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Advanced battery technology solutions provider Solidion Technology (NASDAQ:STI) ranked among Monday’s top performers, likely due to enthusiasm over its electric vertical takeoff and landing (eVTOL) aircraft business. Given enthusiasm over clean transportation, STI stock represents the latest in speculative wagers for the burgeoning industry.
According to Solidion’s press release, the enterprise represents the merged entity between Honeycomb Battery Company and Nubia Brand International. The latter is a special purpose acquisition company based in Dallas, Texas. As for the former entity, Honeycomb represented the energy solutions division of Global Graphene Group.
Last week, Solidion announced details about its eVTOL business. In 2010, the company’s technical team began development of lithium-sulfur (Li-S) batteries. Management claims that it has built the most complete intellectual property (including over 100 U.S. and international patents on Li-S batteries) regarding this innovation. As well, it claims the development of essential technologies for fully commercializing these advanced batteries.
Per the press release, the aforementioned technologies include solid-state electrolytes and separators and graphene-enabled cathodes. Collectively, this innovation may have the potential to revolutionize the broader clean transportation market.
A Compelling Narrative Undergirds STI Stock
Fundamentally, STI stock benefits from rising interest in clean transportation, particularly eVTOLs. Because of their ability to fly vertically, this new breed of aircraft aims to replace helicopters. Though relatively few helicopters are in the air compared to other aircraft, they represent a significant source of local air pollution. A one-hour flight in some models can emit 500 kilograms of emissions.
Second, helicopters are noisy, causing disturbances to people on the ground, especially in urban areas. While eVTOLs are not completely noise-free, some iterations only emit noise equivalent to that of a hairdryer when flying. Potentially, that’s another big plus for STI stock, especially if the underlying battery business helps accelerate eVTOL production and adoption.
According to Precedence Research, the global eVTOL aircraft market size reached a valuation of $11.15 billion in 2022. Experts project that the sector will expand at a compound annual growth rate (CAGR) of 12.37% by 2032. At the forecast culmination point, the industry could be worth $35.79 billion.
Still, there are many challenges that pose risk factors to STI stock. One of the more pressing issues is regulation. Another is the limited range of eVTOLs. While Solidion is attempting to crack that code, efforts in the area — particularly focused on solid-state batteries — have not led to commercially viable products.
Why It Matters
Currently, no analyst covers STI stock. While the idea may be promising, prospective investors should note the extreme wildness of the security. According to data from Yahoo Finance, its one-day range goes from a low of 83.6 cents to $3.08.
On the date of publication, Josh Enomoto did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.
