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Share Name Share Symbol Market Type Share ISIN Share Description
Dg Innovate Plc LSE:DGI London Ordinary Share GB00BYQD5059 ORD GBP0.001
  Price Change % Change Share Price Bid Price Offer Price High Price Low Price Open Price Shares Traded Last Trade
  0.00 0.0% 0.135 0.12 0.15 0.135 0.135 0.135 1,816,181 08:00:00
Industry Sector Turnover (m) Profit (m) EPS - Basic PE Ratio Market Cap (m)
Alternative Energy - - - - 12

DG Innovate PLC Strategic Update & Investor Webinar

11/10/2022 7:00am

UK Regulatory (RNS & others)


Dg Innovate (LSE:DGI)
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TIDMDGI

RNS Number : 3905C

DG Innovate PLC

11 October 2022

11 October 2022

DG Innovate plc

("DG Innovate" or the "Company")

Strategic Update

Investor Webinar

DG Innovate (LSE: DGI), the advanced research and development company pioneering sustainable and environmentally considerate improvements to electric mobility and energy storage, is pleased to provide an update on the Company's development and commercialisation strategy for its suite of technologies.

Highlights

Enhanced Drive Technology (EDT)

-- Further significant progress made with the development of the Company's Pareta (R) electric drive platform in conjunction with its partners, the UK Ministry of Defence and Meritor

-- Successful development of the advanced prototype Pareta(R) concluded and as planned the focus is now on testing to develop a final design prototype

-- Clear staged roadmap set out for the Company to enter Pareta (R) pilot production in 2024 and full scale commercial sales targeted for Q1 2025

-- Ongoing commercial discussions with collaboration partners and other potential end users in a variety of markets, with plans to roll out the Pareta(R) product suite more widely

-- Significant revenue opportunity within aftermarket integration services identified, with a targeted acquisition strategy being adopted both to accelerate growth and complement the existing product offering

Enhanced Battery Technology (EBT)

-- DG Innovate's hard carbon anode materials have demonstrated commercially attractive performance characteristics, in line with the best performing sodium-ion batteries currently available

-- DG Innovate is working with a number of battery manufacturers to enable further cell manufacturing development to be carried out in collaboration with them

   --    The Company is planning to increase the scale of its in-house material production capability 

-- The Company has recently won an Innovate UK grant of GBP170,000 to carry out a feasibility study for the evaluation of manufacturing its sodium-ion anode material at scale in the UK

-- The Company intends to primarily pursue a licensing model to bring its battery technology to the market

Enhanced Drive Technology

The Company's electric drive technology platform, Pareta(R) consists of a motor, high power inverter and control electronics, with a novel 'multi motor/inverter' architecture and a number of fundamental and patent pending innovations. This technology has been developed over a number of years via the Company's ongoing work to build ultra high performance and durable electric drives for the UK Ministry of Defence, with the resulting product family currently in its third iteration.

The Pareta(R) platform has most recently been extended to deliver its associated performance and durability parameters at a competitive cost point for volume manufacture for commercial electric vehicles, initially for the Company's collaboration partner Meritor, the US-headquartered global commercial vehicle components company. The advanced prototypes produced in a scalable 250kW/400kW format, aimed at bus and HGV applications, have already shown good performance versus electric motor systems from global motor manufacturers.

To develop this new offering from its current advanced prototype phase to final product release and volume manufacture, the Company plans to take a staged approach. Having successfully produced an advanced prototype design, work is now ongoing to progress to a final design prototype.

As previously announced, testing of the 250kW Pareta(R) prototype drive is ongoing. Performance results to date are encouraging, and in line with concept expectations. The current cycle testing programme is expected to continue to the end of Q4 2022. Further cycle testing, including in the 400kW configuration, is then expected to be undertaken to establish and validate endurance requirements.

Following the successful completion of the final design prototype stage the Company intends to undertake a phase of pilot manufacturing and industrial engineering. Whilst the current version is already well developed, further prototypes will enable the design to be optimised, particularly regarding performance and costings, in order to progress to the pre-production stage.

