NVX: Growing Environmental Awareness, EV Adoption & Infrastructure Initiatives Positives

By M. Marin

NASDAQ:NVX | OTC:NVNXF

READ THE FULL NVX RESEARCH REPORT

Company positioning to benefit from ramping growth in target verticals

Novonix NVX NVNXF has a positive sector tailwind, in our opinion, as it advances its strategy to develop a U.S.-based lithium-ion battery materials supply chain. The company is an integrated developer and supplier of high-performance materials, equipment and services for the global lithium-ion battery industry. Growing awareness of the climate change challenge, adoption of sustainable technologies and products and infrastructure initiatives create this positive tailwind, in our view. The company is advancing its technologies in North America, where demand is expected to be robust. Heat waves and wildfires in various markets and general shifting weather patterns appear to be boosting awareness of the climate change challenge.

Positive outlook on ESS and EV verticals …

Rising awareness, plus improving performance of electric vehicles (EVs), one of the company's core target markets, is spurring growing EV adoption. Novonix's other initial primary target niche within the battery space is the ESS (energy storage systems) vertical, which NVX's agreement with Emera is designed to penetrate.

… first microgrid battery prototype…

NVX and Emera Technologies intend to jointly develop battery pack systems to support microgrids that are designed to provide solar power to homes. Emera and Novonix recently delivered the first custom designed microgrid battery prototype to support BlockEnergy, Emera's residential pilot project located near Tampa, Florida. The two partners expect to test the battery prototype later in 2022 and to make the system available commercially in 2023.

EV adoption also appears to be accelerating, as noted. We also believe the recent infrastructure bill underscores and potentially expands prospective opportunities for Novonix, as it expands production capacity at its plant in Tennessee to produce high quality battery anode product. The bill envisions the expansion of the domestic EV charging station infrastructure, among other positives expected as catalysts for EV sales.

… and growing North American initiatives

Focus on green automotive options and optimism about the EV space is leading to development of infrastructure to support EVs. For example, Kore Power, a leading U.S.-based developer of battery cell technology for the clean energy industries that has a partnership with Novonix, announced plans to develop what it calls the KOREPlex in Arizona. Automotive OEMs such as GM and Tesla, among others, have also announced planned battery initiatives in North America. We view these initiatives as positives that underscore the potential demand for batteries and could serve as a catalyst for Novonix growth as it builds a North American ecosystem for EV batteries.

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