What happened
Shares of Solid Power(NASDAQ: SLDP) surged Wednesday morning and were trading 11.6% higher as of 10:30 a.m. ET on the back of its quarterly earnings release. Solid Power is among the several start-ups trying to disrupt the electric vehicle (EV) battery market with alternatives to lithium-ion batteries. Solid Power's solid-state battery technology has already found some takers for testing and validation, and the company has now started large-scale production of its EV cells.
So what
Solid Power is not a battery manufacturer but aims to license its cell designs and manufacturing processes and sell electrolyte material. The company already has some impressive joint development agreements (JDAs), including with German luxury car maker BMW(OTC: BAMXF) and auto giant Ford.
In its second quarter, Solid Power generated $4.9 million in revenue from JDAs, up more than twofold year over year. The company racked up $8.7 million in revenue during the first half of 2023, up 123% year over year.
Of course, Solid Power isn't making any money right now -- it incurred an operating loss of $22.2 million in Q2, which was up significantly year over year because of higher spending on research and development.
The real reason behind Solid Power stock's rise today, therefore, goes beyond numbers. Solid Power started ramping up production of electrolytes at its second plant in Thornton, Colorado, last quarter and said it is receiving "positive feedback" for electrolyte sampling from "industry leaders."
At the same time, the company also announced it is scaling EV cell production and expects to deliver some to BMW for testing in the coming quarters. "Our operational focus now shifts to optimizing production processes, improving cell performance, and delivering EV cells to our partners," said Van Scoter, CEO of Solid Power. Scoter joined Solid Power as the CEO in May after spending 30 years at semiconductor company Texas Instruments.
Now what
Solid Power expects to generate $15 million to $20 million in revenue and spend $120 million to $140 million on operations and capital expenditures this year. That's a lot of money, but Solid Power isn't worried as it ended the second quarter with total liquidity (including cash and cash equivalents, marketable securities, and long-term investments) of $443 million.
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Neha Chamaria has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Texas Instruments. The Motley Fool recommends Bayerische Motoren Werke Aktiengesellschaft. The Motley Fool has a disclosure policy.