As announced on 9 September 2022, the Company has been awarded funding from the UK Government's Advanced Propulsion Centre ("APC") through their Scale-up Readiness Validation competition, part of the Automotive Transformation fund. The APC funding of approximately GBP600,000 will cover circa 50% of the eligible costs of the Company's 'Scale up Readiness Validation of Parallel Motor for Automotive Applications' ("SUPAR") project. The SUPAR project, which will involve the establishment of a pilot production facility, is designed to optimise Pareta(R) to enable the most appropriate cost of production using lean manufacturing techniques, enabling substantial upscaling to commercial scale production and demonstrating the attractiveness of Pareta(R) drives to commercial partners.

The pilot manufacturing will be carried out in parallel with continued Pareta (R) development. The pilot facility, when fully developed, is expected to have a capacity of approximately 2,500 Pareta (R) units per annum and be revenue generating for the Company. The planning phase for the pilot facility is underway and the Company expects to start ordering longer lead time items and site preparations later in Q4 2022 and into Q1 2023. The target is for the facility to be completed early in 2024.

Once the pilot plant has been established, the Company intends to carry out a period of industrial engineering on the pilot production line during 2024. Following industrial engineering and with the achievement of a final commercial scale ready Pareta(R) design, the Company is currently targeting full scale commercial sales by Q1 2025. As noted, the latest Pareta(R) drives have been designed from the outset to be compatible with volume manufacture.

The Company is exploring multiple potential routes to market and continues to progress commercial discussions with its existing collaboration partners and other potential launch customers. The Company is encouraged by the progress of discussions to date and is confident that this will translate into commercial supply agreements in due course.

The Company believes that Pareta(R) can address requirements within multiple electric vehicle segments and potentially additional stationary applications. Pareta(R) has been designed to be scalable to a range of vehicle sizes, from e-bike size to large marine drives. To date the Company's focus has been on the military, heavy goods vehicle and bus segments and these are expected to remain a priority given the Pareta(R) units inherent suitability for these applications and the shorter expected timescales for these sectors to adopt new technology.

Following completion of the pilot scale production programme and in order to accelerate the Company's ability to secure commercial scale sales, the current intention is for the Company to commence development of a volume manufacturing facility with a capacity to produce approximately 10,000 Pareta(R) units per annum. Commissioning of such a facility is targeted for 2025, at a capital cost currently estimated to be approximately GBP5 million, with the potential for this to be funded through loans, further grant funding and/or investment from a commercial partner. Additionally, the Company sees the potential for commercial agreements in the form of licenced manufacture, joint ventures or further direct supply agreements in order to increase the volume of units produced and sold.

In addition to demand from OEMs, the Company views the aftermarket as a substantial opportunity for sales. With an increasing number of emissions regulations being introduced and the long useful life of heavy vehicles and buses, the Company expects there to be an increasing demand for aftermarket electric vehicle conversions. The Company would expect to service this demand from in-house manufactured units, with the Company also providing integration expertise and services.

In order to develop a full-service capability within the electric vehicle drive market, particularly to enable aftermarket integration, the Company is considering appropriate acquisitions and intends to take advantage of any compelling opportunities presented. The Company intends to fund these acquisitions through a combination of equity and debt depending on the nature of the acquisition.

Enhanced Battery Technology

The Company's proprietary energy storage technology encompasses a family of hard carbon anode materials produced from a sustainable bio waste product, specifically developed for use in sodium-ion batteries, with potential applications in existing lithium-ion battery production. Sodium-ion batteries offer an attractive alternative to lithium-ion batteries, using materials that are more abundant, with lower carbon footprints, and which circumvent natural resource constraints involved in the production of lithium-ion batteries.

DG Innovate believes that its battery partners consider the Company's technology to be a disruptive alternative in their aspiration to reduce dependency on hydrocarbon-derived anodes for both sodium and lithium-ion battery technologies. The Company's hard carbon anode materials have already demonstrated commercially attractive performance characteristics, particularly enabling significant energy densities, in line with the best performing sodium-ion batteries currently available, in battery cells manufactured at a small scale in the Company's own facility.

Further scale up of material production will involve an iteration of process engineering to maintain the desired performance and material characteristics in high volume. Additionally, integrating the material into commercial scale battery cell production will require a parallel process of optimising cell design and large scale production engineering.

