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Why Shares Of Solid Power Are Plummeting Today
Poised to end 2024 on a sour note, shares of Solid Power (NASDAQ: SLDP) are skidding today as investors seem energized about moving the solid-state battery stock out of their portfolios. The irony though is that the company hasn't reported any negative news which would be a catalyst for the sell-off. Instead, it seems investors may be overreacting to news from Solid Power's partner Ford (NYSE: F).
Shares of Solid Power closed the day 11.7% lower.
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Ford is wrapping up 2024 with an EV recall
The National Highway Traffic Safety Administration (NHTSA) announced today that Ford would recall 20,484 hybrid crossover SUVs, including Ford Escape and Lincoln Corsair vehicles from model years 2020 to 2024. According to the NHTSA, "A manufacturing defect in one or more of the high voltage battery cells may result in an internal short circuit and battery failure."
Solid Power investors are likely responding to the recall because Ford has partnered with the company for more than five years. In 2019 and again in 2021, Ford has invested in Solid Power, which is using the capital to develop and then commercialize its sulfide-based solid-state batteries. Since Ford's recall applies to hybrid vehicles, investors are likely conflating the company's connection with Solid Power which is developing batteries for electric cars.
What's a solid state battery investor to do now?
With no other news regarding Solid Power being reported today, it's most probable that investors are mistakenly concluding that Ford's recall is a result of manufacturing defects in Solid Power's solid-state batteries.
This is grossly inaccurate, however. Solid Power is still in the developmental phase and has not commercialized its product yet. Consequently, the stock's sell-off today is not based on anything material to the company. For those interested in powering their portfolios with Solid Power, today's sell-off provides a great opportunity.
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Scott Levine has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.
