Okay. All right. Well, like I said, appreciate everybody coming today. And again, we're going to go through our presentation and some of the Q&A on camera for those that weren't able to make it here in person. So this morning, we spent the day at the Lookout Valley facility going through all of our development and pipeline assets. We're going to go through the presentation update on the company, the big achievements we've had through this year, and really what that's setting us up for into 2025 as really kind of the key goal here at Riverside, where we are today, starting production for Panasonic. And so then after the presentation and Q&A, we'll go out and walk the plant here as well. So quickly, while most of you guys had a chance to meet most of us, I will run through the team here.
So, of course, myself, my background is in battery materials, battery science. I have a PhD in physics and started our Battery Technology Solutions group back in 2013. And that path took me to Tesla in 2015, where I started working on graphite. And then we started our anode materials division here in Chattanooga in 2017 to focus on the problem statement that we're going to speak about today and trying to bring localized production of material here for the impending localization of vehicles, energy storage, and everything that would be needed for the battery sector. So it's been a long journey to build to this point. But now we've really built ourselves to be at the forefront of the battery supply chain, key materials, especially graphite.
And we're very well set up for the next two to three years of build-out and execution to become a real player in this space. So I'll quickly have Robert, Rashda, and Darcy introduce themselves. Some of you guys got to meet them this morning or last night. But Robert, you want to go ahead?
Sure. Good morning, everyone. Thanks a lot. For those I didn't get to meet and talk to a little bit last night, this morning, Robert Long, Chief Financial Officer. I am by far the newest member of the team. This is the end of the third month. But my background, of course, is financial in nature. I did 10 years in big public accounting between Arthur Andersen and Ernst & Young. Left that to be the CFO of an independent public company. We were eventually acquired by a Paris-based pharmaceutical company. Kind of one thing led to another. I became the CEO of that business. Did that for about six years. Exited that, got with private equity, founded and stood up as CEO another branded consumer products company. Exited that business between February and April of this year.
Never really took off the CFO hat, but really wanted to put it on firmly again. And things work out one thing led to another. Met Chris, met the team. And I'm really excited to be here at Novonix fully as a CFO. And excited to have you guys here and look forward to getting to know you more as we go forward. Thanks.
Robert.
Hi, Darcy MacDougall, Chief Operating Officer. I've been with the company for just over three and a half years now. I was working with Chris as running the Canadian division as the president of BTS for the first couple of years. Relocated here to Chattanooga about a year and a half ago to help be on the ground here, to help oversee the scale-up and scaling up of the operations and the engineering team. It's been a great few years. I've learned a lot. I spent my previous career before joining Chris and Novonix scaling companies from small to medium-sized organizations in Canada and engineering background and a master of business.
Thanks, Darcy.
Hi, I'm Rashda Buttar. I'm Chief Legal and Administrative Officer. Met many of you last night, so welcome. And I've been with the company for almost four years. Back in 2021, I met Chris and the team. My prior company experience has been mostly exclusively publicly traded energy companies. And so I've brought that to the table and just helping effectuate some of the same things here.
Great. Thanks, guys. I'll put that here. So of course, we have a lot of people on the ground here that folks met over at Lookout Valley. Folks will meet here as we go through the plant tour here in terms of our plant manager, director of engineering, other folks that really get everything done and have been critical to where we're building to. But we've also had great support from a great board of directors and set of advisors coming from a set of backgrounds that have really been able to help push us in the industry where we need to go, make connections for us with key customers, build on technology that we've worked on. This is through relationships like Dr. Jeff Dahn, where I did my PhD, Dr.
Mark Obrovac, where we've developed some key technology that we'll speak a little bit about today on the cathode side that's being commercialized in our Canadian division. Andrew Liveris has been a part of the company for a long time and still remains a great advisor to the company after he had stepped off the board, and a great board, including representation from Phillips 66, our largest shareholder, so as we look at the company, and you've heard a little bit about how we've built to this point, we really think of ourselves as a materials and technology company across the space, and our goal is really to build new process technologies and new materials for the localization of the battery material supply chain, so that means our NMC materials technology, everything that we're going to spend the bulk of our time talking about today, is really our critical focus.
But we see so much opportunity still in the growth in this sector, the need to localize, the need for better process technology, that we continue to invest through our Battery Technology Solutions group into new opportunities. And one of those has emerged to be a really strong opportunity for the company in terms of commercializing our all-dry, zero-waste cathode synthesis technology. So we'll spend a little bit of time about that. But at the end of the day, everything started around our technology solutions group. How can we build equipment and technologies to do research faster? How is that going to enable us to make smarter decisions, develop products faster, develop processes faster? Because time is so critical in this industry. And we spent a fair bit of time this morning talking about the path to commercialization, the path through product development, that these things take time.
So every advantage you can have as a company to accelerate that is critical in this space. And when we think about where we are today and where we're positioned, we've become a leader in battery materials and technology here in the U.S., really with a focus on lower carbon footprint technology. And when we talk about the NMC material side and all the process technology that we work on, we felt this was really a key principle of what we needed to do to change the supply chain from the existing Asian supply chain to a new globally based, but here North American-based supply chain.
And all of that work has now really manifested in this year of kind of critical milestones of now having binding offtakes with Stellantis, PowerCo, and Panasonic for all the volume that will be produced out of Riverside, 20,000 tons, and demand in excess of that into our next plant site. And that really positions us to now build into real demand, not just a market that's growing, but real customers and real contracts. And we've had great support from the government, of course. We have a $100 million grant. So every dollar that we're investing here in Riverside is being extended through funds from the Department of Energy. We were selected through the competitive process for a 48C tax credit of $103 million. And we've had strong strategic investment from folks like LG Energy Solution and Phillips 66.
And of course, just raised new capital that's really going to go alongside that grant, take us through building out the first full lines and getting them qualified. But again, behind just the focus here in Tennessee and on our scale-up, we see our patented NMC synthesis technology as a key part of the business moving forward over the coming years and continuing to use our Battery Technology Solutions group to understand the industry, to be ahead of market trends, understand where we want to drive our product and process development portfolio around anode and cathode materials. So I spoke about cleaner process technology. I think that, of course, ESG commitments have become a critical part of almost every sector. And of course, environmental is so important for the battery space.
