BATTERY SURGE
Novonix CEO says Chattanooga, state to gain from electric vehicle growth
Chattanooga and Tennessee are poised to gain from an expected surge in electric vehicle sales as companies here make the autos and the batteries that power them.
“We want to build these cars here, with the batteries built here and the batteries having the materials processed here,” said Chris Burns, chief executive officer of Novonix, which on Monday will mark a planned $160 million investment in a Chattanooga plant.
Burns’ facility on Riverfront Parkway is to make up to 10,000 tons per year of synthetic graphite and employ nearly 300 workers. That product is used in ultra-long-life, high-performance anode material for lithium-ion batteries for electric vehicles and power grid storage.
U.S. Energy Secretary Jennifer Granholm is to appear in Chattanooga, representing President Joe Biden’s administration and its support of EVs.
The $1.2 trillion federal infrastructure bill signed into law Monday by Biden provides $7.5 billion for EV charging stations nationwide and offers generous tax credits for buyers of battery-powered vehicles.
“We’re extremely excited Secretary Granholm is taking time to come to the event,” Burns said in a telephone interview. “It speaks to the importance of what we’re accomplishing. We really want to bring scaled production of the supply chain to North America.”
Burns said America has long been almost completely reliant on China for key materials such as what Novonix is producing in Chattanooga.
“Until recently, almost all battery cells were built in China,” said the CEO of the Nova Scotiabased company.
While battery cell production has grown phenomenally in North America recently, there’s a need to bring the suppliers of the materials to this region, Burns said.
“This site we’re opening and expanding is one of the first scaled sites to produce some of those scaled materials in North America,” he said about the 400,000-squarefoot former Alstom plant Novonix is retrofitting.
“We can’t wait for produc- tion to come on stream in Chattanooga. The market is poised for an accelerated adopting of EVs.”
–JOHAN DE NYSSCHEN, CHIEF OPERATING OFFICER FOR VOLKSWAGEN GROUP’S NORTH AMERICAN REGION
Chattanooga and Hamilton County already approved for Novonix a property tax break of up to 50% over 10 years, though the company would pay all the county school taxes. Meanwhile, the state of Tennessee agreed to provide a $3 million fasttrack grant for the Novonix project.
Burns also cited Volkswagen’s assembly of the battery-powered ID.4 SUV, slated to start in Chattanooga next year, along with production of EVs by other automakers such as Ford, General Motors and Nissan in Tennessee. Also, battery makers such as SK Innovation and LG are investing in Tennessee, Georgia and Kentucky to service the car companies.
Johan de Nysschen, chief operating officer for Volkswagen Group’s North American Region, said in Chattanooga this fall that sales of the ID.4, which is now assembled in Germany, are off to “a good start.”
“We’re in desperately short supply,” the region’s COO said about the ID.4 that went on sale in America around March. “We can’t wait for production to come on stream in Chattanooga. The market is poised for an accelerated adopting of EVs.”
VW Chattanooga plans to add about 1,000 more employees over the next year to 4,000 already working at the plant to hire a third shift and build the ID.4 along with the Atlas SUVs it’s currently building.
The ID.4 is “only our opening salvo” in the EV space in America, de Nysschen said.
“The ID.4 is the first of many EV entries for the VW brand and group,” he said, noting the German automaker is making a $41 billion commitment worldwide on battery-powered vehicles.
In terms of hiring, Burns said Novonix plans “a bit of a wave next year” and then gradually growing its headcount as production scales up.
Currently, the company has about 50 people in Chattanooga. In 2017, Novonix opened a small location in Lookout Valley.
Burns cited earlier statements by the company to look at opening another facility with 1,000 employees.
“We’re in the process of evaluating,” he said. “Tennessee continues to look as an incredibly attractive place to expand, but we’re looking at several different jurisdictions.”
Chattanooga and Hamilton County already approved for Novonix a property tax break of up to 50% over 10 years, though the company would pay all the county school taxes. Meanwhile, the state of Tennessee agreed to provide a $3 million fast-track grant for the Novonix project.
Earlier this year, the U.S. Department of Energy granted $7.1 million to Novonix for technology development.
“We are so far behind China in so many aspects, it’s paramount for government to recognize it needs to play a role,” Burns said.
Also this year, energy giant Phillips 66 agreed to acquire a 16% stake in Novonix for $150 million.
Charles Wood, the Chattanooga Area Chamber of Commerce’s vice president for economic development, said Novonix is “an awesome addition.”
“This is manufacturing in a sector that has a long growth curve out ahead of it,” he said.
Chattanooga businessman Jimmy White and local hotel developer Hiren Desai purchased the former 121-acre Alstom property where Novonix is locating for $30 million in 2018.
White said his Urban Story Ventures group had been waiting for a company such as Novonix. White has said the proposed mixed-use redevelopment of the entire Alstom property could bring $2 billion to $3 billion in investments, add more than $11 million in tax revenue annually for Chattanooga and Hamilton County and spur more than 5,000 jobs.
Use of the former Alstom property for manufacturing goes back more than a century as a location for making pressure vessels, tanks, fire tubes and water tube boilers. In 2007, Alstom announced plans for a new $300 million Chattanooga plant and built the turbine manufacturing facility.
But in 2015, GE bought France-based Alstom’s power operations and later announced it was closing the turbine manufacturing plant and two adjacent facilities, cutting nearly 235 jobs in Chattanooga.
Under Alstom, the facility was known as “Big Blue” because of it’s distinctive coloring. The new developer is rebranding the complex as The Bend, named for its location on a bend in the Tennessee River.