By M. Marin
READ THE FULL NVX RESEARCH REPORT
As Novonix (NASDAQ:NVX), an integrated developer and supplier of high-performance materials, equipment and services for the global lithium-ion battery industry, continues to advance its strategy to develop a U.S.-based lithium-ion battery materials supply chain, adoption of electric vehicles (EVs) continues to grow. The EV space is one of NVX's core target markets and we view EV growth as a positive for NVX.
Rising adoption of EVs…
In 2021, global EV sales accelerated, according to International Energy Agency (IEA) data. Some 6.6 million plug-in vehicles were sold, which represented a greater than 100% increase compared to three million sold in 2020. Including hybrids, EV sales represented about 9% of the global new-car market in 2021, up from 4.1% in 2020 and 2.5% in 2019. Favorable government policies, including subsidies, combined with the introduction of new EV models are key drivers behind EV sales growth. McKinley notes that, "the tipping point in passenger EV adoption occurred in the second half of 2020, when EV sales and penetration accelerated in major markets despite the economic crisis caused by the COVID-19 pandemic."
… as governments provide incentives and EV performance improves
In the U.S., most EVs and even hybrids have been eligible for a federal tax credit of up to $7,500, depending on the total number of EVs the manufacturer has sold. In addition, many states also offer incentives for purchasing a new EV. Also encouraging in terms of consumer adoption is continued improvements in EV performance and regulatory restrictions on automobile emissions.
We also believe the recent infrastructure bill underscores and potentially expands prospective opportunities for Novonix, as the company expands production capacity at its Riverside plant. The bill envisions the expansion of the domestic EV charging station infrastructure, among other positives expected as catalysts for EV sales. The Biden administration has a stated target of constructing a national public EV charging network of 500,000 ports by 2030. Along with the U.S. Departments of Transportation and Department of Energy, the administration recently announced an agreement to deploy about $5 billion over 5-years to support the development of a national EV charging network.
Ambitious Plan to Scale Production
Through its operating units – Novonix Anode Materials, Novonix Cathode Materials and the Novonix Battery Technology Solutions (BTS) divisions – Novonix is leveraging proprietary R&D to develop these key materials. Cathode and anode materials are critical components of lithium-ion batteries and both Novonix Anode Materials and Novonix Cathode Materials are expected to play key roles in the growing demand for batteries. Novonix had cash of about Aus$291 million at the end of calendar 3Q21 to support its development efforts.
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