We've grown up in an industry now that is supporting clean technologies, supporting electrification, EVs, grid energy storage, but unfortunately has come from a supply chain that doesn't have the best environmental footprint, and that's been an effort of industrializing new technologies, scaling it, getting the cost down, and most of that happening in China, but when we look at bringing that to North America, we need to do better, and that was really one of the key things, and so we spoke a little bit about it this morning with graphitization processes. How can we have more energy-efficient process technology? How can we have cleaner inputs, better processes, better outputs? And we think about that both in our anode technology, which you guys saw this morning and will continue to see this afternoon, and also in our cathode technology that we'll speak about.
Existing NMC cathode synthesis has large waste streams, large water consumption, sodium sulfate that has no real useful purpose after it's produced in huge volumes when making high-nickel cathode materials. How can we make the same great products like we talked about this morning? We have to serve our customers. They want the products that they need today. How do we do that with better process technology? And about two years ago, we did the work on a life cycle assessment of one of our grades of product that we would build here at Riverside to show about a 60% decrease in global warming potential. And a lot of that comes from a cleaner grid. But the key in our mind is how can we mitigate emissions from the plant? So we talked about the scrubbing systems on our exhaust and all of this.
And how can we reduce our power consumption? How can we have more energy-efficient graphitization specifically? And that's where our path for induction-based graphitization really started in 2017. So when we think about, again, this year dovetailing into next, we always had four principles: securing customer contracts to drive the demand and timeline of our build-out, scaling our Riverside volumes to meet those contracts, securing financing for that, and then across the board, upholding industry leadership around new materials, new process technology. And I think some of these we've already spoken about, but the offtake agreements that we now have in place, putting capacity into our next plant site, we've delivered very well on proving the demand and securing contracts through this year. That's allowed us to really define the engineering.
Everything that we'll talk about as we go through the Riverside tour now is being built for a product, for a customer on a schedule. That allows the engineering team to really do the last bit of work, define the detailed engineering, and then build the plant out. And we'll be doing that and leveraging all of those designs, all of those principles straight into our new site because our production technology is modular here, continuous. We're building the same type of lines into the next site now with the same products for the same customers. We've done well, as mentioned, to attract government capital. We also have our loan with the Loan Programs Office. That application is in process and hopefully can be a part of funding our greenfield facility and our expansion beyond Riverside.
But that continues to be a key focus in securing funding, hitting our key operational milestones around the build-out now of our 3,000-ton module, the qualification program, and the start of production to really bring and secure more financing to invest alongside the plant. And when we think about industry leadership and materials, we'll speak about the cathode technology. Understanding the path to commercialization here in our NMC materials business is really driving our focus on cathode technology and understanding we need to do this through partnerships. We need to develop and continue to secure key IP and then look to partner in deploying that technology. We want to build NMC materials plants. We want to license cathode material technology. That's our goal.
So let's take a minute and go back to our Battery Technology Solutions group, talk about our cathode technology a little bit, and then we'll jump back into the anode side of things and segue out to seeing everything here at Riverside. Our Battery Technology Solutions group has two key verticals. The first is our ultra-high precision or UHPC hardware, which again is technology that I was part of developing as part of my PhD. And it was all about how we could reduce testing times from months to weeks, how we could determine the longevity of batteries, the performance benefits of materials faster. And we provide that equipment across the industry as well as services out of our group in Canada. And we invested to really build what is now our R&D services team.
We have full battery pilot lines, materials characterization, cell prototyping, thousands of test channels. The purpose of all of that when we made those investments was to support our goal in building the materials technologies on the anode and then became the cathode side of the battery. Because again, the need to do things quickly, the need to learn fast, like we talked about in the lab this morning, everything. We want to control all of that. We want to be able to take samples through development. We want to understand them in our own labs. We want to build them into batteries on our own timescale. Then we want to evaluate them with our technology faster. We need to shorten that research and development cycle. That's the purpose of our Battery Technology Solutions group. Now it operates.
It provides this to the industry, generates revenue to cover the cost essentially of that, and provides this key strategic asset to us as we develop our other technologies. So our ultra-high precision coulometry technology is used across the world. It's been in market since about 2014. And I think it's widely recognized as the industry leader in doing this type of work to diagnose the lifetime of batteries faster. And when we think about how we do that, it's quite simple in concept and quite complicated in execution, where we want to basically measure the rate of losses within the battery at the electrochemical level. And this means we want to see when we charge the battery, how much capacity went in, and when we discharge the battery, how much capacity came out. And the challenge with lithium-ion batteries is they're very good.
So this round trip coulombic efficiency or charge efficiency is 99.5% or higher. And when you want to tell the difference between a good battery and a not-as-good battery, you need to be able to be measuring out at those decimal places of relevance in the parts per million type of level. And so what we developed was technology to do that. And what you see here is a coulombic efficiency chart showing data from other cyclers and data from our equipment with sets of eight or nine cells, replicate cells to show the type of spread in data. And so the point is, in only 20 cycles, if you're using the blue or the red or the green data, you really can't assert a difference between different types of cells because the tolerance, the error bar is too large.
And zoomed in on the right, you see just more decimals and a zoom-in of nine cells down at the 40 ppm spread level. And this is what allows us and the customers of this business to make decisions faster. And we need to do long-term cycling. You need to do more work. But the critical thing is when you want to start talking about 10-year battery life, you don't want to have to cycle every battery for 10 years. So this enables you to make decisions faster, move forward with the good chemistries, iterate on those, and bring the next set of data forward. And as we think about how that's built, our research and development services team, this is a photo from one of our labs there with test channels, thermal chambers.
We build cells anywhere from the couple hundred milliamp-hour range, coin cells at the milliamp scale up to multi-amp-hour pouch cylindrical cell types, all with different chemistries, lithium-ion, non-lithium-ion, all to understand the pace of the industry, the direction of these materials, and understand to make sure that when we're developing process technologies, when we're developing materials, they're competing with the best in the industry because that's what our customers are going to need here. We'll talk about that as we look at the NMC materials side. To jump over to the cathode technology quickly, I mentioned at the beginning high-nickel cathode synthesis chemistry is complex and wasteful. It typically starts with sulfate inputs. It goes through continuous stirred-tank reactor processes where things have to be very tightly controlled to essentially build these particles from the atomic scale up.
