JohnCM Investment Corner

[JohnCM]

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

First thanks for having me on your show. 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 batteries 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 own?

Doug Campbell, CEO of Solid Power

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 the 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

Absolutely. The capital that we will be raising through this transaction is strictly growth capital. 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 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 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

First and foremost 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

Supply agreements for Ford and BMW right now, can you give me an idea about what 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 real qualification. 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 BMW at this moment?

Doug Campbell, CEO of Solid Power

In the 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.