The Novonix Ltd (ASX: NVX) share price continues to defy expectations. In the past month, the battery materials and technology company has set all-time high after all-time high. Even today, shares in the company finished 1.8% higher while the broader market struggled.
In the past month, the Novonix share price has gained around 44%. However, this is infinitesimal compared to the staggering 1,023% rise over the last year.
The seemingly unstoppable rise has given the battery-focused company a market capitalisation of $5.75 billion. This is despite Novonix generating approximately $5.23 million in FY21 revenue.
Clearly, there is some level of expectations for a brighter future playing into the company's valuation. So, let's take a look at what kind of future management is expecting.
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Novonix share price rides the electric wave
The high growth thematic behind the electric revolution is not exactly a new one at this point. As more stringent climate policies are put in place, the shift towards an electric-powered society through the use of renewables could increase.
Novonix's expertise in lithium-ion battery technology and synthetic graphite solutions have put the company in the 'green revolution' basket for investors.
Many analysts are forecasting an explosion in demand for lithium and other battery-related elements. For Novonix, the expected shortage in supply is where it is finding its value proposition.
At Novonix's annual general meeting on Tuesday, CEO Dr Chris Burns highlighted an anticipated gap in the market for anode materials — which are required in the batteries of electric vehicles (EVs). He said:
Over the past year, the focus of the company has been on making preparations to scale up its synthetic graphite anode operation to fill the gap in the US supply-chain and meet the demand that will quickly escalate as the world makes its transition to electric vehicles (EVs) and greater use of stationary energy storage at all levels – utility scale, commercial scale and at the household level.
Additionally, the company made mention of its advantage in being the only fully domestic US supply chain of EV battery anode material.
Currently, anode materials travel from the United Kingdom to China, and then to the US. Instead, Novonix offers a much shorter trip by being located locally in the US.
Management's goal of playing a big role in a growing industry has a lot of investors excited. In turn, the Novonix share price has managed to dodge the waning sentiment witnessed in the S&P/ASX 200 Index (ASX: XJO) recently. Over the last month, the benchmark index has shaved off 2.3%.
