ZENN Motor Co. Inc. ZNN-X shares shot nearly 50 per cent higher yesterday after a partner of the electric car maker announced positive performance data on a ground-breaking battery it is developing.
ZENN, which makes low-speed, short-range electric cars, sees much of its future hinging on an ultracapacitor being developed by Texas-based EEStor Inc. That energy storage system has the potential to charge faster and be a fraction of the cost and size of traditional chemical batteries.
EEStor, a privately held and low-key company, announced third-party testing results on Wednesday of the energy and power density of key material in its technology. Testing of the patented "composition modified barium-titannate powders" exceeded expectations, ZENN said yesterday.
"The permittivity results as indicated are beyond the specifications outlined in our technology agreement, which is extremely encouraging," ZENN's vice-president of engineering, Michael Bergeron, said in a statement.
"We will review these results and expect to announce our findings as soon as they are available." ZENN stock climbed as much as 68 per cent yesterday morning.
ZENN shares are also a way to play privately held EEStor, which will have a "huge breakthrough" if its battery is successful, Paradigm Capital analyst J. Marvin Wolff said in a recent note.
Yesterday, he hiked his one-year target price to $10.90 from $5.50, and maintained a "speculative buy" rating. The test results are 21 per cent better than expected, Mr. Wolff wrote, taking EEStor one step closer to delivering a battery by the end of 2009.
ZENN now has the right to spend up to $5-million on EEStor equity to boost its stake as high as 10.5 per cent from the current 3.8 per cent.
"EEStor feels this is a huge milestone," the company said in a press release. "The automotive and renewable energy sectors are a few of the key markets that would benefit greatly with the technology."
Toronto-based ZENN plans to launch a new, highway-capable vehicle, called CityZENN, using that battery. It also has worldwide exclusive rights to use the battery in vehicles under 1,400 kg.
Shares had already charged higher in heavy trading late last week and early this week, prompting ZENN to say on Tuesday it was unaware of any material changes in its business.
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Yesterday's close $5.16, up $1.71