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With the UK already focused on transforming our road vehicle population to electric vehicles, we are beginning to also see that such a revolution in the way energy is consumed by drivers will not be easy to achieve. It is a great idea in principle, but the logistical effort to build the batteries required is a huge undertaking for the automotive industry.

There is no doubt that sales of electric vehicles (EVs) are accelerating globally and that vehicle manufacturers are investing heavily in regional supply chains and gigafactory networks to make this ambition a reality. But the demand for vehicles is rising faster than pre-pandemic forecasts predicted, and this is already creating bottlenecks in the supply chain.

The US Department of Energy has also woken up to the need for the construction of efficient supply chains: there is an acute awareness of a dependence on Chinese production, with the US forecast to supply less than half the projected demand for lithium-ion batteries for electric vehicles on its roads by 2028.

Part of this boils down to a lack of national strategy, but also shortage of the requisite raw materials. There is now increased focus on whether some of these battery materials can be efficiently recycled. Scrutiny is being applied to the environmental footprint of the battery manufacturing process.

The lithium-ion battery supply chain is still too clumsy and too environmentally unfriendly, and governments are aware that this needs to change. There are many costly attributes involved – e.g. shipping – not to mention the manufacturing time.

Nano One: ahead of the curve on the battery challenge

One company that has been ahead of the curve on the battery challenge for some time now is Canadian-based Nano One (TSX-V:NANO / FRA:LBMB). It specialises in developing more efficient ways to harvest energy from battery materials. When you have economies looking hard at how they can do more with less in the battery space, technology like this – called by Nano One its One Pot Process – is starting to look like gold dust.

Nano One is still a small company but it works with big partners. It owns the technology it licenses, including innovations that are intended to drive down cost, waste, energy and the carbon footprint in the battery supply chain. It is getting interest from automotive companies, cathode producers and indeed governments, having attracted funding from both the Canadian government and the province of British Columbia.

One of Nano One’s potentially transformative technologies is M2CAM. It officially launched this technology in February of this year. It allows cathode materials to be made directly from metal, using nickel, manganese and cobalt metal powder feedstocks, rather than metal sulfates or other salts. The idea here is to shorten the carbon footprint that exists between the mining industry and the battery and vehicle manufacturers.

M2CAM uses 20 times less water as part of its process which reacts in a furnace and comes up with the goods much more quickly than the current wasteful processes.

Nano One has patents pending for M2CAM and says its preliminary test results are showing battery capacity is already up to 5% higher than cathode materials currently made from metal salts.

M2CAM technology can drive down costs and environmental impact

M2CAM effectively eliminates the need for the costly and energy-intensive conversion of nickel, cobalt and manganese to sulfate, and lithium carbonate to hydroxide. It means there is no need to ship large quantities of water and sulfur, which lowers the energy, emissions and costs of shipping by a factor of 4-5x.

Other costs are also eliminated, like making what is called precursor cathode active material, or handling a waste stream.

“OEM’s want ‘clean nickel’ and that refers to the mining, refining and logistics of getting the product to the place where it will be consumed,” says Robert Morris, a strategic adviser on battery metals with Nano One. “Metal producers should have an ESG and premium advantage over sulfate and other non-metal producers, if their nickel can be used directly in the production of cathode materials.”

Miners and refiners use a costly and energy-intensive crystallization process to convert nickel, for example, into nickel sulfate (NiSO4.6H2O, 22% nickel, 78% waste) which weighs 4-5x more, before shipping to manufacturers. The metal sulfates are then mixed in a caustic process to form an intermediate precursor while generating 4-5x waste in sulfate and water. Lithium hydroxide (LiOH) is then added to the precursor in a prolonged thermal process to form the cathode powders before the final protective coatings can be applied.

This supply chain is long and complicated with energy, carbon emissions, environmental waste, complexity, cost, logistics, shipping, and margins added at each stage.

Why M2CAM is so important

Nano One’s patented One-Pot process forms durable single crystal cathode powders and protective coatings simultaneously and M2CAM enables these materials to be made directly from metal powders. Metal powders are one-fifth of the weight of metal sulfates, avoiding the added costs, energy and environmental impact of converting to sulfate and shipping and handling of waste.

It sounds complicated, but this creates added value for metals and aligns Nano One with the environmental, sustainability and cost objectives of automotive companies, miners, investment communities and governmental infrastructure initiatives alike. Just as importantly, it also means that the supply chains can be far more efficient than they have been previously. We anticipate there will be more focus on this in Europe as well as the US over the next few years and that Nano One’s technology will have a very important role to play.

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Please note this article does not constitute investment advice. Investors are encouraged to do their own research beforehand or consult a professional advisor.

Stuart Fieldhouse

Stuart Fieldhouse

Stuart Fieldhouse has spent 25 years in journalism and marketing, including as a wealth management editor for the Financial Times group, covering capital markets and international private banking, and as an investment banking correspondent for Euromoney in Hong Kong. He was the founder editor of The Hedge Fund Journal.

Stuart has worked at CMC Markets, supporting the re-launch of its global financial spread betting and CFD trading platforms. He is also the author of two books on trading, published by Financial Times Pearson. Based in The Armchair Trader’s London office, Stuart continues to advise fund managers, private banks, family offices and other financial institutions.

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