Q1 2024 Solid Power Inc Earnings Call
Operator: Greetings and welcome to the Solid Power, Inc. first quarter 2024 financial results and business update call. Please note that this conference is being recorded. I will now turn the conference over to your host, Jennifer Almquist, Investor Relations for Solid Power. Thank you. You may begin.
Greetings and welcome to the solid power, Inc. First quarter 'twenty 'twenty four financial results and business update call. Please note that this conference is being recorded.
Jennifer Almquist: I will now turn the conference over.
Jennifer Almquist: Or to your house, Jennifer Holmquist Investor Relations for solid power. Thank you you may begin.
Jennifer Almquist: Thank you, operator. Welcome, everyone, and thank you for joining us today.
Jennifer Almquist: Thank you operator, welcome everyone and thank you for joining US today I'm joined on today's call by solid powers, President and Chief Executive Officer, John dense Coder, and Chief Financial Officer, Kevin Pepsis keep a.
Jennifer Almquist: I'm joined on today's call by Solid Power's President and Chief Executive Officer, John Van Scoter, and Chief Financial Officer, Kevin Paprzycki. A copy of today's earnings release is available on the investor relations section of Solid Power's website, www.solidpowerbattery.com. I'd like to remind you that parts of our discussion today will include forward-looking statements as defined by the U.S. securities laws. These forward-looking statements are based on management's current expectations and assumptions about future events and are based on currently available information as to the outcome and timing of future events.
Jennifer Almquist: A copy of today's earnings release is available on the Investor Relations section of salad Power's website, Www dot solid power battery dotcom.
Jennifer Almquist: Except as otherwise required by applicable law, Solid Power disclaims any duty to update any forward-looking statements to reflect future events or circumstances. For a discussion of the risks and uncertainties that could cause actual results to differ materially from those expressed in today's forward-looking statement, please see Solid Power's most recent filings with the Securities and Exchange Commission, which can be found on the company's website at www.solidpowerbattery.com. With that said, let me turn it over to John Van Scoter.
Jennifer Almquist: I'd like to remind you that parts of our discussion today will include forward looking statements as defined by the U S Securities laws.
Speaker Change: These forward looking statements are based on management's current expectations and assumptions about future events and are based on currently available information as to the outcome and timing of future events.
Jennifer Almquist: And otherwise required by applicable law shall empowered disclaims any duty to update any forward looking statements to reflect future events or circumstances.
Speaker Change: For a discussion of their business and uncertainties that could cause actual results to differ materially from those expressed in today's forward looking statements. Please see solid power's most recent filings with the Securities and Exchange Commission, which can be found on the company's website at www Dot solid power battery dotcom.
Speaker Change: So let me turn it over to John <unk>.
John C. Van Scoter: Thank you, Jen. Good afternoon, everyone.
Speaker Change: Thank you Jen good afternoon, everyone. Thank you for joining today's call.
John C. Van Scoter: Thank you for joining today's call. I'll begin today with a brief update on our progress. After that, I'll hand the call off to Kevin for the financial review, and then we'll open up the call for Q&A.
Speaker Change: I'll begin today with a brief update on our progress after that I'll hand, the call off to Kevin for the financial Review then we'll open up the call for Q&A.
John C. Van Scoter: When we last spoke, we outlined our 2024 goals. They are to expand our electrolyte capabilities and available market, advance to A2 sample cell designs, execute for our partners, and strengthen our presence in Korea. 2024 is off to a good start with continued strong execution on all four of these priorities during the first quarter.
Speaker Change: When we last spoke we outlined our 2024 goals they are to expand our electrolyte capabilities and available market advance.
John C. Van Scoter: Advanced aid to sample cell designs.
John C. Van Scoter: Execute for our partners and strengthen our presence in Korea.
John C. Van Scoter: 'twenty 'twenty four is off to a good start with continued strong execution on all four of these priorities during the first quarter.
John C. Van Scoter: With respect to Electrolyte, we expanded our sampling program with ongoing shipments to new potential customers. We made progress on our A2 cell design and are executing on a path that we believe will enable us to deliver higher performing cells by target dates. We continue to execute for our partners, most notably through strong early execution on our SK-ON R&D technology transfer and line installation agreements. And we further established our team and offices in Korea, providing the basis for ongoing engagement in the region.
John C. Van Scoter: With respect to electrolyte, we expanded our sampling program with ongoing shipments to new potential customers.
John C. Van Scoter: We made progress on our a T cell design and are executing on a path that we believe will enable us to deliver higher performing sells by target dates.
John C. Van Scoter: We continued to execute for our partners most notably through strong early execution on our S. K on R&D technology transfer and line installation agreements.
John C. Van Scoter: And we further established our team and offices in Korea, providing the basis for ongoing engagement in the region.
John C. Van Scoter: Looking a little more closely at each of these goals, starting with Electrolyte. We continue to see growing interest in our electrolyte powder. During the quarter, we made shipments to our existing partners. We also made repeat shipments to a potential customer after receiving positive feedback, and we shipped our electrolyte to a new potential OEM customer we are excited to work with. Our electrolyte has now been shipped to 10 potential customers outside of our existing joint development relationships.
