Ilika PLC's (AIM:IKA, OTCQX:ILIKF) Goliath solid-state electric car battery technology is “maturing to the point where it can support meaningful investment into exploring scale-up opportunities”, said broker Berenberg.
The house broker reiterated its 250p share price target and its ‘buy’ rating, saying it continues to view the risk-reward profile of the business as “compelling”.
This followed an update from the company revealing it was carrying out a follow-up study looking at creating a dedicated 100MWh per year production line at the UK Battery Industrialisation Centre (UKBIC) in Coventry.
The UKBIC study is mainly desktop work, Berenberg said, but will be underpinned by scale-up runs on equipment to demonstrate that the process can be applied.
It will also cover expected requirements for capital and operational expenditure, staffing, layout plans, project planning and risk management.
The broker said it understands that Ilika will only commit to building a line “when there are enough orders to justify the investment”.
Berenberg suggested that “some level of co-investment” from an original equipment manufacturer (OEM) would be a “reasonable expectation” at that point, with Ilika seen as likely to pursue any additional scale-up via licensing and partnership agreements with OEMs and/or larger cell manufacturers.