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SEPTEMBER 24

Investing Whisperer

Authored by: Keith Schaefer

COMPANY ANALYSIS NANO ONE MATERIALS CORP; NNO-TSX, NNOMF-OTC Frankfurt: LBMB / WKN: A14QDY

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THE MILLION MILE EV BATTERY GETS A STEP CLOSER

Last fall researchers at Dalhousie University in Halifax, Nova Scotia, revealed that they had developed chemistry for a lithium-ion battery that could: 1 – Power an electric vehicle for more than 1 million miles 2 – Provide at least two decades of grid energy storage A 1 million mile battery…yes the technology is getting very close to being real. And it could be a game-changer. Dalhousie published the full details study in Journal of the Electrochemical Society. The key to unlocking the 1 million mile battery and crucial grid energy storage is a nanomaterial coating that protects the cathode of a battery. In short the cathode decreases the cathode’s resistance, resulting in less heat, greater performance and less degradation. EVs are superior to their internal combustion engine counterparts in virtually every aspect except for one: the fuel tank. Although superchargers and large battery capacities have helped alleviate range anxiety, quick charging tends to reduce a battery’s life. As a result, the battery continues to be the Achilles Heel of the electric vehicle, lasting only about 10 years—less than half of the vehicle’s expected lifespan—and accounting for nearly half the purchase price of the vehicle itself. A million-mile battery, enhanced by protective coatings that can withstand high charging rates, could be just what the doctor ordered. At the front of this nanomaterial coating technology is Nano One Materials – which already has 4 major partnerships and has been visited by 5 large automakers in recent months. Then on June 24th Nano One announced a breakthrough. They had a coated cathode material lasts 4x longer. The key to the million mile battery could very well run through this tiny company. This is the type of renewable energy stocks I want to bring to subscribers—Greenlane Renewables (GRN-TSXv) is another example--it turned into a triple

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in 3 months! QUICK FACTS (Canadian $) Share Price: $3.12 Basic Shares Outstanding: 80.3 million Market Cap: $250 million Net Cash: $10 million Blue sky licensing revenue opportunity: $1 billion https://nanoone.ca/ POSITIVES - Homerun upside - Credibility from existing partnerships - 5 world class automakers and suppliers have visited the company - Not a sure thing, but the market is not pricing in the possibility of success nearly enough - Chairman Paul Matysyk has a GREAT track record in monetizing companies for his shareholders NEGATIVES - Like all revolutionary tech plays this is high risk - Will need more cash - Even if successful, a new better technology could then come along THE TECHNOLOGY Nano One Materials is trying to change how the world makes battery materials. Not batteries themselves…..but the materials that go into them.

https://eur02.safelinks.protection.outlook.com/?url=https:%2F%2Furl.emailprotection.link%2F%3FbPSyIHYTyNXYV9dcyzWytXW7odbG8sz8XLAAHnuw3AIfunKDBBXg1U2vHkXXRKM1jTTJq4MkwFpeZtwK4DGnmDBMNmSoKq586KoMM4FSTyiHo163I5-ys_O8_S0JHrNItI5aV7YgVDKX4FREKZMdJHyQBS36Nrg6AZfRuPhgGKAU~&data=02%7C01%7C%7C2e9d353f4b7d4e1f15b708d84ec4acb6%7C84df9e7fe9f640afb435aaaaaaaaaaaa%7C1%7C0%7C637345953905373392&sdata=V14uoyFZZiuT2YrH535CS5gAiKfRRK5Oh2yAHBgJ9pw%3D&reserved=0

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The company’s technology is designed to both reduce the cost of producing cathode materials used in lithium-ion batteries, and also create a massive step-change in battery performance (think step-change in electric vehicle range). If successful they may find themselves the owner of a royalty on a $23 billion per year cathode market. Lithium-ion batteries consist of largely four main components: cathode, anode, electrolyte, and separator.

Every single component of a Lithium-ion battery is essential as it cannot function when one of the components is missing. But the cathode is the largest, most expensive and most important part of the lithium ion battery.

