Most investors never think about the chips that control the flow of electricity. For Ideal Power Inc (NASDAQ:IPWR), they are the entire story.
The Austin, Texas, company says its proprietary B-TRAN switch can do the work of several conventional devices at once, saving space, lowering costs and improving efficiency in applications from car batteries to data centers.
At the HC Wainwright conference on Monday, chief financial officer Tim Burns confirmed a new order from Stellantis for custom devices aimed at multiple electric vehicle uses.
That extends a multi-year development program that has already reached the design stage for Stellantis’ next-generation drivetrain.
B-TRAN is designed to conduct electricity in both directions. The company highlights three advantages from that: lower energy losses, fewer components and smaller product designs. For automakers, the gains show up in higher efficiency and more miles per charge. Ideal Power estimates its devices could improve vehicle range by 7% to 10% compared with current systems.
The business model is intentionally light. Ideal Power does not own chip fabrication plants, relying instead on existing silicon processing infrastructure. At scale, management expects gross margins of around 50%, before any licensing revenue.
The potential market is wide. Beyond electric vehicles, B-TRAN devices can be used in solid-state circuit breakers, renewable energy systems, storage, motor drives and data centers.
Market researcher Mordor Intelligence estimates the addressable market at $7.6 billion by 2028, up from $3.6 billion in 2023. Ideal Power has already secured its first design win for solid-state breakers, with initial sales expected next year.
Customer validation is starting to matter more. The company has converted several large firms to initial orders and is now working with five global automakers and five Tier 1 automotive suppliers.
Management’s goals for 2025 are clear. They include completing the next phase with Stellantis, capturing more design wins, beginning a sales ramp in the second half of the year, increasing product power ratings and finishing third-party automotive qualification testing.
A portfolio of 96 issued and 74 pending patents provides some protection. The bigger challenge is execution: moving from prototypes and small orders to meaningful volumes.
CFO Burns pointed to Stellantis and other collaborations as signs of progress. Investors will now want to see whether the milestones set for next year can turn technical promise into commercial scale.