Shares of battery technology start-up QuantumScape are jumping because more car makers are interested its revolutionary lithium-ion battery technology.
QuantumScape stock (ticker: QS) surged about 10% in early trading. The S&P 500 and Dow Jones Industrial Average were up 0.4% and 0.9%, respectively.
New business has investors excited. The company said Tuesday it signed an agreement to work with another “top 10 by global revenues” auto maker. Volkswagen (VOW.Germany) is one auto maker Quantum already works with. Volkswagen also owns a sizable stake in QuantumScape, of about 20%. The second auto maker wasn’t identified by name, and QuantumScape wasn’t immediately available to comment.
The new auto maker will evaluate Quantum’s lithium anode, solid-state EV batteries. Solid state refers to the fact that QuantumScape’s technology has no liquid electrolyte transporting electric charge in a battery cell. Solid-state batteries promise better safety, range, cost, and charge times for the EV industry. They are a panacea, but no one has made an automotive-grade, solid-state battery yet.
Quantum is trying and plans to be shipping automotive-grade batteries for testing and integration into an actual vehicle by 2025.
Between now and then, QuantumScape stock will likely trade on news like Tuesday’s. It will also rise and fall on the company’s ability to hit development milestones, such as successfully building bigger batteries that can one day form the basis for an EV battery pack.
A few other publicly traded companies are working on better EV batteries, too. Decarbonization Plus Acquisition III (DCRC) is a special purpose acquisition company merging with Solid Power. That company is valued at about $1.9 billion. And Ivanhoe Capital Acquisition (IVAN) is a SPAC merging with battery company SES; that company is valued at about $3.3 billion.
The market is excited about solid-state batteries, but it’s hard to value stocks with no sales. QuantumScape is worth about $10 billion, making it valuable for global automotive suppliers, and more valuable than its battery peers. Still, the stock is down more than 80% from the 52-week high of $132.73, hit in December.
Year to date, QuantumScape shares are down more than 70% and have fallen about 13% over the past three months. The stock has bounced back, however, rising about 16% over the past month.
Write to Al Root at [email protected]
