Stellantis cancels several raw material contracts

These involve agreements with Novonix and Westwater Resources for anode graphite and Alliance Nickel for nickel and cobalt. In the case of Alliance Nickel (formerly GME Resources), the deal dates back to a non-binding agreement from 2022, before a binding supply deal for a total of 170,000 tonnes of nickel sulphate and 12,000 tonnes of cobalt sulphate was signed in April 2023. The agreement with Novonix for 86,250 to 115,000 tonnes from the beginning of 2026, on the other hand, was signed just over a year ago.

On 4 November, however, Novonix announced that the supply contract with FCA US LLC (the US subsidiary of Stellantis) had been terminated by the customer ‘with immediate effect’. ‘Novonix and Stellantis were unable to agree on the specific specifications of the battery cell product and the milestones for mass production qualification,’ Novonix continued. As is common with many raw material contracts concluded in advance, both sides had agreed on a pricing mechanism based on current market prices.

Novonix also confirms that deliveries from the plant in Riverside near Chattanooga, Tennessee, were scheduled to begin on 1 January 2026, so the cancellation comes at fairly short notice. “While NOVONIX is disappointed with this decision, it remains focused on its deliveries for Panasonic and PowerCo and continuing to provide samples to 15 current and potential customers for battery and industrial applications,” the statement said. Novonix had signed a supply agreement with VW’s battery subsidiary PowerCo at virtually the same time as Stellantis.

Westwater speaks of ‘unexpected’ termination

On 7 November, Westwater Resources announced that FCA US LLC had “unexpectedly terminated its Binding Offtake Agreement with the Company dated July 17, 2024” on 3 November. Stellantis was one of three major customers with existing contracts, alongside Hiller Carbon and SK On. “Collectively, our offtake agreements with Stellantis, SK On, and Hiller Carbon supported our ongoing debt syndication,” explained Terence Cryan, Executive Chairman of Westwater Resources. “However, due to Stellantis’s unexpected termination, the debt syndication is now paused, although our engagement with EXIM and other government agencies regarding financing opportunities is ongoing. In response to these developments, we are focused on optimizing the Kellyton Plant to meet our current offtake commitments, which should reduce the total capital needed to complete Phase I.”

Westwater wanted to supply Stellantis from the Kellyton plant. According to Cryan, the processing capacity in the first phase will now be adjusted to the existing purchase agreements and available financial resources. In other words, the plant will be slightly smaller and the investment requirements will be reduced. “The Company expects to complete this optimization evaluation by the end of the year and plans to provide an update to the market in early 2026,” Westwater wrote. The contracts with SK On and Hiller Carbon remain valid. FCA has also signalled “they are open to reconsidering a new arrangement with the Company, any future agreement would be based on current market conditions.”

Also on 7 November, Australia’s Alliance Nickel announced that its contract with Stellantis (this time not FCA US LLC) had been terminated with effect from 3 December 2025. Assuming a one-month notice period, the termination is likely to have been announced on 3 November. However, prices or demand are not cited as the reason here; rather, the Australian company is likely to have failed to meet agreed milestones. “The termination arises from certain contractual milestone dates not being met rendering the existing agreement inoperative. This is primarily due to challenging nickel market conditions and associated project financing constraints,” the statement said.

Although it also states that Stellantis remains interested in the raw materials from Alliance Nickel’s NiWest project, the terms are to be renegotiated to ‘better reflect the revised project development schedule and market conditions,’ according to the Australians. In other words, deliveries will start later, and volumes and prices are likely to be lower.

“We understand the rationale for the Stellantis decision, and at the same time we recognise that this presents a good opportunity for both sides to negotiate on a new agreement which is more reflective of the revised project development timeline and forward strategy,” said Paul Kopejtka, Managing Director of the Alliance. “I firmly believe that the long-term outlook for nickel and cobalt remains positive.”

The fact is that Stellantis is planning to produce fewer electric cars globally than it did a few years ago and therefore needs fewer battery raw materials in the short term. Much of the specific data for the switch to a pure electric car portfolio for Stellantis brands has been watered down or scrapped, with combustion engines and hybrids set to remain on offer for longer. In the US market in particular, the mood has changed significantly from the BEV-friendly course under President Joe Biden (with subsidies for products and the establishment of US battery supply chains), and many subsidy projects are currently being halted under his successor, Donald Trump.

novonixgroup.com, westwaterresources.net, sharelinktechnologies.com (Alliance Nickel announcement as PDF)

This article was first published by Sebastian Schaal for electrive’s German edition.