JohnCM
3 years ago
The Charles Report
STOCK INVESTMENT NEWSLETTER
“LIVE”
June 19th, 2021 no.150
EV SPECIAL REPORT
New SPAC entry into my personal portfolio
Solid Power
Decarbonization Plus Acquisition Corp
https://www.youtube.com/embed/LMZ1YkVQzAk
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https://www.youtube.com/embed/eKTdA2PPZBI
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BMW and Ford invest in battery startup Solid Power
Posted June 2, 2021 by Charles Morris & filed under Newswire, The Tech.
Solid Power, a producer of solid-state EV batteries, has announced a $130-million Series B investment round led by the BMW Group, Ford and Volta Energy Technologies. Ford and BMW have also expanded existing joint development agreements with Solid Power to secure all-solid-state batteries for future EVs.
“BMW and Ford now share leading positions in the race for all solid-state battery-powered electric vehicles,” said Doug Campbell, CEO of Solid Power. “Solid Power plans to begin producing automotive-scale batteries on the company’s pilot production line in early 2022.”
Solid Power has demonstrated its ability to produce and scale solid-state batteries using existing lithium-ion battery manufacturing infrastructure. The company delivered hundreds of production line-produced battery cells that were validated by Ford and the BMW Group late last year.
“Solid-state battery technology is important to the future of electric vehicles, and that’s why we’re investing directly,” said Ted Miller, Ford’s Manager of Electrification Subsystems and Power Supply Research. “By simplifying the design of solid-state versus lithium-ion batteries, we’ll be able to increase vehicle range, improve interior space and cargo volume, deliver lower costs, and integrate solid-state battery cell technology into existing lithium-ion cell production processes.”
“The development of all solid-state batteries is one of the most promising and important steps towards more efficient, sustainable, and safer electric vehicles,” said BMW Board Member Frank Weber. “We now have taken our next step on this path with Solid Power. Together we have developed a 20 Ah all-solid-state cell that is absolutely outstanding in this field.”
Solid Power is currently producing 20-ampere-hour (Ah) multi-layer solid-state batteries on the company’s continuous roll-to-roll production line, which uses industry-standard lithium-ion production processes and equipment.
Both Ford and BMW will receive full-scale 100 Ah cells for automotive qualification testing and vehicle integration beginning in 2022. Solid Power’s technology allows the production of unique cell designs for each automotive partner.
“Volta invested early in Solid Power when our team found they had not only promising technology, but also a fundamental focus on manufacturability—after all, a breakthrough battery will not find a place in the market if it can’t be produced at scale with acceptable costs,” said Dr. Jeff Chamberlain, CEO of Volta Energy Technologies, a venture capital firm spun out of the DOE’s Argonne National Laboratory. “The fact that Solid Power is already producing multi-layer solid-state batteries using industry-standard automated commercial manufacturing equipment is why Volta is excited to ramp up its earlier investment.”
Sources: Volta Energy Technologies, Solid Power
https://chargedevs.com/newswire/bmw-and-ford-invest-in-solid-state-battery-startup-solid-power/
INTERVIEW - Doug Campbell, CEO of Solid Power
Date: June 17, 2021
Oliver Renick, TD Ameritrade
Just announced this week, a merger with Decarbonisation Plus, and will be coming to the market. Doug Welcome to the show, appreciate you being here, first explain to us your technology, what is the Solid State battery, and what do you want to do with it.
Doug Campbell, CEO of Solid Power
Now well first thanks for having me on your show. So, thank you. I’ll start first with just sort of a quick textbook definition of solid state battery, which is this, just as the name implies, you’re simply replacing the liquid components that you see in conventional lithium ion cells with solid. That in of itself isn’t that exciting but it’s really what solid state enables, and it’s really from Solid Power’s perspective a combination of substantial improvements in energy, improvements in high temperature stability, and improvements in safety, in comparison to today’s industry standard lithium ion batteries
Oliver Renick, TD Ameritrade
How do you differ from competitors and the overall landscape, do you need to differentiate from other solid state battery companies? We’ve seen a few that have gotten a lot of attention over the past year, or is this just a large enough scale game where you just want a piece of land to to own?
Doug Campbell, CEO of Solid Power
Now that’s a great question. No, we clearly have differentiating technology. First and foremost, we’re 100% solid, so meaning unlike some of our peer companies there is no liquid or gel component whatsoever in our cell and that’s what allows us to deliver on the high temperature stability as well as the enhanced safety benefits and then I would say the overarching differentiator is that when we established the company, our strategy was to focus on solid state batteries and all the great things they bring to the table, but we wanted to focus only on solid state battery technology that is highly manufacturable, and of course, the videos here show you that our definition of highly manufacturable is fully compatible with today’s industry standard rules for all production processes and equipment, as it’s used in production of today’s lithium ion batteries.
Oliver Renick, TD Ameritrade
Right now, do you have everything you need to build the batteries. Is this SPAC and going into public markets about raising money to build out manufacturing ability, hiring, walk me through what is next for the company is that you’ll get this cash influx?
Doug Campbell, CEO of Solid Power
Yeah absolutely, the capital that we will be raising through this transaction is strictly growth capital. So you know, today we have a megawatt hour scale roll to roll production line that essentially mirrors lithium ion production. We’re certainly going to scale that a bit, so that we can get to full scale in terms of size for the batteries for our OEM partners, and then in parallel, we’re going to be scaling rather considerably. This single material component we produce at Solid Power which is our solid electrolyte material.
