Ford Motor Company (NYSE:F) and BMW (OTCMKTS:BMWYY) (XETRA:BMW) are leading a $130 million investment round in a solid-state battery startup. Automakers have been looking for ways to reduce the cost of EVs by investing in more affordable batteries. Ford also revealed plans to invest in a battery lab recently.
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Ford, BMW invest in EV battery technology
Reuters reports that Ford and BMW are investing in Solid Power. The Series B investment round includes funding from venture capital firm Volta Energy Technologies, and it will enable the battery startup to expand its in-house manufacturing.
The funds will also position Solid Power to eventually supply automakers like Ford and BMW for their electric vehicles. BME battery cell technology head Peter Lamp told Reuters that the company could be ready to be a supplier for them by the end of the decade.
Solid Power CEO and co-founder Doug Campbell told the news outlet that the partnerships and capital would put them on a "good footing to execute on our roadmap." They plan to qualify their technology for vehicle use and put it into EVs "in the not-too-distant future."
What are solid-state batteries?
Solid-state batteries are an improvement over lithium-ion batteries involving a high-capacity energy storage device. The technology replaces the gel or liquid electrolyte with a solid material that conducts electricity.
Solid-state batteries offer higher energy densities and improved safety because they do not contain components that are flammable. Solid Power said previously that its batteries offer 50% more energy density than current lithium-ion batteries.
However, the problem with solid-state batteries is the fact that they are more expensive than lithium-ion batteries. They are also unproven in the real world, so they must prove that they can not only operate but be durable in regular use. Additionally, companies that produce solid-state batteries much boost their scale to meet demand in the EV industry.
Solid Power's fundraising record
This week's investment from Ford and Volta Energy marks the second for both firms. They participated in the $26 million Series A fundraising round three years ago, which included Samsung Electronics (KRX:005930) and Hyundai Motor Company (OTCMKTS:HYMTF) (KRX:005380).
Ford Chief Product Platform and Operations Officer Thai-Tang said they've been working with over a dozen battery startups, and they've been the most impressed with Solid Power's progress. Solid Power raised $5 million in convertible debt earlier this year from BMW iVentures.
After the latest fundraising round, BMW and Ford will hold equal stakes in the battery startup, although they did not say how big those stakes are. Solid Power also didn't reveal the valuation it received through the latest fundraising round.
Ford is part of the Entrepreneur Index, which tracks 60 of the largest publicly traded companies managed by their founders or their founders' families.
