QuantumScape reported strong technical and business progress during the quarter.
Key Takeaways
QuantumScape made significant strides in Q1 2021, meeting a key milestone with Volkswagen that resulted in a $100M investment. The company also reported progress on multilayer cells and cells with zero externally applied pressure. They are expanding the QS-0 pre-pilot line and expect to enter 2022 with over $1.3B in liquidity.
Met a contractually committed milestone with Volkswagen, resulting in a $100M investment.
Made four-layer cells in the larger form factor with promising initial testing data.
Achieved over 1,000 cycles with good capacity retention in coin-sized cells with zero externally applied pressure.
Decided to double the initial planned capacity of QS-0 to over 200,000 cells annually.
QuantumScape anticipates increased spending in 2021 to continue momentum, with cash spend on operations and capex expected to be between $260M and $320M for the full year. They expect to enter 2022 with greater than $1.3B in liquidity.
Positive Outlook
Deliver prototype samples in commercially relevant form factors to auto OEMs from our engineering line in 2022
Provide cells for R&D test cars from QS-0 in 2023
Enter commercial production in the 2024-2025 timeframe
Completing the development and testing of the four-layer commercially relevant area cells
Building 8-10-layer full-sized battery cells that meet our test criteria
Challenges Ahead
The Company faces significant barriers in its attempts to produce a solid-state battery cell and may not be able to successfully develop its solid-state battery cell.
Building high volumes of multi-layer cells in the commercial form factor and with higher layer count requires substantial development effort.
Historical Earnings Impact
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The Company could encounter significant delays and/or technical challenges in replicating the performance seen in its single-layer cells and early tests of the smaller form factor four-layer cells and in achieving the high yield, reliability, uniformity and performance targets required for commercial production and sale.
The Company may encounter delays and other obstacles in acquiring, installing and operating new manufacturing equipment for automated and/or continuous-flow processes, including vendor delays (which we have already experienced) and challenges optimizing complex manufacturing processes.
The Company may encounter delays in hiring the engineers it needs to expand its development and production efforts, delays in acquiring the facility for QS-0, and delays caused by the COVID-19 pandemic.