Toronto-based Electrovaya Inc., a maker of advanced lithium superpolymer batteries for electric vehicles and other applications, has struggled to compete for financing and attention in a market where rival, better-funded companies such as A123 Systems have captured the love of cleantech watchers eager to see an electric-vehicle revolution unfold, starting with plug-in hybrids. Despite its financial woes, Electrovaya does have a competitive technology. So investors were understandably revved up after reading the announcement that the company is establishing a joint-venture with Electrotherm, the leading manufacturer of electric vehicles in India. The two companies plan to build a manufacturing plant in India capable of producing 10-megawatt-hours per month of battery storage. Electrovaya, while taking an equity position in the joint venture, will get payment for the use of its battery technology and a royalty payment down the road based on plant output. An added bonus is that Electrovaya would have the exclusive right to export the batteries manufactured in the plant to other countries, for example, China.

Now, caution, caution, caution. This is a penny-stock company with falling year-over-year revenues announcing a “non-binding memorandum of understanding,” meaning nothing in this deal is solid beyond a handshake. It’s encouraging, but anything could happen and it’s difficult from our comfortable desks in North America to monitor the status of this development. That said, investors liked the news, which sent Electrovaya’s share price skyrocketing by 54 per cent today — from 28 cents to 43 cents on the Toronto Stock Exchange. And the fact is, Electrovaya’s technology — which the company claims has five times the energy density of lead-acid batteries and less than one-third the weight — is being tested by a variety of potential buyers.

Hell, if the company can’t get respect in North America good on them for milking connections in India. Let’s hope this is a real deal with promising results down the line, not a vapor announcement meant to boost a money-losing company’s lagging share price and make a few people richer in the process.

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