Today's dramatic drop in Solid Power's share price is causing concern.
Today's dramatic drop in Solid Power's share price is causing concern.
With 2024 drawing to a close on a sour note, shares of SolidPower (SLDP -11.68%) are taking a nose dive, as investors appear eager to shed the solid-state battery stock from their investment portfolios. The twist, though, is that the company hasn't shared any negative updates that could spark this dramatic sell-off. Instead, it seems investors might be overreacting to news from SolidPower's partner, Ford (F 0.20%).
Shares of SolidPower closed the day slumping by 11.7%.
Ford is winding up 2024 with an EV recall
The National Highway Traffic Safety Administration (NHTSA) announced today that Ford will recall 20,484 hybrid crossover SUVs, including Ford Escape and Lincoln Corsair vehicles from model years 2020-2024. As per the NHTSA, a production issue with one or more high-voltage battery cells may lead to an internal short circuit and battery failure.
It's likely that SolidPower investors are reacting to the recall given Ford's long-standing collaboration with the company. In 2019 and 2021, Ford invested in SolidPower, utilizing the funds toward the development and commercialization of its sulfide-based solid-state batteries. Since the recall applies to hybrid vehicles, investors might be linking Ford's partnership with SolidPower's work on batteries for electric cars.
What's a solid-state battery investor to do now?
Given there's no fresh news about SolidPower today, it's most likely that investors are misunderstandingly concluding that Ford's recall is due to problems with SolidPower's solid-state batteries.
However, it's essential to note that SolidPower is still in the development phase, and the product has yet to hit the market. Therefore, today's sell-off doesn't appear to have any substantial basis in SolidPower's operations. For those curious about adding SolidPower to their portfolio, today's dip could be a golden opportunity.
Despite Ford's EV recall affecting 20,484 hybrid vehicles, it's important to clarify that the issue does not stem from SolidPower's solid-state batteries. As a solid-state battery investor, this news might present an opportunity to purchase shares at a reduced price, considering the current sell-off is likely due to investors' confusion about the recall's connection to SolidPower's work with Ford.