John C. Van Scoter: Looking a little more closely at each of these goals starting with electrolyte.
John C. Van Scoter: We continue to see growing interest in our electrolyte powder.
John C. Van Scoter: During the quarter, we made shipments to our existing partners. We also made repeat shipments to a potential customer after receiving positive feedback and shipped our electrolyte to a new potential OEM customer we are excited to work with.
John C. Van Scoter: Our electrolyte has now been shifted to 10 potential customers outside of our existing joint development relationships.
John C. Van Scoter: We've also continued to invest in our new electrolyte R&D lab, which we are targeting to complete sometime mid-year. The goal of this lab will be to optimize continuous electrolyte production, reduce the cost of our powder, and develop future generations of even higher performing electrolytes. We continue to believe our proprietary electrolyte represents a great long-term opportunity for our industry and for our shareholders, and we remain committed to continuing to expand our capabilities and available market in this area.
John C. Van Scoter: We've also continued to invest in our new electro like R&D lab, which we are targeting to complete sometime mid year.
John C. Van Scoter: All of this lab will be to optimize continuous electrolyte production.
John C. Van Scoter: Reduce the cost of our powder.
John C. Van Scoter: And develop future generations of even higher performing electrolyte.
John C. Van Scoter: We continue to believe high proprietary electrolyte represents a great long term opportunity for our industry and for our shareholders and we remain committed to continuing to expand our capabilities and available market in this area.
John C. Van Scoter: Turning to cell development, our team continues to refine our A2 cell design with the goal of delivering A2 cells to our partners by the end of this year. Our A2 cells are designed to improve cell performance, including energy and power.
John C. Van Scoter: Turning to sell development our team continues to refine our a T cell design with a goal of delivering a T cells to our partners by the end of this year.
John C. Van Scoter: Our a T cells are designed to improve our self performance, including energy and power.
John C. Van Scoter: We believe these improvements also represent an incremental step towards commercial solid-state technology. With respect to cell performance, our team has also been working hard to better address the handful of A1 cells that went into thermal runaway earlier this year. The team is improving our internal testing capabilities, performing detailed analysis of our cell reactions, and thoroughly evaluating the materials and processes used in production. We've been able to identify minor changes in our cells' chemistry and design, as well as improvements in our manufacturing process that we have factored into our plans for the A2 builds. Battery technology development is challenging, and our team is energized by the opportunity to overcome hurdles and demonstrate the potential of solid state batteries.
John C. Van Scoter: We believe these improvements also represent an incremental step towards commercial solid state technology.
John C. Van Scoter: With respect to sell performance. Our team has also been working hard to better address the handful of a one cells that went into thermal runaway earlier this year.
John C. Van Scoter: The team is improving our internal testing capabilities performing detailed analysis of our cell reactions and thoroughly evaluating the materials and processes used in production.
John C. Van Scoter: We've been able to identify minor changes in ourselves chemistry, and design as well as improvements in our manufacturing process that we have factored into our plans for the H two bills.
John C. Van Scoter: Battery technology development is challenging and our team is energized by the opportunity to overcome hurdles and demonstrate the potential solid state batteries.
John C. Van Scoter: I'm proud of our team's work and want to express my appreciation for their commitment to driving realistic, thoughtful solutions and training for our partners. Since signing the expanded agreement with SKON in January, we've begun collaboration in earnest. In April, we hosted SK-ON for three weeks here in Colorado to kick off the tech transfer process under our R&D license. During those three weeks, we conducted workshops, training, and other hands-on learning with respect to our cell production processes.
John C. Van Scoter: I'm proud of our team's work and want to express my appreciation for their commitment to driving realistic thoughtful solutions.
John C. Van Scoter: Turning to our partners.
John C. Van Scoter: This was valuable time spent and beneficial for both sides as we set a solid foundation for future collaboration. We also sent a team to Korea to begin work on the SK-ON line installation. I'm pleased to say that we're nearing design freeze on SK-ON's new EV cell line.
John C. Van Scoter: Since signing the expanded agreement with SK on in January we've begun collaboration in earnest.
John C. Van Scoter: In April we hosted S. K on for three weeks here in Colorado to kick off the tech transfer process under our R&D license.
John C. Van Scoter: During those three weeks, we conducted workshops training and other hands on learning with respect to our cell production processes.
John C. Van Scoter: This was valuable time spent and beneficial for both sides as we set a solid foundation for future collaboration.
John C. Van Scoter: We also sent a team to Korea to begin work on the S. K on line installation.
John C. Van Scoter: I'm pleased to say that we're nearing design freeze on S. K on new E D cell line.
John C. Van Scoter: All the line's major equipment is now on order, keeping us well on track to complete the line in the first half of 2025. Both the tech transfer and line installation efforts will ultimately increase collaboration and leverage the development efforts of our solid state technology across the US, Europe, and Asia in the years to come. We also continue our close collaboration with both BMW and Ford under our joint development agreements.
John C. Van Scoter: All the lines major equipment is now on order keeping us well on track to complete the line in the first half of 2025.
John C. Van Scoter: With the tech transfer and line installation efforts will ultimately increase collaboration and leverage the development efforts on our solid state technology across the U S.
John C. Van Scoter: Europe and Asia in the years to come.