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One quarter of the cost of a lithium-ion battery is the cathode. Without getting too technical on how these four parts function…… The anode and cathode store the lithium. While charging, lithium ions flow from the cathode via the electrolyte to the anode. When the battery is discharging, lithium ions flow the other way. The movement of the lithium ions creates free electrons in the anode which creates a charge at the positive current collector. The electrical current then flows from the current collector through a device being powered (cell phone, computer, etc.) to the negative current collector. Nano One’s technology is focused on making coated nanocrystalline powders. The nanocrystals add durability and the coating protects the nanocrystals from side reactions. This patented combination is key to improving the durability and number of charges.

By applying the coating to each crystal, Nano One is trying to massively increase the durability and lifetime of a lithium ion battery.

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What we learned in June was that the One-Pot process works. Nano One announced the results of testing showing that their process produced unique coated single crystal cathodes that last up to 4x as long as existing conventional cathodes. This could be a game-changer for electric cars — According to Tesla researchers, coated single crystals could enable electric cars to last a million miles, enabling automotive engineers to extend the allowable range between charges, boost rates of charge or reduce the cost. In the company’s own words: Our latest innovations provide added durability and safety to NMC cathodes by protecting them from the stresses of repeated charging and from undesirable side-reactions. We are able to form protective coatings on individual particles and this is clearly differentiated from others who are developing coatings on larger clusters of particles. The stresses of repeated charging cause large coated clusters to break apart, leaving individual particles on the inside exposed to side reactions. By protecting the individual particle, [we are] engineering new materials for increased durability and safety. Our technology is particularly relevant to high energy nickel-rich NMC batteries because it provides added protection. Nano One have patented these coated nanocrystal powders, and they have also patented their manufacturing technology which is refer to as the “One Pot Process”. It doesn’t just improve the materials and coating which drives longer lasting cathodes, it also reduces production cost by streamlining the production process. Where the standard process for coating cathodes involves many steps…the Nano One process is much simpler and less expensive….

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Nano One has built a demonstration pilot plant to show how the One Pot Process is allowing cathode structures to be formed in hours instead of days. Nano One is not the first to try to fix the durability issues. But so far, the proposed solutions have been too costly. When I talked to Nano One’s IR Paul Guedes he made it clear that cost is at the forefront of all their work. “Everything we’re doing, we’re doing with a focus on being cost competitive.”

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Backing up the claim, at the beginning of June Nano One released a detailed engineering report on the One Pot Process. Nano One commissioned Noram Engineering and Construction to complete the report - firm up the economics and nail down the costs. The report identified “meaningful cost reductions in equipment, construction and operating expense.” Guedes called it a “huge milestone” that take a lot of risk off the table”. The report was done for Nano One’s LFP material but the conclusions apply to all three battery materials. With the promise of both lower cost and a huge improvement in battery performance the One Pot Process could be revolutionary. Nano One’s technology aims to create a new industry standard for lithium-ion battery production by increasing the service life of a battery, reducing incidence rates of failure and reducing maintenance and replacement costs. THE ADDRESSABLE MARKET If Nano One’s technology could increase the lifetime range of an EV, then it could also move the needle on how quickly consumers move to adopt one. There are 1 billion combustion engine cars on the road...so being a key cog in accelerating this transition is a very valuable place to be. Thanks Captain Obvious! Global cathode sales are already expected to be $23 billion by 2025.

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The lithium-ion cathode market is segmented into a variety of different material chemistries, each with specific attributes that address different battery applications. Nano One is currently focused on three distinct opportunities (different types of lithium batteries) within the cathode material space and provides a unique value proposition for each. Opportunity: LFP LFP (lithium iron phosphate) is the safest, longest lasting and lowest cost battery and is dominant in E-buses, E-bikes, fleet vehicles and even entry level mass market electric vehicles. LFP is also suited to Energy Storage Systems

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(ESS) being deployed at a growing rate in electrical grids globally. Nano One’s patented One Pot process produces high performance LFP, with fewer steps, lower cost and in an environmentally friendly manner as compared to current methods of production. Opportunity: NMC NMC (nickel-manganese-cobalt oxide) is the largest segment of the cathode material market. It is forecast to dominate going forward driven by automobile industry’s focus on NMC’s superior energy density enabling long range electric vehicles. However, instabilities limit durability, safety and practical range for high energy applications like long range EVs. Nano One’s One Pot Process uses fewer steps and simpler feedstocks while producing patented coated single crystal NMC powders which resist cracking, last longer and potentially extend EV driving range. In the June press release Nano One quantified the improvement.

