Hi All, The interest in Novonix has grown over the last year,...

Hi All,
The interest in Novonix has grown over the last year, so might be worth a closer look at the actual and potential technology pipeline this great company has. A number of interesting quotes from the Annual Report got me thinking about where they are headed. Quotes from Novonix Annual Report are in bold.

NOVONIX is well-positioned tobe an industry leader at the forefront of product innovation in the batterydevelopment and material technology industry... NOVONIX… continues to focus on developingimproved technologies, pursuing strategic partnerships with leadinginternational battery companies and growing an intellectual property pipelinethat will position the company to be at the forefront of next-generationbattery technology.

DPMG

In fiscal 2021, NOVONIX BTS announced two battery technology developmentsin cathode material processing technology: DPMG and dry synthesis ofhigh-nickel single crystal cathode materials

This could be extremely exciting if DPMG comes through as a low cost and green manufacturing technique for anode and cathode materials. From what I can gather, it works at lab scale, and I assume is being incorporated into ‘Big Blue’ for anode materials production. To what scale I don’t know, but what love to hear if any of you have heard anything that I’ve missed on this front.

Further DPMG uses in cathode material synthesis also seems to be moving forward, and could be the tech that gets Novonix to a true industry leader, with the potential to use low grade Nickel in batteries rather than high grade. This is a substantial saving in production costs, and is also a far greener process than traditional manufacturing (waste water etc), so win-win all round if they can scale – more on this below.

There was discussion of licensing DPMG for other uses outside the battery space, and this could also be good in the future, but we haven’t heard anything on this front for some time.

CATHODE MATERIALS

There were numerous related quotes on these technologies that are worth mentioning:

NOVONIX BTS is increasing investment in the intellectualproperty developed around cathode synthesis technologies that it believes couldenable a substantial reduction in the cost of producing high energy density(high-nickel based) cathode materials. NOVONIX BTS has established asmall-scale pilot line for the development of the technology and filed twopatent applications. Additionally, it expects to leverage NOVONIX BTS’ batterycell pilot line and cell testing capabilities to further expand the dedicatedcathode development team and install larger-scale pilot synthesis capabilitiesto demonstrate the manufacturability of the technology along with theperformance in industrial format lithium-ion cells.

In fiscal 2021, NOVONIX BTS began working with multipleestablished and potential lithium suppliers in material evaluation programswhich build on the company’s initiatives in cathode precursor as well as finalcathode synthesis technology.

NOVONIX anticipates being well-positioned to become aleading single crystal cathode producer for the lithium-ion battery industry.The single-crystal materials offer enhanced energy density and long life, whilealso improving the cost, performance and sustainability of a lithium-ionbattery for electric vehicle and renewable energy applications.

NOVONIX BTS has also opened engagement with multiplecurrent commercial precursor and cathode suppliers to discuss the company’stechnology and current state of demonstration capability in terms ofsynthesizing capability and performance. The team expects to progress intofull-scale cell builds and begin more extensive benchmarking tests by the endof the fiscal year.

The company is in the process of pursuing foundationalpatent applications to further position NOVONIX as the market leader in singlecrystal and polycrystalline cathode production and plans to provide updates asapplicable.

Commercialise our proprietarypipeline of advanced battery materials and process technologies. The drysynthesis cathode technology commercialisation project is progressing with thecompletion of the first phase pilot line in January 2021. The company isworking to meet key testing milestones over the next 12-18 months as it expandsits next phase of pilotscale production to a 10 tonnes per annum capabledemonstration line in 2022 and evaluates material performance in cells built onthe battery pilot line in the Battery Technology Solutions division.

We’ve heard for some time that testing these new materials and techniques takes a long time in this industry, so looks like we have a little while to wait before knowing how good it is. The potential of cathode material production via DPMG is such a game changer, and could make Novonix FAR more money than anode materials IMO. The fact they are trialling different precursor materials from different companies (eg LKE lithium) indicates the HUGE potential if they can get this to work. Single crystal cathode was a buzz word leading up to Tesla Battery Day, but has not got much press since. Still, the benefits of single crystal over polycrystal cathodes are well documented by Jeff Dahn, so if Novonix can produce better cathode materials for less, the profit margin should be excellent! I wish they could go faster with this tech, but I guess it’s also good to learn patience in this game.

EMERA TECHNOLOGIES PARTNERSHIP - ENERGY STORAGE

Further broaden the use of our batterytechnology in grid storage applications. The partnership with EmeraTechnologies illustrates NOVONIX’s ability to apply its technology and know-howinto diverse energy storage applications. NOVONIX is looking to expand this
partnership in connection with the potential tomanufacture and delivery of residential energy storage systems as early as thenext 12-18 months.

NOVONIX also recently entered the grid energy storagemarket by partnering with Emera Technologies to design battery pack systems tosupport microgrids that, if successfully produced, will provide solar powerdirectly to homes in North America… This opportunity highlights the value ofBTS in working with companies and industries across the battery value chain.

Emera is the second storage specialist company linked to Novonix (Kore Power hopefully is still interested in some way). I find it particularly interesting they mention manufacturing energy storage systems in one of the quotes above - what does this mean? Novonix manufacturing batteries in 2022 or 2023? Surely the design is the main thing, but the annual report does say manufacturing, so they must be at least looking into it. I did say last year I believe Novonix could manufacture their own batteries around 2025 or so, but only in a bull case – too much capital needed IMO to do it at scale sooner. They do mentiontheir pilot line of cell manufacturing, but I assume this is really for testing, not for use commercially. So otherwise they would seek a third party for cell manufacturing using NVX design and possibly NVX materials, but would love to see NVX start battery manufacturing if they can find the capital in the medium term. This would move them up the value chain for much larger profit margins.

NEXT GENERATION TECH

Maintain technologyleadership throughout the EV battery and energy storage supply chain. NOVONIXis committed to continuing to leverage its competitive advantage to expand itsofferings and technological know-how into other advanced offerings includinglithium-metal and beyond lithium-ion technology.

Interesting they are talking about beyond lithium-ion technology at this stage. Previously they had mentioned silicon-infused graphite anode material and even solid-state potential, but now different options highlighted. Is lithium-metal going to match their current scaling up of graphite? Many questions here, and look forward to further updates on patents and their technology both in house and via Dalhousie University.

So, just getting the ball rolling looking at their tech and how it fits into Novonix’s future. It’s all closely tied in with their future profitability, so important to get a handle on as investors.

I look forward to hearing from you.