The Novonix Ltd (ASX: NVX) share price traded deep in the red on Friday, extending losses over the past two trading days to almost 15%.
By Friday's close, the Novonix share price was down 8% for the day at $2.07, on a volume of 6.24 million shares – ahead of the 4-week trading average of 4.9 million shares.
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What's up with the Novonix share price?
The share has seen heavy selling activity ever since the company posted its FY22 full-year earnings results. It was a busy year for the battery technology company.
Revenues were booked at $8.4 million, although cash from operations and net profit both slipped year on year as the company ramped up its investment back into the business.
The bedrock of this activity was formed via an investment from Philips 66 back in 2021, following its strategic stake in the company for $203 million.
Despite the heavy investment activity, the company didn't provide any earnings guidance for the coming 12 months.
Perhaps it is this point that has investors worried about the Novonix share price.
In the prevailing market circumstances, investors aren't paying a premium for unprofitable companies like they were in 2020–2021.
That's seen in the large wind down in growth-backed indices and ETFs tracking ASX growth shares. For instance, the S&P/ASX 200 Growth Index is down 14% this year, while the Vanguard Diversified High Growth Index ETF (ASX: VDHG) is down a similar amount.
That comes in behind the benchmark S&P/ASX 200 Index (ASX: XJO)'s 8% loss for the year.
What else could be impacting Novonix shares?
Adding to the downside, ASX materials stocks have taken a nosedive since late August and finished down more than 9% on the week.
Whilst Novonix is an ASX tech share by GICS Industry classification, it has exposure to various commodities through purchase orders.
Losses stemmed on the back of further lockdowns in Chinese megacity Chengdu, located in the west of the country.
The lockdown will last for 4 days but could be extended for the city of 21 million people if COVID-19 cases continue to rise.
"The city is the capital of Sichuan province, which has already been hit by severe drought and floods in recent weeks. A power crisis caused by the heatwave forced some factories in the province to shut last month," Bloomberg reported today.
"[Chengdu] city's economy expanded just 3%, well below the 13.1% it grew in the same period in 2021," it added.
On the back of the news, Brent crude, gasoline and gold posted gains on Friday, whilst lithium was flat at the close.
In fact, lithium carbonate prices remain as buoyant as ever, a point that has implications on the outlook for Novonix in its future purchasing prices of the battery metal.
Meanwhile, the Novonix share price is down 77% this year to date.