And then we have significant waste streams both in water and metal carbonates or sodium sulfate wastes that come out of this process. And these waste streams are not always effectively managed in Asia today, but these are waste streams that have to be understood how to be dealt with in North America and Europe as this industry grows out of primarily China. And so the other opportunity is how do you rethink the process technology? How do you do things differently to make the same types of materials at the end?
What we developed was actually a dry process, not using a continuous stirred-tank reactor process, to combine different types of feedstocks, all forms of the same nickel, manganese, cobalt type of feedstocks, and build these particles from the atomic level through a dry process and then heat them with lithium in the same way that you finish these materials and be able to make the same grades of high-nickel materials as we combine in the industry today with a process that should be simpler, cleaner, and cheaper. We have brought that technology to pilot scale. We first started the development of this around 2021, filed the first patent applications around this.
Within two years, we had commissioned our nameplate 10-ton per year line out of one of our facilities in Canada where we have, as you can see, a roller hearth kiln on the top to demonstrate doing this at industrial scale, much like what we learned about building the anode technology team here and what you saw this morning at Lookout Valley. It's great to be able to do things at the lab, prove proof of concept, but you have to prove industrialization. The type of equipment, and you can see in the bottom, mills, magnetic separation like what we saw at Riverside, these are all scaled assets that are representative of mass production, simply smaller than people would have in industrial plants.
This is allowing us to now sample materials to Tier 1 potential customers, whether those are cell manufacturers, cathode producers today, OEMs, and show that the material performance and underpin the engineering and industrialization is there for this technology. And as I mentioned before, given that we are able to file fundamental patents around this process technology, our goal is to commercialize this through partnerships and licensing. And I think we have a strong opportunity to do that because of what we've been able to build there within the team and be able to demonstrate the product, the engineering, and what the big thing will be is demonstrating the cost benefits with partners who can bring this to scale.
And so as we started back to understanding the benefits of this process technology, last year, we did an engineering study with Hatch, which showed about a 30% reduction in capital intensity in building this process, about a 50% reduction in operating costs in building this process, not including the raw material inputs, the metals themselves, and a more environmentally friendly process. We use no water in the main processing stream, so significantly less water at the plant, really only cooling water, significantly lower power consumption and therefore embedded carbon intensity, and very importantly, no sodium sulfate waste products. And this is becoming more and more of a focus of the industry of how to deal with sodium sulfate or how to move to processes that will not create this problem.
And so this is why we see this as a huge opportunity for the business where we've invested to bring it to a certain scale. We now have a small dedicated team working now on a focused set of programs that are again being driven by our customers. Everything we learned here about commercializing our anode materials, it's great for us to make materials that we think are really compelling. We can build into batteries with our own R&D services team, and we can prove performance, but it matters what the customers want to buy. So now we're able to be sampling materials to customers at their spec and showing them that this process technology can make the right products, and now we need to industrialize it. And so as an example of that, our focus has always been single crystal cathode materials.
It's more catered toward making these types relative to polycrystalline materials. And we've demonstrated now making various grades from 60% nickel up to 90+% nickel chemistries. These are examples of the 60% nickel chemistries where, again, built into cells, commercial references from Asia, Tier 1 references showing we can compete head-to-head in performance metrics. And while this is just capacity retention, of course, beneath this is all of the other metrics of charge rate, density, processability, everything that goes with what it really takes to bring a commercial product to market. And on the right is scanning electron microscope images showing that we can make the same particle morphologies through our dry process as are done through the wet chemical process. So as I mentioned, our strategy has been to commercialize this through partnership. We developed foundational IP.
Now we want to expand that IP with upstream partnerships, people like CBMM to work on niobium to dope into or coat materials with to improve performance, ICoNiChem to work on recycled feedstock materials, all things that are going to be important over the three to five-year time horizon of seeing new technology scale up. And so these are great programs for us to continue to demonstrate the flexibility and improvement around this technology. And now our focus is going to shift into how do we partner with downstream customers, commercialization partners who can actually pull this through into production in the goal of licensing it to them over time.
I think that that will be really our primary goal for 2025: to build that clear path to commercialization through whether it's cell manufacturer partnerships, OEM partnerships, or most likely CAM producers themselves who want to adapt and build new plants with new, better process technology. So now we'll switch gears to our anode materials team. And again, we've gone through a fair bit of this through last night and this morning. But our current state has really been this problem that we foresaw a long time ago. When I was at Tesla from 2015 to 2017, myself and my team, we spent a lot of time on the graphite supply chain in China, out of China, natural, synthetic. And all of the problem statements that we're seeing now in our current state were obvious what's now pushing 10 years ago.
We were going to need these materials in the U.S. Localization was going to come. China controlled the entire market for graphite processing, natural and synthetic. It was going to become a challenge to break out of that cycle. For years, graphite was kind of thought about as the forgotten critical mineral. People wanted to focus on lithium. People wanted to focus on nickel. They were easier to understand. Now, in the past 12 months, that focus has shifted, and people understand the most susceptible issue to our dependency on China for battery materials is graphite. Last year in December, China enforced export controls for the first time on battery-grade graphite, both natural and synthetic grades.
In June of this year, the U.S. reinstated the Section 301 tariffs for 25% for the anode materials and then are phasing in even upstream materials on the natural graphite side over the next couple of years. And then just earlier this week, China has banned the export of certain key materials and highlighted graphite to come under further review in terms of where it should fall in their export control classifications. And it can't be understated that every battery plant that is operating in North America or really anywhere in the world is 100% reliant on graphite from China. And if it were to stop flowing, those battery plants would stop. And that's an incredible issue when you really think about it. And so this is why we said in 2017, we have to have production here in the U.S.
And now we'll build to a scale that is in the tens of thousands to hundred thousand tons while China's operating in the millions and going to 10 million tons. But we have to have security of supply for the plants and the customers that are going to focus on helping to develop that new sector. And these are, as we've seen, the people like Panasonic, Stellantis, PowerCo that are prioritizing the need for their business to have a security of supply of this material. And so when we started the business in 2017, we really had four key principles. Of course, domestic supply, which we've been talking about. The second being high-performance materials. We understood that we were going to be driven by localization. That meant we were going to be driven by the customers who were going to drive localization, which would be the Tier 1.
