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Solid Power ramps up solid-state battery race with public market debut

Solid Power, the solid-state battery developer backed by Ford and BMW, is hitting the public markets running with a spike in stock price shortly after trading opened Thursday.

The company is one of a handful in the electric mobility space to have gone public via a merger with a blank-check firm. Solid Power announced the merger with special purpose acquisition company Decarbonization Plus Acquisition Corp III in June, at a post-deal implied market valuation of $1.2 billion.

The deal ultimately generated around $542.9 million to Solid Power, very near to the estimated $600 million due to the notably low number of redemptions prior to the shareholder vote. The cash includes $195 million PIPE and $347.9 million of cash held in trust.

It’s funds that the company will need, as it seeks to commercialize the world’s first solid-state battery for electric vehicles. Solid-state batteries — so named because they use a solid, rather than liquid, electrolyte — are considered by many to be the next breakthrough in battery technology. Developers say they minimize the fire risks associated with conventional batteries by eliminating the flammable electrolyte, in addition to offering superior energy density, or battery range.

Solid Power has been hard at work, expanding its Colorado factory footprint as it prepares pilot production of its commercial-grade, 100 ampere battery cells in early 2022. Those cells will head to investors Ford and BMW for automotive testing. Solid Power plans to use the capital from the transaction to fund operations through vehicle integration, which the company anticipates will take place in 2026.

The company’s long-term business plan is not to become a large-scale battery producer, like industry giants LG Chem or SK Innovation. The ultimate aim is to license out the cells to OEMs and manufacturers. “Long term, we’re a materials company,” CEO Doug Campbell told TechCrunch earlier this year. “We want to be the industry leader in solid electrolyte materials.”

Solid Power is not the only solid-state battery developer to go public via SPAC, nor is it the only one to have received investment from a big automaker. Indeed, it seems that the major automotive OEMs have been picking their horses in the solid-state race, with rival QuantumScape receiving backing from Volkswagen and Stellantis and Mercedes-Benz lining up their funds behind newer entrant Factorial Energy.

QuantumScape completed its own SPAC deal in November 2020. Like other mobility SPACs, it saw its fair share of stock price volatility, with shares cresting as high as $114 in December before settling around $20-25. Whether Solid Power’s stocks will face similar tumult remains to be seen. The company is trading under the ticker symbol $SLDP.

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