Panasonic Energy Pens Investment Deal with NMG

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by | Feb 21, 2024

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Panasonic Energy has signed a seven-year deal with Nouveau Monde Graphite for the supply of natural graphite, plus an investment agreement starting with a $25 million payment to NMG, as part of Panasonic’s expansion in the North American electric vehicle battery supply chain.

Nouveau Monde, based in Canada, is currently working on developing a fully integrated source of carbon-neutral battery anode material in Quebec for the growing lithium-ion and fuel cell markets. The company aims to become a strategic supplier to battery and automotive manufacturers. 

Panasonic Energy provides battery technology-based products and solutions globally and is part of Panasonic Group’s switch to an operating company system. Panasonic Energy supplies automotive lithium-ion batteries, storage battery systems, and dry batteries.

The deal comes as Panasonic is expanding its EV battery production in North America, with plans to increase its use of locally sourced materials to improve the sustainability of its supply chain while meeting EV demands. Panasonic previously signed a memorandum of understanding with NMG in 2022, which advanced technological development and process optimization for the development of integrated graphite production in North America.

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The new supply deal is considered a mine-to-battery-material model, wherein NMG will produce natural graphite from its Matawinie Mine in Quebec to produce anode active materials at its battery material plant in Bécancour, Quebec. NMG will support Panasonic in building a robust supply chain in North America.

In addition, Panasonic will invest in NMG, starting with $25 million. Separately, Japanese conglomerate Mitsui & Co. will redeem and cancel its existing convertible note and subscribe to NMG’s shares. Prior to the agreement, Mitsui owned 14.1% of NMG. Panasonic will then invest another $150 million in funding in NMG with co-investors, subject to a maximum ownership threshold agreed between the relevant parties, the company said.

The deal also comes as Japan and Canada have deepened their bilateral partnership through a memorandum of cooperation regarding battery supply chains in September 2023. Canada is known for its commitment to clean energy, and in Quebec, 99% of the province’s energy comes from renewable energy. Panasonic has a goal of cutting its carbon footprint by 50% compared to its 2022 level by 2031.

Panasonic Energy now hopes it can support greater EV adoption through its battery operations by extending EV battery range in North America, including the United States. Extending battery range is a critical step to advancing EV adoption, as “range anxiety” has been cited as a barrier for purchasing an EV by consumers.

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