Perhaps the most explosive market theme in play so far in 2020 is in the electric vehicle space, which includes EV OEM’s, battery plays, lithium and cobalt producers, and companies able to improve the functionality of electric-powered automotive performance in any way.

One stock in this space that may deserve a lot more attention on this front is KULR Technology Group Inc. (OTCMKTS:KULR), a company that manufactures and licenses next-generation carbon fiber thermal management technologies for batteries and electronic systems. The company’s core IP was developed in collaboration with NASA and has been used successfully in space missions, so it has been tested under the most demanding conditions by the most rigorous judges.

The upshot for the EV industry is the establishment of systems that reduce the risk of thermal overload in EV power systems. In plain terms, KULR produces tools to prevent your Tesla from bursting into flames.

In the EV industry, the enemy that suppresses unbridled performance is heat. If you have ever held an electronic device of any kind in your hand, you know that heat comes with the package when batteries power systems. But there are so many delicate and intricate parts to defend, and they all run a risk when temperature gets out of control.

As far as progress toward commercializing its core tech as an EV strategy, KULR is working toward the market penetration of its EV battery performance platform, which it hopes to see integrated into a number of EV production systems. The technology is fully developed, and the company already boasts a number of strategic government customers including NASA, the US Department of Transportation, US Air Force, US Army and the Defense Logistics Agency in projects that have a high degree of funding commitment.

The stock is dirt cheap right now given this stage of development, and given the funding that is already pouring into the EV space. We would guess the horse could leave the barn on this one as soon as we start to see tangible contracts with EV manufacturers.

That could be just a matter of time given the credibility and established industry cred in place for KULR after seeing its tech widely integrated into space missions, where heat control is essential to maintaining such precisely controlled parameters for so many intricate and absurdly expensive moving parts.

The Multifaceted Engine of EV Demand

As far as demand, if KULR ends up being a “killer app” for reducing the risk of sudden heat propagation and combustion in lithium-ion batteries in electric vehicles, then the sky truly is the limit here, because the EV trend is unquestionably here to stay.

According to a report published by Fortune Business Insights, the market was worth 8.6 million units in 2018 and will exhibit a CAGR of over 21% to hit 33 million units by 2026.

That could actually be undershooting in terms of expectations given the rapid ascendancy of the ESG investment revolution.

ESG (Environmental, Social and Governance) investing refers to an umbrella term for investments that seek positive returns and a long-term positive impact on society and the environment.

Morgan Stanley recently put out research suggesting that the ESG theme would attract as much as $57 trillion in capital flows over the next 10 years based on research into millennials’ investment mores and the pace of inheritance likely to capitalize them as the world’s biggest ever investor demographic.

That trend is going to put massive pressure on industry players, including any large organization that has to buy automobiles (think: rideshare companies, cab companies, police, rental car companies, trucking companies, emergency services, amazon delivery, UPS, FedEx, etc). They will all come under pressure to toe the line and buckle to the inevitable EV preference written into the charter at funds in this group.

Capital drives everything in a capitalist system. And, with ESG in place as a driving force managing trillions over the coming decade, electric vehicles will likely become a central command – “if you want this money, you will need to get rid of the gas guzzler.”

Risk Adjustment

The other key driver here is likely going to be about insurers. If you are going to have a burning box of lithium-ion cells under the drivers’ seat, you need to have some system – perhaps one developed to satisfy NASA space mission engineers – to ensure something approaching ‘zero risk’ of a heat propagation event that puts the vehicle and its passengers at risk.

KULR Technology Group Inc. (OTCMKTS:KULR) has developed precisely that technology solution. As noted above, our sense is that they will probably have some sort of deal announcement before long that puts in play a real-world case-study or showcase of their solution in an electric vehicle production process.

That will potentially act as a bridge to wider commercialization in the EV space as they mobilize that showcase opportunity to leap into a leadership position in this interesting niche.

That said, we would caution traders and investors: do your homework here. This is a speculative stock. But it is also extremely underpriced if we are indeed talking about a coming “must have” piece of the EV production and battery management puzzle. In other words, you won’t see it anywhere near current levels if the company announces some sort of prospective deal with a major EV OEM.

Thematic Dominance and the New Market Landscape

Finally, so far this year, we have seen a remarkable reshaping of the equities markets, with institutional investors sheepishly moving to the sidelines in terms of portfolio weighting across assets, while the retail investor has returned with a vengeance in a manner not seen since perhaps the late 1990’s.

In Bank of America/ML’s most recent Fund Manager Survey, they found in their sample of large fund managers that the pro’s continue to have a very low equity allocation low, with high exposure to bonds and commodities. At the same time, we have seen retail investor accounts at discount online brokers skyrocket in the past few months. Again, this is reminiscent of the second half of the 1990’s.

However, while most people remember the dotcom crash that followed, one shouldn’t forget about the 5 years of insane stock market gains that defined the pre-2000 market environment.

With commissions at major brokerages now pinned at $0/transaction, and millennials finally getting interested in stocks, the game is on for momentum trading. And, as we noted at the outset, the EV theme has become ground zero for this new market landscape. That goes a long way toward shaping analysis and expectations.

We see KULR Technology Group Inc. (OTCMKTS:KULR) as perhaps the one EV stock that hasn’t really been swept up in the party yet. It has flown under the radar. But that could change. The company has a viable vision and the tech to achieve it. Most stocks anywhere near the EV theme are trading at massive premiums to the bulk of the rest of the market, and many are far less credible.

That points to the speculative possibility that KULR could also join that party, especially if the company starts to communicate real progress along the path toward establishing an active commercial presence in the EV production process.