So we had to be able to make the products to satisfy the highest class requirements of vehicles and energy storage systems. We need to do that with cleaner, more efficient process technology like we talked about. And as a small company, we needed to form strong strategic relationships in order to execute on what we wanted to do. And I think as we look at that, and especially that we'll go through kind of each of these over the next 10 minutes or so, but in terms of key strategic relationships, we now have key anchor customers for our plants. We have technology agreements with LG, Philips 66 on the upstream side, and PowerCo in the development of the products that are now contemplated in the offtakes.
And strategic investment from folks like LG and Phillips 66, right, who want to see this industry build outside of China and recognize we need upstream, downstream, and the processors themselves to be a part of solving this problem. And we have key suppliers, Phillips 66 on the raw material side, of course. We'll look at that domestic angle. We can now focus on, like we spoke about this morning, certain grades of cokes, most of them produced locally, fully processed in this facility, delivered in the plant in the U.S. And then Harper as well in our development of our graphitization technology. And we saw some of the equipment from them in the development site, and we'll go through our continuous graphitization systems after this. So when we think about that North American supply demand gap, it's going to be immense, right?
We are going to need, by the end of this decade, a million tons or more annually of battery-grade graphite, natural and synthetic. But the supply levels of the companies trying to be a part of this solution are being measured in the tens of thousands on that scale, right? And so this is not saying that China will not be a key part of our supply chain moving forward on a global basis. But again, we need to, and I think customers are focused on how they understand the risk in their supply chain between what percentage of material will come from China, what percentage of material will come from ex-China production, but not onshore, and then what percentage they actually want to be domestic.
And so with this gap, we had to prove in the early parts of our commercialization that we can make these Tier 1 performance materials. And what we always focused on was longer life materials. Empowering longevity in the batteries, we always felt was critical in empowering vehicles and energy storage systems. And this was also part of our decision of focusing on synthetic graphite over natural graphite. Synthetic graphite can always outperform, as you see on the right, natural graphite in cycle life tests. And we were developing grades that could significantly outperform that further. And so that has been always our focus, key product performance metrics around lifetime. And now that's expanded significantly to charge rate, processability, a lot of the things that we spoke about this morning. And I think that's really forced us into understanding how we needed to develop the process technology, right?
And we talked about this morning at the Lookout Valley facility making different grades of products with different complexity in the processing, but for different purposes. So this is a great illustration of that where we talked about the shape, the size of our coke input materials, how these are getting converted, primary, secondary particles, coated. And we think in broad scope, we have energy storage-focused products that are not as good at charge rate. They have extremely good cycle life, low carbon intensity. And it's a representative image of what those graphite materials look like on the left there. In the middle, we have these electric vehicle-focused grades where they're improved in charge rate. They still have great longevity. And you can see they're now in these secondary particle formations, right, where we've aggregated the petroleum coke materials and then graphitized them into these structures, which have benefits.
And then also we've gone to, as the industry continues to evolve, very high charge rate materials, right, 3C type of charge rate so we can empower faster vehicle charging. And like we spoke about this morning, typically this involves, again, further changes upstream, whether it's the raw materials, how we do the agglomeration processing, but also now the addition of coating technologies and how we can improve the surface chemistry all to improve the rate capability while still focusing on how to maintain cycle life, keep the process technology at low carbon intensity, and all of the things that are important. And so our focus has been, as we saw this morning, developing the process technology to do any of this, demonstrating that to the customers, and now scaling the right lines for the right products here at Riverside.
And so we went through this morning, and we'll see it all again here at Riverside at the next level of scale. But we bring in raw materials, which is petroleum coke. They go through primary crushing steps. As Harrison spoke about this morning, these materials can come anywhere from four-inch plus or two-inch minus type of sizes. And we have to bring them down to feed into our milling equipment, milling and shaping that are all now going down to the tens of micron level. We have optional steps of agglomeration, like we talked about for the certain grades of material. They have to go through additional calcination. You guys saw the rotary calcination furnaces over at Lookout Valley, all to prepare it to go through graphitization. So then it goes through ultra-high temperature processing up to 3,000 degrees, converts that structure to graphite.
And then we go into finishing it either with coating or just through sieving, magnetic separation, and packaging like we saw this morning, and we'll see again this afternoon. So we've now demonstrated all of this at pilot scale. And through the empirical data we have and the performance data on the products have our path to bring each of those process technologies to mass production scale here at Riverside. And we'll see some of these assets installed on the ground operating. We'll see some of them here ready for installation and walk through what that's going to look like.
And that's really what's underpinned the time it's taken to prove that industrialization path to the likes of Stellantis, PowerCo, Panasonic, and our agreement with LG, where it was a joint development agreement that, of course, contemplates going to an offtake, where now we have target customer offtake volumes that ramp up starting late next year with target deliveries to Panasonic in through 2027, 2028, where these contracts all hit their kind of forecasted run rates, where we have demand that's in excess of Riverside and already allocating capacity into our planned greenfield expansion. And still, when we think about the size of these offtakes relative to our in-discussion offtakes or what people say they need, these customers and more, we're working in order of magnitude below that.
And then it's a further order of magnitude again to the actual North American demand that's going to be measured in the millions, right? But now we've been positioned to be able to now build into and execute against this, define the timelines, the capital flow, the ramp rates, and the products for both Riverside and our planned expansion beyond that. So if we look at each of these agreements quickly, Stellantis, of course, global automaker, many brands, and a focus on electrification in all of those now. They had made plans to build 400 gigawatt hours of battery capacity globally, and most specifically here in North America, working with both LG and Samsung SDI as their cell-making partners. So in this contract, it's a six-year term starting in 2026 with a minimum binding volume of 86,250 tons and a target of 115,000 tons over that term.