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Source: Nano One June 24th Press Release Opportunity: LNMO LNMO (lithium nickel manganese oxide or “high voltage spinel”) operates at higher voltages and lower volumetric change during cycling making it a strong candidate for fast charging applications in next generation liquid electrolyte and solid-state batteries. Nano One’s One Pot Process enables LNMO using fewer steps and simpler feedstocks while making a coated single crystal LNMO powder that improves the interface with solid and liquid electrolytes, resists side-reactions and protects the cathode from high temperature degradation. The company doesn’t need to sell investors on the size of the opportunity…..they need to sell investors on driving change in lithium ion batteries. The partnerships that Nano One has entered are an encouraging indicator that Nano One can do that. The company has partnered (so far) with three big companies that operate in the lithium ion battery supply chain: Partnership 1 – Volkswagen for the development of long-lasting battery materials for electric vehicles.

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Partnership 2 - Saint-Gobin, a French multinational materials company on enhancing high temperature processing for the Company’s lithium ion battery materials

Partnership 3 - Pulead, one of China’s leading ion battery cathode producers on developing a next generation lithium ion phosphate battery plant.

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In addition to those partnerships, I have come to believe that five of the largest automakers and/or cathode suppliers on the planet have visited Nano One over the last few years. When I talked to Guedes he told me that getting a big deal is Job #1: “So getting a commercial agreement is one thing that we are focused on at the moment. We have been at this a while and we know what the market wants next…yes we have a cool technology, yes we have patents, yes we have good test results and this is all very important. These will give us little surges in the market but the market is waiting for a commercial deal.” We saw some of the fruits of that focus a few weeks ago. Partnership 4 - Joint Development Agreement (JDA) with a multi-billion-dollar Asian cathode material producer. Under the agreement the two companies will develop cathode materials using the One Pot Process. If all goes well, a framework is in place to jointly commercialize the materials. No doubt interest in the technology has perked up since Tesla’s Elon Musk claimed that Tesla’s research shows that batteries made with single crystal cathodes can last exponentially longer — thereby supporting Nano One's independent claims on the value of its coated nanocrystal technology and patents.

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Nano One’s CEO actually issued a statement on the Musk comments: “Tesla’s research provides evidence that batteries made with single crystal cathodes can last an order of magnitude longer than conventional composite cathode structures in battery cycle testing. These results help to substantiate Nano One’s technology advantage and have spawned a great deal of interest in our coated nanocrystal innovation which produces our patented single crystal cathode powders. This has generated a measurable increase in strategic level discussions and forms the basis of current relationships with several automotive players and chemical companies. We are working hard to add these developing relationships to our existing list of joint development partnerships.” Announcements of further partnerships and joint ventures are likely to be the next big catalysts for the share price. MONETIZING AND FINANCES The plan for monetizing this technology is to license it to battery manufacturers and create a business that has wide profit margins and big cash flows. Management believes that they have a $1 billion licensing opportunity.

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The chart below is the key for the company delivering on this potential. The goal is to allow customers to also generate much wider profit margins as a result of Nano One’s lower cost production.

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Profitability of typical cathode production for a battery manufacturer is on the left, on the right is how Nano One views their patented technology delivering for the customer. The green bar is total customer profitability……it is wider on the right even with the royalty paid to Nano One. The One Pot Process eliminates so much cost that customers can pay the royalty to Nano One and still make a lot more money themselves. Nano One has raised $27 million from equity issuances to date and has received another $13 million in non-dilutive government grants.

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Nano-One has enough money to get through most of the testing. At some point, Guedes told me Nano One would like to see the partners ante-up on the cost of advanced development as each partner would have unique formulations. The Board owns 13% of the 80 million shares outstanding. Nano One had a little over $10 million in the bank at the end of June 2020. Trying to assign a specific valuation target to a company like this is difficult. But this is exactly the type of stock the market wants now, and they have validation through collaborations with global brands---and I’ve seen much less promising technologies with smaller addressable markets trade for multiples of this valuation. If this was a NASDAQ listed stock with some analyst coverage it would have a much higher valuation.