John C. Van Scoter: We also continue our close collaboration with both BMW and Ford under our joint development agreements. We continue to value. These relationships and look forward to continuing to work closely with our OEM partners throughout the year.
John C. Van Scoter: We continue to value these relationships and look forward to continuing to work closely with our OEM partners throughout the year. And, lastly, Korea. We've made good progress in solidifying our Korean presence. We now have an entire team on the ground in Korea with a combination of expat Solid Power employees and local expertise who onboarded at our SP2 facility a couple of weeks ago. This team is located in Seoul, where we are establishing a home base for driving further engagement across the peninsula with potential customers, vendors, government agencies, and others at the forefront of battery technology development.
John C. Van Scoter: And lastly, Korea.
John C. Van Scoter: We've made good progress in solidifying our Korean presence, we now have an entire team on the ground in Korea with a combination of ex Pat solid power employees and local expertise.
John C. Van Scoter: On boarded in our S. P. Two facility a couple of weeks ago.
John C. Van Scoter: This team is located in Seoul, where we are establishing a homebase for driving further engagement across the peninsula with potential customers vendors government agencies and others in the forefront of battery technology development.
John C. Van Scoter: Before I wrap up, I also want to say we're making good progress on our planned investor event for later this year. We look forward to sharing more details with you in the coming months. With that, I'll turn the call over to Kevin. Thanks, John. Good afternoon, everyone.
John C. Van Scoter: Before I wrap up I also want to say, we're making good progress on our planned investor event for later this year, we look forward to sharing more details with you in the coming months.
John C. Van Scoter: With that I'll turn the call over to Kevin.
Kevin A. Paprzycki: I'll start off today with an overview of our financial results for Q1. Then I'll discuss our 24-month outlook. Our first quarter financial results reflect continued technology development and initial execution on our new SK agreement. First quarter revenue was just under $6 million. This primarily reflects solid performance on our BMW agreement. Operating expenses for Q1 were $31.7 million, reflecting our planned investments in cell and electrolyte development, the scaling of our operations, and execution under our development agreement. First quarter operating loss was $25.8 million, and the net loss was $21.2 million, or $0.12 per share.
Kevin: Thanks, John Good afternoon, everyone.
Kevin A. Paprzycki: I'll start off today with an overview of our financial results for Q1.
Kevin A. Paprzycki: Then I'll discuss our 24 outlook.
Kevin A. Paprzycki: Our first quarter financial results reflect continued technology development and initial execution on our new S K agreements.
Kevin A. Paprzycki: First quarter revenue was just under $6 million. This is primarily reflects solid performance on our BMW agreement.
Kevin A. Paprzycki: Operating expenses for Q1 were $31 7 million, reflecting our planned investments and fell and electrolyte development the scaling of our operations.
Kevin A. Paprzycki: <unk> under our development agreements.
Kevin A. Paprzycki: First quarter operating loss was $25 $8 million and net loss was $21 $2 million or 12 cents per share.
Kevin A. Paprzycki: Turning to our balance sheet, we ended the quarter with total liquidity of $379 million in cash, marketable securities, and long-term investments. We invested $29.1 million in operations during the quarter and $4.1 million in CapEx, mostly going towards our new electrolyte R&D lab. Our overall CapEx investments were lower than last year when we were investing heavily in our SP2 electrolyte plant.
Kevin A. Paprzycki: Turning to our balance sheet, we ended the quarter with total liquidity of $379 million in cash marketable securities and long term investments.
Kevin A. Paprzycki: We invested $29 $1 million in operations during the quarter and $4 $1 million in capex, mostly going towards our new electrolyte R&D lab.
Kevin A. Paprzycki: Our overall capex investments were lower than last year. When we were investing heavily in our S. P. Two electrolyte plant.
Kevin A. Paprzycki: We did have an increase in working capital invested this quarter. We had a couple of large partner receivables at the end of Q1 that will be collected in Q2 in line with contract milestones. We also placed down payments during the quarter on equipment for the SK line install. We expect our working capital to normalize over the remainder of the year, lowering our cash burn over the coming quarters. Lastly, during the quarter, we repurchased 5 million shares of our common stock for a total of just over $8 million.
Kevin A. Paprzycki: We did have an increase in working capital investment this quarter.
Kevin A. Paprzycki: We had a couple of large partner receivables at the end of Q1, they will be collected in Q2 in line with contract milestones.
Kevin A. Paprzycki: We also placed down payments during the quarter on equipment for the SK mine installed.
Kevin A. Paprzycki: We expect our working capital to normalize over the remainder of the year lowering our cash burn over coming quarters.
Kevin A. Paprzycki: Lastly, during the quarter, we repurchased 5 million shares of our common stock for a total of just over $8 million.
Kevin A. Paprzycki: You will see $4.9 million on our statement of cash flows, with the remaining amount sitting on the balance sheet as the cash settled in early April. Overall, our liquidity position remains strong, especially in light of our capital-light business model with its lower CapEx requirements. Turning to our outlook for the year, we are reiterating our guidance for 24, with revenue still expected to be in the 20 to $25 million dollar range.
Kevin A. Paprzycki: You will see $4 $9 million on our statement of cash flows with the remaining amount sitting on the balance sheet is the cash settled in early April.