We have pricing constructs within all of these agreements that contemplate raw material. They may have adjustments and other mechanisms in them because we need to make sure that these contracts are structured in a way for them to have extended terms and understand how they're going to adapt to changes in the market, market pricing, and raw material inputs, and of course, the start of commercial supply is targeted for the beginning of 2026, and like all of these agreements, they have final qualification and quality audit criteria that we have to go through over the next 12 months in order to maintain the contract, move into the deliveries that are contemplated over this six-year term. More recently with PowerCo, very similar structure because these are the types of agreements that are going to drive growth into the plants and also help bring the financing to the plants.
A minimum binding volume of 32,000 tons over a five-year term starting in 2027. Very similar prerequisites in terms of moving into those binding volumes as it relates to the product qualification, quality audits, and again, pricing structures that are contemplated for different products under the agreement. Of course, PowerCo is building plants in Europe as well as in St. Thomas, Ontario, and Canada to focus on the support not just of Volkswagen, but their other customers in electrification here in North America. For simple perspective, their planned plant in St. Thomas is a 90 gigawatt hour factory. With simple math, a gigawatt hour is about 1,000 tons of graphite. So if they reach these run rates, their annualized graphite demand is 90,000 tons, right? Our contemplated offtake is an aggregate volume of 32,000 tons over five years.
So all of these agreements and working with these types of Tier 1 have the ability to drive growth not just in this site, but the next. And our need to acquire additional customers is important, but our ability to build into these relationships is huge. And the same is true, of course, of Panasonic, right? One of the leaders in terms of cell manufacturing here, of course, running the Reno Gigafactory and the cell-making side of Tesla, 71 gigawatt hours roughly online now in North America. And we signed this agreement earlier this year to start deliveries next year with a 10,000-ton aggregate volume commitment over four years.
This was really our first underpinning agreement to define what our 3,000-ton per line first line needed to produce in terms of the right product, the product that we're qualifying with Panasonic, and now build the timeline out that we'll walk through as we go through the plant. Last year, of course, our relationship with LG Energy Solution started. They made a $30 million investment in the company, and we signed the joint development agreement, which, upon successful completion, which really maps out the product specification, the programs that we need to go through with them, would trigger a 50,000-ton 10-year aggregate offtake agreement. This was a really significant announcement last year because it contemplates a 10-year term for this material, which is unprecedented. These materials are bought in China today in short-term or spot pricing.
But again, as we look at building a new industry, we need to do things differently, not just from our side, production, process, all of that that we spoke about, but our customers need to appreciate that they need to support what's needed to build the industry as well. And this is why these types of customers providing these types of structures and agreements show their commitment to wanting to have a localized supply chain, right? It's not to move away from China. It's, again, to de-risk that 100% roughly reliance that they have today. And so when we go out in the plant, when we think about what this year has given us here at Riverside and where we need to go over the next 12 months, it's now fully into a focus on execution and equipment deployment.
So this year started with, again, the goal of defining the offtakes, defining the products to push the engineering forward. Panasonic was, of course, the first of that, then define the product and the 3,000-ton line and working back from when they wanted volumes to why now the 3,000-ton per year line will come online in the first half of next year, where we initially had an internal target at the end of this year because that's in line with what we need to do for Panasonic. Now that we've finished certain milestones within that, we're building out that capacity. We've raised capital to be funded to do all of that work.
We'll be able to use that to continue to provide now mass production scale B/C samples to other customers as well, continuing to further put us ahead in terms of our ability to showcase the industrialization, not just of the first product that we'll make out of this line, but products in the future as we show the path to move them from Lookout Valley at pilot to here at Riverside at production, so 2025, the first half of the year, we'll have the 3,000-ton line up and running, ready to go through those final qualification milestones with Panasonic with the target of deliveries at the end of next year, and we'll continue investing toward our next internal milestone of 5,000 tons per year because we look at Stellantis and their volumes that are going to be starting alongside Panasonic in 2026.
And so as we go through that year, it'll continue to define the engineering on the rest of the plant fully out to 20,000 tons in line with the timeline and the product types under the three agreements that we have. And importantly, we have to prove that we can do this profitably at Riverside. And this, of course, as we go through it, you'll see kind of an amazing asset and ability for the company to have bought this site with the existing infrastructure and capabilities that existed. But there's also inefficiencies in building your first plant in these first lines. And all of that is going to be leveraged to help improve as we look at new projects in the future.
But when we shared these indicative unit economics of the plant, showing that we're looking to sell material in the roughly $7-$10 kind of basket pricing range. Again, we talked this morning about simpler products, simpler processing, or different raw materials. These can impact both the operating costs as well as the sale price of these materials. And those operating costs, when we reach 20,000 tons here at the site, we expect to be $6-$8 per kilogram all in. And when we look at pricing in China today, these mid to high-grade materials are typically selling in the intra-China market in the $5-$6 range for mid and the $8 range for high. So while these are North American prices that are going to be higher than the intra-China prices, we have to have a path to be competitive, right?
Of course, that comes in a couple of forms. The first is the government incentives that we've received here. If we look at how our $100 million grant from MESC impacts our reduction in capital and therefore impacts our depreciation, and same with how the 48C tax credit can be leveraged, this can produce a significant amount of value for the Riverside plant alone, where we can target mid-20% to high-20% margin profiles when we're at steady state running conditions. Of course, over the term of building this agreement out, we'll see the dynamic market as well, where tariffs may increase, where export controls may change the price of landed materials. This is all going to affect how customers think about how they want to shift focus or into more U.S. supply.
But one of the most important things now as we think about changes in EV demand and changes in adoption rate and growth rates for this industry is they're going to be strong. They're going to continue to grow. We have a very long-term horizon on all of that. And most importantly now, we're building into actual contracts within Riverside. So we're no longer talking about there's a significant opportunity because of the number of vehicles that will exist in North America and someone will buy graphite because they'll want to localize. That's part of the question of how quickly we'll build to our eventual targets. But Riverside's timeline is now squarely defined by three real offtakes that are in place with Tier 1 partners. But as I said, that means we already have demand into our next site.
