After releasing positive news this morning, the Novonix Ltd (ASX: NVX) share price is making headway on a three-month green streak.
Shares in the battery technology and materials company are 5% higher to 90 cents. For context, the S&P/ASX All Ordinaries Index (ASX: XJO) is broadly flat this morning. An earlier rally in the Novonix share price made it the fifth best-performing stock among index members.
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Government gives $159 million
Novonix has landed a major tax credit from the United States Government. Following a recommendation by the US Department of Energy, the battery company has been selected to receive US$103 million (A$159 million) in tax credits.
The award is part of the government's 'qualifying advanced energy project tax credit' program in the United States.
It was announced on 29 March that US$4 billion in tax credits would be provided to more than 100 projects to jumpstart domestic clean energy manufacturing and curb greenhouse gas emissions. Novonix is among the lucky few to nab a slice of the US$4 billion available.
According to Novonix's announcement, the tax credit can offset income tax liability. In addition, a qualifying project can be monetized by way of sale for cash. However, the company must meet the requirements set out by the US tax code.
The company will have two years to fulfil the conditions and claim all A$159 million in tax credits.
Novonix CEO Dr Chris Burns commented on the company's selection, stating:
In a period already filled with company milestones, the approval of our 48C application strengthens our financing strategy and demonstrates another significant landmark for Novonix. We are excited by Novonix's participation in this program in furtherance of our commitment to innovation, sustainability, and the localisation of a battery materials supply chain in North America.
Reportedly, Novonix is one of the first to receive this tax credit allocation.
Novonix share price storming back
Both 2022 and 2023 were brutal years for the Novonix share price.
Shares in the battery tech company fetched $9.35 on the first trading day of 2022. Fast forward to the end of 2023, and suddenly investors are staring down a share price below 80 cents apiece.
Increasing interest rates and continued losses on the bottom line came down on Novonix shares like a 12-tonne hammer. However, sentiment appears to be turning around again this year.
The Novonix share price is up 22% this year (as shown above), buoyed by positive developments. In February, the company revealed it had entered into a binding off-take agreement with Panasonic Energy to supply synthetic graphite anode.
