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The Nano One manufacturing hub represents a game-changing opportunity to secure sustainable and clean battery supply chains in NA

One of the largest gaps in the North American EV metals supply chain is the need for ‘western supply’ of lithium iron phosphate (“LFP”) cathodes used in most standard range electric cars, smaller electric cars, commercial vehicles, and stationary energy storage. These demand areas are set to surge this decade, yet where is the non-China supply of LFP going to come from?

At Tesla Inc. (NASDAQ: TSLA) 2023 Annual Shareholder Meeting on May 16, 2023, Elon Musk showed a very interesting slide that stated solar and wind production needs to increase by 3x/yr, battery production by 29x/yr, battery electric vehicle (“BEV”) production by 11x/yr. The takeaway from the slide is that the greatest area of forecast demand is battery production. Another key thought is that Tesla sees most, if not all, of their standard range electric cars, smaller electric cars, and stationary energy storage batteries using LFP cathode chemistry.

Solar and wind production needs to increase by 3x/yr, battery production by 29x/yr, BEV production by 11x/yr to reach a 100% renewable energy world

Source: Tesla 2023 shareholder meeting

All of Tesla’s current LFP batteries come from China, which results in US-made Tesla electric cars with LFP batteries only receiving half of the IRA clean vehicle tax credit of US$7,500. Similar to other EV OEMs using China batteries from Contemporary Amperex Technology Co., Limited (SHE: 300750) (“CATL”), Gotion High-tech Co., Ltd. (SHE: 002074), and others.

The next big thing will be North American and European LFP battery production. LFP cathodes and batteries could be made in North America using a Western supply chain. There is just one company currently able to supply a small volume of LFP cathode material from North America.

Nano One Materials Corp.

The Company is Nano One Materials Corp. (TSX: NANO) (“Nano One”). Nano One owns the only existing North American lithium iron phosphate (“LFP”) production facility (“the Candiac facility”). Nano One is a battery materials focused company that has developed and patented numerous more effective ways to produce cathode materials that are cost-effective with no waste streams and an improved environmental footprint.

Nano One is converting its 2,400tpa LFP Candiac facility in Québec to the One-Pot process with small pilot plant volumes targeted for end of 2023 for evaluation with partners and scaling up to approx. capacity of 2,000tpa by end of 2024.

On April 24, 2023, Nano One updated the market on their commercial plans for LFP and other cathode materials. Highlights of the plan were quoted as follows:

  • Nano One’s technology, manufacturing hub and plans represent a game-changing opportunity to secure sustainable and clean battery supply chains in North America.
  • Nano One’s systematic plans jump start the commercialization of its One-Pot process starting at 200 tonnes per year in 2023, expanding in steps to 2,000, 10,000 and hundreds of thousands of tonnes per year.
  • $40 million in cash, $7 million in grants remaining to draw down and multiple proposals for additional government support.

Nano One’s Candiac facility in Québec is being retrofitted with its new One-Pot reactors (using Nano One’s patented one pot process), and will be commissioned initially as a Pilot Plant with 200tpa in Q3 2023, ramping up to 2,000 tpa. The Pilot Plant will produce product off-take samples to be qualified by cathode and battery manufacturers. Nano One then plans to expand this to a 10,000tpa Demo Plant.

Of particular interest was the part highlighted above, notably “hundreds of thousands of tonnes per year“. Given the massive demand wave ahead for LFP cathodes and a new North American supply chain, the potential growth ahead for Nano One is enormous. We wrote about this opportunity in late 2022 here.

CEO Dan Blondal commented:

“The cathode market opportunity is extraordinary, with production volumes projected to grow, in North America for instance, from thousands to over a million tonnes per year, within a decade. We are laying a solid foundation to address these opportunities and to bring increased value to our shareholders. It begins with a strategy that leverages our newly acquired facility in Candiac, Québec which is the only LFP production plant and most experienced operational team in North America.……”

Nano One says they will launch LFP in North America, followed by Europe and the Indo-Pacific region to power hundreds of gigawatt hours (“GWh”) of battery storage and millions of EVs.

Nano One state:

“This plan could enable hundreds of millions in revenue during Nano One’s initial years of commercial operations while also enabling demonstration of its technology to the market, potential licensors, joint ventures, and investors, at a scale relevant to automotive OEM and renewable energy storage interests.”

