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Chattanooga

NOVONIX Closed Chattanooga Plant Following Grant Dispute

The company failed to meet job creation targets, leading the state to demand repayment of a $3 million grant.

Updated on Sept. 18, 2026 in Jobs — General

Isometric editorial illustration of a solitary industrial warehouse facade with an overhead crane arm, evoking the closure of a manufacturing site.
NOVONIX has officially closed its Chattanooga plant and must repay a $3 million state grant after failing to meet employment targets. AI Illustration. Upload story photo >

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NOVONIX has officially shuttered its Chattanooga plant after failing to meet employment commitments. The state government has ordered the firm to repay a $3 million FastTrack grant.

Why it matters

The closure stems from the company's inability to hit its original goal of creating 290 jobs, having only established 85 positions. This highlights the risks associated with state-backed economic development incentives.

NOVONIX created 85 new jobs against an original commitment of 290. The company was subsequently ordered to repay a $3 million FastTrack economic development grant.

The players

NOVONIX

This is a battery technology company that focuses on synthetic graphite production for electric vehicle batteries.

Tennessee Department of Economic and Community Development

This state agency oversees economic growth initiatives and manages the administration of FastTrack grants for business expansion.

The details

Contractors at the Chattanooga facility were notified on Friday morning that the plant was closing and they had 24 hours to remove their equipment. Additionally, the company opted not to move forward with the purchase of a 17.5-acre tract at the local Alstom site.

Timeline

  1. April 2026: Federal officials certified the Riverside project for $103 million in tax credits.

  2. June 11, 2026: The state set a 45-day deadline for NOVONIX to repay its grant funds.

  3. September 18, 2026: The company closed the plant and notified contractors of a 24-hour equipment removal deadline.

Market Landscape

This plant closure marks a departure from the state's efforts to attract high-tech manufacturing through targeted fiscal incentives. It reflects a wider consolidation trend where companies are reevaluating site commitments amid shifting federal tax credit landscapes.

The closure of this facility eliminates 85 local jobs and halts the development of the intended 290-position operation. Residents and contractors affected by the sudden 24-hour equipment removal order face immediate logistical and financial disruption.

The takeaway

Companies operating under government-funded incentives must strictly adhere to performance benchmarks to avoid significant financial penalties. Local economic stability remains vulnerable to the shifting priorities and operational failures of corporate entities.

Further reading

For more information on the regional labor market, visit the Jobs — General section.

Live Poll

Should local governments be more rigorous in holding companies accountable for promised job creation?