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Battery startups recharge the SPAC market

Illustration of a battery with a dollar bill wrapped around it.

Illustration: Aïda Amer/Axios

The past month has seen three SPAC mergers by battery storage startups: Amprius, Gogoro and, this morning, Dragonfly Energy.

Why it matters: While investor interest in SPACs has cooled, they remain hot in at least one sector.

Driving the news: Dragonfly Energy, which is producing "deep cycle" lithium-ion batteries, announced a SPAC agreement with Chardan NexTech Acquisition 2 (Nasdaq: CNTQ).

Yes, but: The valuations, at least for Dragonfly and Amprius, are relatively modest.

What they're saying: "The question becomes, as much as batteries are important and critical, how many battery companies can the ecosystem support?" Girish Nadkarni, the recently retired head of TotalEnergies Ventures, tells Axios.

  • "When Atlanta was booming, every hotel company went there. So there were 25-30 hotels built there, each predicting 15%-20% market share. Mathematically, that doesn't work, so you knew one or more of those hotels wouldn't survive," Nadkarni continues.

The bottom line: Between EVs and the firming up of renewables, we know the demand for batteries won't be subsiding anytime soon.

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