Novonix rockets amid Tesla collaboration rumours, commercialisation plans and research breakthrough

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Novonix is raising $58.28 million to facilitate its advanced battery material commercialisation plans.

Lithium-ion battery materials and testing pioneer Novonix’s (ASX: NVX) share price has rocketed in recent days amid rumours the company may announce a partnership with electric vehicle giant Tesla, the imminent commercialisation of a supply agreement with Samsung, and breakthrough research.

The media rumours follow Tesla chief executive officer Elon Musk postponing the company’s Battery Day event from May till June after tantalising spectators for months that he was unveiling major advancements in battery technology.

According to Reuters, in conjunction with China’s Contemporary Amperex Technology Ltd (CATL), Tesla has developed a low-cost battery that could power an electric vehicle for a million miles.

Sources close to Reuters said the new million-mile battery will be launched in China with electric Teslas anticipated to compete cost-wise with a standard internal combustion engine vehicle.

The newswire’s sources said Tesla’s new batteries will either be cobalt-free or have low levels of the mineral as well as additional chemicals, materials and coatings to reduce internal stress and boost storage capacity.

Renowned lithium-ion battery innovator Jeff Dahn and his Dalhousie University team in Nova Scotia have been collaborating with Tesla since 2016, with a number of the new battery advancements purportedly originating from Mr Dahn’s lab including the chemical additives and nano-engineered materials to strengthen lithium-ion batteries against environmental stressors to boost life span.

Novonix link

Novonix comes into the picture due to its relationship with Dr Dahn’s lab. The company was spun out of the lab in 2013.

The company has two main business divisions – Novonix BTS, which focuses on battery technology solutions and is based in Nova Scotia.

In the US is the PUREgraphite division which is focused on developing high performing, lower cost battery materials.

Novonix already manufactures what it claims is the “highest accuracy battery test equipment in the world” which is already used by Tesla, along with Apple, Microsoft, CATL, GM, Panasonic and other manufacturing majors.

Novonix’s team includes co-founder Dr David Stevens who was a former research associate of Dr Dahn’s.

Fellow Novonix co-founder and chief executive officer of Novonix BTS Dr Chris Burns also worked with Dr Dahn prior to the spin out.

Dr Burns is also a previous senior battery research engineer for Tesla.

“We can forecast battery lifetime, with reliable methods in a much shorter time period,” Dr Burns told HyperChange about Novonix’s testing technology.

“We’re able to detect the rate of inefficiencies really quickly.”

He said this can be calculated in a matter of weeks compared to months or years of cycling data through traditional methods.

Dr Burns said this also enables new materials to be “screened in a couple of weeks instead of many months and [provides] a very rapid research cycle”.

Commercialising synthetic graphite

In addition to producing world class manufacturing equipment, Dr Burns said Novonix had used its testing technology to develop a new synthetic pure graphite anode material.

He added the 2018 agreement with Samsung would come into effect this year, where Novonix will supply an initial 500t of its synthetic graphite to Samsung.

Novonix then plans to scale that to supplying various gigafactories in North America with up to “thousands of tonnes” of synthetic graphite over the coming years.

Dr Burns pointed out the deal with Samsung was the first time any company in North America had collared a materials supply agreement contract for graphite to any of the big five battery manufacturers.

“It shows growth can come outside of Asia.”

Stable materials required to underpin battery life

Commenting on the lithium-ion battery, Dr Burns said they should be called “nickel-graphite” batteries.

“Graphite is half of the battery that makes the whole thing work.”

He said “really stable graphite” was needed in batteries to reduce degradation and fade due to its lower reactivity with the electrolyte lithium, explaining this means you lose less lithium over time and increases battery life.

“Synthetic graphite materials are going to have a dominant role in the supply chain for electric vehicles and energy storage systems compared to natural graphite.”

Research breakthrough

According to Dr Burns, part of the company’s strategy was to develop very stable, lower cost anode and cathode materials that can support extremely long cycle life.

Via a collaborative research agreement, Novonix revealed earlier this month a patented “breakthrough method” for manufacturing cathode and anode materials.

Known as dry particle microgranulation (DPMG), Dr Burns said the method is able to consolidate fine materials that are usually discarded as waste.

The method enables materials to be produced for use in lithium-ion batteries with 100% yield and no waste particles expelled into the environment.

It also allows the material to be produced without waste-water or chemicals.

Heading up the research at Dalhousie University, Prof Mark Obrovac said DPMG “represents a breakthrough in reducing the cost, waste, and environmental impact of advanced powder production”.

Meanwhile, Dr Burns said there were “immediate opportunities” to use the technology within the Novonix business.

Capital raising and rocketing share price

At the end of last month, Novonix revealed it was raising about $58.28 million to provide the capital required to fulfil its initial 500tpa supply contract to Samsung and expand production to 2,000tpa by 2021.

The company added it would be using funding to repay loans and assist with commercialising the DPMG technology for cathode and “other million-mile battery innovations”.

Novanix chairman Tony Bellas said it was an “exciting time” for the company as it transitions to commercial anode production.

Investors have reacted positively to the news – spurring Novonix’s share price up more than 175% over the last four weeks, with the price up 46.36% this week alone.

Novonix closed Wednesday at $0.695 – up 69% on Monday’s finish of $0.41.

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