Novonix share price rockets on new Volkswagen deal

There's some big ASX news out of Novonix today.

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Man smiling at a laptop because of a rising share price.

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This Wednesday is shaping up to be a very pleasant one for the All Ordinaries Index (ASX: XAO) and most ASX All Ords shares. At the present time, the All Ords has gained a rosy 0.45%. But let's talk about what's going on with the Novonix Ltd (ASX: NVX) share price.

Novonix shares are on fire today. The ASX All Ords battery technology and graphite stock closed at 82 cents a share yesterday. But this morning, those same shares opened at 85 cents a pop before rising to 86 cents at the time of writing. That's a gain worth a healthy 4.48%.

This happy day for the Novonix share price comes after the company made a major announcement to investors this morning before market open via an ASX filing.

This filing revealed Novonix has signed a "non-exclusive testing and development agreement (TDA)" with PowerCo SE. PowerCo is a battery cell company owned by the German vehicle manufacturing giant Volkswagen Group.

Here's some of what the announcement told investors:

The work to be conducted under the TDA will include NOVONIX developing, testing, and analyzing synthetic graphite anode materials tailored to meet PowerCo's requirements and upon successful completion of certain development work under the TDA, NOVONIX and PowerCo may enter into a supply agreement for developed products with details to be determined at that time…

The TDA could lead to future collaboration with NOVONIX with a focus on requirements of the St. Thomas facility and aims to bolster the development of the North American battery materials supply chain.

Novonix also reiterated that its North American Riverside facility is still scheduled to commence synthetic graphite (a key battery ingredient) production by the end of 2024. The company is planning to scale production up to 20,000 tonnes per annum in time. Novonix also stated that it "plans to further expand capacity to a total of 150,000 tonnes per annum of production capacity in North America".

Novonix share price snapshot

Judging from today's share price reaction, it seems investors are rather excited about today's Powerco announcement. This lift in the Novonix share price extends a stellar year for the company over 2024. Novonix shares are now up an impressive 16.2% year to date.

However, the company is still down by almost 15% over the past 12 months. It also remains a very long way from the all-time highs of almost $11 a share that we saw back in late 2021.

At the current Novonix share price, this All Ords battery stock has a market capitalisation of $403.4 million.

Motley Fool contributor Sebastian Bowen has no position in any of the stocks mentioned. The Motley Fool Australia's parent company Motley Fool Holdings Inc. has positions in and has recommended Volkswagen Ag. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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