We have been working for the past couple of years on how we'll continue to expand production capacity. This is a rendering of our planned greenfield facility, which as we look at it today, will bring online an initial roughly 30,000 tons of capacity, likely targeted for 2028, which is now when we have demand into offtakes that exceed our Riverside facility based on our expectations of those, and the potential to expand on this site to 75,000 tons. We have several sites all here in the southeast of the U.S. We have an application in with the Loan Programs Office, which can support a significant amount of the capital investment for this plant. We have also applied for the same 48C tax credit that we received for Riverside facility, which we understand they are targeting announcing early in January of next year.
So all of this puts us in the best position to now already have customer demand into our next plant, the potential for significant government financing again to support that site, to bring it online in our next phase of growth. And all of the engineering for this site is going to be based on real engineering, real results that are coming out of Riverside starting next year, all in that proof of industrialization plan for customers, for financing, and for the government as we look at our opportunity to deliver along this plan. So with that, I think we think about always maintaining a position in the forefront of product and process technology. And I think over the past seven years of shifting our focus into the materials and process technology stream, we've really become recognized as a leader in these key areas of focus.
Simply put, we have two key goals. We continue to scale our anode materials division now that we've developed the products, we've developed the process, and we're into scale mode now that we have the offtakes. We want to continue to commercialize our patented all-dry zero-waste cathode synthesis technology, which we think is going to become a significant part of the company over the coming years. We'll do all of that while continuing to develop new IP, both here on products and processes on the anode material side and the cathode material side to build into projects that can support strong cash flows in the future and make us a key part of localizing materials here in North America. With that, I'm happy to go through any questions that you guys may have about any of the parts of the business.
Obviously, we've had some opportunity to chat through different things today. Scott has a mic just so that people online will be able to hear if you guys have questions, and then after we wrap that up, we'll go out on the plant and take a look at where we are.
Thanks. Mark Schutter, William Blair. How have your customer conversations changed as the dynamic around EVs and batteries have changed since, let's say, more of the hype of 2020 and 2021?
I think we've seen a number of things in terms of the shift in how customers are looking at things. I think, speaking very practically, in 2021, people believed they had infinite capabilities to build and expand and grow, and of course, I think it led to a few things.
It led to new technologies or new projects getting support that maybe they have more challenges to really deliver on than necessary. It led to a lot of capital formation in helping fund projects, and ourselves included in that. We raised $250 million in 2021, and that's what's allowed us to be in this position. I think at the end of the day, while there was excitement in 2021 at the customer level, there still wasn't necessarily the urgency because the plants were still in concept, the plants were in design. The question was, will we build four or five? Now we're talking to customers with very clear timelines. Panasonic's a great example. Their factory in Kansas is coming online. It has a schedule. It has a product type. It has a customer. They want North American feedstock. So we work through with them.
When does that need to happen? When do we need to contract to go through this process? So I think we've found that over the past few years, things have become much more practical in our discussions and much more based in the idea of what needs to be done, what can be done, and then what both parties need to do that, right? And especially for us, I think our ability to position exactly where our projects are, our process technology, being realistic in the timelines it will take to build, has done two things. I think it's given customers the confidence to move into these offtake agreements. And I think it's setting us up to deliver against the plan that we can execute against instead of in 2021, maybe everyone having a bit more ambitious targets that were likely never to be reached.
And so when you also dovetail that to, well, those customers have "less demand" today for, let's say, 2028 than they thought they would in 2021, that's okay because their demand level was going to be measured in the many hundreds of thousands per customer. And if it's 80% of that or 60% of that today, the supply demand imbalance is so huge that it still massively oversubscribes the capacity that we can plan to build. And that's why these contracts have been structured at the size they are so that we can build into them on the right timelines. So I think it's become very practical over the last few years. And I think we've seen the customers recognize that it's not a market where a soft agreement can get us financed to try to build.
We actually have structures in these agreements that are going to be critical in us securing the financing and executing against the plan. The people who want to drive localization, they're working to do that.
Thank you. A follow-up on those customer conversations. You're transparent with your cost structure and your margins. Costs in China have come down. So do customers kind of bring that to you? Do you see pressure now that you're telling people what your margins are? What's to stop them from saying, "Hey, China's price is so much lower"? How does that conversation go?
Yeah, it absolutely happens. You spend six months working on a deal, and then it goes up to the top, and China price is down 20% in those six months, and people ask questions, right? But at the end of the day, it's back to practicality.
These are the pricing we need to attract the investment based on the scale rates, the risks in the contract, whatever they may look like. A great example of this is cost adjustments on raw materials. Those don't happen in contracts in China, right? Also because the term probably is less relevant for it. All of our contracts have contemplations for adjusting if there are significant changes in our raw materials costs. Without that, we cannot harbor that risk and expect to be financed. So these are simply the margins that we need to produce in order to attract the capital. And for the customers like Panasonic, like Stellantis, like LG, or like PowerCo, sorry, LG included, of course, they want to see projects actually get built, right? They actually care about having localized supply. And so if these are what it takes, then they have to understand that.
And they're signing agreements that are in line with what we believe we need to do that. So it adds time to the process, we'll say, but I think the right customers end up in the right place. Hey, Jordan Levy, Truist. Just wanted to think through how you think about the capital runway as you move through Riverside and then into the greenfield development. How do you think about that trajectory? Sure. So in terms of capital needs, of course, building manufacturing is expensive in North America, right? And we've seen projects have cost escalations across every part of the battery supply chain, whether they're vehicle plants, cell plants, or materials plants. And so for us, we're focused on incremental investment.
And again, this is a really key benefit for us in Riverside specifically, is that people looking to fund a new construction project really have to look at how to finance that entire package upfront. And without the proof of scaled production and the need for these plants to cost, let's put a number on $500 million-$1 billion, $500 million-$1 billion, it's very challenging to build that capital stack with offtakes with conditions, without proof of scale, all of these things. So for us, Riverside is the solution to that, right? We've been able to invest to Riverside to now, within the next six months, be proving scaled production. And that's going to open up doors to new capital that would have been unavailable for a project that was not past those milestones.
So the capital raise that we just undertook, of course, Phillips 66 supported it as well. That money will go to a shareholder vote in January. That takes us through that process, through critical milestones of proving production, opens doors to new capital. But we still see that key strategic partners, whether those are customers or folks like Phillips 66, are going to be a continued part of the co-investment in plants in order to make sure they stay on time. We've seen customer financing, prepayments, equity investments at the project level be a part of that. And we have all of those conversations happening in parallel, all with different timelines and milestones in order to open that up. So I think Riverside, we're able to continue incremental investment.
