Cavendish has highlighted a new joint development agreement between Ilika PLC (AIM:IKA, OTCQX:ILIKF, FRA:I8A), the solid-state battery developer, and Brompton Bicycles as a potential gateway to commercial licensing opportunities.
The broker reiterated its 'buy' rating and 130p price target on shares currently trading at 27p (up 4% on the day).
The 12-month programme, named SELECT and supported by the government-backed Battery Innovation Programme, aims to integrate Ilika's 10Ah Goliath solid-state battery cell prototypes into battery packs for Brompton's next generation of foldable electric bikes.
Solid-state batteries replace the liquid electrolyte found in conventional lithium-ion cells with a solid material, offering higher energy density and improved safety characteristics.
The programme is due to begin on 1 July 2026, with battery pack production and on-bike trials both expected to complete by mid-2027, subject to the achievement of specified technical milestones.
Cavendish said successful trials could open new commercial markets and licensing opportunities for Ilika, noting that the Goliath cells could help Brompton produce lighter and safer battery packs.
The broker pointed to growing regulatory and commercial pressure around e-bike battery safety as a tailwind for the technology, citing Press Association data showing at least 432 e-bike fires were recorded in the UK in 2025.
Cavendish also noted that demonstrating superior battery safety could prove critical for e-bike manufacturers seeking access to the Chinese market, where strict battery regulations currently present a barrier to UK and European producers.