September 5th, 2022 | 14:04 CEST
GreenTech companies in hot demand: Freyr Battery, Rock Tech Lithium, Meta Materials, BYD
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"[...] Silumina Anodes® is a ceramic-coated graphite/silicon anode composite material that we plan to produce in Schwarze Pumpe, Saxony. Here, we aim to supply manufacturers of batteries for e-cars with an application-ready drop-in technology that is low-cost, high-performance and safe. [...]" Uwe Ahrens, Direktor, Altech Advanced Materials AG
Freyr Energy and Nidec: Cooperation with a future
The Freyr Energy share was still trading at EUR 6 in July, but last week the value reached a whopping EUR 14.80. Although the stock has since rebounded somewhat, the story behind the price increase is a compelling one. Freyr Energy is an expert in semi-solid lithium-ion batteries. The Company hooked up with Japan's Nidec Corporation at the end of August, a potent cooperation partner. Nidec primarily manufactures precision motors for the automotive industry. However, the field of activity of the new joint venture, in which Nidec will hold 66.7% and Freyr 33.3%, is in a different area. The new company will use the particularly sustainable manufacturing technology, for which Freyr is known, to produce giant energy storage units to help industrial and utility companies store renewable energy. Only hydroelectric power will be used in the production of the energy storage units. In total, the contract is for storing a whopping 38 GW of capacity between 2025 and 2030, with the option to expand to 50 GW.
The semi-solid lithium-ion battery from Freyr is considered particularly safe and durable. In 2024, Freyr's first Gigafactory in Norway is scheduled to go into production and initially stand for 29 GW of capacity. By 2030, Freyr has set a target of 200 GW. The joint venture again demonstrates that innovative technologies are in demand even in difficult market phases. Industry transformation in the wake of the energy turnaround but also digitization is forcing large companies to take action. Suppliers and solution providers like Nidec are recognizing these new markets and seizing these opportunities. Large industrial companies are also taking this path: A few weeks ago, it was announced that the lithium and recycling company Rock Tech Lithium, for example, will be working with Daimler in the future.
Meta Materials: Are these products ushering in a GreenTech revolution?
While the potential at Freyr Battery now seems to be exhausted, there are other technology leaders with enormous potential. Canadian company Meta Materials focuses on innovative surface materials with physical properties not found in nature. What sounds abstract has many tangible applications: Meta Materials is researching materials and manufacturing techniques to make batteries more durable, safer and cheaper. Among other things, the aim is to ensure that batteries of the future are made of fewer metals. In the field of solar energy, too, there are applications for the ultra-thin surfaces, which can have conductive properties, for example, to make solar panels even more efficient. Combination products are also possible thanks to the ultra-thin surfaces: For example, window panes that contain almost invisible 5G antennas or have other functions.
Meta Materials became a household name worldwide within days last summer - when its Nasdaq share price surged to more than USD 12 and multiplied. At that time, Meta Materials became a meme stock, and the business model was known to a broad group of investors for the first time. In the meantime, a lot has happened at the Company. For example, Meta Materials has entered into several cooperations, including in the field of geothermal energy, to bring the technology to market maturity with partners. Last year, Meta Materials was already confident that it would soon be able to produce the ultra-thin material at competitive prices. As soon as one of the existing cooperations reaches market maturity or an even larger partner joins forces with Meta Materials, the Company's potential should also unfold on the stock market. Currently, one share is trading at around EUR 0.80, close to its low of several months. Anticyclical investors should be alert, and trend followers should watch every twitch of the share with a sharp eye!
Why the Buffett shock is not a BYD shock
The hour of the anticyclical investors could also have struck at BYD. Major investor Warren Buffett has recently sold shares of the Chinese automaker. Many private investors followed the investment guru and sent BYD's share price further down. But fundamentally, little has changed at BYD - rather the opposite: BYD recently tripled its profit and is quite well positioned with its own battery production and a chip division. The reasons for Buffett's exit are, therefore, likely to lie less with BYD than Buffett himself. Buffett invested USD 230 million in BYD in 2008. Today, his share would be worth USD 8 billion - the value investor cannot be blamed for taking profits.
Buffett, who has surprised investors in recent years with his openness to new technologies, may also move on and discover new industries for himself. Given the lack of profits, the Meta Materials share is probably not yet a good fit for value investors. However, as soon as the products prove their readiness for the market, speculative value investors might also take notice - thanks to existing collaborations and patents, Meta Materials should secure a solid market position. A robust business model has always been a good argument for investors who want to accompany a company as shareholders for years.
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