QuantumScape cleared a technical hurdle recently. It means $100 million for the company.
Ronny Hartmann / AFP via Getty Images
Electric-vehicle battery pioneer QuantumScape cleared a technical hurdle recently. That’s good news for investors. It also means $100 million for the company.
Volkswagen (ticker: VWAGY) successfully tested the latest generation of QuantumScape (QS) batteries in its own labs, one of the criteria for QuantumScape to earn a $200 million investment from the German auto maker. The coming $100 million is the second half of the total.
QuantumScape stock is up 16.3% to $52.05 in Thursday morning trading. The S&P 500 and Dow Jones Industrial Average, for comparison, are both up less than 1%.
QuantumScape finished 2020 with about $1 billion in cash on the balance sheet. The company also sold more stock, recently raising roughly $400 million to help take the company all the way to commercialization. The $100 million is nice to have at this point, but the technical success is a bigger deal.
The company is pioneering solid-state lithium anode rechargeable EV batteries that potentially have lower costs, better safety, more range, and faster charging times. It sounds like a panacea, but no one has been able to commercialize solid-state batteries for car applications yet.
“Achievement of this milestone is an important step for QuantumScape and we look forward to receiving and testing subsequent generations of cells, with the goal of getting solid-state technology into series production.” said Frank Blome, head of the Volkswagen Group’s Center of Excellence Battery Cell, in QuantumScape’s news release.
Volkswagen was an early investor in QuantumScape. Volkswagen owns about 26% of the class A common stock and 12% of class B common stock outstanding, as of year-end 2020.
QuantumScape CEO Jagdeep Singh added in the release: “We are delighted to have met this technical milestone with Volkswagen, and we look forward to working jointly to bring solid-state lithium-metal battery technology into industrialized mass-production.”
Production is a long way off. QuantumScape doesn’t plan to have significant sales until 2026. That’s how long commercialization of the potentially revolutionary tech will take.
It’s a long wait for investors, and contributes to stock volatility. And shares have been on a wild ride. Since December, shares have traded from roughly $30 to $130. QuantumScape stock dropped roughly 25% this past week after announcing the capital raise.
Write to Al Root at [email protected]
