Phillips 66 will acquire a 16% stake in lithium-ion battery material supplier NOVONIX Limited for $150 million, the U.S. refiner said Aug. 9, as demand for electric-vehicle battery materials rises.

Phillips 66 develops carbon anodes and other materials for lithium-ion batteries using by-products from its oil-refining business.

U.S. Democrats have been advocating for a majority of cars manufactured in the country to be electric by 2030 and every car on U.S. roads to be electric by 2040.

Phillips 66 makes specialty coke, a key precursor in the production of batteries that power electric vehicles, personal electronics, medical devices and energy storage units.

NOVONIX produces synthetic graphite used to processes specialty coke to make anode material for these batteries.

The company's anode materials business is based in Chattanooga, Tennessee, where it is increasing capacity to produce 10,000 metric tons per year of synthetic graphite by 2023. The investment by Phillips 66 will support a capacity expansion of an additional 30,000 metric tonnes per year, which is expected to be completed by 2025.

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