Canadian process technology company Nano One Materials Corporation is rapidly advancing a global lithium iron phosphate (LFP) cathode strategy as demand from energy storage, electric vehicles and defence applications accelerates.

Nano One explains that new Canadian, US and European government policies are creating more opportunities for localised LFP production, with Nano One aiming to address these markets through licensing and development company partnerships to build industrial-scale operations in a capital-light manner.

Nano One is seeking to license its Pne-Pot process technology into regional markets through localised development companies that will be leveraged to establish regional partnerships.

While the company’s focus remains on its core market segments outlined below, it is also monitoring other emerging technologies, such as sodium-ion chemistries, with a view to potentially leveraging its supply chain experience in feedstock pre-qualification and circularity, including recycling.

"We no longer find ourselves alone in making the case for LFP cathode production outside of China - G7 leaders, US defence procurement rules and the International Energy Agency (IEA) have all echoed it this year.

"Our job now is to convert that momentum by advancing expansion at the Candiac LFP facility in Québec and establishing development companies that bring partners and project development funding together with our technology to build recurring licensing and services revenue.

"I expect these efforts to enhance shareholder value and support long-term growth," says Nano One CEO Alex Holmes.

MARKET ASPECTS

LFP chemistries accounted for about 60% of global lithium-ion battery cell demand in 2025, roughly 1 TWh, and yearly demand outside China is forecast to reach 2.1 TWh by 2035, equivalent to about 168 new LFP cathode plants with a capacity of 25 000 t/y.

LFP is the dominant chemistry in energy storage applications, accounting for more than 90% of installations, with North American growth led by grid and AI data-centre storage and European demand led by battery-electric vehicles (BEVs).

BEV registrations across 17 European markets grew 33.7% in the first half of 2026. The addressable LFP market outside China is estimated at about $8-billion to $10-billion a year, as of 2026, with the market forecast to grow to $40-billion a year by 2035.

GOVERNMENT STRATEGIES

Governments are converting some of that demand into localisation requirements. In the US, the National Defense Authorization Act has placed restrictions on batteries from prohibited foreign entities starting in 2028, with the 45X manufacturing credit maintained at $35/kWh.

The EU and G7, in turn, are committed to diversified regional battery supply chains, while the IEA has warned that Chinese export controls announced in October 2025 put downstream cell production capacity outside China at risk.

DEVELOPMENT APPROACH

Nano One’s One-Pot process is designed for this environment by making cathode materials directly from non-sulphate metals or oxides feedstock, which bypasses the need to rely on China-dominated precursor cathode active materials.

The technology also alleviates the need to manage certain byproduct waste streams that can prove difficult in some regions, creating an easier pathway to permitting.

For each target market, Nano One plans to establish or participate in development company vehicles, or joint-venture-style entities, created to advance development, finance, build and potentially operate LFP cathode plants.

These development companies will allow Nano One to pair its technology with regional partners, customers and capital. Rather than being a sole shareholder of a project, Nano One seeks to derisk the development and the funding of such projects by contributing technology, engineering and services while future consortium partners contribute construction capital and offtake.

Going forward, each plant can be financed on its own merits - which is a standard practice in industrial technology licensing that can allow for a more capital-light development model for the company, as well as providing the capacity to pursue multiple growth projects in different regions.

Under its "Design One Build Many" strategy, Nano One intends to license its One-Pot process technology through flexible adoption paths - from a direct technology licence to a fully integrated package - matched to each customer's needs.

Nano One aims to earn licensing fees and royalties, complemented by support services across the plant lifecycle, from pre-final investment decision development through construction and commissioning, ramp-up and ongoing operations and maintenance.

The business model is intended to be prudent and repeatable: derisk each plant, keep the company’s balance sheet capital-light and grow recurring high-margin revenue as plants multiply.

CANDIAC EXPANSION

Nano One is advancing detailed engineering on the Candiac expansion, with commissioning of the expanded 800 t/y production line currently targeted for the first half of next year. The existing 200 t/y pilot line is already supporting customer sampling and product qualification.

Small-volume commercial supply discussions are ongoing with defence and energy storage customers, with initial commercial agreements targeted for the end of this year.

Nano One expects to provide further updates on progress against this strategy in the coming months, including a dedicated update on its supply chain qualification initiatives and the establishment of its development company vehicles.