Will This Be Tesla's Next Battery Acquisition?
Early this morning, as the first rays of sunlight were breaking through the foggy haze, I spotted an article on Yahoo Finance that had the effect of three double shots of espresso.
It contained a quote from the CEO of a company I've been following for the last few months.
Here is what I read:
There is a global effort underway to increase the energy density and safety of lithium ion batteries, and solid-state batteries are one of the more promising solutions. [We have] developed a number of cathode materials and processes that have caught the attention of the industry, primarily from within the automotive sector. We have many third-party evaluations now underway with the goal of partnering to make solid state batteries a reality.
Now, the significance of this quote should be self-evident.
What this CEO is talking about, essentially, is the arrival of a next-generation lithium-ion battery.
This development could not have arrived too soon because current battery technology is the limiting factor for a wide spectrum of applications.
A Giant's Clay Feet
From smartphones to electric vehicles, problems including capacity, longevity, reliability, and even safety have been plaguing the technology for years.
The issues arise mainly during the production process and can lead to problems ranging from mere annoyance and inconvenience all the way up to life-threatening danger.
Case in point, hardly a week goes by where I don't read yet another story about a Tesla vehicle randomly catching fire and burning to the ground.
And the culprit is always the same: the giant, cumbersome, expensive yet fragile battery array.
These problems are anything but limited to cars, too.
Remember how Samsung Galaxy Note 7s were banned from airline flights?
The reason was that the batteries had a nasty habit of overheating and, on occasion, even catching fire.
Each One Is a Potential Killer
There have been more than 100 incidents involving just that one device, and each time, there was real potential that the fire could have spread, causing an uncontrollable blaze.
At 30,000 feet, in an oxygen-rich environment, it's hard to overstate the danger this scenario poses.
A few years back, our own office got to experience the lithium-ion battery's natural propensity for self-destruction when one of our hoverboards decided to spontaneously catch fire and explode, forcing us to evacuate.
I can tell you that the experience was downright terrifying. One minute it was just sitting there, and the next minute it was smoking, then burning.
Long story short, the problem is real, it's widespread, and it's been the bane of both manufacturers and users alike.
And that's just the risk of meltdown.
Even when these things work properly, they age fast, rapidly losing their ability to hold a charge and to maintain capacity through numerous charge/discharge cycles.
Ever notice how your phone or smartwatch's battery life starts getting shorter and shorter after just a few years?
Not something you want to worry about after paying between $500 and $1,000 for new phone or tablet... or worse yet, $90,000 for a new car.
And yet the problem is universal.
These problems may be an annoyance or a source of stress to you, but to the makers of the devices they power, they are the #1 limiting factor.
It's for this reason that any conspicuous improvements in existing technologies are immediately noticed, exploited, and often hoarded.
Back in February, Tesla, Inc. (NASDAQ: TSLA) paid an astounding 56% above market value for California-based battery maker Maxwell Technologies.
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“We Didn't Charge Enough”
Even more astounding was that Maxwell board members tried to block this sale because they thought they weren't charging enough.
Tesla scooped Maxwell up because Elon Musk wanted access to improvements Maxwell had made in supercapacitor technology.
But I've been following another company, which is making potentially revolutionary improvements to another component of the lithium-ion battery: the cathode.
It's the biggest and most expensive part of the battery, which means any major innovations made in cathode production will automatically make the resulting battery potentially disruptive to the entire industry.
And that's exactly what we're looking at here.
That's the reason the quote at the beginning of this article was so important... But it's also a cause for concern if you're only now reading about this for the first time.
It Could Already Be Too Late
You see, that quote appeared in one of the world's most popular financial media outlets.
Millions of people will be able to see it.
And since this company's stock is already public, this could be an historic event, both for the company and for its shareholders.
If you're not one of them, your time could be running out.
Like I said earlier, technological innovations in this field do not go unnoticed, and if the average Joe now has access to this information, you'd better believe potential buyers do as well.
I recently published a full-length research report on this company, detailing its technology and the changes it could bring to the industry.
I urge you to check it out as soon as possible because as this story gains traction, prospective shareholders will be losing upside potential every hour they delay their buy-in.
It's available to you right here, right now, free of charge.
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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