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STOCK CHART

WHAT THE ANALYSTS SAY

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FIRM TARGET PRICE No Coverage CONCLUSION The June 24 news on their longer lasting lithium battery was a HUGE step forward. The more recent news of the JV with the multi-billion-dollar cathode producer just adds to the evidence. Their technology is advanced, and attracting commercial partners. Nano is focusing on 3 materials. LFP near term, NMC mid term and HVS long term.

1. LFP is almost there as they have an engineering report and 2 years of working with Pulead

2. NMC is making significant advancement (June 24th news) and is attracting attention in the industry

3. HVS is betting on solid state batteries commercializing and is a good candidate material for those batteries but lots of work with partners needs to be done and they have those strategics in place now

But do not mistake me – what we have now is data saying the tech works as advertised. That is a HUGE step in the right direction and with large partners on board and a large treasury we expect things to get accelerated. I believe that the market still underappreciates the position that Nano One currently finds itself in……mainly because the stock market isn’t aware that the company exists. The Market is now waiting for a couple of additional joint venture announcements—that would involve cash/milestone payments. Any one of those could move the stock higher very quickly. Keith

TESLA BATTERY DAY ANALYSIS

GUEST SPEAKER = DAN BLONDAL,

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CEO OF NANO ONE MATERIALS CORP

NNO-TSXV/NNOMF-OTC

WEDNESDAY SEPTEMBER 23 2020

Keith: Welcome, everybody. Thank you so much for joining us today. We have with us an insider on the battery tech space, Dan Blondal, CEO of Nano One.

And he's going to kind of go through the... what he heard Elon Musk say, and what Elon Musk didn't say. So we had a brief chat here about an hour ago, and the way we're going to kind of run the program here today, folks, is... so Dan is going to speak to again, what he heard Elon, what he heard Elon didn't say, and kind of the positives and negatives there. And then also talk about how, with regards to Nano One itself, how it was impacted today or yesterday by some of these announcements, and how he kind of sees that helping or hindering Nano One going forward. So, Dan, thank you so much for joining us on the call today. I appreciate that you're a very busy guy today. A lot of people are going to want your attention. So thank you for taking a few minutes here. So Dan, I'd encourage you to be as detailed as you can be, and take as much time as you want. And then, we'll open it up for questions. But again, I do appreciate that you do have other commitments today. So again, thanks so much for joining us, and the floor is over to you. Dan B: Yeah. Okay. Well, on that path, let's start with what did Musk say that it was real. You know, it's funny. I just did an interview with Andrew McCready, who does this driving podcast for Postmedia, and he said something in there that was actually quite interesting. He said, "Tesla will often provide a tremendous amount of detail in what they do. And why do they want to reveal this stuff?" And it occurred to me that whenever they're saying something real, that's when they're doing the deep dive. They've done an amount of work that they thought a lot about it, and they're able to talk about it. And the reason they reveal it and don't hide it is because they got a tremendous amount of momentum behind them, and of course a lot of cash. And when they say stuff with not a lot of detail, they're often BSing us. So justice to... And I think that's kind of the premise of what I wanted to... how I wanted to kind of address your audience. So I hope that makes sense. Keith: Mm-hmm (affirmative).

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Dan B: Yeah. So listen. Tesla's Battery Day, at the end of it, was all about cost savings and the challenges of scale up. Now they're getting hit a little bit hard today in the markets because they're not there. They don't have this new battery platform in place. The low cost battery isn't there. The plaid isn't quite there yet, either. And so they delivery on their promises is... they're getting kind of measured on that today. But really, at the end of the day, what they said was all about cost savings. And let's start with the... To me, which is what is probably the most exciting thing they talked about, was this idea of a tablets battery cell.

So moving to tablets battery cells is super innovative because it creates... What it does is, instead of having this one little tab that allows electrons to flow into this big, long piece of foil that the electronic then have to flow all the way down the coil inside the battery to get to the capitol materials and nano materials that are in there. Instead of doing... What they do is they get rid of that tab. They extend the foils up on the top of the bottom of the battery, they fold them over. And those foils then don't need to have a tab welded to them. And then it creates a super short pathway for the electrons. And I don't want to get overly detailed, but everyone knows that when electrons are flowing through wires, the wires get warm, and that's because there's resistance in the wires. So if you can shorten the pathway for the electrons, you reduce the resistance and the heat build up.

