Within the EV space, the companies that position themselves as integral to the supply chain for producing and catering to electric vehicles represent a powerful secular growth theme. One of the most important subgroups in that equation is companies involved in producing and improving batteries.
According to recent research from Technavio, “The advances in EV batteries and associated technologies will offer immense growth opportunities. To leverage the current opportunities, market vendors must strengthen their foothold in the fast-growing segments while maintaining their positions in the slow-growing segments.”
Technavio’s report calls for incremental growth adding another $38 billion in annual activity in the EV battery marketplace between 2021-2025.
According to a report by the U.S. Department of Energy, analysts believe the mobility storage demands in 2030 will reach 0.8 to 3.0 TWh, driven by light EVs, which represents a massive jump from current levels and will require an enormous growth in the battery-related industrial infrastructure to support such a tremendous expansion in demand.
That suggests innovators in the battery space represent one of the most promising and exciting investment opportunities going, which points to stocks related to the battery supply theme, including Albemarle Corporation (NYSE:ALB), KULR Technology Group Inc (NYSEAMERICAN:KULR), Romeo Power Inc (NYSE:RMO), Quantumscape Corp (NYSE:QS), Sociedad Quimica y Minera de Chile (NYSE:SQM), and Tesla Inc (NASDAQ:TSLA).
We take a look below at some recent catalysts in this space.
Albemarle Corporation (NYSE:ALB) is a key player in the battery space. The company engages in developing, manufacturing, and marketing of chemicals for consumer electronics, petroleum refining, utilities, packaging, construction, transportation, pharmaceuticals, crop production, food-safety, and custom chemistry services.
It operates through the following segments: Lithium, Bromine Specialties, and Catalysts. The Lithium segment is the most important for our topic today, and engages in developing and manufacture of basic lithium compounds, including lithium carbonate, lithium hydroxide, lithium chloride, and value-added lithium specialties and reagents. That lithium can then be used in lithium-ion batteries, such as those used to power most EVs.
Albemarle Corporation (NYSE:ALB) just announced its results for the second quarter ended June 30, 2021, including net income of $424.6 million, or $3.62 per diluted share, adjusted diluted EPS of $0.89, an increase of 4%, and net sales of $773.9 million, an increase of 1%. Net sales increased 5% excluding FCS.
“Albemarle delivered another strong quarter, generating $195 million in adjusted EBITDA, driven by continued strength in demand for our Lithium and Bromine products,” said Albemarle CEO Kent Masters. “We are focused on executing our accelerated growth strategy. We are in the final stages of two lithium projects which are expected to double our nameplate capacity to about 175,000 metric tons, including La Negra III/IV where construction is complete, and commissioning is progressing. We are firmly focused on advancing all our lithium projects to meet customer demand and accelerate profitable growth.”
And the stock has been acting well over recent days, up something like 7% in that time.
Albemarle Corporation (NYSE:ALB) managed to rope in revenues totaling $829.3M in overall sales during the company’s most recently reported quarterly financial data — a figure that represents a rate of top line growth of 12.2%, as compared to year-ago data in comparable terms. In addition, the company is battling some balance sheet hurdles, with cash levels struggling to keep up with current liabilities ($569.9M against $953.3M, respectively).
KULR Technology Group Inc (NYSEAMERICAN:KULR) manufactures and licenses next-generation carbon fiber thermal management technologies for batteries and electronic systems. This one is particularly interesting because it has massive credibility, a key niche, and almost no direct competition, which bodes well over the long run.
The central premise is its proprietary technology for preventing heat-induced catastrophic damage in EV batteries. This includes the company’s two core products: its Passive Propagation Resistant (PPR) battery design (cooler and safer battery module or pack) and its Thermal Runaway Shield (TRS) (battery enclosure). The technology behind these products was developed in partnership with NASA.
KULR Technology Group Inc (NYSEAMERICAN:KULR) has already built custom heat management technology for two NASA JPL space missions (Mars Perseverance Rover and the mission to put a human back on the Moon’s surface by 2025) and its tech is currently in use on the International Space Station. KULR has also already won over 30 NASA contracts, and has inked deals with the DoT and USAF.
Now the company is picking up additional momentum with the Department of Transportation. This latest permit authorizes commercial transportation of damaged, defective, or recalled (DDR) lithium-ion cells and batteries, or lithium metal cells contained in or packed with KULR’s proprietary Thermal Runaway Shield (TRS) packaging.
“Damaged, defective, or recalled lithium-ion batteries can present tremendous safety risks to people, property, and the environment if they are improperly handled, stored or disposed of,” said Keith Cochran, KULR President & COO. “We live in an increasingly portable and digital society in which we routinely see rechargeable batteries or battery centric products suffer damage or defect which require a recall. We’ve seen it with children’s toys, scooters, laptops, mobile phones, online shopping, and of course electric vehicles. With further adoption of Li-ion technology, we believe there will be an ever-increasing need for KULR’s Thermal Runaway Shield (TRS) packaging. Our DDR special permit, along with our recently attained prototype battery special permit and recycling special permit, strategically establishes KULR as an end-to-end provider of safe battery shipping solutions, no matter the mode of transfer.”
KULR Technology Group Inc (NYSEAMERICAN:KULR) also just reported that the company drove revenues totaling $620K in overall sales in calendar Q2 – a figure that represents a rate of top line growth of 208%, as compared to year-ago data in comparable terms. In addition, the company has a strong balance sheet, with cash levels exceeding current liabilities ($6.2M against $2.5M).
Sociedad Quimica y Minera de Chile (NYSE:SQM) engages in the production and distribution of fertilizers, potassium nitrate, iodine, and lithium chemicals. Like Albermarle, described above, SQM is relevant here as a major producer of lithium for the production of the storage cells.
The company’s Lithium and Derivatives segment covers lithium carbonate for electrochemical materials for batteries, frits for the ceramic and enamel industries, heat-resistant glass, air conditioning chemicals, continuous casting powder for steel extrusion, primary aluminum smelting process, pharmaceuticals, and lithium derivatives.
Sociedad Quimica y Minera de Chile (NYSE:SQM) recently announced that it suffered from a fire that impacted two of its storage ponds located at its Nueva Victoria production site in the Pozo Almonte district on July 19.
The company updated the situation recently, announcing that its emergency protocols were effectively executed with a quick response time, there were no injuries to employees present at the site, and the company was able to contain the damage, almost completely limiting it to the storage ponds. The good news for SQM is that the company believes the incident won’t materially impact its commercial commitments.
Even in light of this news, SQM hasn’t really done much of anything over the past week, with shares logging no net movement over that period.
Sociedad Quimica y Minera de Chile (NYSE:SQM) managed to rope in revenues totaling $382.8B in overall sales during the company’s most recently reported quarterly financial data — a figure that represents a rate of top line growth of 21.4%, as compared to year-ago data in comparable terms. In addition, the company has a strong balance sheet, with cash levels exceeding current liabilities ($604.4B against $369.7B).
