Secret behind Qld stock’s stunning 142 per cent surge
Shares in Brisbane battery technology company Novonix, whose directors include former Trump manufacturing czar Andrew Liveris, are on a tear as the US seeks to reduce reliance on China for lithium-ion battery materials.
Novonix, which is producing synthetic graphite anode from its plant in Chattanooga, Tennessee, has seen its shares soar 142 per cent since the start of the year after the new Biden Administration boosted optimism of further investment in electric vehicle development.
The stock rose 8.9 per cent to $2.93 on Tuesday after trading as high as $4.23 last week.
China currently dominates the supply of natural graphite, which provides the negative electrode in lithium-ion batteries, forcing the US to seek alternative supplies of the material in the coming years. Graphite makes up about 10 to 15 per cent of the cost of a battery.
Novonix chief executive Dr Chris Burns said natural graphite was cheaper than the synthetic version but less suitable for long-life batteries. The challenge was to make synthetic graphite more cost effective to produce cheaper electric vehicles.
Nova Scotia-based Dr Burns said Tesla wants to produce a mid-market US$23,000 electric car by 2023 making the development of cheaper batteries essential. "With Tesla, the range of the car is great and so is the battery life," said Dr Burns. "The problem is cost."
He said the search for reliable and cost effective sources of battery material was "front and centre" in the US as concerns mount that China could dominate supply.
"We have to build supply resilience and we just can't get it all from China," he said. "The new Biden Administration is just solidifying the priority."
Novonix last month received a $5.6m grant from the US Energy Department as part of the push to establish a domestic supply of high performance battery material.
President Joe Biden has promised to replace the US government's fleet of roughly 650,000 vehicles with electric models as the new administration shifts its focus toward clean-energy.
The US is 100 percent reliant on imports of graphite, which is used not only for electric and hybrid vehicles but for cellphones and laptops. China produces over 60 per cent of the world's high-purity graphite needed for rechargeable batteries.
Global annual electric vehicle sales are estimated to rise to 10m per year in 2025, 28m in 2025 and 56m by 2040. As a result, demand for high-performance battery material, including graphite, copper, cobalt, lithium and nickel, was expected to grow seven fold.
Novonix, considered one of the world's top researchers in lithium-ion batteries, has an agreement to supply 500 tons of synthetic graphite anode material to electronics giant Samsung. It also has a research and development agreement with the Korean company for the development of new materials.
Novonix shares have more than doubled since the start of the year on the Biden election and speculation the company would tie up with Elon Musk's Tesla. The stock rose 8.9 per cent to $2.93 on Tuesday after trading as high as $4.23 last week,
Novonix, who also has richlister Trevor St Baker on its board, announced on January 19 it had retained Tesla consultant Jeff Dahn as its chief scientific adviser.
Dr Dahn also will continue his work with Tesla, fuelling continued speculation that a formal relationship between Novonix and the electric carmaker may eventuate.
Tesla Motors began a five-year partnership with Dr Dahn in 2016 to develop longer-lasting batteries and accelerate its dream of building cheaper, mass-market electric cars.
That includes building a $5bn gigafactory in Nevada that will supply the batteries in its cars and double the production of lithium-ion batteries in the world.
Mr St Baker saw his 60.08m shares increase in value from $74.49m to $165m over the period while Mr Liveris' 6.6m shares surged from $8.184m to $18.15m.
Originally published as Secret behind Qld stock's stunning 142 per cent surge