Kevin A. Paprzycki: Overall, our liquidity position remains strong, especially in light of our capital light business model with its lower capex requirements.
Kevin A. Paprzycki: Turning to our outlook for the year, we are reiterating our guidance for 'twenty four.
Kevin A. Paprzycki: With revenue is still expected to be in the $20 million to $25 million range.
Kevin A. Paprzycki: This includes the remaining revenue from our BMW agreement and expected revenue from our new SK agreement. We did have a small amount of SK revenue in Q1 and expect more over the rest of the year as we execute on the tech transfer and line installation. With respect to the overall cash flow guidance, we are reiterating our expectation that total cash investment for 2024 will be in the range of $100 to $120 million, with operating cash investment expected to be 60 to 70 million and CapEx investments expected to be 40 to 50 million.
Kevin A. Paprzycki: This includes the remaining revenue from our BMW agreement.
Kevin A. Paprzycki: And expected revenue from our new S K agreements.
Kevin A. Paprzycki: We did have a small amount of S. K revenue in Q1 and expect more over the rest of the year as we execute on check transfer in line installation.
Kevin A. Paprzycki: With respect to the overall cash flow guidance, we are reiterating our expectation the total cash investment for 24 will be in the range of $100 million to $120 million.
Kevin A. Paprzycki: With operating cash investment expected to be 60 to 70 million in Capex investments are expected to be $40 million to $50 million. In addition to the $100 million to $120 million, we will have $8 million of share repurchase investments show up in our financing cash flows from the repurchases we've done so far.
Kevin A. Paprzycki: In addition to the 100 to 120 million dollars, we will have eight million dollars of share repurchase investments show up in our financing cash flows from the repurchases we've done so far this year. We'll continue to evaluate the timing and amounts of future repurchases under our plan. With that, I'll now turn the call back to John. Thanks, Kevin.
John: For this year.
Kevin A. Paprzycki: We'll continue to evaluate the timing and amount of future repurchases under our plan.
Kevin A. Paprzycki: With that I'll now turn the call back to John.
John C. Van Scoter: In closing, 2024 is off to a solid start. The team here at Solid Power continues to execute well on our 2024 goals, whether the targets are technical, strategic, or financial in nature. I'm confident that this continued strong execution will drive shareholder value for the long term. With that, I'll turn it over to Q&A. We will now begin.
John: Thanks, Kevin and closing 'twenty 'twenty four is off to a solid start.
John C. Van Scoter: The team here at solid power continues to execute well on our 2024 goals.
John C. Van Scoter: Targets are technical strategic or financial in nature.
John C. Van Scoter: I'm confident that this continued strong execution will drive shareholder value for the long term.
Speaker Change: With that I'll turn it over to Q&A.
John C. Van Scoter: Yeah.
Operator: We will now begin the question and answer session. To ask a question, you may press star then 1 on your telephone keypad. If you are using a speakerphone, please pick up your handset before pressing the keys. If at any time your question has been answered and you would like to withdraw your question, please press star then 2. At this time, we will pause momentarily to assemble our roster. The first question comes from Mike Shlisky with DA Davidson. Please go ahead.
Speaker Change: We will now begin the question and answer session to ask a question you May Press Star then one on your telephone keypad. If you are using a speakerphone. Please pick up your handset before pressing the keys is that any time. Your question has been addressed and you would like to withdraw your question.
Operator: Please press Star then kit.
Operator: At this time, we will pause momentarily to assemble our roster.
Michael Shlisky: That's the first question comes from Mike <unk> with D. A Davidson. Please go ahead.
Michael Shlisky: Yes, hello, good afternoon, and thanks for taking my questions. You mentioned you have shipped Electrolyte to 10 potential partners beyond the three that you've already mentioned you're working with. Those 10 partners, could you give me a kind of bracket for us? Are they auto OEMs or battery folks? And maybe it gives some sense as to the size. They combined, what kind of market share those autos or batteries may have, or just some sense as to how big, if they all signed up to work with Solid Power, the long-term opportunity may be there.
Michael Shlisky: Yes, Hello, good afternoon, thanks for taking my questions.
Michael Shlisky:
Michael Shlisky: You had mentioned your shifts metro like 10 potential partners beyond the three that you've already mentioned you're working with.
Michael Shlisky: Those 10 partners any kind of bracket for us are they.
Michael Shlisky: Auto Oems or battery folks and maybe some sense as to the size.
Michael Shlisky: They combined.
Michael Shlisky: What kind of market share of those all of those are batteries may have or just some sense as to how big if.
Michael Shlisky: They all signed up to work with.
Michael Shlisky: <unk> power.
Michael Shlisky: The long term opportunity may be there.
Michael Shlisky: Okay.
John C. Van Scoter: Good afternoon, Mike; thanks for joining us. Yeah, it's a combination of battery OEMs and EV OEMs. I would say it's skewed more towards battery OEMs in this period of time. But again, it's both. I honestly don't have a good assessment of what the total available market that they address would be, but it is a combination of the very large known players in the market as well as some of the medium-sized players in the market.
Speaker Change: Good afternoon, Mike Thanks for joining yes, it's a combination of battery Oems and E V Oems.
