Ilika plc (LON:IKA) is the topic of conversation when Liberum’s Equity Research Analyst Adam Collins caught up with DirectorsTalk for an exclusive interview.
Q1: Adam, can you remind us of the partnerships that Ilika has established for electric vehicles (EV’s) and the funding that’s been available to them?
A1: There’s actually three collaborations under the EV programmes which are called Goliath. The PowerDrive Line collaboration with Honda, something called MOSESS which is with Ricardo and McLaren and then, 2 weeks ago, they announced the Granite project which is with Jaguar Land Rover.
The total grand funding for the three of those projects combined is £5 million and it covers around 70% of the company’s expected costs.
The main objectives of these projects, various bi-projects but there’s a common strand, they’re intended to develop a prototype battery, work on the sourcing arrangements for the main raw materials and there will be some demonstration of the manufacturing of cells for the auto applications.
The key development challenge as far as we can tell is to find a low-cost manufacturing process slightly akin to screen printing which will be suitable to the low-cost needs of the auto sector.
Q2: Why are solid state batteries attracting so much interest for the future of electric vehicles?
A2: Many listeners will be aware that they have alleged benefits which we actually think are pretty real.
The electrolyte is non-flammable so pretty safe, faster charging times are below 10 minutes which is a third of what we see in best of class today, and they offer longer driving range because of improved energy density, somewhere between 2-3 times that of existing liquid electrolyte batteries.
We think the solid state battery market could be huge, by 2030 there are forecasts out there that EV’s could be as much as 20% of the new cars. If that’s right, we think the total value of that market is going to be about $100 billion so dwarfing the size of Ilika’s market capitalisation today.
So, very promising and IKA are one of the main technology providers for some of the key factors that will drive this.