Quantumscape Has Done Nothing Wrong
QuantumScape stock has had a rough go of it over the last four weeks. Its performance is probably only going to get worse in the short term.
Thats because QuantumScape has a new , very similar competitor called Solid Power , which become a publicly traded company on Dec. 9. Like QuantumScape, Solid Power merged with a SPAC and develops solid-state batteries for electric-vehicles.
Both stocks have fallen in recent days. But even though QS stock has dropped, I expect it to perform well over the longer term.
The Bottom Line On Qs Stock
Analysts average price target on QS stock indicates that the shares will climb. In my opinion, the launch of of Solid States shares dealt QS stock a temporary blow.
But Solid State is just one competitor on the long road that QuantumScape must travel to bring solid-state batteries to the EV sector. QuantumScapes outlook hasnt changed.
Competition simply continues to increase in the solid-state EV battery space. But QuantumScape is just as central to that sector as it ever was, so QS stock will rebound.
On the date of publication, Alex Sirois did not have any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.comPublishing Guidelines.
Colorado Startup Solid Power Goes Public Raises Nearly $543m In Spac Deal
A Colorado battery technology company that Ford and BMW have invested in raised $542.9 million by going public through a reverse merger. Louisville-based Solid Power Inc. shares appear on the Nasdaq exchange a day after the closure of its acquisition by Decarbonization Plus Acquisition Corporation III , a special purpose acquisition company, or SPAC, formed to get the battery startup publicly listed. The companys solid-state battery technology promises to create batteries for electric vehicles that would be lighter, faster-charging and safer than existing lithium-ion batteries that use liquid electrolytes.
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The Most Efficient Small
BLUEGEN is a micro CHP system , based on fuel cell technology and optimised for maximum use and benefit of electricity, to supply small businesses, private households or public buildings with highly efficient power and heat.
The system supplies around 13,000 kWh of low-emission electricity per year and thus can meet your electricity needs either completely or in part. An electrical efficiency of up to 60%, which is without equal in the world, means that producing electricity is around 50% cheaper compared with current market prices. Operators receive government subsidies for operating the plant and can thus achieve substantial savings .
BLUEGEN is powered by the fully integrated fuel cell module, which, by using solid oxide ceramic fuel cells, ranks among the most efficient energy conversion systems currently available on the market. The waste heat of BLUEGEN produced by the process of generating electricity can optionally be used to heat water. About the size of a washing machine, BlueGEN can be installed right there where the electricity is needed. Natural gas or biomethane is used as the source of energy.
What Makes This A Big Deal
First and foremost, Solid Power appears to be closer to mass production than its rivals. Most solid-state battery efforts are at least a few years away from production. QuantumScape, for example, is hoping to begin pilot production of its batteries in about three years. But Solid Power is already producing its second-generation 20 ampere-hour battery cells on a pilot production line, and it expects to begin pilot production of its full-scale 100 Ah batteries next year.
A Solid Power manufacturing engineer holds two 20 ampere hour all solid-state battery cells, produced on its pilot assembly line in Colorado. The company will begin pilot production of its next-generation 100 Ah cells for BMW and Ford next year. Image source: Solid Power.
Second — again, unlike most competitors — Solid Power’s solid-state battery cells can be manufactured with equipment and processes adapted from lithium-ion battery manufacturing, meaning that existing battery plants can be converted to build Solid Power’s cells at relatively low cost.
Finally, as I mentioned above, both Ford and BMW are investors in Solid Power. Both participated in the company’s most recent funding round earlier this year, both expect to receive batches of those 100 Ah cells for testing in their own electric vehicles next year, and assuming those tests go well, both will be early customers for the company’s mass-produced cells.
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Why Did Quantumscape Stock Fall 30% Last Month
QuantumScape , a startup developing solid-state batteries for electric vehicles, has seen its stock price decline by almost 30% over the last month. So whats driving the sell-off? Firstly, analysts havent exactly been positive on QuantumScape, assigning neutral or negative ratings on the stock. Secondly, momentum has played a big role in driving up EV stocks last year, driven by retail investors who tend to buy stocks because they are going up. This partly drove QuantumScapes post-IPO rally in December. However, investors are likely recognizing that although QuantumScape has the potential for large returns, they are quite far out in the future. The company is only expected to start generating meaningful revenue in about four or five years, over which a lot can change. Other companies are working on similar technology, including Solid Power, a start-up that appears to be ahead of QuantumScape in some respects. Thirdly, the supply of QuantumScape stock has been increasing since its IPO. In late December, the company filed an amended S-1 filing that registered over 300 million shares from selling security holders, with over 60 million shares not subject to any lockup agreement.
See our indicative theme of Electric Vehicle Component Supplier Stocks – which includes stocks of companies that make EV components and raw materials for batteries.
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Why Ford And Bmw Invested In Solid Power
Solid-state battery technology overcomes the many shortcomings of conventional lithium-ion batteries. For example, solid batteries pack more energy and dont pose a fire risk. When used in electric vehicles, solid batteries can help automakers lower manufacturing costs and produce vehicles with more space for passengers and cargo.