John C. Van Scoter: I would say, it's skewed more towards a battery Oems in this period of time, but again its bowl I honestly don't have a good assessment of what are the total available market that they address.
John C. Van Scoter: Would be but it is a combination of the very large are known players in the market as well as some of the medium sized players in the market.
John C. Van Scoter: Okay.
John C. Van Scoter: Got it. Thanks. I also appreciated your details on the team's efforts to fix those issues with Thermal Runaway. I'm going to share with us: is the resulting Dell going to look, cost, or perform differently than what was originally put in, or are the changes very small to your knowledge at this point?
Speaker Change: Got it thanks.
John C. Van Scoter: I also appreciate your details on the team's efforts too.
John C. Van Scoter: Those issues.
John C. Van Scoter: With thermal runaway.
John C. Van Scoter: Share with US is the resulting <unk> going to look cost or performed differently than what was originally put in our underwriting is very small your knowledge at this point.
John C. Van Scoter: Yeah, great question. Again, Mike, I want to emphasize clearly that these are just a handful of cells that we had out of thousands that we've built. So just to keep the situation in scope, but they're small tweaks that we're making. But I would like to once again reiterate that the battery system is really a complex interplay between the chemistry, the mechanics, and the overall system environment that it operates in. And so those all have to be tweaked as you make a change in one area, because it may affect the design, it may affect the manufacturing flow. And so just bear that in mind when we talk about changes. It's small tweaks to all those things because of the interplay between them for the battery system.
Speaker Change: Yeah, Great question again, Mike I want to emphasize clearly there's just a handful of cells that we have out of thousands that we bill so just to keep the situation in scope.
John C. Van Scoter: But there are small tweaks that we're making but I would like to once again reiterate that the battery system is really a complex interplay between the chemistries the mechanics.
John C. Van Scoter: And the overall system environment that it operates in and so those all have to be tweet is you make a change in one area than it may affect the design it may affect the manufacturing flow and so just bear that in mind, when we talk about changes at small tweaks to all.
John C. Van Scoter: All of those because of the interplay.
John C. Van Scoter: Between them for the battery system.
Kevin A. Paprzycki: Got it, thanks. And perhaps one last one for me, maybe this is for Kevin. Is it too early to ask about 2025 at this point? Do you think that your cash growth or expense run rate, as it tapers down a little bit later on in the year, could it maybe run similar to what you're seeing this year, or is there a major step up or down for 2025?
Speaker Change: Got it thanks, and perhaps one last one for me and this is for Kevin.
Kevin: Oh to ask about about 'twenty at this point.
Kevin: I think that your cash burn our expense run rate as it tapers down in London.
Kevin: I loved it around the year and maybe similar to what you are seeing this year or are there is there a major step up or down for 2025.
Michael Shlisky: No, thanks, Mike; we're going to give longer-term guidance later this year at our investor event. But I don't think our messaging has changed much from what we said originally, which was once we got through our SP one line install on our SP two electrolyte facility that our capex needs would tighten down, and overall spend would go down. So we're not expecting any changes, but we'll give more detailed guidance later this year.
Kevin: No. Thanks, Mike we're gonna give longer term guidance later this year at our Investor event.
Michael Shlisky: I don't think our messaging has changed much from from what we said originally which is once we got through our S. T. One mine install on RSP two electrolyte facility that our capex needs would would tweak down in overall spend would go down so.
Michael Shlisky: We're not expecting any changes, but we'll give more detailed guidance here later this year.
Operator: OK, I appreciate those answers. Thanks so much.
Mike: Okay I appreciate those answers thanks, so much.
Brian H. Dobson: Our next question comes from Brian Dobson with Chardon Capital Markets. Please go ahead.
Operator: Our next question comes from Brian Dobson with Chardan capital markets. Please go ahead.
Brian H. Dobson: Yeah, thanks very much for taking my question. I guess just one follow up on those call it 10 clients. And the two new clients that you mentioned, you mentioned supplying powdered electrolyte on an ongoing basis to one potential client and and one new potential client. What kind of feedback have you received from those companies? And can you give us an idea as to what industry they're in, either automotive or battery?
Brian H. Dobson: Yeah, Thanks, very much for taking my question I.
Brian H. Dobson: I guess, just just wanted to follow up on those call. It 10 clients.
Brian H. Dobson: And the two new clients that you had mentioned.
Brian H. Dobson: You mentioned supply powdered electrolyte.
Brian H. Dobson: On an ongoing basis to one potential client.
Brian H. Dobson: One new potential clients.
Brian H. Dobson: What kind of feedback have you received from those companies and can you give us an idea as to what what industry, they're in either automotive or battery.
John C. Van Scoter: There's one customer that's in the battery space providing for the EV market, a major player in Asia, and then there is a second EV OEM also in Asia. So those are the descriptions of the two that we referred to in the call, of sampling with both of them, them looking at the initial material, saying, I like this characteristic about the electrolyte, but could you change this characteristic? And we go ahead and do our modification or screening or whatever has to get to that desired specification. We re-sample it. They re-evaluate it, taking through their cell lines. And then it's a rinse and repeat from there.
