The Novonix Ltd (ASX: NVX) share price was in sensational form in October.
During the month, the battery materials and technology company's shares jumped a massive 52%.
This was many times greater than the strong 6% gain recorded by the ASX 200 index over the same period.
Why did the Novonix share price rocket higher?
The main driver of this gain was the release of an announcement which revealed that Novonix could receive some major government funding.
According to the release, Novonix's Anode Materials division was selected to enter negotiations to receive US$150 million (A$240 million) in grant funding from the US Department of Energy (DOE). Under the terms of the grant, the government funds must be at least matched by the recipient.
If successful, these funds would be dedicated to the construction of a 30,000 tonnes per annum (tpa) US manufacturing facility, including site selection, plant layout, and engineering design with capability for additional expansion.
Novonix's co-founder and CEO, Dr Chris Burns, believes this would be a big boost to its aim of accelerating the domestic battery supply chain. He said:
We are proud to have been selected to negotiate this funding in recognition of our readiness to accelerate the domestic battery supply chain and meet growing global demand from the electric vehicle and stationary grid storage markets.
Can its shares keep rising?
Despite its stellar gains, the team at Morgans sees value in the Novonix share price at the current level. Though, only for investors with a higher tolerance for risk.
It currently has a speculative add rating and $3.11 price target. This compares to the latest Novonix share price of $2.60, implying potential upside of 20% over the next 12 months.
