Novonix share price rockets on new Volkswagen deal

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

Sebastian Bowen

Author Bio Sebastian Bowen has been a Motley Fool contributor since late 2018. Sebastian found his passion for writing and educating others about shares and all things finance after completing his studies in political, economic and social science and enjoys bringing this passion to life at the Fool. His investment philosophy is a simple one – buying high-quality companies at prices that make sense. When he’s not researching his next investment at all hours of the morning, Sebastian enjoys classic movies and likes to unwind with a good book, newspaper or record. Areas of Expertise Dividend investing ETFs Education Bachelor of Political, Economic, and Social Sciences (Government and International Relations), University of Sydney Social Media X/Twitter Favorite Investment Quote "In the short run, the market is a voting machine, but in the long run, it is a weighing machine." – Benjamin Graham

Published May 15, 2024 2:02 pm AEST

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".

Man smiling at a laptop because of a rising share price. — Image source: Getty Images

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.

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