Electrovaya Inc. (NASDAQ:ELVA) (TSX:ELVA) saw its shares climb roughly 50% on Wednesday following the announcement of a commercial agreement and related warrant transaction with Amazon (NASDAQ:AMZN).
The Toronto-based lithium-ion battery technology and manufacturing firm said the arrangement is intended to help accelerate the deployment of its proprietary Infinity Battery Technology within material handling operations. Electrovaya also indicated the partnership could expand to include work on robotics and energy storage applications.
Under the terms disclosed, Amazon will receive warrants that allow it to purchase up to 13,880,345 common shares of Electrovaya. Those warrants will become fully vested if Amazon achieves cumulative future purchases of $280 million. Electrovaya said a portion of the warrants vests immediately upon execution of the agreement. The exercise price for the warrants is tied to the 5-day volume weighted average trading price immediately prior to the date of the agreement.
Electrovaya emphasized that its energy storage systems are built around Infinity Technology, which the company says has a field safety record and delivers a reduced environmental footprint and lower total cost of ownership when compared with conventional lithium-ion technologies.
"Electrovaya’s Infinity Battery Technology has demonstrated real performance in demanding material handling environments, and this agreement with Amazon reflects our confidence in the opportunity ahead," commented Raj DasGupta, Chief Executive Officer of Electrovaya. "We look forward to building on that foundation in other industrial applications where safety and longevity are critical."
Beyond current deployments, Electrovaya said systems under development pair its Infinity lithium-ion chemistry with high-power architectures designed for data center, industrial and logistics applications. The company cites enhanced safety, longer cycle life and rapid charging capability as characteristics of these systems under development.
Market reaction was swift, with the company’s share price experiencing the double-digit percentage jump on the day of the announcement. The details of warrant vesting and the linkage to milestone purchase volumes were highlighted as central contractual elements of the transaction.
While the agreement outlines specific mechanics for warrant vesting and exercise pricing, Electrovaya described additional opportunities for collaboration in robotics and energy storage as potential extensions of the relationship.