And as we pass some of those milestones with Riverside, that's going to allow us to, again, look at our next plant, which will hopefully have strong support from the Loan Programs Office, potentially tax credit, again, a lot of capital access from the government, hopefully. And if so, then filling the equity there with our capital or strategic partner capital becomes much simpler because of the execution and the proof points of Riverside. So that's going to be a big focus over next year, is continuing to map out how the investment will flow into Riverside over the next two to three years and how we can bring essentially a financial close to be ready to build the next plant.
Appreciate that. And then just a quick follow-up. You're all on the crux of commercialization. It's a really exciting time.
Can you just help frame up what the rest of the competition for domestic supply looks like and where your competitors are at?
Sure. So to take one step back to kind of the philosophical side of competitors, right? We think people can look at these in different ways. You can look at alternative anode chemistries. You can look at natural versus synthetic graphite. You can look at purely synthetic graphite, other companies. And I think at the end of the day, we could talk about it for a long time, but we are bidding on volumes that people want for synthetic graphite. They're not willing to shift those volumes to alternative chemistries or anything else, right? So natural graphite, again, people who have demand for both have demand for both for their own reasons, not simply because there may be one or more of the other.
So when we then zoom into synthetic graphite specifically, while there have been several announced potential projects, we don't believe any of those actually have construction underway, a shovel in the ground. We've not seen offtakes from any of these other companies to, again, help to how do you bridge needing to finance such a significant amount of money, even if you're successful in some government funding. The gap in these projects is large. And without the ability to take what you guys saw this morning and take customers through the idea of Lookout Valley and the industrialization path to Riverside, I think it's a very challenging conversation. So I hope that these projects can get where they need to be because we need more supply here domestically.
But I think we are probably at least two years ahead of likely anyone else in this space because that's the time it takes to build a plant even once you're financed, let alone qualify that plant and go through the backend process. So I think these are the challenges, frankly, in commercialization. This is part of why we've been working at this for a long time. And even from Riverside, from acquiring this site in 2021 to where we are today. But now we really understand the, I don't know the password for the room.
If you wanted to log in, I can.
Yeah, yeah. Yeah, you want to come? Yeah, you can come log in real quick just for the sake of it. But I think we understand that path very clearly, and I think others are still quite early in that process.
Hey, Chris, I'll start with my follow-up question because it just leads well with what you just said. The premium to domestic supply, I mean, just in general, supply from geopolitically safe places, what have you been seeing with that in offtake agreements over the past couple of months? And how would you maybe guide us towards looking at it going forward?
Yeah, it's certainly a part of why negotiating these types of contracts takes a long time because people are trying to understand. And if we go all the way back to LG, even though it's not an offtake, pricing and structure of what an offtake could look like was an important part of that conversation. We were contemplating a 10-year term. We were trying to decide what the price of synthetic graphite in the U.S. should be in 2034, right, or 2033. Nobody knows the answer, right?
And so I think there's a couple of things. When we look at the pricing premiums, again, from the Tier 1 products, even things like a 25% tariff start to bridge that gap pretty quickly. So we're not sitting here saying that people need to pay five times more in North America than they do for other product, right? But I think more importantly than the cost side is the product performance, right? Because back to what we spoke about this morning, customers have product requirements. And in many of these cells, they can't simply say, "Well, we could take a lower grade for a lower price." They don't have this type of flexibility. So even before you can talk about pricing, you have to have performance. And then I think to the earlier question, we take people through the cost structure. We have should costs. We have target costs.
We have improvement ideas about how to be more efficient in the next plant. We take people through that path, but we say, "This is still what we need today," right? And should those change significantly, we'll come to the table and work through them with the customers like any commercial relationship. But I think the premiums that we want, whether you want to attribute them to being local, whether you want to attribute them to cleaner process technology, lower carbon intensity, everybody can find the value in these given, let's say, the risks around relying on China still. Moving on to what I was initially going to ask you, I mean, it's now December, page 34 of presentation had a pretty nice pathway to commercial production. So production startup here really isn't that far out. We walked through the plant very briefly earlier to walk into this room.
A lot of the stuff's already on site. A couple of things to that. First of all, any large-scale components that are still missing that maybe, I don't want to say you're concerned about getting, but anything that maybe is stuck on a ship somewhere or something. And also, is there anything in particular that maybe the analyst community should focus on during the production startup? Any components that maybe give you a bit of a headache or sleepless nights? Anything to focus on in that regard, please. Sure. I think, and we'll go out and we'll see everything that's on the ground and which things are stood up and which things are in boxes still. And we do have equipment still to come toward that fully integrated line.
And we still have work to do, for example, with Panasonic, specifically on exactly what we're going to do as a quality program, right? But I think from a primary processing asset standpoint, most, if not all of that is here. We have new machines to come just as we kind of increment the throughput, specifically more graphitization furnaces showing up early in the new year. That's really going to kind of be what builds most of our schedule out.
But I think a lot of the work is going to be in, and some of the things that are not yet here are some of the simpler processing things, finishing and things that we're still working through on the quality side of not necessarily the primary processing assets, certainly nothing that isn't already defined to say, "These are the machines that we're using and we know them from either the assets here or the assets at Lookout Valley." And so I think as we look at kind of the focus for us and how we want to be able to provide appropriate updates through next year, while we have the line start up in the first half of the year, we'll still continue to run campaigns, right? We won't run steady state.
We're looking to potentially find people that will buy commissioning material so that we can run the plant more and move those volumes. But really then we'll go into campaign mode as we continue to sample, continue to B or C sample for our customers, and really start up of steady state production and deliveries to Panasonic is targeted for late in the year. And so I think we need to think about how to continue to show the progression of the plant and the progression of operations through next year. And then focusing on that and our tracking toward the end of the year goal is really going to be the important part. Thank you. Yeah.
Hi, Chris. Wei Sim from Jefferies here.
Just in terms of some of the slides that you showed on Stellantis partnering with LG Energy Solutions and Samsung, how does that play with agreements with them separately? Is there any kind of risk of cannibalization on offtake agreements?
