Nano One update: progress on battery technology – The Armchair Trader

There is a lot of excitement around Nano One (TSX-V:NNO / NDQ:NNOMF) at the moment, thanks in large part to its recent announcement that the proprietary battery materials it is working on are demonstrating far more durability, when tested under laboratory conditions, than competitor solutions. Here we revisit some of Nano Ones core technologies in the light of recent developments at the company.

We would encourage readers to revisit our initial note which covers off the basics of Nano One which we wrote last December. This article is supplementary in that it revisits some of the core technology in light of developments in the last six months, since that note was written.

Nano Ones technology for making high nickel cathode materials is a one pot process, radically different in its chemistry, in that everything is added into a single pot, including nickel, manganese and lithium to produce one product: each individual crystal has its own coating, granting greater durability than uncoated material. It translates into better cycle life and less degradation.

The one pot process also has the advantage of not requiring a lot of different firing steps, which adds to expense. The process yields a more stable structure. The coating is also not damaged as it is the individual nano crystals which are coated. This translates into life extension as born out by recent results from the company which compared uncoated material with coated material. After a number of cycles, it degraded 4% and the uncoated material degraded 17%. This is based on lab results, but Nano One says it is scaling up the process and we could see this translating into much more durability for batteries.

Nano One is a play across a number of different battery materials, based on filed patents, including LFP (lithium iron phosphate) and high nickel NMC (lithium nickel manganese cobalt oxide) battery technologies. CEO Dan Blondal says the company is also pursuing research into high voltage spinels, using a manganese-based battery that runs at very high voltage. Nano One is not a one tech play by any means and the research team is working to develop technology with more immediate commercial outputs while other projects could take more time to bear fruit.

Each one of them has pros and cons, says Blondal. Each one of them has properties which are beneficial to certain applications. There isnt going to be a winner, there is going to be a continuum of these materials. I think its important that were positioning our technology to be able to do any one of these things. The fact that we can use lithium carbonate as feedstock for high nickel materials is very unique.

LFP, he reckons, will soon have the capacity to power batteries that can sustain electric cars for 500-600km rather than 150km. That, he argues, is going to be a serious game changer. It actually starts to address the long range luxury vehicle market as well, he says.

The battery materials technology that is employed today requires hydroxide, but there is a way to eliminate the need for hydroxide. High nickel requires short firing processes to produce the battery crystals. If the crystals are fired at too high a heat or for too long, the battery performance is impinged, as the nickel and lithium change places.

By lowering the temperature, lithium carbonate ends up not decomposing or reacting. Lithium hydroxide addresses this. The Nano One process adds lithium carbonate into the one pot reactor, making it react in the reactor, not in the kiln. It is not carbonate when it enters the kiln.

Lithium hydroxide or lithium carbonate can therefore both be used as the product will end up being the same. Nano One can use either hydroxide or carbonate, giving it much more flexibility if lithium market prices change.

Fewer process steps also mean a higher yield and capex and opex will thus be lower. Significant amounts can be saved in the process costs. The material can be coated simultaneously, therefore avoiding subsequent steps to coat the material.

The elimination of a lot of the intermediate grinding steps typically used in battery material manufacturing also mean there will be fewer metallic impurities. The Nano One process does not require the removal of metallic impurities with magnets, again stripping out a more expensive part of the process.

By and large we are there on LFP, says Blondal. We completed a relatively detailed engineering report in mid-June. That maps out a plan that is very cost effective. We have identified sources of iron and phosphorous that actually help drive down the cost of the cathode materials. But the biggest step is that you have to provide this stuff first of all. Were well along the way with lithium ion phosphate.

The key for future profitability of Nano One is proving the materials outperform other types of coated materials. LFP, in Blondals view, brings a significant cost advantage, NMC brings the durability advantages with the option to sacrifice durability for performance if that is the manufacturers priority.

The company is also working within a high voltage spinel ecosystem to develop a next generation battery. Blondel does not see these various technologies competing against each other.

LFP batteries look the closest to achieving some level of commercialisation, largely because much of the process of turning the technology into something that can be manufactured can already be readily implemented. NMC looks further off but Blondal says it has the scope to speed up significantly.

NMC remains challenging to make. Some of these issues are fundamental to the technology, but Blondal believes more durability will deliver some distinct advantages. NMC does not replace LFP as an industrial material and LFP will see wider use in the future, he says. But we are starting to see a battery pack design which packs cells much closer together, while still leveraging LFP technology. Performance has never been an issue for LFP, it has been range.

We found Nano Ones recent durability results very encouraging indeed, as did the market. Nano One shares are currently trading at CAD 1.54 in Toronto, up substantially from where they were in early December. We have seen considerable progress in the last few days, with shares up from the CAD 1.35-1.36 level seen last week.

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Nano One update: progress on battery technology - The Armchair Trader