Speaker Change: Oh, there's one customer that's in the battery space, providing to the EV markets are a major player in Asia.
John C. Van Scoter: And then a second E V O O M also in Asia.
John C. Van Scoter: So those are the description of the two that we referred to are in our in the call.
John C. Van Scoter: The feedback has been very encouraging.
John C. Van Scoter: And the reason I say that is that we've been through multiple iterations of Rick of sampling with both of them.
John C. Van Scoter: Then looking at the initial material, saying I like this characteristic about the electrolyte, but could you change. This characteristic and go ahead, and we do our modification or screening or what have you to get to that are desired.
John C. Van Scoter: Specification, we re sample it they reevaluate it taking through their cell lines.
John C. Van Scoter: We've had as many as five cycles with one of those two OEMs at this point, so it clearly shows engagement. It shows that there's interest, strong interest, I would say, as a result of the engagement.
John C. Van Scoter: And then it's a rinse and repeat from there we've had.
John C. Van Scoter: As many as five cycles with one of those two Oems at this point so it.
John C. Van Scoter: It should clearly shows engagement. It shows that there is interest strong interest I would say as a result of the engagement.
John C. Van Scoter: We're not through that process with either of them, and I would expect that to continue through the balance of this year. As I said, the battery system is a very complex interplay. They both have their own cell designs, and so we're really tuning the electrolyte to make it perform the best in their cell designs. And I believe that will continue through the balance of this year.
John C. Van Scoter: We're not through that process with either of them I would expect that would continue through the balance of this year as I said the battery system is a very complex interplay they both have their own cell designs and.
John C. Van Scoter: So we're really tuning the electrolyte to make it perform the best in their cell design and I believe that will continue through the balance of this year.
John C. Van Scoter: Yeah, excellent. And is there any update on the work that you have been doing with BMW toward the development of one of their prototype cars?
Speaker Change: Yeah excellent and is there any update on work that you had been doing with BMW toward the development of one of their prototype called cars.
John C. Van Scoter: Yeah, so our collaboration with BMW continues to be very strong. If anything, it's gotten stronger in 2024.
Speaker Change: Yeah. So our collaboration with BMW continues to be very strong if anything its gotten stronger in 2024.
John C. Van Scoter: You may recall, we actually have ex Pat engineers from BMW here onsite in Colorado for extended periods of time, and they're working shoulder to shoulder with our engineers to come up to speed on our cell design. So that they can duplicate that and then build on it in parts.
John C. Van Scoter: You may recall, we actually have expat engineers from BMW here for extended periods of time, and they're working shoulder to shoulder with our engineers to come up to speed on our cell design so that they can duplicate that and then build on it in Parsdorf, Germany. I understand that the equipment for that facility is coming in this year, and they have an objective to get that facility up and running in 2025.
John C. Van Scoter: For Germany.
John C. Van Scoter: I understand that equipment for that facility is coming in this year and they have an objective to get that facility up and running in 2025.
John C. Van Scoter: We're still in discussions with them about the demo car, so we really don't have any further updates for you at this point, but we will share that with you as soon as we do have clarity about their plans. As you, I'm sure, know, they are going through a major platform change with the NOI class coming out next year, and so they're doing a lot of internal planning. So there really is no further update at this point other than that close collaboration, which is based in Parsdorf, Germany, as we go through this year.
John C. Van Scoter: There is a we're still in discussions with them about the demo car when they really don't have any further updates for you at this point, but.
John C. Van Scoter: But we will share that with you as soon as we do have clarity about their plans.
John C. Van Scoter: As you I'm sure know they are going through a major platform change with the noy class coming out next year and so they're doing a lot of our internal planning. So there really is no further update at this point other than that close collaboration and our support of their lining.
John C. Van Scoter: Lighting and power store with Germany, as we go through this year.
Brian H. Dobson: Yeah, excellent. And during the quarter, you retire nearly $5 million worth of stock. I think we're in agreement that shares are undervalued at this level.
John C. Van Scoter: Excellent.
John C. Van Scoter: And during the quarter, you retire nearly $5 million worth of worth of stock.
Brian H. Dobson: I think we're in agreement that shares are undervalued at this level.
Kevin A. Paprzycki: But as you're thinking about utilizing additional additional shares of purchases, you know, are you thinking about being programmatic? Are you thinking about being opportunistic in nature? I guess. How are you and the board going about that?
Kevin A. Paprzycki: As you were thinking about utilizing the.
Kevin A. Paprzycki: Additional additional share repurchases.
Kevin A. Paprzycki: Are you thinking about being programmatic are you thinking about being opportunistic in nature, I guess or.
Kevin A. Paprzycki: How are you and the board going about that.
Brian H. Dobson: Hey, Brian, you know, we're thankful that we have such a strong balance sheet at this point. And we'll remain flexible here and consider the opportunities to buy our stock back going forward. We're at this point, we don't want to give too much detail because that could impact our ability to buy back, but we'll consider the opportunities here as they come up going forward.
Speaker Change: Hey, Brian.
Speaker Change: We're thankful that we have such a strong balance sheet at this point and we'll remain flexible here and consider all opportunities to buy our stock back going forward. At this point, we don't want to give too much detail because that could impact our ability to buy back, but we'll consider the opportunities here as they come up going forward.
