Energy revolution: the disruptive technologies that will transform energy storage (Part I)

In a world where innovation does not stop and industries are constantly reinventing themselves, allocating 10% to 15% of the portfolio to startups with disruptive potential can be a key strategic play. These companies, still in the early stages of recognition, are charting the path towards what they could become giants of the future. Although these investments carry significant risks, the long-term return opportunities are undeniable, comparable to having invested in companies like Apple or Amazon in their early days. As promised, starting this week I will show you the different sectors and companies that I have in my crosshair when making my twins’ purse.

In this first analysis, I will focus on an area that combines technological innovation and sustainability: energy storage. Few areas have as much disruptive potential as this one, as it not only promises to overcome the current challenges of renewable energy, but also redefine the way we generate, distribute and consume energy.

For decades, massive energy storage was not a real need. Traditional sources, such as coal or oil, stored energy in the form of fuel until use. However, The transition towards clean energy has changed the landscape, turning advanced storage into a key piece to stabilize electrical networks based on renewable energies such as solar and wind.

The main challenge of these renewable sources is their intermittency: the sun does not always shine or the wind blow. To solve it, Storage technologies capture surplus generated at production peaks and release it when it is needed most. This advance is essential to decouple power generation from demand and ensure grid resilience.

In addition to renewables, the mass adoption of electric vehicles is driving this market. Although lithium-ion batteries have improved, they still have limitations such as lower energy density than fossil fuels and longer recharge times. This increases the demand for more efficient and safer batteries.

Despite their widespread use, lithium-ion batteries face challenges such as safety issues, degradation over time, and a lifespan limited to 7-10 years in stationary applications. To overcome them, the industry is exploring disruptive technologies:

1. Solid state batteries: They promise greater energy density and safety by replacing flammable liquid electrolytes with solid ones. Although they present enormous opportunities, manufacturing costs and scalability are major challenges.
2. Flow batteries: Ideal for large-scale storage, they offer greater durability thanks to their long-life electrolyte tanks.
3. Green hydrogen: generated through electrolysis with renewable energy, it can be stored indefinitely.

Each technology has specific applications depending on factors such as cost, capacity, durability and safety. For example, residential storage prioritizes security, while power grids look for longer-lasting solutions.

In this article and the following ones, I will analyze the main companies that are developing these disruptive technologies in the three mentioned sectors. Today I will focus on the first: solid-state batteries, one of the most promising alternatives to revolutionize both scale storage and electric vehicles.

QuantumScape (NYSE: QS)

Quantumscape is a leader in the development of solid-state lithium-metal batteries for electric vehicles. Its proprietary solid ceramic electrolyte significantly increases energy density compared to conventional lithium-ion batteries. QuantumScape’s published performance data shows that its single-layer cells could charge from 0 to 80% capacity in just 15 minutes, operate over a wide temperature range (-30oC to 60oC), and last over 800 battery cycles. charge while retaining more than 80% of their capacity. QuantumScape has a strategic partnership with Volkswagen Group, which has invested more than $300 million and plans to incorporate QuantumScape batteries in its electric vehicles.

Technically, Quantumscape stock has been trying to lay the groundwork for a bullish rebuild on horizontal support for a couple of years now. $4.65which is what I would use as a stop reference. We can trust in a context of bullish rearrangement as long as it does not lose that support, hence I see any fall that brings the price closer to that support as an unbeatable opportunity to incorporate this company into a disruptive portfolio with a 20-year orientation. If its technology succeeds, it is clear that we would be facing one of the best players in its sector. We will find clues that would point towards the success of the bullish reconstruction process if it overcomes the resistance of the 10 and then 13.80 dollarssomething that would invite an increase in positions in the value.

Solid Power (NASDAQ: SLDP)

Solid Power specializes in fully solid state rechargeable batteries for electric vehicles and other applications. The company’s batteries use solid sulfur-based electrolytes for higher energy density and improved safety. Solid Power has alliances with major automakers, including Ford Motor Company and BMW, which have invested in the company and signed joint development agreements. Solid Power aims for commercial production by 2026.

In the case of Solid Power, everything indicates that the downward trend that the title has been developing since the 15 dollars has possibly found a bottom at the psychological support of $1. From there the title formed a powerful rebound to the $2.70which during the last two weeks has been retraced by 61.80%, after reaching the 1.65 dollars. Among the 1.65 and in the worst case the $1.37I believe that Solid Power should try to form another upward momentum. Operationally, keeping in mind that the stop or level whose transfer would make no sense in a context of increases that we seek in coming years, is at 1 dollar, I would be in favor of placing purchase orders in the $1.37not before.

Toyota Motor (NYSE: TM)

Toyota Motora global automotive leader, has been investing in solid-state battery research for more than a decade. The company holds more than 1,000 patents related to solid-state batteries, making it one of the largest intellectual property holders in the field. In 2020, Toyota unveiled a work vehicle prototype equipped with a solid-state battery, an important step toward commercial viability. Toyota aims to begin mass producing solid-state batteries by 2027-2028, leveraging its extensive manufacturing and global supply chain experience.

Toyota shares have developed an impeccable and formidable upward trend over the last few years. That is why if the price were to seek support in the area of 160 dollarswhich is the base of the channel that has been guiding the rise during the last three decades, I would see it as a clear purchase option. There they can place their purchase orders to incorporate this value into their children’s disruptive portfolio.

Ilika plc (LON: IKA)

Based in the United Kingdom, Ilika focuses on the development of solid-state batteries using advanced materials technology. Stereax technology produces miniature solid-state batteries with high energy density and long life spans, suitable for medical implants, industrial sensors and IoT devices. Beyond small-scale batteries, Ilika is also advancing its Goliath program to develop large-format solid-state batteries for electronic vehicles and grid storage. Ilika has collaborated with industry partners and received funding from government agencies to accelerate development.

As a technician, I am clear that there are many possibilities that the decline that has developed in recent years will lead the title to seek support again at the historical lows of 2018 in the area of 11 pounds. If that happens we would be faced with a magnificent opportunity to buy this value for the disruptive portfolio, not before.

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