Lite-On Technology Corp: Tritium's saviour?

TLDR: Tritium’s story since being founded in 2001:

• Tritium started making EV chargers in 2012

• In 2021 it was valued at USD 2.2 billion

• In 2022 it listed on the NASDAQ

• In 2022 Joe Biden announced an “American manufacturing comeback” as a new factory would be built in Tennessee that would make 30,000 EV chargers a year – Tritium’s factory

• By 2023 Tritium owned 30% of the DC Fast Charger market in the United States – the largest market share of any single company

• Largest ever customer order received from BP to deliver chargers to USA, UK, Europe, and Australia

• Also in 2023 NASDAQ issued a noncompliance notice to Tritium because it’s share price dropped below $1 for 30 days (that was more than a month ago, its currently trading at USD 20c)

• Later in 2023 Tritium failed to secure Australian government funding (both state and federal) to shore up its balance sheet and give it enough cash to trade beyond early 2024

• Shortly thereafter Tritium announced it would close its Brisbane factory (capacity 5,000 units per year, circa 200 jobs)

Most recently: last week Lite-On Technology Corp was reportedly in negotiations to invest in Tritium.

Who is Lite-On Technology Corp, and Why is this important?

Lite-On Technology Corp is a Taiwan-based electronics company that already makes EV chargers, but they traditionally manufacture consumer electronics.

Lite-On is interested in Tritium for a number of reasons:

• Tritium is on its knees – they’ve been unable to secure further Australian investment or government funding, and are running out of cash

• Tritium will probably be delisted before 2024 – they have no hope of their share price recovering to the $1 level required to avoid NASDAQ expulsion

• Intellectual Property – Tritium’s next generation DC chargers are already being rolled out in Europe and North America

• Market access – instant access to 30% of the US market, and a strong worldwide order book with large multinational clients

• Instant manufacturing capacity increase – 35,000 units annually if the Brisbane factory can be included

• EV Market growth – 20% CAGR for the next 20 years (check my earlier Tritium article for details, it's huge but realistic)

Tritium’s existing investors aren’t going to put in any more funds. They know that the EV charger market is not yet mature and by the time it is, the technology will have taken a few more step changes, and to keep ahead of both of those will take more capital than they’re willing (or able?) to invest.

Realistically nobody’s going to let Tritium completely implode because its future opportunities are too great.

Lite-On are in the hot seat at the moment because they know the product and the market, and have sufficiently deep pockets (market cap of $12 billion).

Their timing is also perfect.