NOVONIX ($NVX) – Potential 5x Coming!

NOVNIX ($NVX), is on the verge of a big upwards trend. I'll preface everything I am about to say with this. I typically stay far away from penny stocks. I think they are extremely volatile and often pump & dumps. However, the opportunity here with NOVONIX is far too great to pass up. Let's get into it.

Founded in 2012, NOVONIX is an Australian based producer of synthetic graphite. During the first quarter of 2025, they relocated their headquarters to Chattanooga, Tennessee. Now here is the important thing. NOVONIX is the ONLY producer of synthetic graphite in the US

What is synthetic graphite and why is it important? Synthetic graphite is an engineered form of carbon that possesses the necessary properties for the high performance of lithium-ion batteries. In recent years, Li-ion battery demand has been skyrocketing. This is due to the increasing electric vehicle market and battery energy storage systems (BESS), as well as consumer electronics. Li-ion batteries are the best commercially available battery due to their higher energy density and long-life cycle. Graphite is the #1 mineral by mass in all Li-ion batteries, making it highly demanded. Synthetic graphite is sought after because of its high purity. This improves the battery lifespan and performance compared to traditional graphite. Overall, it is superior to regular graphite. The only thing is, it is 3-5x more costly and requires 10x more energy consumption. According to research from the University of Michigan, US synthetic graphite demand is expected to outpace their ability to produce it. In 2020, battery anodes represented just 8% of graphite consumption, with traditional applications like refractories, electrodes, and lubricants dominating at 92%. By 2024, battery anodes captured 28% of the market, and projections indicate this will surge to 62% by 2036. That makes producers like NOVONIX extremely valuable when once again, THEY ARE THE ONLY US PRODUCER!

You might ask, why the hell do you care about a synthetic graphite producer with a market cap of $337 million? Well, here's why.

"China producers control approximately 85-90% of spherical graphite production, and over 95% of synthetic graphite anode manufacturing." Once again, the main thesis comes down to the US not being able to rely on China for critical materials anymore.

On July 5th of 2025, The US Commerce Department imposed preliminary anti-dumping duties of 93.5% on graphite imports from China effective July 17th, 2025. Anti-dumping relates to the Chinese producers "dumping" their graphite into the US at a lower than fair market price. "Dumping is a malicious trade practice used by China to undercut competition and wield geopolitical influence. It is all made possible by a combination of massive subsidies and other state-sponsored policies" (S&P Global).

According to American Active Anode Material Producer (a coalition representing North Americas graphite producers) spokesperson, Erik Olsonsaidin, the cumulative rate on China's active anode materials is now 160% when adding the new policy onto preexisting anode tariffs. In December of 2024, the AAAMP initiated a petition with the Department of Commerce, seeking a tariff as high as 920%. This is based on the grounds that China's state subsidies and artificially low prices are undermining the establishment of industry in the US. "The US does not mine natural graphite. The country relies entirely on imports to meet its graphite requirements" (S&P Global).

On October 9th of 2025, China's Ministry of Commerce restricted the export of Dual-Use items. This means companies wanting to export certain things will have to apply for approval to the Chinese government. It also means the Chinese government fully controls the supply chain now and will likely deny a significant portion of export requests… The export controls could lead to supply shortages and supply chain management issues for overseas markets. Below is a list of restricted items.

• Rechargeable and dischargeable lithium-ion batteries (including cells and battery packs) with an energy density of 300 wh/kg or higher.
• Technology & equipment for the production of batteries above.
• Graphite anode material-related items.
• Synthetic graphite anode materials.
• Equipment and materials used to produce graphite anode material.

Following this announcement, Trump has stated there will be a new 100% tariff on goods from China, further escalating the tension between the two nations.

Now, back to NOVONIX… They have three business segments which are: Battery Materials, Battery Technology, and Graphite Exploration. The one we are focused on here is Battery Materials. This segment is responsible for the creation of synthetic graphite.

Currently, the company is producing synthetic graphite in their Riverside Facility in Chattanooga, TN. This facility is poised to become the first large-scale production site for SG in North America, with plans to grow output to 20,000 tonnes per annum (tpa). They are expanding and opening a new facility called Enterprise South, which will be able to produce 31,500 tpa by the end of 2028. The company will have total production capacity of over 50,000 tpa by 2028.

BIG NEWS: On September 29th, 2025, the Riverside Facility delivered its first mass production sample of commercial grade SG. This delivery marks a huge milestone for the company, demonstrating their ability to produce at scale. This is key given the fact that NOVONIX already has customers lined up. Their key customers as of now are Panasonic Energy, Stellantis, and PowerCo SE (Volkswagen's battery arm).

Here are the details of those purchase agreements:

Panasonic Energy – In February of 2024, the companies signed a binding offtake agreement for SG supply. Panasonic agreed to buy at least 10,000 tonnes of anode material for use in their US power plants over the term of 2025-2028. This commitment is subject to NOVONIX achieving agreed upon milestones regarding final mass production qualification timelines prior to Q4 2025. Panasonic has the right to reduce the 10,000 tonne offtake volume up to 20% if these milestones are not achieved by the required dates or terminate the agreement if there is a substantial delay in achieving these milestones.

Stellantis – On November 10th, 2024, the two companies entered into a binding offtake agreement for a minimum of 86,250 tonnes, up to a target volume of 115,000 tonnes of high-performance SG material. This material will be supplied to Stellantis cell manufacturing partners in North America over a six-year term starting in 2026. This offtake agreement lasts until 2031. In a statement from prior NOVONIX CEO Dr. Chris Burns, "This contract allocates the remainder of our available volumes at our Riverside facility and a portion of volumes to be produced at our planned greenfield facility. Offtake agreements with high-quality partners such as Stellantis solidify NOVONIX’s position as a leader in onshoring the supply chain of synthetic graphite and accelerating the adoption of clean energy.”