Sure, so we initially had an MOU with Samsung that we signed a number of years ago. We've continued a relationship with them that expired just in the kind of ordinary course, and the Stellantis agreement is really interesting because it is the OEM reaching past their cell manufacturing partner. I mean, continuing to highlight graphite was the forgotten critical mineral. It's not anymore, right, and I think it's a recognition from the OEMs, and of course, Stellantis isn't the only OEM that's looking at this type of strategy of reaching upstream to recognize it's too important to simply defer to their cell making partners.
Now, with that said, both LG and Samsung work with a number of the OEMs, right? So the products that we've been working on with LG, they may or may not be for Stellantis, right? So it's possible that these agreements can converge in some ways. And again, as we look at, sorry, as we look at this chart in terms of where we expect to drive volumes, this is only based on Stellantis, PowerCo, and Panasonic. There's no allocation of KORE Power. It's unclear what their timing may be on KOREPlex. And now we have binding commitments from these Tier 1. Of course, LG is not yet an offtake. It may end up working with the Stellantis agreement. It may be for other customers. But these are now binding term agreements that are already in offtake form. So it's certainly possible that those converge.
It's also possible that those continue to drive demand into the other OEM classes that both LG and Samsung work with.
And just a second question on the cathode side of the business. I know it's been the key focus for now, but given that we're going through a probably a more capital-light way of approaching our approach on the cathode side, can you talk about what the expectations for partnership and licensing, what kind of milestones we'd be looking for, and approximate timelines that we'd see as a successful part of the business?
Yeah, absolutely. So on the cathode side, and I think very similarly to the anode side, we don't come out with a huge amount of announcements. Frankly, it's challenging at times to provide appropriate updates on where we are commercially, where we are operationally to the public markets.
But generally speaking, when we come with announcements, they're quite material, right? Funding agreements from the government, these types of offtakes from customers on the anode side. I think the cathode side is going to be very similar to that in concept, that we have a number of key workstreams that we're making phenomenal progress under these different stoichiometries of nickel content. Providing those in incremental updates has challenges to them. But I think our goal is certainly through the next 12 months to have a very select number of partners similar to the anode side that want to see this driven through to commercialization. And those may look like joint development agreements with, take LG's agreement on the anode side as a framework. Wasn't ready for an offtake. It was a joint development agreement to lead to an offtake.
Are we ready to enter licensing agreements on the cathode technology? I think we have a lot of proof points, but there'll be more to come, right, from the engineering, from the materials side. So I think likely these types of structures where there are development agreements with the key partners who can then go to licensing agreements, that's our goal. And that's a goal that we're hoping to accomplish with a select few people in 2025. And then really, just like these contracts define the build out of Riverside, that really defines the commercialization timeline for cathode over the next couple of years. So I think they become very near term in the sense of over the next 6 to 12 months. And I think those will help crystallize again. Just like on the anode side, there's so many analogies.
Just like on the anode side, we now have customers with defined products. That's where we work. We're not working on other people's products if they look different to our core technologies. If we have one, two, three real downstream potential customers that could pull through licensing agreements, if they want to work on 90% nickel, our focus is going to be 90% nickel, right? If those agreements contemplate mid-nickel, our focus will be on mid-nickel because it goes back to delivering what the customer needs for them to see the value and move it forward to commercialization.
And just in terms of the IP portfolio that we have right now, that agreement that we've had with Dalhousie University for first right of refusal, is that still in place?
Just when we do think about, I guess, the licensing agreements for cathodes, is there any key holes in the IP or technology that you think are still waiting to come through?
We still have our agreement with Dalhousie, the structure there. I think it has one or two years left and then, of course, it's expected to renew if that's what we choose to do. All those IP rights flow through to the company and are assigned. You can kind of see that in the first patent filings that are now all the way through being granted in certain jurisdictions, right? The inventor names may include people from those, but everything is assigned to the company.
So I think for us earlier this year, having kind of some of the key early patents actually become issued, first market being in Japan and then other jurisdictions are likely to continue to follow quickly, that was a very important milestone for us, right? Protecting the first piece of IP is the biggest part of the umbrella. And every patent application that we've filed, which is a number of them around this process technology, continue to be refinements, right? Improvements from that base IP portfolio. So of course, there'll be a number of things that we expect to hopefully grant over the next one to two years from work that we've done over the past one to two years.
But I think having that first patent actually reach the granted state this year was, let's say, one of the big questions of, "Okay, can this go through?" And if so, then we have a very nice claim space. And we did a lot of work leading into that, looking at other patent applications, for example, that had been filed after our priority date to show that we believe that it would get issued and it did. And so I think that was for us the critical milestone. Everything from here is incremental benefit in terms of the additional patents that we filed and expect to get granted. Any other questions from folks? I think we had a couple kind of come through email, most of which we've touched on in terms of kind of the production timeline, capital formation into the plant.
To Wei's question, there were questions about commercialization timeline on the cathode synthesis technology. I guess one here we haven't talked about is growth in our anode materials business outside of the U.S., right, and when we started the business, we had growth aspirations here in the U.S., and of course, it felt logical and maybe back to your question in 2021 to talk about how we should already start going overseas to grow into new markets because the same problem statement is evident in Europe or any other jurisdiction, and I think, again, we've had to become just very focused, right, to be able to execute because as a small company, if you try to do too much, you face too many challenges.
And so I think while we have looked at expansion to Europe, we had looked at expansion into the Middle East, we have demand for products for this plant and the next plant here in the U.S. That's our focus. And as we continue to unlock milestones, if we're pulled by our customers into global growth, then we're going to be pulled by our customers. But it's challenging for us to push and lead that effort given the state of the industry and the size of our company and where we need to be focused. So I think we've become very realistic in delivering actually the slide that I have up. How do we deliver against these milestones? This is our focus for the next three years. And I think everything else we've hit in terms of the remaining questions.
So if nothing else, thank you everybody for coming. And anyone who's joined and listened online, appreciate your time. And what we'll do, we'll take a quick break and then we'll head out to the plant and see everything that's here on the ground at Riverside. Thanks, everyone.