Ford-backed EV battery producer to go public via SPAC merger at a $1.2 billion valuation

Solid Power Inc batteries
  • Solid Power announced it is going public via a SPAC merger in a deal that would value the entities at $1.2 billion.
  • The company is expected to have $600 million in cash, including $165 million from private investors.
  • Ford Motors and BMW recently participated in the $135 million Series B funding of Solid Power in May.

Electric-vehicle battery producer Solid Power on Tuesday announced it’s going public by merging with blank-check firm Decarbonization Plus Acquisition Corporation III in a deal valued at $1.2 billion.

The company is expected to have approximately $600 million in cash, including $165 million from investors such as Koch Strategic Platforms, Riverstone Energy Limited, Neuberger Berman funds, and Van Eck Associates Corporation. The capital will be used to fund operations and growth.

Ford Motors and BMW recently participated in the $135 million Series B funding of Solid Power in May. The two companies also expanded partnerships with Solid Power to secure all solid-state batteries for future electric vehicles.

Solid Power produces rechargeable batteries for electric vehicles and mobile power markets. The company claims its production mirrors lithium-ion manufacturing processes while eliminating certain expensive and timely steps.

Upon closing of the transaction, which is expected to be completed in the fourth quarter of 2021, the combined company will trade under the Nasdaq ticker “SLDP.”

Solid Power is expected to have a nine-person board composed of a majority of independent directors and will continue to be led by Solid Power’s existing management team.

Other electric vehicle makers went public via SPAC this year such as Lucid Motors and Nikola Corp.

SPACs, shell companies seeking to merge with private companies with the intention of taking them public, have exploded in popularity in the last year.

In 2020, a total of 248 SPACs raised $83.3 billion according to SPAC Analytics. But in the sixth month of 2021 alone, data already show 340 SPACs that have raised $106 billion, comprising 61% of initial public offerings.

Read more: A client portfolio manager at Cathie Wood’s Ark Invest shares which of its ETFs are projected to see the most growth over the next 5 years, and explains the recent downturn in the broader family

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Ford climbs 9% after saying it will boost electric-vehicle spending to $30 billion by 2025

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  • Ford climbed as much as 9% Wednesday after revealing plans to boost its electric-vehicle investment to $30 billion by 2025.
  • The automaker also said it expects electric vehicles to make up 40% of its global sales by 2030.
  • The announcements were made during Ford’s Investor Day, its first under CEO Jim Farley.
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Shares of Ford Motor climbed as much as 9% on Wednesday after the automaker revealed plans to boost its electric-vehicle investment to more than $30 billion by 2025, up from its previous $22 billion target.

The company also said it expects electric vehicles to make up 40% of its global sales by 2030.

The series of announcements were made during Ford’s Investor Day conference on Wednesday, the first under CEO Jim Farley who assumed his post in October 2020. Farley came to Ford in 2007 after a career at Toyota.

“While the stocks and the EV space are clearly going through a painful digestion period, we view this as a short-term pullback in a bullish multi-year upward rally,” Wedbush analyst Dan Ives said in a note Wednesday.

He added: “We forecast the EV market represents a $5 trillion [total addressable market] over the next decade with many EV original equipment manufacturers/supply chain players poised to be major winners over the coming years in this green tidal wave.”

The rationale behind the new plan dubbed “Ford+” is for investors to shift their perspective of the company from an automaker to a technology firm instead.

The company under the plan aims to deliver an 8% operating-income margin by 2023.

Ford joins other automakers worldwide in transitioning gasoline-powered vehicles into electric-powered ones in a bid to promote a greener environment and to compete with the leading electric-vehicle makers such as Tesla and Volkswagen.

General Motors in January 2021 said it will end all sales of gas-powered vehicles by 2035.

Thus far, Ford has amassed 70,000 reservations for its F-150 Lightning, an all-electric version of its iconic pickup truck that was unveiled one week ago.

“As more companies make the commitment to go carbon neutral, they are going to expect electric products that can integrate into their operations easily,” Jim Farley, Ford president and CEO, said in a statement in May. “Ford is so uniquely positioned to answer this call because we have a zero-emissions pickup and van, many of our customers want both vehicles in their fleet.”

US President Joe Biden last week tested Ford’s electric F-150 prototype himself during a visit to the Ford plant to tout federal investment in EVs.

The president has committed $174 billion to boost EV production under his massive $2 trillion infrastructure plan.

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