What happened
Shares of Enovix (ENVX -2.99%) are on fire this morning, rocketing as much as 36.5% as of 10:14 a.m. ET. Enovix manufactures lithium-ion batteries using silicon anode, which improves energy density significantly. Tuesday morning, the company announced an order from a global consumer electronics company -- a milestone that's sent the markets into a tizzy.
So what
Enovix announced today that it has received an initial order for its smartwatch battery from "one of the top consumer electronics companies in the world."
Image source: Getty Images.
Enovix didn't name the customer but said this large consumer electronics company was now ready to purchase its battery commercially after having tested and qualified the products over a period of more than a year. CEO Harrold Rust called it a major milestone and believes it could open up more opportunities for Enovix across this customer's vast portfolio of products.
It's easy to see why this development has investors so excited today -- this initial order confirms the commercial viability of Enovix's lithium-ion battery technology, unlike most battery start-ups that have only demonstrated promising technologies so far and are far from commercialization still. It also means it is now ready to produce batteries at scale.
The company already started commercial production last year and shipped the first samples from its first automated production line to customers in January.
Now what
2022 is a pivotal year for Enovix, and the company has clearly kicked off the year on the right note. It plans to scale up production of batteries for the wearables market this year while starting another production line for larger battery cells for mobiles and laptops. It is also building 3D battery cell technology for the electric vehicle and battery storage markets.
Once it hits full production, Enovix expects to generate more than $1 billion in revenue each year. Also, it expects to start generating its first revenue in the second quarter.
Enovix shares debuted in the U.S. in mid-2021 and have slumped dramatically since hitting their peak in the middle of November. That also explains why the stock is skyrocketing today -- the lithium-ion battery market has exponential growth potential; therefore, investors perhaps see an opportunity to buy shares of a promising battery start-up while they're still significantly off highs.