PowerCO SE – On November 25th, 2024, NOVONIX announced a binding offtake agreement with PowerCO for a minimum of 32,000 tonnes of high-performance SG. The material will be supplied over a five-year term starting in 2027.

Key Strategic Partnership W/Phillips 66 – Phillips 66 is a leading global manufacturer of specialty coke, which is a precursor material for the process of synthetic graphite production. In 2022, they acquired a 16% stake in NOVONIX valued at $150 million. In a statement made by prior NOVONIX CEO, Dr. Chris Burns, "We believe NOVONIX is currently the only supplier with plans to provide large volumes of synthetic graphite anode material in the U.S., and this partnership will accelerate our mission to establish a North American supply chain to power the growing battery sector and facilitate a sustainable future.” This partnership gives NOVONIX a stable and immediate supply of specialty coke in order to produce SG.

A History of US Government Funding for NOVONIX – With all of the investment news recently with companies like MP, LAC, and Intel, I find it important to mention the history of support the US has provided to NVX.

In October of 2023, the company received a $100 million grant from the US Department of Energy due to the Bipartisan Infrastructure Law to expand manufacturing of batteries for EVs.

In April of 2024, the company was selected to receive a $103 million tax credit under the Qualifying Advanced Energy Project Allocation Program to support the critical production of battery materials from its Riverside facility.

In December of 2024, The DOE made a conditional loan commitment to NOVONIX for a total value of $754.8 million. $692 million being principal and $62.8 million being capitalized interest. This loan is set to help NOVONIX finance their Enterprise South facility. This facility has not been selected under the 48C program. The company is working with the loan programs office to be approved for the necessary requirements to be eligible for the loan. Things like environmental reviews, final design and cost confirmations, etc.

This all leads us to today. The company has signed a definitive agreement to purchase a 182-acre parcel in Enterprise South Park in Chattanooga. The land will be acquired for $5 million and serve as NOVONIX's second facility for production of high-performance synthetic graphite. The company is expected to receive $54 million in total net tax and other benefits from the City of Chattanooga and Hamilton County over a 15-year period, contingent upon meeting specific conditions outlined in the agreement. The company does not intend to close on the purchase of the Enterprise South land until the conditions related to the committed $754 million loan have been satisfied.

What does their financial position look like? Similar to my points made with $MP, the past financials don't mean a damn thing to be quite honest. If you looked at NOVONIX purely based on financials, you'd laugh. The stock trades around $2 – $3 for a reason. The only thing we need to be concerned about here is their position in terms of a possible bankruptcy. At the moment, they are operating at an average yearly loss of $58.96 million over the last 5 years. As of their last report, Cash & ST Investments sit at $24.8 million, which has steadily decreased from $142.7 million in June of 2022. Although, total receivables have more than doubled in the last year, going from $8.2 million in December of 2024 to $18.9 million as of their last report. They have a current ratio of .9x and a quick ratio of .8x. Total Assets are $239 million compared to $95.2 million in Total Liabilities. The most concerning thing in terms of financials is their negative Altman Z-score of -1. Management has stated that their expansion plans will require additional funding outside of their cash position. So, there is a realistic likelihood that this company could go bankrupt without further funding.

As I mentioned, the company needs funding. In July of 2025, NOVONIX entered into an agreement with Yorkville Advisor Global. NOVONIX is to issue up to $100 million of unsecured convertible debentures. Yorkville has agreed to provide NOVONIX with funding up to $57 million under the first two tranches of the agreement. So, they have already received $23.275 million from this deal under the first tranche. The second tranche has been issued on September 10th after a NOVONIX general meeting. This means they have the ability to get the additional $33.725 million. This is a complex financial deal that provides NOVONIX access to funding. The key thing is they just got $23.275 million.

New & Growth-Oriented CEO – On January 20th, 2025, CEO Dr. Chris Burns stepped down after running the company since September of 2020. Burns is still with the company, serving as a special advisor to the board. The company is entering a new growth phase, and the board was expressing their desire for a CEO with strong experience in manufacturing, operations, and scaling. Enter Michael O'Kronely. O'Kronely took over the company on May 19th, 2025. He brings significant experience to NOVONIX, with 30 years in the automotive sector, 15 of those being in lithium-ion battery and battery materials work. Prior to joining NOVONIX, he was the CEO of Ascend Elements which is a battery recycling and materials company. Over a 5-year tenure with Ascend, O'Kronely increased the enterprise value of the company by $1.6 billion. He has a bachelor's and master's degree in engineering from the University of Michigan.

Conclusion – With all of that being said, NOVONIX has massive amounts of upside at only ~ $2.5 – $3 a share. The ongoing geopolitical tension between the US and China is causing the rapid development of a domestic supply chain. Things only got worse within the last 2 days after China announced restrictions on many key exports like synthetic graphite, anode & cathode equipment and technology, etc. Followed by a Trump announcement of an additional 100% tariff on everything Chinese. NOVONIX is in a great spot as they are the only producer of synthetic graphite in the US, which is critical to the American supply chain due to its necessity in the EV, BESS, and consumer electronic markets. They have just delivered their first sample, proving they are capable of quality production. Because of this, I fully expect that the DOE loan will be granted to NOVONIX soon. They already have the land and are ready to start expanding production, just need that loan approval. Once this happens, it opens the flood gates for more purchase agreements to come in, and more investment. Currently at $2.94 a share, I think this stock could easily reach the $10 – $15 range within months if all goes according to plan. Obviously, there is significant risk with the company's financial position that is hard to ignore, however, my thesis negates those. The upside potential here is massive. I believe this would be a good fit in any portfolio with proper risk management.