Solid Power, Inc.

Previous wording

The following Management’s Discussion and Analysis of Financial Condition and Results of Operations should be read in conjunction with the consolidated financial statements and related notes thereto included elsewhere in this Report. The following discussion contains forward-looking statements that reflect future plans, estimates, beliefs, and expected performance. For additional discussion, see “Cautionary Note Regarding Forward-Looking Statements” above. The forward-looking statements are dependent upon events, risks, and uncertainties that may be outside of our control. Our actual results could differ materially from those discussed in these forward-looking statements. Factors that could cause or contribute to such differences include, but are not limited to, those identified below and those discussed elsewhere in this Report, under “Part I, Item 1A. Risk Factors” of the 2025 Form 10-K,as such descriptions may be updated or amended in future filings we make with the SEC. Unless indicated otherwise, the following discussion and analysis of results of operations and financial condition and liquidity relates to our current continuing operations and should be read in conjunction with the consolidated financial statements and notes thereto of this Report and the 2025 Form 10-K. We do not undertake, and expressly disclaim, any obligation to publicly update any forward-looking statements, whether as a result of new information, new developments, or otherwise, except to the extent that such disclosure is required by applicable law.

Current wording

The following Management’s Discussion and Analysis of Financial Condition and Results of Operations should be read in conjunction with the condensed consolidated financial statements and related notes thereto included elsewhere in this Report. The following discussion contains forward-looking statements that reflect future plans, estimates, beliefs, and expected performance. For additional discussion, see “Cautionary Note Regarding Forward-Looking Statements” above. The forward-looking statements are dependent upon events, risks, and uncertainties that may be outside of our control. Our actual results could differ materially from those discussed in these forward-looking statements. Factors that could cause or contribute to such differences include, but are not limited to, those identified below and those discussed elsewhere in this Report, and in “Part I, Item 1A. Risk Factors” of the 2025 Form 10-K,as such descriptions may be updated or amended in future filings we make with the SEC. Unless indicated otherwise, the following discussion and analysis of results of operations and financial condition and liquidity relates to our current continuing operations and should be read in conjunction with the consolidated financial statements and notes thereto of this Report and the 2025 Form 10-K. We do not undertake, and expressly disclaim, any obligation to publicly update any forward-looking statements, whether as a result of new information, new developments, or otherwise, except to the extent that such disclosure is required by applicable law.

Previous wording

Solid Power is a U.S.-based leader in solid-state battery technology and manufacturing processes. Our core technology is a sulfide-based solid electrolyte material, which replaces the liquid or gel electrolyte used in traditional lithium-ion battery cells. We believe our electrolyte technology has the potential to enable a step-change improvement in battery cell performance beyond what is currently achievable in conventional lithium-ion battery cells, including improved energy density, battery life, and safety performance. We are currently targeting the battery electric vehicle market due to the size and perceived demand for next generation battery technology but believe our technologies can have a broader application as they mature.

Current wording

Solid Power is a U.S.-based leader in solid-state battery technology and manufacturing processes. Our core technology is a sulfide-based solid electrolyte material, which replaces the liquid or gel electrolyte used in traditional lithium-ion battery cells. We believe our electrolyte technology has the potential to enable a step-change improvement in battery cell performance beyond what is currently achievable in conventional lithium-ion battery cells, including improved energy density, battery life, and safety performance. We are currently targeting the battery electric vehicle market due to the size and perceived demand for next generation battery technology but believe our technologies can have a broader application as the market matures.

Previous wording

Comparison of the Three Months Ended March 31, 2026 to the Three Months Ended March 31, 2025

Current wording

Comparison of the Three and Six Months Ended June 30, 2026 to the Three and Six Months Ended June 30, 2025

Previous wording

During the three months ended March 31, 2026, our capital and operational investments supported our key 2026 development objectives.

Current wording

During the three and six months ended June 30, 2026, our capital and operational investments supported our key 2026 development objectives.

Previous wording

We recognized $2.1 million of collaborative revenue for the three months ended March 31, 2026. The collaborative revenue mostly consisted of performance on ourresearch and development technology license agreement (the “SK On R&D license”), line installation agreement, and electrolyte supply agreement with SK On (collectively, the“SK On Agreements”). During the three months ended March 31, 2026, we approached completion of site acceptance testing of the SK On line under the line installation agreement, which we completed in April 2026.