The Company intends to primarily pursue a licensing model to bring its battery technology to the market , through licensing to sodium-ion battery manufacturers, with the potential for in-house material production should that prove commercially attractive. Whilst there is currently limited volume sodium-ion battery manufacture worldwide, a number of large global battery manufacturers have recently announced plans to establish substantial sodium-ion battery manufacturing capabilities. As global sodium-ion battery production increases in the coming years, the Company believes there will be a substantial addressable market for its technology.

DG Innovate is already working with a number of battery manufacturers and arrangements are being made to supply them with small sample batches of material for further testing and to enable further cell manufacturing development to be carried out in collaboration with them. In parallel, the Company is planning to increase the scale of its in-house material production capability.

The Company has recently won an Innovate UK grant of GBP170,000 to carry out a feasibility study for the evaluation of manufacturing its sodium-ion anode material at scale in the UK, in particular to enable the Company to refine its economic and technology model out to 10,000 tonnes-per-annum production of the Company's hard anode material.

Due to the stage of development of the sodium-ion battery industry and the complexities of cell manufacturing scale-up, the Company currently expects that moving from the current pilot manufacturing phase to 'giga-scale' manufacturing will take around 42 months from now, although there is the potential for earlier deployment both in existing lithium-ion battery manufacture, and sodium-ion battery manufacturing should commercial scale be developed sooner.

Commenting, Peter Tierney, Chief Executive Officer of DG Innovate, said: "Since I joined DG Innovate at the beginning of July, we have been reviewing the Company's strategy in order to ensure that our world class technology is appropriately exploited and brought to commercial scale production as quickly as possible. As set out today, we have a clear roadmap to commercialisation for both our electric mobility and energy storage technologies to take advantage of the numerous market opportunities we are seeing.

"This is a very exciting stage of development for the Company as we progress the significant potential of our proven suite of new and disruptive technologies. I believe that with this clear strategy and route to market for its technology, DG Innovate has a very bright future. I look forward to providing further updates as we progress."

Investor Webinar

DG Innovate's management will be hosting an online presentation and Q&A session at 5.30 p.m. BST on Tuesday 18 October 2022. This session is open to all existing and prospective shareholders. Those who wish to attend should register via the following link where they will be provided with access details:

https://us02web.zoom.us/webinar/register/WN_nPBNMLtIQqe7cXNWAUcV3w

Participants will have the opportunity to submit questions during the session, but questions are welcomed in advance and may be submitted to: dginnovate@investor-focus.co.uk .

For further information please contact:

 
 DG Innovate plc                              C/O IFC 
 Peter Tierney, CEO 
  Jack Allardyce, CFO 
 
 IFC Advisory (Financial PR & IR)             020 3934 6630 
 Tim Metcalfe 
  Zach Cohen 
 
 Grant Thornton UK LLP (Financial Adviser) 
  Samantha Harrison 
  Jamie Barklem 
  Daphne Zhang 
  Ciara Donnelly                              020 7383 5100 
 
 OvalX (Joint Broker)                         020 7392 1400 
 Tom Curran 
  Thomas Smith 
 
 WH Ireland (Joint Broker)                    020 7220 1666 
 Chris Hardie 
 Megan Liddell 
 

About DG Innovate

DG Innovate is an advanced research and development company pioneering sustainable and environmentally considerate improvements to electric mobility and storage, using abundant materials and the best engineering and scientific practices. DG Innovate is currently developing its products alongside a number of major manufacturers across the transportation and energy sectors, research institutions and the UK Government, and has filed 18 patents worldwide. DG Innovate's current research and development activities are broadly split into two areas, focusing on novel electric motor technologies and energy storage solutions. Its two main products are:

- Enhanced Drive Technology (EDT) - High efficiency, cost-effective electric motors + power electronics; and

- Enhanced Battery Technology (EBT) - Sodium-ion batteries offering a sustainable energy storage solution at similar/greater energy density to incumbent technologies at a lower cost, increased safety with lower environmental footprint.

Further information may be found at: https://www.dgiplc.com

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October 11, 2022 02:00 ET (06:00 GMT)

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