1%.
Image source: Getty Images
Why are Novonix shares racing higher?
Investors have been buying the company's shares after Novonix announced an agreement with leading electric vehicle (EV) batteries manufacturer, Panasonic Energy.
According to the release, the two parties have signed a binding off-take agreement for high performance synthetic graphite anode material to be supplied to Panasonic Energy's North American operations from Novonix's Riverside facility in Chattanooga, Tennessee.
Under the off-take agreement, Panasonic Energy has agreed to purchase at least 10,000 tonnes of anode material for its U.S. plants over the term of 2025-2028. In addition, during the term, if additional volumes are requested, Novonix will attempt to deliver the increased volumes.
The agreement is subject to Novonix achieving agreed milestones in respect to production qualification timelines.
Novonix CEO, Dr. Chris Burns, was pleased with the news. He said:
We are excited to announce the finalization of a binding off-take agreement with Panasonic Energy to become a supplier of key anode material for its North American based facilities. Off-take agreements with high-quality partners such as Panasonic Energy solidify NOVONIX's position as a leader in onshoring the supply chain of synthetic graphite and accelerating the adoption of clean energy in the industry. We look forward to expanding our long-standing relationship with Panasonic Energy to support its growth efforts in North America.
Despite today's strong gain, Novonix shares remain down by a disappointing 56% over the last 12 months.
