During the last year, we have noticed a significant increase in interest in companies that are levered to the electric vehicle (EV) and energy market.
Tesla Inc. (Nasdaq: TSLA) has been a major beneficiary of the increased interest and was valued at more than $1 trillion (by market capitalization). Although we do not expect other EV and energy companies to benefit like Tesla, we believe the trend is going to become more significant in the coming years.
Due to our bullish outlook on the EV and energy market, we have been working to identify companies that are levered to this theme and are underappreciated by the street. Indie Power Systems (IPS) is an operator that we have conducted due diligence on and are favorable on how the business is positioned to benefit from having an environmental, social, and corporate governance (ESG) component.
Another core pillar of the Indie Power Systems story is related to the amount of intellectual property (IP) that is owned by it. The company has a portfolio of proprietary technology and trade secrets that will play a key role in the growth of the business and believe our readers should be aware of this.
Highly Levered to the ESG Investment Theme
2021 has been a transformational year for the global economy and many companies are focused on the ESG trend. We believe Indie Power Systems’ goal of becoming a single source solution for energy management makes the business highly levered to the ESG theme and will monitor how the management team is able to advance the business.
By focusing on utility grid support, energy storage, vehicle charging, demand charge reduction, and other microgrid solutions, Indie Power Systems has been able to differentiate itself from other operators that are focused on the EV and energy market.
Indie Power Systems’ leadership team believe that the lack of options for a fully integrated single source energy management system has created an attractive growth opportunity for the business. By better distributing power, offering variable pricing solutions and limiting the amount of blackouts, the company is focused on offering a solution that provides these benefits and finds the improvements to be significant.
Indie Power Systems’ patented and field-tested single source energy solution was developed by experts and industry veterans to specifically meet the needs of commercial customers. We expect the personalized nature of each system to increase the number of clients the platform can help and are bullish on this. We are favorable on the amount of time and human capital that has been focused on this opportunity and will monitor how the company can bring its proprietary product to market.
Levered to Several Major Markets
Indie Power Systems has state-of-the-art technology that optimizes energy and allows for microgrids and for energy to be better distributed. By providing energy management and storge technologies, the company should benefit from the transformation of the energy landscape and we are favorable on the growth profile that is associated with the opportunity.
When it comes to the opportunity for Indie Power Systems, the management has identified the following three key markets for the business:
- Home and consumer energy storage
- Large scale industrial and manufacturing energy storage and resiliency
- Integrating existing hardware and storage with its proprietary software to increase efficiency
The single source solution that Indie Power Systems will offer can be scaled and upgraded to meet a client’s requirements. The company’s software solution can integrate and improve existing hardware and storage and we find these aspects of the technology to be important.
Executing on a Multi-Faceted Growth Strategy
Indie Power Systems is highly focused on growth and has been executing on a multi-faceted expansion strategy. The company has a strong balance sheet and the management team has outlined its plans to use the capital to grow the business through a commercialization and a go-to-market strategy.
Over the next year, we expect Indie Power Systems to announce important milestones as it execute on its growth strategy and believe our readers should be aware of the management team’s plan to use resources to advance the business:
A key aspect of the commercialization strategy is related to the consolidation of multiple assemblies to a single circuit board as part of the design-to-manufacture modules process. The company plans to drastically reduce the size of the modules by upgrading.
The management team also plans to use resources for 3rd party testing services, to be granted a UL certification, for higher voltage and efficiency levels, and for contract manufacturing and deployment.
We are highly focused on the use of funds due to the impact these milestones will have on Indie Power Systems’ go-to market strategy. As part of this plan, the company plans to expand partnerships with VARs (define?) and system integrators. Another core pillar to the go-to market strategy is related to scaling assembly, servicing, and support capabilities and will monitor how the management team is able to execute on this.
Yellowstone Project Could be a Major Growth Catalyst
A key reason for our bullish view on Indie Power Systems is related to the project it is working on. The Yellowstone Project represents a major opportunity for Indie Power Systems and we are closely monitoring this aspect of the story.
The Yellowstone project is part of a partnership that was formed with Toyota in 2015. The companies are working to implement a microgrid at Larmar Buffalo Ranch in Yellowstone National Park. The project includes 2 PV solar arrays, a water turbine, generator, state-of-the-art software, power electronics hardware, and low-cost energy storage that incorporates the use of batteries.
Over the next year, we expect to learn more about the advancement of the Yellowstone project and believe the market is discounting the growth prospects that are associated with this initiative. This will be IPS major proof concept with a large multinational player and we will monitor for future partnerships. We expect a positive outcome to lead to an increase in projects for the company and will monitor this aspect of the story in 2022 and beyond.
An Underappreciated Growth Story
We believe that Indie Power Systems is focused on high-growth industries and are favorable on the growth profile that are associated with them. Demand for EV and energy is only going to increase on a year-over-year basis and the business is well positioned to be a beneficiary of this trend.
Due to the expectation for continued high-demand from consumers, the market has rewarded companies with exposure to the EV and energy market with high multiples. When compared to smaller-scale EV and energy companies, we believe that Indie Power Systems is trading for a discount and expect this to change as the management team continues to execute on previously announced growth initiatives.
When we look ahead to 2022 for Indie Power Systems, the business is positioned to record strong growth and has multiple potential catalysts. We consider Indie Power Systems to be an underappreciated opportunity and will closely monitor how the story advances in the near and long-term.
Pursuant to an agreement between StoneBridge Partners LLC and Indie Power Systems Inc. we have been hired for a period of 90 days beginning November 22, 2021 and ending February 22, 2021 to publicly disseminate information about (IPS) including on the Website and other media including Facebook and Twitter. We are being paid $5,000 per month for a period of 3 months. We own zero shares of (IPS), which we purchased in the open market. We plan to sell the “ZERO” shares of (IPS) that we hold during the time the Website and/or Facebook and Twitter Information recommends that investors or visitors to the website purchase without further notice to you. We may buy or sell additional shares of (IPS) in the open market at any time, including before, during or after the Website and Information, provide public dissemination of favorable Information.