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With Battery Day upon us, we thought it would be topical to have a catch up and discussion with Dan Blondal, CEO of Nano One Materials Corp (TSX-V:NNO). Seasoned readers of our analysis will know that we have been following Canadian battery technology specialist Nano One since December. During that time its share price has risen from CAD 1.18 to its current price of CAD 3.13.

We will be updating our note on NNO shortly but had the opportunity to receive some further insights from Dan on the state of the battery materials market which we wanted to share with our readers.

AT: What new areas of battery-related technology are you working on now?

There are increasing demands from the automotive sector for environmentally sustainable battery materials, including battery grade raw materials like nickel. Nano One’s patented One Pot Process eliminates the need for metal feedstocks in the form of sulfates, which also eliminates a costly refining step and a sulfate waste stream in cathode production. And our most recent innovations could enable better integration with raw material refiners for even better economics, environmental differentiation and value-added opportunities. To support this initiative, we have recently retained advisor Robert Morris, formerly Executive VP of Sales and Marketing for Vale and responsible for developing their electric vehicle strategy.

AT: You are already well-positioned to license your technology in the EV market – what are the big battery trends you are seeing here which Nano One could benefit from?

As we have discussed before, the million-mile NMC battery is a trending phenomenon, enabled by the increased durability of coated single crystals. Nano One’s technology enables the simultaneous formation of individual nanocrystals and could make production of these enhanced materials economically viable.

Lithium iron phosphate (LFP) batteries remain one of the lowest cost, safest and longest lasting batteries out there; ideal for heavy duty industrial applications and demanding fleet vehicles. And then to add to this over the last year, we have seen a new generation of LFP batteries that leverage LFP’s inherent durability with more cells packed into the same space and much improved driving range. This represents a foundational change with manufacturers choosing materials, designing their cells and engineering their battery packs specifically for automotive applications. You are going to see more stability and durability from these batteries.

OEMs are starting to take control of the cell design, but this innovation is going to benefit other markets too, for example power tools and all kinds of consumer electronics. As a licensing company, Nano One can play an important role in the technology that goes into all types of batteries. We are working with OEMs to develop and define next generation batteries using our technology and we are working further up the supply chain with materials producers to adopt and deploy our technology to meet the demand. We are well positioned to benefit from joint development, joint ventures or licensing and royalty deals in the battery market.

We interviewed Nano One CEO Dan Blondal on The Armchair Trader podcast where he provided a good overview of the company’s research efforts.

AT: Battery Day is focusing minds on the potential of battery technology and EVs – the battery is such an important part of the EV equation, but what’s your take on this?

The renewable energy storage space is seeing some amazing innovation, with LFP batteries starting to push into new areas. Much of the focus is going to be on durability, energy density, millions of miles and extending the range of batteries of course, but we could see aggressive cost projections that could be a tipping point for challenging applications like mass market vehicles, lead acid replacement, data centres and renewable energy storage.

Tesla has been actively acquiring companies and the tools to help it in the quest for cell production, increased energy density and the million-mile batteries. Dry cathode manufacturing from Maxwell could help with battery assembly, more silicon in the anode will help with energy density, durability enhancements in the cathode will help Tesla thrift away the cobalt, drive a little further and lighten up their battery management systems. And I would be surprised if Tesla doesn’t respond to other OEMs who have been rethinking the cell and the automotive battery pack.

AT: Nano One has done well in terms of shareholder value through the pandemic – it helps being active in a very exciting and innovative sector; but what do you think lies in store for this area?

When it comes to EVs, we are going to see a lot of focus on the car batteries, how they can be made more competitive. Manufacturers are going to be focused on both sides of the supply chain and will be looking at their margins. Big players will be looking to control all stages of the manufacturing process and looking for opportunities to integrate and consolidate for reduced costs and increased efficiencies. We’re going to see more innovation in pack level and even cell level design. Nano One is well suited to partner with auto makers that are dealing with these issues right now.

AT: Cobalt will continue to be an issue – can the market replace cobalt with something else if prices get too high or supplies are not sustainable?

It’s hard to say from the perspective of 2020, but the quest for cobalt alternatives will be one to watch. The fruits of research into high voltage spinels could be important, as this holds out the opportunity for the commercialisation of novel cathode materials which will lower costs and improve safety, plus wean EVs off cobalt.

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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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