Nano One’s Candiac 2,400tpa LFP plant (Quebec, Canada) and expansion plans for a one-pot process Pilot and Demo Plant

Source: Nano One company presentation

Nano One also plans to make cathode materials for NMC and LNMO batteries

In addition, Nano One has commercialization plans for nickel manganese cobalt (“NMC”) and lithium nickel manganese oxide (“LNMO”) cathode active materials. Nano One also has engineering work underway for a separate 100 tpa NMC and LNMO pilot facility.

Closing remarks

For a long time, Nano One has been seen as a pioneering cathode materials research style company. However, this has changed significantly since their purchase of the Candiac facility in North America. Nano One is now starting a new journey as a commercial cathode materials ‘manufacturer’ with plans to scale to large volumes and supply the emerging North American battery supply chain with critically needed cathode materials LFP and NMC. The company is also implementing its licensing strategy to deploy its technology with partners throughout key markets in Europe, Asia and South America.

Nano One Materials trades on a market cap of C$278 million.




Skyrocketing LFP demand has experts asking, “How fast can Nano One scale production?”

Lithium iron phosphate (“LFP”) batteries are rapidly gaining market share due to their improved energy density, longer cycle life, improved safety, generally lower costs, and no requirement for nickel and cobalt. It certainly makes sourcing the critical materials much easier as lithium and graphite become the only critical materials needed. No need to source cobalt from the Congo or nickel from Russia.

Furthermore, the LFP trend is now expanding out from China to other regions as Chinese patents expire. In October last year, Tesla announced it is switching all of its standard range Model 3 and Model Y electric cars globally to LFP batteries. Multiple OEMs have since followed Tesla’s lead. The problem is now that the Inflation Reduction Act will only reward U.S or U.S free trade countries if their batteries are made locally (not in China), but there are very few western LFP battery facilities.

Nano One Materials now owns the only LFP battery facility in North America

In news announced on October 31, Nano One Materials Corp. (TSX: NANO) has now completed the acquisition of Johnson Matthey Battery Materials Ltd., who just happens to own the only LFP battery factory (the “Candiac facility”) in North America. Many in the market failed to appreciate the significance. And let me lay out — there is a massive demand for western made LFP batteries, and there is an extremely small current western supply to access.

Highlights of the announcement are:

“The Acquisition helps expedite Nano One’s business strategy for LFP and other battery materials and includes:

  • A talented and dedicated workforce of 46 professionals with almost 400 years of scale-up, commercialization, and cathode manufacturing know-how on LFP.
  • The only existing North American lithium iron phosphate (“LFP”) production facility.
  • An 80,000 square foot, 2,400 tpa capacity LFP production facility on 9.5 acres, strategically located near Montréal.
  • Certification systems supplying tier 1 cell manufacturers for the automotive sector.”

Note: Bold emphasis by the author.

Another key factor many in the market fail to appreciate is the difficulty in obtaining experienced battery manufacturing personnel. In the case of the above-mentioned deal, Nano One was able to secure a very key person, namely Denis Geoffroy. Denis was an early contributor to Phostech Lithium, which led the first commercial manufacturing of LFP cathode active materials globally. Nano One CEO Dan Blondal summed it up well stating:

“Today marks the beginning of an exciting new chapter in the Nano One story. I am pleased to report that the entire team in Candiac has transitioned to Nano One and this positions us with the most experienced LFP workforce in North America.”

Denis Geoffrey is the Chief Commercialization Officer of Nano One

Source: Nano One Materials website (video link)

In terms of the next steps Nano One states:

“The Company will begin with trials in the Candiac facility to validate the production of LFP using the Company’s patented One-Pot process. Results from these trials will drive business, commercial and plant conversion decisions in 2023.”

One would think Tesla and other North American based electric car and battery OEMs would be taking notice of how this all develops, and off-take deals could potentially soon emerge.

The rise and rise of LFP batteries

LFP batteries outsold NMC batteries last year in China, rapidly gaining market share (see below).

LFP battery demand skyrocketing – LFP outsold NMC in China as of March 2022

Source: Energy Storage News

Looking ahead this decade it looks likely that LFP will continue to gain market share from NMC and become the preferred battery cathode type. Energy Storage News quotes research from Wood Mackenzie stating: “Lithium iron phosphate (LFP) will be the dominant battery chemistry over nickel manganese cobalt (NMC) by 2028.”

Time will tell, but certainly, the current trend is towards LFP gaining market share globally. In North America the LFP demand will massively outweigh the supply, putting Nano One Materials in the box seat this decade, as a LFP battery manufacturer. The question really will be – How fast can Nano One scale production?

Nano One trades on a market cap of C$266 million.