It’s hard to overstate the importance for markets and the economy of the energy storage revolution now underway.
We tend to underestimate the idea of “batteries” because that word has such a clear everyday meaning, and nothing about it seems revolutionary. But the idea of being able to capture and store industrial scale energy stores to be deployed later where and when we choose is truly a revolutionary idea just coming into its own.
Power is everything. Establishing a broad flexibility in the accumulation and deployment of power could have enormous implications for the global economy over the coming decade. One could easily make the case that it is the most important technological Revolution now underway. And it has come into focus largely as a side effect of the transition to electric vehicles.
Like many technology paradigm transitions, the energy storage revolution got its start because of a need: the need to supplant an auto industry dominated by fossil fuels. But the technological advances spawned by overcoming that need have produced additional avenues to value for society – the means to store energy for use in cars also implies the means to store energy for all sorts of use cases.
According to a recent piece in the Wall Street Journal, the U.S. had less than a gigawatt of large battery installations in 2020, or approximately what you might need to power 350k houses for a few hours. Now, it is on track to add 6 more gigawatts in 2021 and 9 more in 2022 (via S&P Global Market Intelligence).
As we often see in such revolutionary transitions, something like a “network effect” comes into play at a certain stage of maturation. In other words, once a new technology paradigm achieves enough traction – once enough people start to make use of it – the math changes because demand becomes secure enough as a proposition to spur new investments in production efficiency and key materials sourcing, which in turn drives costs lower creating a viability feedback loop.
As a case in point, as demand for electric vehicles has risen over the past decade, the cost for lithium-ion packs, per kilowatt-hour, has dropped nearly 90% from $1,200 in 2010 to $132 today, according to data from BloombergNEF.
This has created a big opportunity for one little-known stock with core technology geared toward this once-in-a-lifetime opportunity: KULR Technology Group Inc (NYSE AMERICAN:KULR), which develops, manufactures, and licenses next-generation carbon fiber thermal management technologies for batteries and electronic systems.
Pieces Coming Together
KULR has been building the technological foundation for this moment in history for 30 years. The company offers lithium-ion battery thermal runaway shields, fiber thermal interface materials, phase change material heatsinks, HYDRA TRS battery storage bags, internal short circuit devices, and CRUX cathodes.
Its technology in this domain has earned numerous government contracts and is trusted by NASA, with KULR parts on the Mars Rover 2020 Perseverance and the International Space Station.
KULR Technology Group Inc (NYSE AMERICAN:KULR) also just announced a major order for its Passive Propagation Resistant (PPR) solution suite from Volta Energy Products, a subsidiary of Viridi Parente, Inc. The PPR solution will be used for Volta’s stationary lithium-ion battery power systems as well as certain of its mobile lithium-ion battery power systems.
According to the company’s release, the initial deployment order totals approximately $1.6 million for immediate delivery with higher volume shipments expected throughout 2022 for KULR’s PPR solution, which includes the patented thermal runaway shield product. After more than 18 months of joint design and testing efforts, KULR’s PPR solution will support Volta’s commercialization of proprietary battery architecture for energy storage systems. This order represents KULR’s first PPR order of commercial deployment in a stationary energy storage product.
Michael Mo, CEO of KULR Technology Group added: “Volta’s depth of technology experience and innovative approach to the market makes them an outstanding partner for us. Our thermal solutions for their products were based on similar designs we provided to customers such as NASA and Lockheed Martin, and therefore provides Volta with space-grade thermal management architecture for stationary and mobile energy storage applications. Our partnership marks only the first step in commercializing KULR’s suite of thermal solutions for the rapidly growing commercial and residential battery storage market.”
To make matters more compelling, Volta’s parent company just announced that it recently raised approximately $95 million in a Series C funding round. That puts its relationship with KULR on solid footing for potentially maximizing the volume implied by the recent deal reached between the companies.
In reaction to the deal, Volta Energy thinks the integration of KULR’s thermal shielding into Volta’s battery pack architecture will make it safe to install Volta’s energy storage systems indoors and outdoors, and could be used anywhere from data centers and manufacturing facilities to residential and commercial sites, as well as medical or research facilities, which the companies believe will have a critical need for resilient power.
In other words, KULR has advanced to a fully commercial-stage operational framework in providing PPR thermal shielding for energy storage solutions. And its first primary customer is dedicated to expanding on this potential and just roped in nearly $100 million in fresh funding.
Word on the Street
Given its core technology advantage in the energy storage space, the stock is likely to gain a spotlight as more and more investors start to catch on.
As such, Wall Street analysts will play a role in defining the story. At this point, there are only two firms providing analyst views on KULR shares.
Litchfield Hills (see here) recently put out an analyst report on the stock that should give shareholders an extra shot of confidence. The firm gave KULR a “Buy” rating and put a $7 per share price target on it.
From the report: “The partnership between KULR and Volta parent company Viridi Parente marks the first application of PPR for energy storage and will see Volta deploy up to 1,000 new storage units with the safety technology. It hopes to deploy as many as 50,000 units by 2023. The failsafe system can make energy storage safer and less expensive for a variety of residential and business uses by limiting the need for external fire suppression tools.”
That pairs up with a recent report issued by Taglich Brothers: “We are maintaining coverage of KULR Technology Group, Inc. with a Speculative Buy rating and raising our twelve-month price target to $6.00 per share from $4.50 based on our robust revenue growth projections into 2023.”
That report also cites the breakthrough Volta order as a major factor in opening up the commercial potential for KULR’s market leading technology. That note also includes reason to speculate that this relationship could be worth a whole lot more than one might see at first glance:
“In December 2021, Utility Dive (a publisher of utility industry news) published an interview article1 with Jon Williams, the CEO of Viridi Parente, parent company of Volta Energy Products. Williams stated that Volta plans to bring between 750 to 1,000 battery storage units (using KULR’s technology) to market in 2022, increasing to up to 50,000 units in 2023. We believe this could equate to revenue of at least $80 million from this order in 2023 if prices per unit were to remain constant and the maximum number of units were shipped.”
We would further point out that the energy storage theme ties into a number of interesting stocks beyond KULR, including NextEra Energy Inc. (NYSE:NEE), Enphase Energy Inc. (Nasdaq:ENPH), AES Corp. (NYSE:AES), QuantumScape Corp. (NYSE:QS), Fluence Energy Inc. (Nasdaq:FLNC), ESS Tech Inc. (NYSE:GWH), and Eos Energy Enterprises Inc. (Nasdaq:EOSE).
But KULR appears to have carved out a truly unique niche in the space that could represent big upside potential as the energy storage theme matures.
