HPQ Silicon: From Tinkerer to Commercial Player
After 10 years of intensive development work, HPQ Silicon is moving beyond the laboratory stage. The company has established three pillars of business: silicon anode material for batteries, pyrogenic silica, and portable hydrogen technology. The recent memorandum of understanding to evaluate a Canadian production platform for electric powertrains underscores the transition from technology developer to commercial supplier. The partnership with the French powertrain specialist LN Innov is a strategically wise choice. LN Innov’s current production capacity of 5,000 drone motors per month is set to rise to 20,000 units by the end of 2026. Every motor requires a battery pack, and HPQ, through its subsidiary Novacium, supplies precisely that, featuring integrated silicon anode material. This provides direct market access that competitors must first laboriously establish.
The key difference from many competitors is that HPQ has developed its battery cells in the standard 21700 format and tested them against the best available graphite cells. The results are impressive. Over 7,000 milliampere-hours and an energy density of 395 watt-hours per kilogram were measured for drone applications. Ten inquiries from institutions and companies were received following the announcement of these results. A European drone manufacturer has already ordered the Gen-4 material. At the same time, French drone manufacturers are evaluating Novacium’s battery technologies for future platforms. These concrete commercial steps set HPQ apart from competitors who merely advertise theoretical improvements.
Spreading risk across three technology areas is now proving to be a key advantage. While the silica project took longer than planned, battery development progressed more quickly. Now all three segments are simultaneously reaching the commercialization phase, and each would actually justify its own company. The Canadian government is supporting this effort with a CAD 3 million grant for a production facility with an annual capacity of 50 metric tonnes. This factory will cost a total of CAD 5 million. HPQ is thus positioning itself as a potentially important non-Chinese supplier of silicon anode material with proven practical viability. This is a strategic advantage in times of geopolitical supply chain considerations. The stock is currently trading at around CAD 0.15.
BASF: Between Cost-Cutting and Future Technology
The chemical giant is struggling to forge a new identity. With “CoreShift” and the spin-off of its coatings division, BASF is pushing ahead with streamlining the group, while the first quarter presented a mixed picture. Revenue fell under currency pressure, but profit climbed by just under 15% thanks to booming volumes in China and the sale of equity stakes. This discrepancy underscores the urgency of cost-cutting. At the same time, structural changes in the battery industry are creating prospects that could justify tough cost-cutting measures in the medium term.
While many manufacturers are suffering from subdued demand for electric vehicles, BASF is reaping profits from the fundamental transformation of supply chains. The company is deeply embedded in the value chain with customer-specific cathode materials and closed-loop recycling processes. Politically driven regionalization and the push toward a circular economy play right into its hands. Customers value the supply security offered by European production, while the recycling of critical raw materials generates additional margins. For investors, BASF thus becomes an anchor of stability in the volatile battery business.
The biggest bet is Zhanjiang. The low-carbon mega-site in southern China is already operating at 80% capacity and is expected to provide a noticeable boost to profits starting in 2027. However, this focus on the fastest-growing chemical market is a double-edged sword. Overcapacity and geopolitical tensions remain real risk factors. Analysts also remain divided. While some see opportunities for the share price to rise, others warn against overly optimistic expectations. The transformation driven by “CoreShift” and battery recycling offers promising prospects, but the strict cost-cutting measures require patience. Investors should closely monitor operational progress. The stock is currently trading at around EUR 47.89.
BYD: From a China Specialist to a Global Player
Amid the current upheaval in the battery industry, BYD is benefiting on several interlinked levels. Historically, the company has evolved from a pure battery supplier to a full-fledged vehicle manufacturer. This vertical integration allows the company to consistently synchronize cell development, manufacturing, and vehicle integration. In-house cell production eliminates intermediary markups, a decisive advantage in a market under strong price pressure. Additionally, manufacturing capacity can be flexibly shifted between vehicle production and external battery orders. This serves as an effective buffer against cyclical fluctuations in demand.
While competitors rely on more expensive nickel- or cobalt-rich chemistries, BYD has invested heavily in LFP-based designs and has conducted research to improve the energy density and fast-charging capabilities of these cells. The latest cold-weather test demonstration with the second generation of the Blade Battery showed impressive results. At minus 30 degrees Celsius, a vehicle reached a 97% charge level in 12 minutes. This reduces dependence on scarce raw materials, lowers material costs per kilowatt-hour, and thus reduces manufacturing costs. This is a clear advantage in a market where total cost of ownership is the deciding factor.
The latest sales figures point to a structural shift. With 160,644 units exported in May, BYD set a new record for overseas deliveries. This represents an 80.4% increase year-over-year. The export share thus climbed to 41.9% of total sales. At the same time, domestic sales plummeted by 24%, and BYD’s market share in China also declined. BYD is addressing this by expanding its international production facilities. Its first European plant in Hungary is scheduled to begin production in late 2026. CEO Wang Chuanfu expressed confidence that BYD will become the world’s largest automaker within five years. The stock is currently trading at around EUR 8.111.
Industry has left the phase of euphoria behind. Operational excellence and supply chain resilience are now crucial. HPQ Silicon is reinforcing its niche strategy with, among other things, commercial breakthroughs in silicon anodes for drones. BASF is struggling to balance cost-cutting measures with forward-looking recycling capacities—a balancing act that requires patience. BYD is leveraging its vertical integration to expand globally with low-cost LFP cells, even as the domestic market weakens.
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