Thursday was Earth Day. It was also Day One of Joe Biden’s two-day virtual climate summit involving leaders from around the world. Biden’s objectives for the event became strikingly clear: The US is back at the table, battling climate change and being a good-faith actor on sustainability, and we are prepared to prove it.
Among the 40 heads of state gathered for the event (virtually), sentiment as reported across news coverage of the event suggests the US will have to do more than just make bold proclamations. Follow-through will be key to restoring global faith in the US as a leader in the fight against climate change.
This forms a strong foundation for equities powered by top-down regulatory and subsidy tailwinds rooted in sustainable energy and similar technologies.
One group that continues to sit at the center of this thematic universe is the electric vehicle space.
While stocks in this group have been pulling back sharply over the past 3 months, the secular fundamental opportunity they represent is undeniable, and the correction that has played out this year may be an opportunity to take a fresh look at stocks such as Tesla Inc (NASDAQ:TSLA), Workhorse Group Inc (NASDAQ:WKHS), FuelCell Energy Inc (NASDAQ:FCEL), Plug Power Inc (NASDAQ:PLUG), Nio Inc – ADR (NYSE:NIO), and Blink Charging Co (NASDAQ:BLNK).
Every stock on that list has been red-hot at some point over the past year and has dropped significantly over the past three months. Many are at key long-term technical support levels as well.
Focus on Batteries
Now that we are climbing toward the hump of Q1 earnings season, don’t be surprised to see some bids return to the group, especially as attention centers on environmental sustainability with Day Two of Biden’s climate summit in play to close out the week.
One name not in the list above, but one that may deserve attention as a more speculative, lower-priced EV play is KULR Technology Group Inc (OTCMKTS:KULR).
The company is rooted in a 30-year history tied to carbon fiber thermal energy management technology for aerospace and defense applications. Its technology is trusted by NASA, with KULR parts on the Mars Rover 2020 Perseverance and the International Space Station.
According to KULR CEO, Michael Mo, its mission now is to take these space proven technologies to make the world of lithium batteries and electronics cooler, lighter, and safer.
In other words, KULR is basically a hedge for Lithium battery technology by removing downside risk for EV manufacturers through beneficially shifting the probability of negative battery events.
Saturday’s incident – where two men died in Texas after a Tesla crashed, triggering a battery fire that apparently reignited multiple times after being extinguished – underscored the continued risks presented by a wholehearted shift to EVs on a society-wide basis over coming years.
The story is just one of many that point to the need for further advances in safety systems for EV battery technology, where KULR may have an IP advantage already in place.
Biden, Commercialization, and Andretti
In a podcast released this week, Mo was asked about the advantages for KULR of having the Biden administration in power, and the related efforts to increase the use of electric vehicles moving forward.
“It is a very ambitious plan to bring the green energy jobs back to the US,” said Mo. “Electrification is going to be the future of this green economy, and battery storage is a critical part of that. We focus on the safety side of battery storage. There has been a massive amount of risk involved in these large energy storage projects. We have a battery safety technology that we developed with NASA in 2015, which is on the International Space Station to keep the electric laptop batteries safe. We are working with both commercial entities, as well as government regulation bodies to commercialize this technology.”
Asked when Mo believes commercialization will come to fruition and revenues will start to flow to the balance sheet, he replied, “Some of the commercialization is already taking place, and you should continue to see revenue ramp up throughout 2020 and 2021. The expectation is that when our revenue run rate gets to about ten million dollars, we will be able to start giving a more definite forecast. Before that I think we will just remain focused on growing the top-line as quickly as possible.”
On the company’s partnership with Andretti Technologies, Mo noted, “We’re really thrilled about our partnership with the Andretti’s. Michael Andretti’s organization is one of the most famous names in auto sports in the US. KULR became the official thermal management and battery safety technology partner for Andretti Technologies. The mission of the partnership is to establish a thermal management testing design platform for high-performance battery solutions with the highest safety ratings.”
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