Novonix (ASX:NVX) lithium-ion battery leader


by Anna Napoli

Novonix Limited (ASX:NVX) Managing Director, Philip St Baker talks about the company's lithium-ion battery technology, advanced battery materials, testing equipment and strategy.

Anna Napoli: Hello Anna Napoli for the Finance News Network and joining me from Novonix Limited (ASX:NVX) is Managing Director, Philip St Baker. Philip, welcome to FNN.

Philip St Baker: Thanks for having me Anna.

Anna Napoli: First up, could you please provide us with an introduction to Novonix (ASX:NVX)?

Philip St Baker: Novonix (ASX:NVX) is a battery technology company, focused on developing and delivering battery materials and technology solutions, to the lithium-ion battery market. We’ve got operations in the USA and Canada, and we sell product in 14 different countries.

Anna Napoli: Can you tell us about your battery cell test equipment?

Philip St Baker: Essentially, nearly every major company that makes batteries, lithium-ion batteries in the world is now buying Novonix equipment, to test how good their product is or how efficient their product is.

We’re specifically looking at testing the coulombic efficiency of batteries, which in simple terms, is the efficiency of the battery. If you have a battery that’s perfectly efficient, it’ll last forever. So batteries don’t do that, there’re slight parasitic reactions that occur in each charge and discharge. And our technology allows battery makers and battery scientists to measure the losses that take place in the batteries. And to be able to predict the life, how long that battery will last.

Anna Napoli: Can you tell me who some of your main clients are?

Philip St Baker: Unfortunately with our client base, they’re really the who’s who of the battery industry and manufacturers worldwide. So we have a lot of confidentiality agreements that preclude us from disclosing, but some of them we can. The biggest battery maker in the world is a company called Panasonic Corporation (TYO:6752). And they buy our equipment to test their batteries and to determine the efficiency of their product.

The second biggest battery maker in the world is a company called CATL (SHE:300750) from China. They buy our product, in fact CATL owned one third of Novonix once upon a time, until we acquired their interest a year ago.

When you flip over to the manufacturing, the primary well known brands that are focusing on electric vehicles. I think if you just close your eyes and think about the large electric vehicle makers of the world, or those that are aspiring to it. Power tools is traditionally a very big user of batteries, Bosch Limited (NSE:BOSCHLTD) is a very big brand I can mention there.

Anna Napoli: Can you tell me about the battery materials themselves?

Philip St Baker: Absolutely, the battery materials part of our business; it has two components to it. One is a joint venture based in the United States, called PUREGraphite. So this is a joint venture focused on commercialising and bringing to market, a very high performance and long-life anode materials, specifically for the electric vehicle and energy storage markets, where you need batteries to last for 10 to 20 years.

We also have a world-class graphite deposit here in Australia in north Queensland, just north of Cloncurry.

Anna Napoli: Can you tell us about your new products?

Philip St Baker: A new area and new products that we’re looking at developing are electrolytes and electrolyte additives. And we’re heading that out of our Halifax office. We’re also developing new battery testing technologies. And these are in the areas of non-destructive chemical testing, and non-destructive volume metric testing. So we’re able to analyse the electrolytes within a battery, without opening it up. It’s pretty innovative and we’ve not brought that to market yet, we have prototypes.

We also have technology that allows you to look at the swelling of a battery, which is a common problem, as they push limits with lithium-ion technology. We have problems with batteries swelling; we’re developing technologies to allow research companies to be able to optimise that.

Anna Napoli: Now to financials and strategy. How are you progressing?

Philip St Baker: The two parts of the business, the materials business is a commercialisation of a new technology and IP. So it’s a business that is a cost centre at present, as we finalise our technology and build our first production plant, and start sales and production. So that’s a path to market that we’re executing right now, and we expect to be into sales late this year or early in the New Year.

Flipping over to the technology, Novonix Technology Solutions. That business is already making profit selling its wonderful technology and equipment, around the world. So it’s doing very well, its turnover I expect to be more than $2 million this year, for a brand new company really in its third year of sales. So I expect that to be a 30/40 per cent growth this year, but it’s on a very good trajectory.

Anna Napoli: Last question Philip. Why should investors consider adding Novonix to their portfolios?

Philip St Baker: Novonix is a really good opportunity for investors, who want exposure to the lithium-ion battery market. And the EV and grid storage and home storage, the whole energy storage market generally. Novonix is a great opportunity for people, to invest in a company that’s pursuing opportunities right across the supply chain, from the materials through to battery making and battery testing technology. So right across that whole supply chain.

Anna Napoli: Philip St Baker, thanks for the update.

Philip St Baker: It’s a pleasure, thanks for having me.