Oliver Renick, TD Ameritrade
In your press release you say Ford and the BMW Group aim to utilize Solid Power’s battery technology. What does that mean, aim to utilize?
Doug Campbell, CEO of Solid Power
Essentially integrating their vehicles. So what we have executed in parallel with this transaction is very extensive, very detailed vehicle integration programs that initiates the formal automotive qualification phase in early 2022, and then really goes to the entire vehicle automotive qualification phase and then of course into vehicle introduction.
Oliver Renick, TD Ameritrade
What is the relationship with Ford and BMW? Fo they have commitments with your product right now, do they have buying commitments or integration plans from a construction perspective in the vehicles, what is the status of that relationship?
Doug Campbell, CEO of Solid Power
Yeah, first and foremost you know, no OEM is going to issue a supply contract until you have, you know you’ve been fully qualified. In the automotive world that is not trivial. So that’s essentially what we’re kicking off, but in our agreements we do indeed have a framework. It’s a Stage Gate process but it does culminate in supply agreements.
Oliver Renick, TD Ameritrade
Ok so supply agreements for Ford and BMW right now, can you give me an idea about the nature of these agreements are? If you do something they’ll pay this amount, or the timeline for them?
Doug Campbell, CEO of Solid Power
In some respects, we do have some specified volumes, but the timeline is really about really qualification. So, you know, we’ve got to get through what’s called in the industry an A sample, and a B sample validation phase in the relative near term. When I say near term, get that completed by the end of 2023. Just so your viewers are aware, successfully concluding B sample is a big deal because at that point, you have demonstrated full compliance with the full set of automotive requirements and you’re essentially designed frozen.
Oliver Renick, TD Ameritrade
Is there a revenue component to these agreements right now? Do you have revenue coming from for BMW at this moment?
Doug Campbell, CEO of Solid Power
In relative near term no because we just closed a very very substantial equity investment from them but in the mid to long term, absolutely there will be a revenue component.
Business Combination Agreement and Plan of Reorganization
On June 15, 2021, Decarbonization Plus Acquisition Corporation III, a Delaware corporation (“DCRC”), DCRC Merger Sub Inc., a Delaware corporation and wholly owned subsidiary of DCRC (“Merger Sub”), and Solid Power, Inc., a Colorado corporation (the “Company”), entered into a business combination agreement and plan of reorganization (the “Business Combination Agreement”), pursuant to which Merger Sub will be merged with and into the Company (the “Merger,” together with the other transactions related thereto, the “Proposed Transactions”), with the Company surviving the Merger as a wholly owned subsidiary of DCRC (the “Surviving Corporation”).
Is there a cobalt ETF?
Amplify Advanced Battery Metals and Materials ETF (BATT)
BATT is a professionally managed ETF that seeks to provide exposure to lithium, cobalt, nickel, manganese and graphite via publicly-traded stocks (mostly miners)
Lithium
Neo Lithium Corp. [TSX:NLC] [GR:NE2] (OTCQX:NTTHF)
Neo Lithium 100% own (fully paid) the Tres Quebradas (the "3Q Project") lithium project in Argentina, with lithium rich brines hosted in salars and reservoirs covering 160Km2. The 3Q Project has high grade lithium brine with extremely low impurities (very low magnesium/lithium ratio). Importantly Neo Lithium has the entire salar to themselves.
President & CEO Waldo Perez previously founded Lithium Americas [TSX:LAC] (OTC:LAC). Describing the 3Q project he states:
"3Q is one of the best lithium brine projects under any metric. In terms of grade, it is top three worldwide. In terms of size, it is the seventh largest brine project with significant blue-sky potential. Finally, in terms of impurities, it has the lowest impurities of any known salar. These qualities would allow us to develop a low-cost process with a very low capital intensity when compared to other brine projects worldwide."
The updated PFS resulted in a post-tax PFS result of NPV8% of US$1.14b and IRR of 49.9%, payback of < 2years with a 35 year mine life. The PFS was based on an initial 20kt pa LCE production and has a CapEx of US$319m.
The 3Q Project is quite advanced with some pilot ponds already constructed and infrastructure already in place. The BFS is underway and the EIS is currently under assessment.
In recent news China's largest battery manufacturer Contemporary Amperex Technology Ltd ('CATL') [SHE:300750] agreed to invest C$8.5 million, representing an 8% equity stake in Neo Lithium, at C$0.84 per share. CATL also got "board representation and pre-emptive rights". This suggests to me that CATL possibly intends to later support the project financing in return for significant off-take and a possible share of the project. Of course this is not yet priced in and is only my thoughts.
Valuation is extremely attractive on a current market cap of just C$153m due to the fact the project is not yet funded. Analyst's price target is C$2.55 representing 96% upside. My price target is C$2.64 in 2024 (2x upside), based on carbonate prices of 8,000/t. Further upside if production is expanded.
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John Mueller (The Charles Report) is not a licensed financial advisor, income tax advisor or stockbroker. All investment/financial opinions expressed by John Mueller are derived from his personal research and 35 years of investing experience and are intended as educational material only. Although best efforts are made to ensure that all information is accurate and up to date, occasionally unintended errors and misprints may occur. The purchasing and selling of equities, mutual funds, ETFs and cybercurrencies may be transacted at your own risk. All times – Pacific Standard Time. All dollars – U.S. American.
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