Why is the Novonix share price sinking like a stone today?

It has been a difficult session for the battery materials and technology company. But why?

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The Novonix Ltd (ASX: NVX) share price is having a poor session on Thursday.

At the time of writing, the battery materials and technology company's shares are down over 4% to 69 cents.

Why is the Novonix share price falling?

Investors have been selling the company's shares today after broad weakness in the battery materials industry overshadowed an announcement.

In respect to the former, the likes of Core Lithium Ltd (ASX: CXO) and Sayona Mining Ltd (ASX: SYA) are tumbling into the red following a poor night of trade for lithium stocks on Wall Street.

What did Novonix announce?

This morning, Novonix announced that Hatch, a global engineering and consulting firm, has completed an independent assessment of the company's Riverside production facility in the United States.

According to the release, the assessment considered various topics, including the evaluation of operations, project execution, and financial model assumptions, as well as the graphite market, production technology, environmental considerations, feedstock, and supply agreements.

With the independent engineering review completed, Noxonix notes that it remains on track for its initial 3,000 tonnes per annum (tpa) of commercial production capacity at the Riverside facility by the end of 2024. Importantly, all primary production equipment is either in place or ordered.

Novonix has also updated its project economics following the review and in response to recent government funding initiatives.

It revealed that when the Riverside facility reaches its targeted capacity of 20,000 tpa, it expects to be achieving operating margins in the range of 23% to 30%. This will be with an operating cost range of US$6 to US$8 per kg and an anticipated selling price of US$7 to US$10 per kg.

Though, it is worth highlighting that these estimated operating margins do not reflect the potential benefit of Section 301 tariffs or the potential impact of compliance with the Foreign Entity of Concern requirements of the Section 30D Clean Vehicle Credit under the Inflation Reduction Act. So, Novonix's margins could be better than these estimates if all goes to plan.

Novonix's CEO, Dr. Chris Burns, commented:

The completion of the independent engineering review provides us with a high degree of confidence as we advance our overarching plans towards production and deliveries from Riverside. The completion of this review represents a significant milestone that reinforces our progress and underscores our position as pioneers in localizing lower-emissions synthetic graphite supply in North America.

The Novonix share price is down 25% over the last 12 months.

Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia's parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. 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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