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As The Global Electrification Movement Intensifies, So Should Demand For KULR’s Battery-Safety Technology…Here’s Why ($KULR)
The world is getting electrified. And KULR Technology (NYSE: KULR) intends to ensure it's done safely. Make no mistake, manufacturers and consumers need what KULR sells, especially with billions of products, including household tools, toys, and even hypersonic missiles integrating the extraordinary power of lithium-ion energy sources. But there's a problem looming. In fact, it's an issue that's far from secret- if these powerfully and densely packed energy sources aren't required to integrate available battery safety technology, like KULR's, headlines noting catastrophe could become common.
That's no exaggeration. Plenty of video evidence show explosions happening with electric vehicles, mobile devices, and household consumer products. While shocking, consider that even more powerful battery-powered energy sources are used for military use, aerospace technology, and infrastructure. If not adequately protected, those capsules pack enough power to level an entire building. And not just on earth but in space as well.
But here's the deal. These potential catastrophes can be prevented or at least significantly mitigated. And KULR's patented technology could be the answer.
A Who's Who Client List
For many utilizing battery technology, it already is. KULR clients include Lockheed Martin (NYSE: LMT), General Motors (NYSE: GM), Meta Platforms (NASDAQ: META), and NASA. That's just naming a few. KULR's client list stretches into many directions targeting diversified needs, bringing with them a combined battery-safety market opportunity estimated at $2.9 billion by 2030, about 123% higher than 2022 levels.
An expected compound annual growth rate (CAGR) of about 11.8% during the forecast period leaves plenty of incremental revenue-generating opportunities along the way. Small-cap KULR is in the sweet spot of capitalizing on that market potential by maximizing the value inherent to its best-in-class battery safety technology solutions. Frankly, trading at roughly $1.18 a share, KULR's share price doesn't give justice to the fact that they are inking potentially substantial revenue-generating deals with mega-cap companies. More importantly, those agreements could be integral to helping accelerate and usher in the global transition to a sustainable electrification economy.
The better news is that KULR's solutions are more than good; they're validated, earning the company an industry-leading position in safe battery design and testing. Furthermore, KULR is one of few companies successfully designing products to meet the stringent requirements and rigorous testing mandated by the JSC 20793 Revision D safety standard created by NASA crewed space missions. This qualification provides that KULR's products and solutions are approved for use and can be utilized for Artemis missions and future space exploration voyages.
And, here's the best part of that allowance- it strengthens KULR's credibility and validates proof of concept to expedite offering similar battery safety and energy management solutions to customers across various industries needing similar commercial applications. By the way, returns from this technology are near term, with KULR saying they expect to begin accepting client orders this quarter.
Accruing Deals That Expedite Near-Term Growth
That's just one example of where KULR is making a difference. A potentially massive deal was announced in Q4 that detailed KULR entering into an agreement to provide its internal short circuit ("ISC") battery safety and testing device to the largest automotive manufacturer in the United States, General Motors. The technology in focus shows the ability to create thermal runaway in lithium-ion battery trigger cells and, importantly, does not rely on mechanically damaging the battery exterior to activate the short, a meaningful differentiation from other evaluation methodologies that do not trigger an actual internal short.
That KULR difference makes it possible to accurately isolate and fix problems that lead to product malfunctions. Moreover, the innovative testing method allows KULR and its customers to more effectively test the next generation of EV batteries, bringing more reliable and safer battery systems to market faster and more cost-effectively. KULR is optimistic its ambitions will be met with considerable EV sector interest. It should. After all, with the electrification movement gaining momentum and a global automotive company embracing the strategic value of better testing for designing the next wave of EV battery systems, KULR's technology is being validated ahead of potential competitors.
Besides advancing its work with General Motors, KULR is scoring deals with other influential global companies. In its SEC filings, KULR indicates that its sales and marketing team has expanded its customer engagements through direct sales and its Manufacturer's Representative team, resulting in a currently known client book exceeding 300 customer engagements at the end of Q3 2022. That number could grow; its imminent Q4 update could prove that point.
It would not be surprising, considering that KULR continues to expand its market reach. Beyond the clients mentioned, KULR has inked deals with Ball Aerospace, a subsidiary of Ball Corporation (NYSE: BALL), SAFT, a subsidiary of TotalEnergies SE ( NYSE: TTE), Leidos Holdings (NYSE: LDOS), Viridi and BOSCH. What's notable about these relationships is that KULR expects they can build upon themselves.
