Tesla Beaten to the Punch on Million-Mile Battery?
Last spring, Elon Musk did what he does best: He ran his mouth.
It may have gone unnoticed by the mainstream media because this round of gum flapping wasn't focused on a new rocket, a time-travelling pickup truck, or even a plastic flamethrower.
Instead, the subject was batteries, and the big claim this time around was that Tesla (NASDAQ: TSLA) vehicles would soon be getting a new power source — a battery array with a million-mile lifespan.
Currently, Tesla battery packs last less than half that long, which makes this round of promises dramatic, to say the least.
However, unlike many of the billionaire's past public statements, these proclamations seemed to be grounded in science.
A few months after Elon's big announcement, researchers at Dalhousie University published a paper in the Journal of the Electrochemical Society describing a lithium-ion battery that “should be able to power an electric vehicle for over 1 million miles” while losing less than 10% of its energy capacity during its lifetime.
Dalhousie, it should be noted, has an exclusive agreement with Tesla.
Promotion Meets Science
Jeff Dahn, leader of the research team, showed that recent advancements could lead to a brand new standard in lithium-ion battery production, more than doubling service life while reducing incidence rates of failure, as well as maintenance and replacement costs.
The prospect of such an improvement doesn't just sweeten the deal for any prospective Tesla clients in the future; it also opens the door to new applications for electrical vehicles — namely self-driving taxis and long-haul trucking.
At the core of the innovation is the protective coating surrounding the nickel manganese cobalt (NMC) cathode.
It's this super-thin layer that will allow battery arrays to endure charge/discharge cycles with far greater efficiency.
Seems legit, right? Progress at its best.
But, this being an Elon Musk production, you just know that it can't be so cut and dried.
So what's the catch?
To One Group Based out of Canada, This Isn't News
Another company may have already beaten Tesla and its legions of researchers to the punch.
It's a tiny company you've probably never heard of. It doesn’t have a billionaire front man spouting off on Twitter or staccato-stuttering his way through speeches before crowds of drooling fans.
What it does have, however, is a head start on a technology that will very likely change the face of the lithium-ion industry forever.
In August of 2019, a month before the Dalhousie paper was published, this small, unknown company's CTO delivered the following quote in a press release:
[Our] latest innovations provide added durability and safety to NMC cathodes by protecting them from the stresses of repeated charging and from undesirable side-reactions. We are able to form protective coatings on individual particles and this is clearly differentiated from others who are developing coatings on larger clusters of particles. The stresses of repeated charging cause large coated clusters to break apart, leaving individual particles on the inside exposed to side reactions. By protecting the individual particle, [we are] engineering new materials for increased durability and safety. Our technology is particularly relevant to high energy nickel-rich NMC batteries because it provides added protection.
Called a "single crystal" protective coating, it's a super-thin layer that will give this new generation of batteries vastly improved range and reliability.
This company has been working on the technology for quite some time now, but it wasn't until Tesla started making waves on the subject last year that the mainstream media started picking up on it.
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Its CEO, far more reserved than Elon, was nevertheless grateful for all of the positive attention brought on by these statements.
Here's a direct quote from a press release put out by the company earlier today:
Tesla’s research provides evidence that batteries made with single crystal cathodes can last an order of magnitude longer than conventional composite cathode structures in battery cycle testing. These results help to substantiate [our] technology advantage and have spawned a great deal of interest in our coated nanocrystal innovation which produces our patented single crystal cathode powders. This has generated a measurable increase in strategic level discussions and forms the basis of current relationships with several automotive players and chemical companies. We are working hard to add these developing relationships to our existing list of joint development partnerships.
This Is What Happens When You Talk Too Much
Or, put more plainly, "Thanks for the free advertisement, Mr. Musk."
The value for the consumer here is clear. These innovations remove more points of resistance from mass adoption of EV technology by mainstream consumers.
Future vehicles will be cheaper, more reliable, and easier to maintain, but the company that's now thanking Elon Musk for the free publicity takes all of this a step further.
Its batteries will also be cheaper and cleaner to produce as well. And with rising energy densities of the NMC cathode, unexploited applications, such as electric aircraft, may soon become commonplace as well.
The value to the investor, however, is even greater.
You see, while Tesla is a $90 billion giant, boasting not just the world's most famous EV brand, but also the biggest battery manufacturing facility in history (with more planned), the company that's been benefiting from this free publicity is currently valued at just $60 million.
Mind you, this is a company with patents, years of research, and real results already notched into its belt.
Early-Stage Company, Ripe Technology
The technology it's pioneering grows more important by the day, as the world races to transition from carbon to electron-derived power.
And yet... This company is still just 1/1,500 the market capitalization of its closest competitor.
Are you starting to see the significance here?
When Tesla IPO'd in 2010, shares were selling for around $23.
Today, it's going for close to $500 — all-time highs for the stock.
The company I've been mentioning throughout this article is also publicly traded, and its shares cost less than $1 on the U.S. exchange (a bit over $1 on its home exchange in Canada).
The potential here isn't just significant; it's approaching critical mass.
There is a lot more to this story, of course, but, luckily, the information is easily accessible.
Get all the facts you need, including the ticker symbol and stock metrics, by clicking here.
Fortune favors the bold,
Coming to us from an already impressive career as an independent trader and private investor, Alex's specialty is in the often misunderstood but highly profitable development-stage microcap sector. Focusing on young, aggressive, innovative biotech and technology firms from the U.S. and Canada, Alex has built a track record most Wall Street hedge funders would envy. Alex contributes his thoughts and insights regularly to Wealth Daily. To learn more about Alex, click here.
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