And ultimately, that will enable faster charging and more aggressive charging. It allowed them to build a bigger cell. And now, because you don't have these big, long pathways, you've got a still very, very short pathway, even with a cell that, as they proposed, it's going to be about the size of coke can. So that enables some really kind of fast charging on that sense. But fundamentally, the big advantage here is that by having these folded over electrodes on the top and the bottom, they can move the heat in the battery very quickly to the top and the bottom of the battery as each cell. And then, when they put it all together in a pack, they can cool it from the top and the bottom of the pack rather than from within the pack between the cells. And if you can get rid of all the heating systems between the cells, you can then push them all together, close packed, so they're touching along the cylindrical surfaces of the cells. You can glue those cylindrical surfaces together to make a super strong, super light honeycomb structure that takes advantage of the strength of the tubes, and you get the structural integrity right from the cell.

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And that will allow them to lighten the battery. It'll allow them to reduce the thermal management systems. And of course, out of all that, they get a faster charging cell. That should be a lot easier to make because you don't have to stop and weld tabs to it during the manufacturing process. So you get to this kind of bottle making premise that they put together with the video session. So look, it's a fantastic, I think, response to the blade battery, which we talked about last week from BYD. BYD have done a very similar thing, of course, but they're doing it by making this kind of ski-shaped battery cell and laminated them all together to make a really big, strong structural beam. And it allows them to pack way more of them closer together, and takes advantage of these thermal properties. And that allows them to just pack more between the wheels, and exactly what Tesla have done here. So a very good response, albeit they're going to be a couple of years behind BYD. They're still a few years away from having this in play, but very exciting than the last. And as I predicted that... As I said last week, I think Tesla has to make some kind of an announcement about this, and indeed they have, and design the cell for the automotive structure is going to be absolutely key to all these next gen batteries you're going to see. And so we can expect to hear similar things from, I think, from all the automotive OEMs. They're going to have to design those cells to pack them into the car. And if not, and maybe even do what Tesla's been saying. They're talking about making it... making the celled frame. And by doing that, I'm sure that's got all kinds of problems and challenges, but by doing that, they can help really, really drive down the costs. They'll have to get there. They'll have to certainly improve their... the reliability of the whole battery system and the reliability of every cell because you can't have one cell failing in that system because it's going to be almost impossible to replace. But nonetheless, it's very, very strong direction towards making a fully integrated battery with much lower costs and higher energy density, and presumably better driving, and better driving range, and better charging rates. So that's kind the... to me, that's the biggest takeaway I have from this. And coupled into there is dry electrode manufacturing, which sounds like it's a ways off yet. They're still at the laboratory level trying to figure that out. And it sounds like their cobalt-free battery is also quite a ways away. They didn't really give any details on that. So my guess is there'd be asking a little bit on that, but those are very big challenges, getting rid of cobalt. Of course, it addresses, security of supply, and all the child labor issues related to cobalt, but cobalt's a stabilizing element, and removing it... kind of like they said, their analogy was a set of bookshelves. And lithium goes... it's the books that go on the bookshelves, and the bookshelves are the cobalt, the nickel, and stuff. When you take the cobalt out, then nickel gets really