John C. Van Scoter: Okay, and just one final one, if I sneak it in. It's very exciting that you're building out Korea. Have you received any kind of early, early feedback from team members on the ground there regarding the reception of Solid Power by the local companies?
Brian: Okay, and just one final one if I could sneak it in and it's very exciting that you're building out Korea have you received any kind of early early feedback from from team members on the ground there regarding the reception of solid power buyback by the local companies.
John C. Van Scoter: Yeah, the reception has been just what we hoped it would be. I think once you plant your flag and start to invest in a country like that, it's really our first global expansion, people take notice. And so yes, we are getting differential treatment from the various partners and providers, and suppliers over there. And also very close collaboration with the national labs. They have clearly acknowledged that being there makes a difference.
Speaker Change: Yes. The reception has been just what we hoped it would be a I think once you plant you flag and start to invest in a country like that it's really our first global expansion.
John C. Van Scoter: People take notice and so yes, we are getting a differential.
John C. Van Scoter: Treatment from the various partners and providers suppliers over there.
John C. Van Scoter: And also very close collaboration with the National Labs.
John C. Van Scoter: They have clearly acknowledged that being there it makes a difference.
John C. Van Scoter: And we have already hired three nationals already in program management, technical lead, as well as HR over there to build out that core team. So the reception is exactly what we had hoped for, maybe a little bit better than I had expected on the government side, but it's really coming in nicely.
John C. Van Scoter: And we have hired now three nationals already.
John C. Van Scoter: Throughout our program management, our technical lead as well as HR over there to build out that core team. So the reception is exactly what we had hoped maybe a little bit better than we than I had expected on the government side, but it's really coming in nicely.
Speaker Change: Thanks very much.
Operator: Our next question comes from Jeffrey Campbell with Seaport Research Partners. Please go ahead.
John C. Van Scoter: Our next question comes from Jeffrey Campbell with Seaport Research Partners. Please go ahead.
Jeffrey Campbell: Good afternoon, and congratulations on all the success that you've laid out. I really only have one question at this point, and that is, all these various samplings of the electrolyte, where the electrolyte is going, is this electrolyte being tested for any other kind of battery architecture besides the silicon EV cell? Or conversely, if not, can we see this as some sort of validation of the silicon EV cell architecture?
Jeffrey Leon Campbell: Good afternoon and congratulations on.
Jeffrey Campbell: All the success that you've laid out I really only have one question that at this point and that is.
Jeffrey Campbell: All of these various San.
Jeffrey Campbell: Samplings of the electrolyte.
Speaker Change: Your line is growing.
Jeffrey Campbell: Is it.
Jeffrey Campbell: Is this sort of like being tested for any other kind of battery architecture. Besides the silicon E B cell.
Jeffrey Campbell: Or Conversely, if not can we do.
Speaker Change: Steve This is some sort of validation of the silicon B cell architecture.
Jeffrey Campbell: Yeah.
John C. Van Scoter: Yeah, good question, Jeffrey. We believe that it's being used in a variety of different anode-cathode combinations at this point. For obvious reasons, these OEMs generally keep those designs pretty close to their chests. So we don't have a lot of visibility, but we get some clues, if you will, based on what they're asking for in terms of the changes to the electrolyte. And I think it's fair to say that there are a number of different combinations of anode and cathode that are being utilized with our electrolyte at this point.
Speaker Change: Yeah. Good question Jeffrey we believe that it's being used in a variety of different anode cathode combinations at this point.
John C. Van Scoter: Probably its reasons. These Oems generally keep those designs pretty close to their chest.
John C. Van Scoter: So we don't have a lot of visibility, but we get some clues if you will based on what they're asking for in terms of the changes to the electrolyte.
John C. Van Scoter: And I think it's fair to say that there's a number of different combinations of anode and cathode that are being utilized.
John C. Van Scoter: Utilized with our electrolyte at this point again it underscores the we're really indifferent to the.
John C. Van Scoter: Again, it underscores the – or really indifference to – anode technology and the cathode technology. It speaks to the versatility, I think, of our electrolyte and of our business model. We do, again, work closely with customers, but don't have ultimate visibility right now on those designs.
John C. Van Scoter: The anode technology and the cathode technology. It speaks to the versatility I think of our electrolyte and of our business model.
John C. Van Scoter: We do again.
John C. Van Scoter: Worked closely with the customers, but don't have ultimate visibility right now on those designs.
John C. Van Scoter: Yeah.
Jeffrey Campbell: Yeah, well, that flexibility is kind of where I was going. So thanks for that answer. I appreciate it.
John C. Van Scoter: Yeah.
Speaker Change: Their flexibility, that's kind of where I was going so thanks for that answer I appreciate it.
Jeffrey Campbell: Okay.
Operator: Again, if you have a question, please press star then 1. Our next question comes from Vincent Anderson on Stiesel. Please go ahead.
Jeffrey Campbell: Again, if you have a question. Please press Star then one.
Operator: Our next question comes from Vincent Anderson with Stifel. Please go ahead.
