The key to billions in profits: High-performance batteries in the spotlight at NEO Battery Materials, Volkswagen, and DroneShield

NEO Battery Materials – The battery as a bottleneck

The AI revolution has a blind spot. It requires immense amounts of power, especially in mobile devices and autonomous systems. While everyone focuses on processors, the battery often limits the practical use of drones, robots, or smart electronics. The current market offers few suitable solutions for this, as it is fixated on standardized mass-produced cells from a highly concentrated supply chain. Manufacturers with special requirements in terms of runtime or performance have no choice but to develop their own expensive solutions. This gap between standard products and high-tech requirements is creating a new market niche.

This is precisely the niche that NEO Battery Materials is positioning itself in. The Company is taking a different approach to the industry giants and developing customized high-performance batteries. The technological core is a proprietary silicon anode that is designed to enable significantly higher energy density. NEO has found a way to control the typical problems associated with the material, such as severe bloating, at low cost and to manufacture the anodes at 60-80% lower cost than comparable solutions. On December 16, a second order, brokered by EN+, was announced by a Fortune 500 automotive company.

This is in line with the recent announcement that NEO Battery Materials, through its subsidiary NBM Korea, has signed a binding lease agreement for a production-ready electrode factory in South Korea's Gimje Free Trade Zone to minimize scaling risks and generate cash flow quickly. The affiliated team brings experience from established battery companies. It is important to note that NEO Battery is taking care to make its supply chains independent of China. Initial contracts with drone and robotics manufacturers worth millions validate the demand. The long-term vision is to build a resilient battery supply chain in North America to make Western customers more independent. The stock is currently trading at CAD 0.495.

Volkswagen – A balancing act between change and resistance

The results for the first three quarters show a group under considerable pressure. Although revenue rose slightly, the operating margin slumped to around 2%. The reason for this lies in a bundle of burdens such as special costs for value adjustments, noticeable effects from higher US tariffs, and the still marginally profitable ramp-up of electric vehicles, which forced management to correct the annual forecast for the operating return to 2-3%. Free cash flow in the core business is expected to remain just barely in positive territory. In the short term, profitability therefore remains under severe pressure.

The picture on the sales side is mixed. Volkswagen was able to slightly increase deliveries worldwide. Europe and South America are developing positively, driven by solid demand for combustion engines and new electric models. However, things are not going according to plan in the key markets of China and North America. Aggressive local competitors and trade policy hurdles such as tariffs are taking their toll there, leading to noticeable declines in sales. This regional divide is becoming a key challenge.

The strategic focus on electrification is beginning to bear fruit, but it is still a cost driver. Deliveries of pure electric vehicles increased by over 40%, especially in Europe. In China, on the other hand, the Company's own electric offensive is lagging significantly behind expectations and local competition. At the same time, the Group is pushing ahead with tough cost-cutting measures. A comprehensive restructuring program with extensive job cuts is intended to improve the cost structure in the long term and lay the foundation for more profitable growth in the new automotive era. A better battery could provide a boost. The stock is currently trading at EUR 104.45.

DroneShield – Questions of trust for a drone defense specialist

Former market darling DroneShield is facing massive challenges. What began as a clear growth investment in the hot sector of drone defense has become a gamble for many investors. This is triggered by deep doubts about the Company's management. A recent "Sell" recommendation by an analyst firm explicitly cites governance concerns. This skepticism is fueled by extensive insider sales by directors in the double-digit millions and a series of communication mishaps, including erroneous stock exchange announcements. Investors' fundamental trust appears to have been shaken.

Ironically, the Company's operations provide plenty of reasons for optimism. It recently reported record sales and positive operating cash flow. Demand in the military and civil sectors remains strong, fueled by geopolitical tensions. A recently announced follow-up order from Europe underscores the continuing business potential. However, these solid fundamentals are currently coming up against a wall of mistrust. Questions about the integrity and transparency of management are currently dominating the market. The gap between operating performance and capital market valuation could hardly be greater.

Despite a massive drop in the share price, the valuation still appears ambitious. The price-to-earnings ratio continues to signal high growth expectations, which seem difficult to fulfill given the ongoing turmoil. The technical chart situation also points to further downside potential. For investors, the question is less about market opportunity and more about the credibility of the team that is supposed to exploit it. Until the governance issues have been convincingly resolved, the stock remains a highly speculative investment in which fundamental analysis loses its effectiveness. The next decision on the direction to take will depend on the management itself. The stock is currently trading at AUD 2.47.

The future technology of high-performance batteries separates the disruptive winners from the established challengers. NEO Battery Materials cleverly addresses a critical market gap for mobile AI systems, robotics, and drones with its customized silicon anodes. Volkswagen is fighting margin pressure with painful structural measures, while its electric offensive is proving bumpy in some regions. DroneShield, on the other hand, despite operational records, demonstrates how deeply governance doubts can undermine a company's value. The battery remains the bottleneck. Only those who combine technological leadership with solid implementation and trust will realize the billion-dollar potential in the long term.