Current wording

We recognized $(1.0) million and $1.1 million of revenue for the three and six months ended June 30, 2026, respectively. The revenue mostly consisted of performance onthe SK On R&D license, line installation agreement, and electrolyte supply agreement with SK On (collectively, the“SK On Agreements”). During the second quarter of 2026, we completed the line installation agreement and received the associated final milestone payment. We recorded a $1.2 million reversal of previously recognized revenue through a cumulative catch-up adjustment. The adjustment was driven by a change in assumptions connected to our constraint on variable consideration within certain milestone payments under the SK On R&D license agreement.

Previous wording

We recognized $1.0 million of government grant income for the three months ended March 31, 2026. Government grant income consists of grant income from the Assistance Agreement. The Assistance Agreement provides that the DOE will provide us with funding of up to $50 million for our installation of equipment necessary for the continuous production of sulfide-based solid electrolyte material. During the three months ended March 31, 2026, we began construction of the continuous electrolyte production pilot line.

Current wording

We recognized $0.7 million and $1.7 million of government grant income for the three and six months ended June 30, 2026. Government grant income consists of grant income from the Assistance Agreement. The Assistance Agreement provides that the DOE will provide us with funding of up to $50 million for our installation of equipment necessary for the continuous production of sulfide-based solid electrolyte material. During the three and six months ended June 30, 2026, we continued construction of the continuous electrolyte production pilot line.

Previous wording

Total revenue and grant income decreased $2.9 million for three months ended March 31, 2026 compared to the three months ended March 31, 2025 largely due to the timing and nature of milestone-based work under the SK On Agreements. For the remainder of 2026, we expect revenue recognition to continue to decrease relative to prior periods as we conduct validation activities under the SK On R&D license, construct the continuous electrolyte production pilot line, and provide electrolyte to our partners and customers.

Current wording

Total revenue and grant income decreased $7.8 million and $10.8 million for the three and six months ended June 30, 2026 compared to the three and six months ended June 30, 2025 largely due to the timing of performance milestones achieved under our customer arrangements in the prior year and, to a lesser extent, the $1.2 million cumulative catch-up adjustment. For the remainder of 2026, we expect revenue recognition to continue to decrease relative to prior year periods as we focus on our construction of the continuous electrolyte production pilot line, and provide electrolyte to our partners and customers.

Previous wording

Operating expenses decreased $0.6 million in the three months ended March 31, 2026 compared to the three months ended March 31, 2025 primarily due to the reduction in materials purchased related to research and development.

Current wording

Operating expenses decreased $3.4 million and $4.0 million in the three and six months ended June 30, 2026 compared to the three and six months ended June 30, 2025 primarily due to the reduction in spend on the SK On Agreements as the milestone achievements were larger in the prior year.

Previous wording

Direct costs, which include labor, subcontractor, and material costs incurred in support of revenue-generating projects, increased $0.9 million for the three months ended March 31, 2026 compared to the same period in 2025. The increase was mainly driven by the timing of milestone achievements under our collaborative agreements. In addition, the increase was due to increased costs associated with electrolyte product mix.

Current wording

Direct costs, which include labor, subcontractor, and material costs incurred in support of revenue-generating projects, decreased $6.3 million and $5.5 million for the three and six months ended June 30, 2026 compared to the same periods in 2025. The decrease was mainly driven by the timing of milestone achievements under our collaborative agreements.

Previous wording

Selling, general and administrative expenses are largely comprised of employee compensation and personnel-related costs for our administrative functions as well as costs driven by insurance and regulatory requirements. Selling, general and administrative expenses did not change materially for the three ended March 31, 2026 compared to the same period in 2025.

Current wording

Selling, general and administrative expenses are largely comprised of employee compensation and personnel-related costs for our administrative functions as well as costs driven by insurance and regulatory requirements. Selling, general and administrative expenses increased $1.9 million and $1.7 million in the three and six months ended June 30, 2026 compared to the same periods in 2025. This increase was driven by higher tax and facilities-related costs and timing of spend on strategic consulting projects.

Previous wording

Nonoperating income and expense includes interest income, the non-cash impact from the change in the fair value of our warrant liabilities, and other immaterial income and expense items.

Current wording

Nonoperating income and expense includes interest income, the non-cash impact from the change in the fair value of our warrant liabilities, and other immaterial income and expense items. For the three and six months ended June 30, 2026, nonoperating income and expense increased $6.5 million and $11.0 million compared to the same periods in 2025 due to the change in fair value of warrant liabilities and the change in interest income earned.

Previous wording

For the three months ended March 31, 2026, nonoperating income and expense increased $4.5 million compared to the three months ended March 31, 2025 due to the change in fair value of warrant liabilities. The change in the fair value of warrant liabilities for the three months ended March 31, 2026 caused a $9.6 million gain compared to the three months ended March 31, 2025 where the change in the fair value caused a gain of $5.9 million. The impact of these changes caused a period-over-period loss in the fair value of warrant liabilities of $3.8 million.

