Sunrise New Energy (NASDAQ: EPOW) inks $11m Xiaolu Lithium supply deal after Narada Power contract

Sunrise New Energy Co Ltd (NASDAQ: EPOW) has signed a new supply agreement to deliver 3,000 tons of anode materials to Xiaolu Lithium beginning in 2026, with an estimated contract value of $11 million. This follows a separate deal earlier this month for 246 tons of material to be supplied to Anhui Narada Huatuo New Energy Technology Co Ltd, marking Sunrise’s expansion into the telecom tower backup power market. Despite these developments, Sunrise New Energy’s stock has lost over 15 percent in the past five trading days, trading at $0.88 at 12:06 PM ET on December 16.

Why Sunrise New Energy’s $11M Xiaolu Lithium deal signals a long-tail bet on UAV and sodium-ion adoption

Sunrise New Energy’s contract with Xiaolu Lithium centers on high-rate discharge anode materials for use in sodium-ion and lithium-ion batteries across UAVs, energy storage, and high-performance power tools. While the $11 million contract is spread over an unspecified 2026 delivery schedule, the real signal here is market positioning. As sodium-ion battery chemistry gains credibility as a cost-effective alternative for stationary storage and emerging mobility use cases, securing early exposure via partnerships like this could create a durable revenue stream—especially in high-discharge applications where graphite performance is being closely benchmarked.

Xiaolu Lithium, founded in 2019, is not a household name but claims commercial presence in over 30 countries. Sunrise’s ability to align itself with second-tier but globally distributed battery OEMs may reflect a volume-focused rather than margin-driven growth strategy. The market may be skeptical of how meaningful this $11 million pipeline is when compared against Sunrise’s capital expenditure needs, operating cash flow profile, and price realization challenges in a deflationary anode materials market.

Can Sunrise’s telecom backup contract with Narada Power move the needle on recurring revenues?

The earlier December 10 announcement of a 3,000-ton annual supply forecast for telecom tower backup systems, starting with a 246-ton December order, marked Sunrise New Energy’s entry into the communication energy infrastructure segment. The partnership with Anhui Narada Huatuo New Energy Technology—part of listed energy storage player Narada Power (SZSE: 300068)—adds institutional credibility. But again, investor reaction has been muted.

This segment could offer more near-term demand predictability than UAVs, especially as 5G rollout continues globally. However, these contracts are likely to be low-margin and highly competitive. Unless Sunrise can demonstrate consistent product qualification and secure multi-year blanket purchase agreements, one-off supply contracts may not translate into forecastable revenue traction or reduce earnings volatility.

Why the market is discounting Sunrise’s double announcement despite volume visibility

The company’s stock dropped from over $1.00 on December 11 to $0.88 by mid-day on December 16, reflecting a 15.34 percent decline over five trading days. This sell-off occurred despite back-to-back announcements that theoretically should have offered a floor on investor sentiment. Instead, the slide suggests concern around either dilution risk, weak financial transparency, or longer-term execution doubts.

Sunrise New Energy’s long-term credibility may be clouded by questions around its revenue recognition model, contract enforceability, and capital intensity—especially given the company’s pivot into sodium-ion, a segment still largely pre-commercial. The relatively small size of these contracts ($11 million across an unspecified multi-year window and an initial 246-ton batch for a second contract) does little to address larger investor questions about balance sheet resilience and competitive moat in a commoditized materials sector.

How does Sunrise New Energy stack up in a crowded anode materials space?

The graphite anode materials sector has become increasingly saturated, particularly in China, with players such as BTR New Energy Materials, Shanshan Corporation, and Putailai commanding significant market share. Sunrise’s differentiation narrative hinges on its manufacturing facility in Guizhou Province, which leverages renewable energy for cost-efficiency and lower environmental footprint. While this helps from a branding and ESG perspective, it may not be enough to offset the commoditization pressure that defines the current anode supply chain.

In terms of market footprint, Sunrise appears to be pursuing a volume-first, mid-tier OEM alignment strategy, likely trading margins for off-take stability. That could buy time in a deflationary pricing environment, but it risks locking the company out of higher-value opportunities in next-gen battery architectures where proprietary coatings, spherical morphology, or hybrid graphite-silicon blends are becoming table stakes.

Investor sentiment and capital structure risks: What’s holding the stock back?

Investor sentiment appears unconvinced. Even with two new contracts, Sunrise has struggled to reclaim psychological support at the $1.00 level, and the drop to $0.88 may increase its risk of Nasdaq non-compliance concerns if it remains under $1 for too long. If equity-linked financing or convertible instruments are part of the company’s near-term funding roadmap, any incremental upside from these contracts could be viewed as offset by dilution.

The market may also be waiting for stronger disclosures around customer concentration, gross margin trends, and cash flow from operations. In the absence of those, even credible wins like these may be interpreted as tactical rather than structural.

What could shift the narrative for Sunrise New Energy going into 2026?

For Sunrise New Energy to regain investor trust, the company needs to show proof of repeat business, broader contract scope, and ideally pricing power. If Xiaolu Lithium or Narada Power expand their orders based on qualification milestones or performance metrics, Sunrise could begin shifting the conversation from opportunistic sales to programmatic supply partnerships.

More fundamentally, commercial wins in sodium-ion battery applications will only translate to upside if Sunrise is able to demonstrate production scale-up, cost controls, and application-specific performance advantages over incumbents. As demand in the telecom, UAV, and stationary storage markets evolves, Sunrise’s ability to play in both mainstream lithium-ion and emerging sodium-ion markets will be tested not just on volume, but on consistency and yield.

What are the key takeaways from Sunrise New Energy’s back-to-back contract announcements?

• Sunrise New Energy signed an $11 million supply agreement with Xiaolu Lithium for 3,000 tons of anode materials starting in 2026.
• A separate deal with Anhui Narada Huatuo New Energy Technology covers 246 tons for December and a 3,000-ton annual forecast for telecom backup systems.
• Despite the announcements, Sunrise’s stock is down over 15 percent in five days, signaling investor skepticism about execution and long-term value creation.
• The deals open exposure to sodium-ion and backup energy storage markets but offer limited near-term margin visibility.
• Sunrise is competing in an intensely crowded graphite anode market, with limited differentiation beyond renewable-powered cost structures.
• The company’s strategic focus on second-tier OEMs may offer volume stability but raises questions around scalability and customer stickiness.
• Investor sentiment remains cautious amid concerns about dilution, Nasdaq compliance risk, and insufficient financial disclosures.
• Sustainable upside will likely depend on repeat orders, production reliability, and Sunrise’s ability to demonstrate pricing discipline and performance edge.