Solid Power will use the latest funds from Ford and BMW to expand its manufacturing capacity. For the automakers, the investment will secure solid-state battery supplies for their future electric vehicles.
Ford is in the process of converting its vehicles into electric models. It aims to bring an electric version of its Transit van to the market before the end of 2021. An electric F-150 pickup is targeted to go on sale in 2022. For BMW, the German automaker aims to convert most of its lineup to electric models by 2023.
Automakers are counting on solid-state battery technology to deliver safer electric vehicles with longer driving ranges. Range anxiety has been a major stumbling in the shift to electric vehicles as drivers worry about running out of charge before completing a trip. With solid-state batteries, electric vehicles can recharge faster and travel a longer distance on a single charge. Addressing the range issue will likely encourage more drivers to adopt electric cars.
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Solid Power To Go Public In $124 Billion Spac Deal
All-solid-state battery producer Solid Power is going public on the Nasdaq through a special purpose acquisition company merger with Decarbonization Plus Acquisition Corp III – Get Decarbonization Plus Acquisition Corporation Class A Report valued at $1.24 billion, the firms announced on Tuesday.
Upon closing, the combined company will be called Solid Power Inc and its common stock and warrants will trade on the Nasdaq under the ticker symbol SLDP.
“Today marks an important milestone of commercializing Solid Power’s next generation of all-solid-state batteries that can alleviate the two largest passenger EV pain points: range anxiety and cost,” said Solid Power CEO Doug Campbell.
Solid Power, which makes electric batteries for automobiles as well as mobile devices, already counts giant auto makers Ford – Get Ford Motor Company Report and BMW among its existing investors.
Solid Power Stock: The Business
Founded in 2011, Solid Power produces solid-state rechargeable batteries for electric vehicles and mobile power markets. Solid-state batteries dont use traditional liquid electrolytes. Instead, they use a solid electrolyte for a safer and more stable battery.
Additionally, Solid Power claims its batteries can give 50% to 100% more energy density while enabling a cheaper battery pack design. But theyre still compatible with lithium-ion processes. All of this makes Solid Powers batteries an ideal candidate for future EV production.
And the company has some major support
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Is Sldp Stock The Next Quantumscape 7 Things To Know As Solid Power Starts Trading
The solid-state battery maker made its debut on the Nasdaq today
Today, Solid Power made its debut on the Nasdaq exchange after 99.9% of shareholders of voted to approve the SPAC merger. Solid Power will receive gross proceeds of roughly $573 million, which includes $195 million worth of PIPE investments.
Solid Power operates as a solid-state electric vehicle battery maker. Due to its high energy density, solid-state batteries are thought to be more safe and stable than lithium-ion batteries. As the name suggests, solid-state batteries dont contain liquid electrolytes, so the risk of fire or explosion is decreased. Many consider solid-state batteries to be the next big innovation in battery technology. However, the technology is still in the early stages of development, and they are therefore more costly than lithium-ion batteries. Prices will likely go down as further technological improvements emerge.
The companys co-founder and CEO Doug Campbell had high hopes about the merger:
Solid Power has spent the last ten years developing all-solid-state battery technology that is designed to deliver the increased performance demanded by both automakers and consumers. We are excited to have completed our business combination with DCRC and we are looking forward to our future as the only pure-play solid-state company trading on the public markets.
Will SLDP stock be the next QuantumScape? Heres what you should know.
Read More About Electric Vehicles From Cnbc Pro
The company’s first commercialized batteries are expected to be for Ford Motor and BMW, both of which have invested in the company. Campbell said the company could provide to other companies, including large auto suppliers, but its focus right now is on producing for the two automakers.
“Job No. 1 is delivering on our roadmap specifically for Ford and BMW,” he said, declining to specify how many battery cells it plans to produce for the companies.
Solid Power is currently going through a formal automotive qualification process to validate the company’s battery cells, Campbell said.
Ford, which initially invested in the company in 2019, and BMW led a $130 million funding round in Solid Power in May.
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Battery Stocks For High
Lithium-ion batteries are benefiting from the massive growth in electric car production
Editors note: 7 Battery Stocks for High-Powered Gains was previously published in August 2020. It has since been updated to include the most relevant information available.
One of the underperforming sectors in the stock market today is the battery sector. Trade tensions, higher raw material costs and global inflation are just a few of the macroeconomic headwinds that consumer discretionary stocks face.
Yet stock markets tend to over-exaggerate on the downside risks, punishing a sector on the view that things will not improve.
Fundamentally, the battery market is undergoing a major shift. Electric vehicles are driving the demand for lithium-ion batteries. Solar power panel prices plunged in recent years. This is creating a potentially higher demand for battery solutions to store energy captured from such panels.
How might investors play the battery boom led by growing electric vehicle production and a soaring number of devices needing portable power?