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flimsy. And so you've got to replace it with something else. And you can replace it with manganese and aluminum, but you also have to make single crystals, and you have to coat them with things like titanium and niobium to gain back that lost durability. And very interesting, and maybe I'm getting ahead of myself here, but Tesla... what Tesla did not mention was the million mile battery, or coated single crystals. And it's probably because their work on this is still in academia. This was a paper that was published a year ago by Jeff Dahn at Dalhousie University. And none of the materials that he talked about were commercially viable. And it paints a fantastic picture where we need to get to, and plays very much into Nano One's field because we are much, much closer to making a single-coated nanocrystal materials that can address those... bring back that lost durability from stripping out cobalt. We've got two cobalt-free materials already in place, and one low-cobalt technology that heavily leans on the sort of coated nanocrystal process that we've developed. So to us, that's kind of how my read into what we saw yesterday. Keith, any questions quickly, from you that have come up from this? Or do you want me to just keep going? Keith: No, just keep going. Dan B: Okay, great. So... And probably the most important thing that came out of the discussion Tesla's conference yesterday for now, one is their proposed cathode strategy. So they're talking about building a plant, and going direct from metal and nickel powder, straight to a cathode material. And this couldn't lend better support to Nano One process and a raw material strategy. It plays completely into our strategy and what we announced just last week or the week before on September 9th. And basically, by going direct from a non-sulfate source of metal, be it a powder or some kind of intermediate product at the refinery, to a cathode material, well, we can eliminate the sulfate waste, which is what they said. You eliminate a large amount of water that wouldn't have to be transported with that nickel sulfate to the cathode producer. And you also eliminate a rather significant cost of the crystallization process. And that would be converting nickel into a nickel sulfate, very, very energy intensive. Dan B: That would be converting nickel into a nickel sulfate. Very, very energy intensive and capital intensive. And that by sidestepping that you will need a bunch of costs and a bunch of waste and very environmentally sensitive water-related issues as well. So we recently filed patents on that, And to further support this, we hired this guy, Bob Morris, who's an ex Executive Vice President of Vale and nickel cobalt strategist who was working on their battery strategy. So we're fine tuning the strategies and tactics with Bob and reaching out into that space

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to move with the strategy board. It doesn't change really anything in our technology, other than we might change our feedstocks slightly to make capital materials to accommodate this. But we're already on this, and it’s fantastic to see Tesla really validating the strategy that we've been moving on. So super excited about that. And of course, it totally supports the automotive OEM need for environmentally sustainable feedstocks and supply chain integration because that eliminates all these extra steps and costs that Tesla alluded to. And we have as well in a bunch of our media. So listen, that kind of sums up the Nano side of things. Some of the stuff that I think was BS in Elon Musk’s talk, the lithium mining stuff, crazy. He basically said, "Oh, lithium is everywhere. All you need to do is add a little table salt into a little bit of clay and out comes battery-grade lithium. Total unadulterated bullshit. I've already to our advisor, Joe Lowry, who's really well connected to the... Of course the Lithium Americas group, a guy named... Their CTO, Rene LeBlanc and Jon Evans have no idea what Tesla re talking about. They claim to have some kind of Nevada clay asset. They didn't know what that was about. And of course they'd been working on extracting lithium from clay for a long time. It's not easy peasy like Elon says. But clearly, I think what he was trying to do was really just downplay the supply uncertainty about lithium going into the future. And specifically, "There's lots of lithium out there. You don't have to worry about it." He doesn't want to see another spike in lithium pricing. My guess is that's the only reason he was doing it. But the rest of it, just them going into lithium mining and extraction just sounds like total BS to me. I guess that's kind of about it that relates to Nano One. They talked about things like silicon anodes and it doesn't sound like they're too far ahead on that stuff. There's lots of people working on silicon anodes. There's tons and tons of challenges to get there. And they could still be years away from having a pure silicon anode, as our opinion and many people, just because of the expansion and contraction issues related to that. They didn't say anything about the solid-state batteries, which was interesting. And that's probably because a solid-state battery size for an electric vehicle ain't going to be cheap and their talk yesterday was all about cost reduction. So until we see a viable solution that can actually be scaled, I don't think you're going to hear companies like Tesla really touting the solid-state side of things. There's lots of exciting development work on that, but we're a long way from seeing giga, let alone terrawatt-sized battery plants doing solid-state batteries. And that's just an indication of where they're coming from.

