Electrovaya To Start Local Production This Year

May 31, 2023

Electrovaya has completed the purchase of the former Acu-Rite building in Jamestown and is nearing financing for the first phase of renovations to open its Gigafactory in the facility.

The update was part of Electrovaya's second quarter financial results released recently. Electrovaya expects to start battery system assembly at the Jamestown facility later this year. For that to happen the plant needs significant investments at the site to enable production of its proprietary lithium ion ceramic cells. Electrovaya's battery products have best in class safety and cycle life and the company sees growing demand in electric heavy duty vehicles and energy storage applications utilizing its technology.

"So ultimately, this facility will be over a gigawatt hour in capacity," said Raj Das Gupta, Electrovaya CEO. "That said, the first phase of the project, we’ll be looking at more like a third of that capacity because that's what the existing building can handle, and that's what we’re looking to finance in this first phase."

The Jamestown site has access to low cost renewable energy as agreed with the New York Power Authority. The site is well connected to transportation, has excellent room for expansion, and has close proximity to the company's existing facilities in Ontario in addition to current and prospective customer manufacturing facilities.

Company officials said there has been progress on the financing for the Giga Plant, primarily through a potential combination of grants and debt. Electrovaya has received a term sheet from a U.S. government-controlled lending institution regarding a debt facility. The company has also engaged with an independent engineering firm as part of the due diligence process to evaluate its overall manufacturing and business plans for the site.

"Electrovaya is rapidly growing, and we will ultimately need additional capacity," Gupta said. "This was one of the driving factors for our U.S. manufacturing expansion in Jamestown, New York. In March, we acquired the site at one Precision Way by purchasing the shares of Sustainable Energy Jamestown. We are also making good progress with respect to reaching an agreement with a government-backed finance institution to provide the necessary funding to outfit the first phase of our planned gigafactory. One of the requirements of this institution is to provide a detailed independent engineering review for which we have engaged with a leading engineering consultancy. Their initial analysis is well underway, and we expect to receive it later this month. The Jamestown gigafactory will be key in enabling Electrovaya to grow further and also access new incentives tied to the inflation Reduction Act."

Second-quarter revenues totaled $10.5 million, an increase of 144% compared to $4.3 million in the fiscal second quarter ended March 31, 2022. Management anticipates continued strong year-over-year revenue growth in the second half of 2023, noting a substantial backlog of orders and indications of significant new orders for delivery during 2023. Management maintains its guidance for revenue of $42 million in 2023, more than double the total of $19 million in 2022.

Electrovaya eked out a $200,000 net profit in the second quarter of 2023, which compares to a $2.3 million net loss in the second quarter of 2022.

The company received purchase orders in excess of $20 million during the second quarter of 2023.

Total debt through March 31, 2023, was $16.8 million compared to $16 million as at September 30, 2022, the end of the company's 2022 fiscal year. Some of that debt includes additional debt relating to the building at 1 Precision Way, Jamestown, and the promissory note issued as a result of the acquisition of Sustainable Energy Jamestown LLC. Management is actively managing cash to reduce interest charges and believes that available liquidity, plus $8.2 million of accounts receivable and $5.1 million of inventory, will provide adequate working capital to support operating activities and growth targets for 2023. Despite hte additional debt and costs, the Jamestown factory is playing a key role in Electrovaya's ability to fulfill the orders it is receiving.

"Yes, Aaron, we’ve also been making some building infrastructure upgrades here to enable higher throughput," Gupta said. "So we have quite a bit of room to grow still before we max out capacity here in Mississauga. But we do see – we’re looking even six months. We do see us adding capacity limits and are getting close to it. So having that operation, a mirrored operation in Jamestown sooner than later is what we’re planning."

On April 18, Electrovaya officials announced the company has received data from a third party battery testing lab confirming that Electrovaya's Infinity battery line completed more than 9,000 cycles while retaining approximately 87% of its initial capacity. Projections will be to 14,000 cycles at 80% capacity as the designated criteria for end of life.

If an electric vehicle is assumed to drive 250 miles per cycle, this would translate to several million miles of operation using the Infinity battery. Actual mileage would depend on many other factors, including driving and vehicle conditions. Similarly, if an energy storage application is assumed to operate at one deep cycle per day, the Infinity battery could last for decades. The company is in the research phase of developing a solid state battery. Electrovaya's SSB technology is expected to complement its Infinity Battery Platform technology.

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