Playing megatrends with the right stocks – NEO Battery Materials, XPeng, BYD

NEO Battery Materials – Innovation is key

Around 95% of global graphite capacity and approximately 80% of cell production comes from the People's Republic. From the perspective of consumers, this situation is further exacerbated by existing export controls on lithium compounds, LFP cathodes, and graphite. As is so often the case, there is a lack of alternatives in the West. However, the picture could shift significantly in favor of non-Chinese suppliers in the future. This is where NEO Battery Materials comes into play.

The Canadians are developing cost-effective, silicon-enhanced batteries that store more energy and charge faster. Using its patented process, NEO Battery Materials manufactures silicon anodes branded NBMSiDE® P200 and P300N – with four key advantages. Energy density is increased by 30 to 40% compared to graphite anodes, and ultra-fast charging capabilities have been realized in tests. In addition, system tests have shown that an EV driving range increase of around 20% can be achieved. It is also noteworthy that, according to the Company, production costs are more than 60% lower than those of its competitors.

NEO Battery Materials already has several commercial successes to its name in its goal of industrial production. A four-year supply contract for 50 tons of silicon anodes has been signed with a North American manufacturer. These anodes are used in high-performance applications for unmanned aerial systems (UAS), drones, and defense-related mobile systems. In addition, the Company is in the process of acquiring an existing manufacturing facility in South Korea and building another in its home country, Canada.

The latest success story includes a CAD 3 million order and a joint product development agreement with a South Korean manufacturer of drones and unmanned combat aerial vehicles (UCAVs). As part of this forward-looking project, NEO Battery is supplying comprehensive end-to-end battery solutions for the customer's multi-drone platform. The goal is to use battery-powered systems to match those of gasoline-powered UCAVs designed for medium altitudes and long flight durations.

To finance the expansion, NEO Battery Materials recently raised CAD 5 million through a capital increase. The Company, with a current market capitalization of around CAD 70 million, represents an exciting investment story, with clear potential to disrupt the battery market through technologically superior approaches.

BYD – Aiming for stronger international growth

BYD is one of the world's leading manufacturers of electric vehicles and plug-in hybrids. But times are getting tougher. Sales figures are shrinking, as are revenue and profits. The background to this is a massive price war in its home country, with emerging players seeking to secure market share. As a result, the share price has fallen in recent months.

BYD is now countering these developments and aims to expand more strongly internationally. A sales target of 1.5 to 1.6 million units has been announced for next year, following up to 1 million units in 2025. Analysts currently attribute an average upside potential of almost 30% to the stock.

XPeng – Robotics and autonomous driving fuel imagination

On the sunny side, however, is XPeng – its stock has already doubled this year. There are several reasons for this. The latest sales figures show that the Chinese company can easily achieve its ambitious targets for 2025. In addition, an agreement with VW in China for joint vehicle development has been confirmed, which also includes the use of the Chinese company's autonomous driving software by the German automaker.

Investors are very interested in the future prospects of robotics and autonomous driving. In this regard, the Chinese announced that the new humanoid robot "Iron" is scheduled to go into series production at the end of 2026. In addition, initial test drives of its own robot taxi fleet are to begin in several Chinese cities next year.

Innovations are the basis for breaking down existing structures. NEO Battery Materials has the potential to challenge China's dominance with innovative approaches and processes in battery technology. The Canadian company's order pipeline is filling up as it moves toward industrial production. The stock is an exciting investment that investors should keep an eye on. BYD is under pressure from the massive price war in its home country of China and wants to cushion this with international growth. XPeng is impressing with its rapid expansion and conquest of new business areas such as robotics and autonomous driving.