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You know, the fact that they're moving into cell production makes total sense. And obviously, they're going to continue working with their existing cell suppliers. But at the end of the day, Panasonic and LG are not incented to make a cell that is very specific to Tesla's automotive needs so they have to design their own. Same thing goes with BYD. Apple designs their own batteries for their own phones because they need a very specific battery to put in their phones and laptops and wearables, and gear pods and all that kind of stuff. So we've seen this trend for a while. A strong movement of the OEMs to take charge of the battery design, to make it, to optimize it for the application it's going into. And we're just starting to see that now on the automotive front. BYD, Tesla, you're going to start hearing from all the other OEMs that are going to be doing this stuff as well. Because it's the only way to drive costs down, is to integrate all of that stuff and make it very, very car-specific. All of it plays very well in the Nano One's, I think, Nano One's court because we've got some of the really underlying building blocks to make these low cobalt, high energy density materials they're going to need for the battery to go into the new architectures. Keith: Okay. Dan, thank you. Dan B: I might've missed a few things. I've been kind of going flat out since yesterday at noon. I don't know if there's any questions from your group on this and I'm happy to answer them, actually. Keith: Sure. So if there's any questions, please press five and then star on your handset. You will come up here on my screen as wanting to ask a question and you'll get the floor. So again, five and then star. Dan just while we're waiting for our first question, when you say Tesla is a couple of years behind BYD, what does that really mean? Dan B: All I mean is- Keith: What implication does that have for them? And are we ever going to see any Chinese technology over here, do you think? Dan B: I think we'll see. So what I mean is that... So BYD has this blade battery that we talked about briefly, and I think you sent some information around to our group on it last week. It's in production. It's going into a car right now called the Han car. They're targeting up to 600-kilometer range with it. So it's fully in production. They're dedicating plants to it right now. So in that way, they're probably two years ahead of Tesla, in terms of having an integrated battery design like Tesla proposed to us yesterday in the battery day.

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So in that regard, they're (Tesla) behind BYD. But they're approaching it from a nickel manganese front rather than the lithium iron phosphate front. So Tesla's battery, when they finally get, will probably have greater range. It may not have the durability of LFP, but it'll probably have a greater range just because the energy density is naturally higher. And they're tackling the problem in a slightly different way, but really, at an overarching view, they're basically taking the structural property of the cell and building them into the pack, taking advantage of the underlying chemistry, to make them a more energy dense battery that's presumably going to be cheaper and faster charging and easier to manufacturer. And that's exactly the description of what BYD have done. Just BYD are further ahead, but it's LFP-specific. Do they compete? Yeah, there's some crossover there, but I think they will still also address different parts of the market. And to that, we did not answer the second part of the question. I think that the blade battery design will make its way into long-range electric vehicles, or maybe mid-range electric vehicles, at the very least. And I think that will spill out of China because it's an elegant, safe, low cost solution. And it'll be mainstream. It's going to get proven out in China, but it'll get mainstream, I think. And we'll start to see it across the board. I wouldn't be surprised if people start to lean on BYD for that type of battery. And we start to see it emerge in other people's vehicles. So I don't know if Tesla will do that. I don't know if Tesla's batteries will end up in other people's vehicles, but I don't think that's beyond BYD. Certainly if it helps them reach into the Western market, why wouldn't we see it? Rather than BYD's branded vehicles, why wouldn't that cell actually make its way into a Volkswagen or a GM car or whatever it might be. Certainly if it can bring the necessary range, and there's highly durable battery with great total cost of ownership and super safe, because the risk of fire is far, far less. Why wouldn't it make its way into the consumer electric vehicle and break its way out of its current industrial applications. Keith: Is there a kind of an inherent distrust of things Chinese in the sector? We're seeing all this political crap around everything Chinese these days. And obviously, I don't think anybody's worried about the Chinese government putting any kind of super secret surveillance device in a battery blade thing. But I mean, is there any culture in the industry that suggests that that's not really going to be an easy sell for BYD? Because I guess the battery is the big thing, right? Whether it's a Nikola or a Canoo or whatever, are they basing their cars on their own batteries? Is battery technology the absolute guts of this thing? Or is it turning into a bit more of a plug and play? We've got a really neat design, we can just... It's really into like the big three where... The big three, as you know, don't make any of their parts. They've got a whole sector, that supply chain that supplies them the parts. So how do you see that- Dan B: Yeah, and we put skin around it? Yeah, so it might move that way that they put a skin, that the OEMs are going to be just... They're all going to be about the design of the skin and the badge and the brand. And the guts are all going to be supplied to them by their supply chain. But I think in the interim, what Tesla has