How To Invest In Solid Power Stock
If you want to invest in Solid Power stock now, youll need to go through the private capital market. However, SEC regulations limit participation in the private stock market to accredited investors. It means that you need to have at least $1 million of net worth and a certain level of trading experience before you can access Solid Power stock.
Investors can get indirect exposure to Solid Power through Ford stock since it has a stake in the business. You can buy Ford shares through your regular brokerage account. Ford shares have gained more than 130 percent in the past year and currently trade at $11.63. The stocks $13.31 average target price implies a 14 percent upside from the current price.
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Is Dcrc A Buy
I’m not sure yet, but right now I’m leaning toward “yes.” Solid Power’s technology is very promising, and executives at Ford think highly of the company’s technology and leadership team. As with any battery start-up, the question is when the company can bring its batteries to market — but I think Solid Power will still have good growth potential even if production slips by a year or two.
That said, I’m still working through all of the company’s investor materials, and I expect to have more thoughts on Solid Power’s valuation and growth potential in a few days. Stay tuned.
Editor’s note: This article has been updated to include the name of Koch Strategic Platforms.
Ford And Bmw Expand Agreements
In the Series B announcement, Solid Power also revealed that Ford and the BMW Group have expanded their joint development agreements with the company. The agreements secure the automakers batteries for future EVs. And having contracts with two household names warrants interest in the idea of Solid Power stock.
Currently, Solid Power produces 20 ampere hour batteries. The company uses a roll-to-roll manufacturing process with industry standard lithium-ion practices. In 2022, Solid Power plans to deliver full-scale 100 Ah cells to both Ford and the BMW Group. The companies then plan to start automotive qualification testing and vehicle integration.
Heres what the management had to say
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About Net Power Stock
NET Power: · Produces clean power from natural gas inherently capturing all emissions with superior economic advantage to any emitting and non-emitting source of power generation · Partners are 8 Rivers, Exelon, McDermott, and Occidental Petroleum · 50 MWth plant constructed in La Porte, TX is now under its operational testing phase with power being supplied to the ERCOT grid soon · Commercial unit will be 500MWth, and we are engaged with many customers globally for these units · Allows the world to meet all its climate targets at power prices the entire world can afford
Sociedad Qumica Y Minera De Chile Sa
Sociedad Química y Minera de Chile S.A. is another lithium supplier. It raised its lithium outlook and said it expected sales of around 50,000 tons. The higher output is due to its operations in the Atacama salt flat.
SQM shares are still recovering from 52-week lows they touched during the March meltdown. Investors are not confident that the company will meet the demand growth led by full electric vehicle penetration levels reaching ~2%.
Still, if SQM can increase its total capacity this year, the company may eventually achieve its 180,000 metric ton output target. In the near-term, SQM will keep producing at levels about demand, accumulating inventory. In doing so, it will have more flexibility in selling in higher volume if prices and demand levels are favorable.
For the rest of 2020, SQM expects pricing levels similar to last years levels. Strategically, the company will not go after market share in the short-term. Instead, it expects demand in 2025 will top one million metric tons. From there, it is positioning the company to have the output capabilities to meet that demand level.
As of this writing, Chris Lau did not hold a position in any of the aforementioned securities.
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Quantumscapes Outlook Hasnt Changed
There are still a few good omens for QS stock. First of all, analysts average price target for QuantumScape is above $32, while it now sits below $24. As a result, its reasonable to believe that QS stock will rebound down the road.
Beyond that, recent events have proven that QuantumScape can be profitable for short-term investors. The shares are volatile, but thats attractive for investors with certain risk profiles.
Solid Power A Competitor To Ev Battery Maker Quantumscape Goes Public
A solid power manufacturing engineer maintains two 20 amp-hour all-solid-state battery cells for BMW and Ford.
Courtesy of Solid Power
This is not right quantumscape now and. Investors have another newly formed, well-capitalized, solid-state electric-vehicle battery technology company to consider buying.
Now that the merger has taken place, the stock symbol for decarbonisation will change to SLDP on Thursday morning. Holders of decarbonization stock need not do anything. Investors new to exposure to new EV battery technology will need to use the new name and stock symbol.
SPAC shareholders have the right to redeem their shares for $10 instead of agreeing to the merger. This is one reason why merger cash can fluctuate.
The merger brings about $540 million in cash to Solid Powers books. It was approved with over 99% of shareholders voting in favor, but some redeemed their shares, even though decarbonization stock was worth about $12 before the vote. Redeemers essentially swapped $10 for $12.
Solid State for EV batteries, refers to how the electric charge of the battery is facilitated. In a traditional lithium-ion battery, that facilitator is a liquid. Solid Power is one of a handful of start-ups trying to disrupt the traditional lithium-ion EV battery industry by making lithium-ion batteries without the liquid electrolyte inside the battery cell.
Existing battery players, such as Chinas contemporary Amperex Technology known as CATLalso invest in solid-state batteries.
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