- Lithium iron phosphate, an essential material for lithium batteries, is almost entirely under Chinese control, with new export restrictions only exacerbating market tightness
- Nano One Materials, a battery technology innovator and lithium iron phosphate manufacturer, is on a high-probability path to becoming a leader in non-Chinese supply
- Nano One stock has yet to recognize the company’s potential, opening the door for a value play
Lithium‘s unmatched performance in the storing and deploying of energy makes lithium batteries a key driver behind the energy transition, powering most electric vehicles on the market today. That said, they are not without their drawbacks.
This content has been prepared as part of a partnership with Nano One Materials Corp., and is intended for informational purposes only.
Lithium batteries are incredibly expensive to produce, given that new mining projects require billions in capex and long-term time horizons before seeing a return on investment. Additionally, essential battery components are in some cases subject to supply-chain bottlenecks with conflict-prone nations. This is the case with lithium iron phosphate (LFP), a fundamental ingredient for cathode active material, which, alongside the anode, facilitates the transmission of electricity.
According to a recent CNN report, while LFP batteries account for 40 per cent of EVs on the road thanks to their superior safety and lower price – granting them a global market expected to surpass US$40 billion by 2030 – China currently controls about 94 per cent of LFP production capacity, with recently announced restrictions on battery cathode technology likely to push prices higher in the rest of the world.
This demand dynamic is shining a light on Nano One Materials (TSX:NANO), market capitalization C$113.73 million, an emerging manufacturer of LFP cathode active materials whose patented One-Pot production process has been shown to reduce opex and capex by 30 per cent, greenhouse gas emissions by 50-60 per cent, and water and energy usage by 80 per cent compared to legacy methods.
Nano One operates an up to 1,000-ton-per-year manufacturing facility in Quebec, the only one outside of Asia, and is currently at work with high-profile partners Rio Tinto, Worley and Sumitomo Metal Mining, backed by government funding from Canada, Quebec, British Columbia and the United States Department of Defense, to repatriate LFP production and reinforce supply chains across the world.
The company is currently in the process of “sampling, demonstrating and collaborating with partners in North America, Europe and the Indo-Pacific,” according to a statement from Dan Blondal, Nano One’s chief executive officer, in a July 8 news release, positioning the company for what its June 2025 investor presentation describes as “multi-track revenue growth” across a global pipeline spanning artificial intelligence (AI) data centers, aerospace, defense, energy grids and EVs.
With numerous catalysts expected in 2025, including capacity expansion and client sample validation (see slide 22 of the investor presentation), as well as a capital-light licensing model in place to catalyze growth, Nano One is on a path to taking its target market by storm, leveraging its low-cost technology into greater efficiencies of scale to enhance margins and foster shareholder value.
Nano One stock shows the broader market’s pessimism about the underlying company’s considerable promise, giving back 21.54 per cent year-over-year and 59.52 per cent since 2020, clearing the way for value investors with the required risk tolerance to look past pre-revenue operations and capitalize on the clear reasons for conviction.
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