KULR noted in its recent 10Q report that as they expand partner relationships, it will be able to cross-sell and up-sell its total solution packages. In other words, while the individual deals can be value drivers, they can get substantially larger and more accretive through the same customer engagement.
Meeting Record Demand With Validated Solutions
That's likely. Remember, while the EV sector earns headlines from companies like Tesla (NASDAQ: TSLA) and Ford (NYSE: F) serving its products into record demand, behind that sector, manufacturers of millions, even billions, of other products, from consumer staples to space-age technology, also embrace the clean energy solutions that battery power offers. Few argue against that trend continuing.
In fact, geopolitical and local legislative pressures support the proposition that the pace at which battery power gets integrated into current infrastructures will accelerate. That makes sense. The powerful and densely packed batteries used are inherently dangerous, especially with advanced lithium-ion technology contributing to making densely packed and enormously powerful energy drivers in smaller housing. The result can be explosions, fires, and even potential meltdowns of energy-providing infrastructures.
But here's the deal. Many of these potential catastrophes can be avoided. And as KULR continues to strengthen an already impressive IP portfolio, it may very well secure its place as the go-to company to deliver best-in-class battery safety solutions to a potential trillion-dollar market opportunity. Its IP property was again fortified.
Last week, the United States Patent and Trademark Office awarded a patent on the technology behind KULR's SafeCase products – a U.S. Department of Transportation ("DoT") permitted lithium-ion battery cell and pack storage and transportation system. The SafeCase products are designed to mitigate thermal runaway propagation and its catastrophic effects for lithium-ion battery packs of up to 2.5 kWh (kilowatt-hours) per case by utilizing KULR's patented Thermal Runaway Shield ("TRS") technology.
In 2022, that technology gave KULR immediate and open access to commercial partners and customers by securing United Parcel Service (NYSE: UPS) shipping certification, allowing for the shipment of batteries utilizing the KULR SafeCase products through UPS' vast shipping network.
By the way, the most recent patent is the fourth issued to KULR based on its TRS design architecture, which, as a result, helped KULR secure a trio of DoT-granted special permits enabling it to strategically pursue regulatory markets ranging from shipping prototype batteries to end of life battery management, as well as those used by NASA to transport and store batteries aboard the International Space Station.
Feeling The KULR Vibe
KULR is penetrating other markets with its recently unveiled vibration reduction solution. And like its other technology, it keeps getting better. Acquired in 2022, the KULR VIBE is updated to include a scalable, centralized artificial intelligence ("AI") server platform. Powered by NVIDIA (NASDAQ: NVDA) accelerators, the enhanced KULR VIBE system will deliver faster processing speeds and data capture for remote access. Of particular interest and request from KULR's enterprise customers, the cornerstone of this expansion will bring enhanced security to protect customer data, mission-critical projects, and intellectual against potential cyber security risks.
Specifically, the KULR VIBE suite of products and services provides vibration analysis and mitigation solutions to commercial clients, a sector served for over two decades. Getting better with age, advances in measurement and computing have allowed the KULR VIBE technologies to offer transformative, scalable solutions across aviation, transportation, renewable energy (wind), manufacturing, industrial, performance racing, and autonomous aerial (drone) applications. That's not all.
KULR notes that the new KULR VIBE AI platform allows for advanced, trajectory-altering maintenance capable of optimizing craft performance and systems to prioritize safety, allow for lower maintenance costs, and increase the lifespan of sensitive and expensive equipment in the field, resulting in more extended commercial use. From a demand perspective, by providing enhanced security and faster remote diagnoses for managing the vibration and balancing needs of high-performance machines and systems, KULR is tapping into markets potentially worth billions from clients that are looking to be more competitive in the market by ensuring their systems are operating as safely as possible.
Seizing A Sum Of Its Parts Disconnect
Bottom line: KULR's sum of its parts justifies a higher valuation than its roughly $1.18 price. And considering that KULR is better positioned now compared to when shares traded over 121% higher over the past 52 weeks, it's a disconnect worth considering from an investor's perspective. Moreover, the disconnect exposes more than just a consideration of KULR's potential dominant market position; KULR has a formidable balance sheet, is making deals with global and diverse industry players, and is acquiring accretive revenue-generating assets facilitating top-line growth and strengthening the bottom line.
The best part for the considering investor- the work completed to serve the world's largest companies will likely pay the rewards intended sooner than later. Thus, the record-setting performances and consecutive revenue growth over 2022 may be the precursor to better reports. If so, which precedent implies, it's fair to suggest that KULR's stocks' path of least resistance is higher. For growth stock investors, that's typically the best a company can offer, and KULR checks that box.
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