Current wording

The change in the fair value of warrant liabilities for the three months ended June 30, 2026 caused a $2.3 million gain compared to the three months ended June 30, 2025 where the change in the fair value caused a loss of $3.2 million. The change in the fair value of warrant liabilities for the six months ended June 30, 2026 caused a $11.9 million gain compared to the six months ended June 30, 2025 where the change in the fair value caused a gain of $2.7 million.

Previous wording

As of March 31, 2026, total liquidity, which includes all cash and cash equivalents as well as our available-for-sale securities, was $435.3 million, an increase of $98.8 million compared to December 31, 2025. As of March 31, 2026, contract assets and contract receivables were $12.7 million and total current liabilities were $17.1 million.

Current wording

As of June 30, 2026, total liquidity, which includes all cash and cash equivalents as well as our available-for-sale securities, was $419.3 million, an increase of $82.9 million compared to December 31, 2025. As of June 30, 2026, contract assets and accounts receivables were $3.2 million, total current liabilities were $17.2 million, and we continued to have no debt.

Previous wording

Our short-term liquidity requirements include operating and capital expenses needed to further our research and development programs and to install our continuous electrolyte production pilot line. We anticipate that our most significant capital expenditures for the remainder of the year will relate to construction of our continuous electrolyte production pilot line as well as improvements to our cell development capabilities. We believe that our cash on hand is sufficient to meet our operating cash needs and working capital and capital expenditure requirements for a period of at least the next 12 months.

Current wording

Our short-term liquidity requirements include operating and capital expenses needed to further our research and development programs and to install our continuous electrolyte production pilot line. We anticipate that our most significant capital expenditures for the remainder of the year will relate to construction of our continuous electrolyte production pilot line as well as improvements to our cell development capabilities. We believe that our cash, cash equivalents, and available-for-sale securities are sufficient to meet our operating cash needs and working capital and capital expenditure requirements for a period of at least the next 12 months.

Previous wording

Longer term, we may require additional liquidity prior to being able to generate adequate cash flows from electrolyte sales and/or licensing activities. We also may require funding if there are material changes to our business conditions or other developments, including changes to our operating plan; development progress or delays; negotiations with OEMs, cell manufacturers, or other customers; market adoption of EVs; supply chain challenges; competitive pressures; government regulations, including tariffs; and inflation. To the extent that our resources, including our ability to use the ATM to generate additional proceeds, are insufficient to satisfy our cash requirements, we may need to seek equity or debt financing. We also may opportunistically seek to enhance our liquidity through equity or debt financing, if such financing becomes available to us on terms that we consider favorable. If financing is not available, or if the terms of financing are less desirable than we expect, we may be forced to take actions to reduce our capital or operating expenditures, which may adversely affect our development, business, operating results, financial condition and prospects.

Current wording

Longer term, we may require additional liquidity prior to being able to generate adequate cash flows from electrolyte sales and/or licensing activities. We also may require funding if there are material changes to our business conditions or other developments, including changes to our operating plan; development progress or delays; negotiations with OEMs, cell manufacturers, or other customers; market adoption of EVs or other markets; supply chain challenges; competitive pressures; government regulations, including tariffs; and inflation. To the extent that our resources, including our ability to use the ATM to generate additional proceeds, are insufficient to satisfy our cash requirements, we may need to seek equity or debt financing. We also may opportunistically seek to enhance our liquidity through equity or debt financing, if such financing becomes available to us on terms that we consider favorable. If financing is not available, or if the terms of financing are less desirable than we expect, we may be forced to take actions to reduce our capital or operating expenditures, which may adversely affect our development, business, operating results, financial condition and prospects.

Previous wording

During the three months ended March 31, 2026, we did not sell any shares of common stock under the Distribution Agreement. As of March 31, 2026, approximately $58.8 million remained available for future sales under the Distribution Agreement.

Current wording

During the three and six months ended June 30, 2026, we did not sell any shares of common stock under the Distribution Agreement. As of June 30, 2026, approximately $58.8 million remained available for future sales under the Distribution Agreement.

Previous wording

On January 23, 2024, we announced that our Board approved a stock repurchase program authorizing us to purchase up to $50 million of our outstanding common stock. During the three months ended March 31, 2025, we did not repurchase any shares of common stock under the program. The stock repurchase program expired on December 31, 2025.