Vincent Alwardt Anderson: Yeah, thanks. So just two quick ones on the SK partnership. Could you remind me, are you able to immediately start iterating off of your most recent A2 battery with SK, or does the nature of the JDA mean that you kind of have to start a few steps back and develop forward from there?
Vincent Alwardt Anderson: Yeah. Thanks.
Vincent Alwardt Anderson: So just two quick ones on the S. K partnership could you remind me are you able to immediately start at her iterating off of your most recent eight two.
Vincent Alwardt Anderson: Battery with SK or does the nature of the J D. A mean that you kind of have to start a few steps back and develop forward from there.
John C. Van Scoter: We will start with the A-1 design as a baseline because it's the most learned, and then build from there. But our intention would be to have ongoing collaboration on the various designs as we go forward. They've expressed a desire to do that same thing, but it will start off on our base, which we built largely last year.
Speaker Change: We will start with the a one design as a baseline because it's the most learn and then build from there.
John C. Van Scoter: But our intention would be to have ongoing collaboration for the various designs as we go forward Dave expressed the desire to do that same thing, but it will start off our base, which we built largely last year.
Vincent Alwardt Anderson: Okay, all right, that makes sense. And are they going to be explicitly sourcing raw materials for you or having a direct say in
John C. Van Scoter: Okay, alright that makes sense and.
Vincent Alwardt Anderson: Are they going to be explicitly sourcing raw materials for you or or having a direct say in and raw material sourcing.
Vincent Alwardt Anderson: Do you mean for our precursors, or do you mean for the other components in the battery? In the battery.
Vincent Alwardt Anderson: Oh, you mean for our precursors or do you mean for the other.
Vincent Alwardt Anderson: The battery and the battery yet sorry.
John C. Van Scoter: Yeah. Sorry. Apologies. Yes. No, we solely control our precursor vendors and selections.
Vincent Alwardt Anderson: <unk>, yes for your precursors.
John C. Van Scoter: No. We are solely control are a precursor vendors and selection.
Vincent Alwardt Anderson: Alright, and I'm just shifting gears. I'm curious, are you planning on, you know, requiring or dedicating additional prototyping equipment or electrolyte manufacturing equipment to support the new electrolyte chemistry? And I'm only asking because I assume you've already started working on some of this R&D around the new chemistry and you feel the need to afford it. It's a lab space. So I'm just wondering if that's going to eventually come with maybe entirely segregated lines and things like that.
John C. Van Scoter: Alrighty and just.
Speaker Change: Just shifting gears.
Vincent Alwardt Anderson: I'm curious are you planning on requiring or dedicating additional prototyping equipment or electric light manufacturing equipment to support the new electric chemistry, and I'm only asking because I assume you've already started working on some of this R&D around the new chemistry, and you feel the need to afford it.
Vincent Alwardt Anderson: Its own lab space. So I'm just wondering if that's going to eventually come with maybe entirely sep segregated lines and things like that.
John C. Van Scoter: We have the DBPR line that will be coming in mid-year here, well, lab, excuse me, not line, that will advance the state-of-the-art there, advance our production capability in terms of continuous flow versus batch, as well as drive down our cost vectors. But once that's done, it's designed so that whatever results can be seamlessly integrated into our SP2 existing powder line. And one of the real highlights of this year has been the flexibility that that line has demonstrated already.
Vincent Alwardt Anderson: We have the DVT or line that will be coming on mid year here, a while lab excuse me not line that will advance.
John C. Van Scoter: The state of the art there advance our production capability in terms of continuous slow versus batch as well as driving our cost vectors.
John C. Van Scoter: But once that's done it's designed so that whatever results can be seamlessly integrated into our S. P. Two existing powder line.
John C. Van Scoter: And one of the I think a real highlights of this year has been the flexibility that that line has demonstrated already I mean, it was designed for flexibility, but as we've gone through these customers sampling exercise as I described previously our ability to actually tune it very quickly.
John C. Van Scoter: I mean, it was designed for flexibility, but as we've gone through these customer sampling exercises I described previously, our ability to actually tune it very quickly to the customer requirements has really proven to be beyond even my expectations. So we don't anticipate a different line other than the DVPR lab that then will material and designs will migrate into the standard SP2 facility. Perfect.
John C. Van Scoter: Two the customer requirements is really proven to be a beyond even my expectations.
John C. Van Scoter: Oh, we don't envision a.
John C. Van Scoter: A different line other than the D. V. P. R lab that then will material designs will will migrate into the standard S. P. Two silly.
Vincent Alwardt Anderson: Perfect. All right. That's that's all from me. Thank you.
Speaker Change: Perfect Alright, that's that's all from me. Thank you.
Operator: This concludes our question and answer session. I would like to turn the conference back over to John and Scoter for any closing remarks. Thank you.
Speaker Change: This concludes our question and answer session I would like to turn the conference back over to Javan, Scott or for any closing remarks.
John C. Van Scoter: Thank you for joining the call today, everyone, and for your interest in Solid Power. We look forward to updating you again next quarter.
John: Thank you for joining the call today, everyone and for your interest in solid power. We look forward to updating you again next quarter.
Operator: The conference is now concluded. Thank you for attending today's presentation. You may now disconnect.
Speaker Change: The conference has concluded. Thank you for attending today's presentation you may now disconnect.