EV makers are increasingly turning to graphene battery technology to power their vehicles, which has helped to drive the share price of key players like Haydale Graphene Industries and Applied Graphene Materials.
Haydale Graphene Industries [HAYD.L], Applied Graphene Materials [AGM.L] and Graphene Manufacturing Group [GMG.V] shares have jumped in the past two years as the electric vehicle market continues to expand and innovate. While their performance this year has been rockier, the graphene battery market is expected to grow rapidly.
Graphene, an allotrope of carbon consisting of a single layer of atoms in a honeycomb lattice structure, is made from graphite. It is increasingly being eyed by electric vehicle manufacturers as the key to better and faster vehicle performance.
Graphene is an effective electrical conductor, highly flexible with a large surface area, which, according to scientists, provides high power to EVs, drones and other electrical devices. In terms of battery technology this means quicker charging capacity, increased charge cycles, better performance in high temperatures and extended duration of charge.
According to a recent report, the global graphene battery market — valued at $57.5m in 2019 — is expected to grow at a rate of over 23.9% between 2020 and 2026 as more people switch to EVs in the race to net zero and customers increasingly expect performance in line with that of fossil fuel-powered vehicles.
This expected surge is helping to drive share prices in the sector. Haydale Graphene Industries, which offers a range of products from graphene face masks to battery tech and storage, has seen its share price surge from 1.1p on 25 March 2020 to 5.8p at the close on 24 March 2022. UK-based Applied Graphene Materials, which uses graphene to develop anti-corrosion paints and thermal adhesives in addition to its battery technology, has seen its share price soar from 9p to 22p over the same period.
Predicted CAGR for the global graphene battery market 2020-2026
Graphene technology is gaining ground
According to materials science publication AZO Materials, the Graphene Manufacturing Group [GMG.V], based in Brisbane, Australia, claims that aluminium-ion batteries could become the EV battery of the future as they can charge 60 times faster than conventional lithium-ion batteries. The report added that graphene aluminium-ion cells can recharge an AA battery within one minute.
There are still limitations to the technology, though. A report by EV news platform Topcharger noted that the cost of graphene manufacturing is around £60–100 per gramme. “The manufacturing process isn’t mature enough for mass production. It could take a decade to mass produce graphene batteries for EVs,” it wrote.
Nevertheless, developments in the graphene battery space are taking place around the globe. At the end of last year, GMG sent out its graphene aluminium-ion batteries 2032-type coin cell prototypes to prospective customers across the world. US group Nanotech Energy is developing graphene-enhanced batteries for EVs, while Spain’s Graphenano is developing a graphene polymer-based battery that can provide EVs with a maximum range of 500km and a recharge time of under five minutes.
How are Graphene companies performing at the moment?
Haydale Graphene Industries recently posted half-year results revealing UK and APAC sales up 19% to £490,000. It didn’t mention EV batteries but highlighted the progress of graphene sportswear, hydrogen powertrain technologies and smart medical diagnostic devices.
“Haydale’s proprietary technology now has the potential to deliver material change across many sectors and customers are turning to Haydale in their search for cheaper, more environmentally friendly and functionally effective materials,” said its CEO Keith Broadbent.
However, the Haydale share price has remained almost flat since the start of the year, falling 2.5% year-to-date at the close on 24 March.
Applied Graphene Materials said in its full-year results that it was working with universities to develop graphene-based battery solutions, as well as material applications for hydrogen fuel cell technology.
Its CEO Adrian Potts said: “Technology development is now addressing potential in the green energy sector using our graphene dispersion know-how. While, to some extent, Covid-19 lockdowns have restrained the pace of graphene testing and adoption by some of our commercial partners, we expect this impact to lessen in 2022. Our commercial pipeline of engagements is strong and expanding, and AGM is in solid shape to accelerate growth to meet customer demand.”
Applied Graphene Materials shares have been hovering around the low in mid-20s since the start of the year. The stock started the year at 22p, the same price it closed at on 24 March.
Are graphene stocks a potential buy?
According to the Wall Street Journal, only one analyst has initiated coverage on Haydale and Applied Graphene stocks. The analyst rated Applied Graphene Materials stock a ‘buy’ with an average price target of 35p, representing a 59.9% upside on its current value.
Similarly, Applied Graphene stock was rated a ‘buy’ with a price target of 10p, a 72.4% increase on its 24 March closing price.
The future for both stocks looks promising given the sector’s forecast growth over the coming years, but they are still very much in the early stages of development, said analysts. When innovative technology is involved investors need to be cautious, especially around cash burn and lack of revenues.