Current wording

On January 23, 2024, we announced that our Board approved a stock repurchase program authorizing us to purchase up to $50 million of our outstanding common stock. During the six months ended June 30, 2025, we repurchased 3,361,396 shares of common stock at an average price of $1.05 per share for an aggregate cost of approximately $3.53 million. The stock repurchase program expired on December 31, 2025.

Previous wording

Cash used in operating activities for the three months ended March 31, 2026 decreased by $7.5 million compared to the three months ended March 31, 2025. This decrease was driven by the timing of annual contract payments, which shifted from a beginning-of-year payment schedule to an end-of-year payment schedule.

Current wording

Cash used in operating activities for the six months ended June 30, 2026 decreased by $13.6 million compared to the six months ended June 30, 2025. This decrease was driven by the timing of our payments under annual contracts, which shifted from a beginning-of-year payment schedule to an end-of-year payment schedule, and higher collections from our partners, which increased by $4.5 million during the six months ended June 30, 2026 compared to the same period in the prior year.

Previous wording

The decrease was also attributable to cash used for employee compensation and related benefit costs, including the payment of annual performance-based incentive compensation. Cash used for employee compensation decreased by $1.6 million during the three months ended March 31, 2026 compared to the same period in the prior year.

Current wording

The decrease was also attributable to cash used for employee compensation and related benefit costs, including the payment of annual performance-based incentive compensation. Cash used for employee compensation decreased by $1.7 million during the six months ended June 30, 2026 compared to the same period in the prior year.

Previous wording

Other cash used in operating activities during the three months ended March 31, 2026 related to facility operating costs, purchases of materials from suppliers, and hazardous waste removal. We expect cash used in operating activities for the remainder of the year to remain consistent on a quarterly basis as we continue to explore a production partnership in the Republic of Korea and focus on driving electrolyte product competitiveness.

Current wording

Other cash used in operating activities during the six months ended June 30, 2026 related to facility operating costs, purchases of materials from suppliers, and hazardous waste removal. We expect cash used in operating activities for the remainder of the year to remain consistent on a quarterly basis as we continue to achieve our development objectives and focus on driving electrolyte product competitiveness.

Previous wording

Cash used in investing activities increased by $122.8 million in the three months ended March 31, 2026 compared to the three months ended March 31, 2025 due changes in our proceeds from and purchases of available-for-sale securities and changes in capital expenditures.

Current wording

Cash used in investing activities increased by $134.7 million in the six months ended June 30, 2026 compared to the six months ended June 30, 2025 due to changes in our proceeds from and purchases of available-for-sale securities and changes in capital expenditures.

Previous wording

Purchases of available-for-sale security activity increased $143.4 million in the three months ending March 31, 2026 compared to the same period in prior year. This change was driven by deployment of $121.3 million of proceeds, net of fees and expenses, from the registered direct offering into our investment portfolio.

Current wording

Purchases of available-for-sale security activity increased $143.8 million in the six months ending June 30, 2026 compared to the same period in prior year. This change was driven by deployment of $121.3 million of proceeds, net of fees and expenses, from the registered direct offering into our investment portfolio.

Previous wording

Cash used for capital expenditures and intangibles decreased $1.2 million in the three months ended March 31, 2026 compared to the three months ended March 31, 2025 due to timing of milestone payments on our capital projects. We anticipate cash used in investing for capital expenditures for the remainder of the year to increase as we continue to construct the continuous electrolyte production pilot line.

Current wording

Cash used for capital expenditures and intangibles increased $2.2 million in the six months ended June 30, 2026 compared to the six months ended June 30, 2025 due to timing of milestone payments on our capital projects. We anticipate cash used in investing for capital expenditures for the remainder of the year to increase as we continue to construct the continuous electrolyte production pilot line.

Previous wording

Cash provided by financing activities increased $121.1 million in the three months ended March 31, 2026 compared to the three months ended March 31, 2025. The increase was due the proceeds of $121.3 million, net of fees and expenses, from the registered direct offering.

Current wording

Cash provided by financing activities increased $123.0 million in the six months ended June 30, 2026 compared to the six months ended June 30, 2025. The increase was due to the proceeds of $121.3 million, net of fees and expenses, from the registered direct offering.

Previous wording

Except as set forth below, there have been no significant and material changes in our critical accounting policies and use of estimates during the three months ended March 31, 2026 as compared to those disclosed in “Part II, Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations—Critical Accounting Estimates” in the 2025 Form 10-K.

Current wording

Except as set forth below, there have been no significant and material changes in our critical accounting policies and use of estimates during the six months ended June 30, 2026 as compared to those disclosed in “Part II, Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations—Critical Accounting Estimates” in the 2025 Form 10-K.