The automobile world has come to the agreement that the next forefront of electric vehicle innovation is batteries. And even the most conservative gas car makers are pouring money into far-fetched battery tech startups, hoping to gain an edge over competitors in the future EV race.
Latest to the game are Ford and BMW (BMWYY). The American and German auto giants announced Monday that they are leading a $130 million series B funding round in the solid-state battery startup Solid Power.
Solid-state batteries are the next-generation batteries that promise to significantly lower the cost of electric vehicles. They are less flammable, charge faster and have a higher energy density (thus longer driving range) than lithium-ion batteries. The only downside is that, with existing technology, they are too expensive for mass use.
Solid Power said its technology can deliver 50 percent more energy density than current lithium-ion batteries. But commercialization could take years. BMW, which has had a partnership with the startup since 2016, expects Solid Power to supply batteries for future EVs by the end of this decade.
Other solid-state battery startups face a similar challenge. QuantumScape, whose market value reached $55 billion in December 2020, said it won’t be able to deliver a real product until at least 2024. QuantumScape is backed by Volkswagen and Bill Gates. The startup went public through a SPAC merger in November 2020.
Ford believes Solid Power has a good chance to succeed. “We’ve been working with more than a dozen different startups in this space and we’ve been most impressed with the progress that Solid Power has made,” Hau Thai-Tang, Ford’s chief product platform and operations officer, said in an interview with Reuters.
Ford also participated in the Solid Power’s $26 million Series A round in 2018, along with Hyundai and Samsung.
At the closing of series B, Ford and BMW will each own an equal, undisclosed stake in Solid Power.
“The partnerships and the capital that comes along with it are really going to put us on a good footing to execute on our road map, which simply speaking is qualifying this technology for vehicle use and getting them into vehicles in the not-too-distant future,” said Solid Power cofounder and CEO Doug Campbell.
The startup plans to begin producing automotive-scale batteries on the company’s pilot production line in early 2022.