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proposed, what BYD is currently doing in China, it just makes it harder for people to do that. Dan B: ...in China. It just makes it harder for people to do that because they're basically setting the bar much higher and by redesigning the guts by becoming much more vertically integrated. And I think for the foreseeable future, I think that's going to be the trend we see. But to answer the first part of your question about people are nervous about China, I think yeah. There's times that there is [inaudible 00:33:23] about big brother watching us, for sure. Look, the key thing is I think the US, in particular, is really afraid of China leapfrogging them just on the vehicle front, just from a pure manufacturing point of view. So they're putting all kinds of blocks in place to prevent those technologies and those products and making their way here. And so it's really just way more, I think, about trade and manufacturing. At least on the battery front, than it is to do with sort of espionage type things. So look BYD any other Chinese manufacturers have some massive challenges. And that's going to be how do they partner with Western brands to get their products into their vehicles? And so the blades battery, it might make a lot of sense getting that under the hood or under the floorboards of a Western company like Volkswagen or Ford or GM or whoever it might be. And certainly, if it gives Ford or GM a response to what Tesla's doing, I think they'll jump on it. And given how far ahead they are on it, I can't see why it wouldn't actually make its way there. I'm sure GM and these other players are all working on a similar kind of strategy, but I just don't think they have the horsepower or the willpower really to do it like Tesla have. Simply because they can't market it as heavily because they'll undermine the sales of all their pickup trucks and vans. That's a challenge for the existing automobile companies. Volkswagen's kind of got over that by saying, "Okay, we're going all electric." And you know, they're moving fast in that direction, but it's a massive company to turn around in that direction and it will take them time. So that kind of cell-level design thing, I don't think we saw anything in the ID.4 reveal today from Volkswagen. I haven't had time to look into it in any kind of detail, but surely we'll have to see that kind of response. And whether they partner with companies like BYD or Tesla to put this new kind of architectures into their cars or not as still to be seen. But I think new architectures are going to be needed to compete. Keith: Okay. Dan, I don't see any questions. So I'm just going to ask you to close off here. Just repeat to us again, what you think the biggest impact on NNO is out of Battery Day yesterday. You had talked a little bit about how I think that you see that

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what was happening here, it makes your fit even better for what you're trying to do with the single cathode thing. So maybe you want to just maybe repeat that for us, so we've got that clear in our minds. Dan B: Yeah, absolutely. So the biggest takeaway, I think from the Tesla announcement is just the fact that Tesla said that they're trying to go to a no cobalt cathode that's manufactured directly from metal powders. And that fits very well into Nano One's narrative about eliminating sulfate waste stream, eliminating the heavy cost of making that sulfate, and eliminating the waste water that goes along with it. And that goes to addressing the environmental sustainability of feedstocks. And it goes to the talking about the supply chain integration. And then on top of all that, the process that we use to do that is the same process that makes the single-crystal coated nanocrystals that will address the stability needs as you strip out cobalt. And the fact that we've got a manufacturing solution for that that is scalable is something that Tesla don't have because he didn't talk about it. And that fits very much into our narrative. Keith: Okay. There's one question here from Casey. Hold on, Casey. Okay, I've un-muted you Casey, go ahead. Casey: Hi. I'm wondering what you see as the future for cobalt, say in the next three years, and the three years after that. And specifically, should I be selling my First Cobalt? Dan B: Cobalt's here to stay for a long time. I don't think we're anywhere near a no cobalt a solution that Tesla kind of alluded to. Look, your comfort level on First Cobalt is yours, and I'm not sure I can give you any advice on that, but I think cobalt is here to stay. I believe the blend of cobalt, it will be used in lithium iron batteries for electric vehicles, is going to be about 20%. Yeah, there's going to be instances where Tesla will say, "No, we're going to try to go to zero cobalt." And people are already going to be using 811. They're going to be niche applications where someone's willing to pay the extra money for all the stability and everything that needs to be added into those cells. The aggregate sum of the NMC battery, I think is going to be 60% nickel, 20% cobalt, and 20% manganese. When you add it all up, all the different solutions and all the different batteries that are going to be used out there, that's where I think it's going to land over the next three to five years. Casey: Thank you. Dan B: Hopefully that gives you some insight on where I think it's going. Casey: Thank you.

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