QuantumScape Today QS QuantumScape $6.00 -0.10 (-1.64%) 52-Week Range $4.67 ▼ $10.03 Price Target $6.62 Add to Watchlist After 13 years, QuantumScape Co. NYSE: QS is getting closer to the launch of its first commercial solid-state lithium-metal (SSLM) battery. Its announcement of the extended production agreement with Volkswagen AG (OTCMKTS: VWAGY) subsidiary PowerCo sent shares rocketing over 40% up to $9.52 on July 17, 2024. Shares have since pulled back down to complete the gap-fill at $5.45, and it's ge ...

It's made amazing progress. But it's still not making batteries to sell. In this video, Motley Fool contributors Jason Hall and Tyler Crowe discuss the latest with QuantumScape (QS -1.89%), its partnership with Volkswagen (VWAGY 1.18%), and what investors need to know right now. *Stock prices used were from the afternoon of Aug. 14, 2024. The video was published on Aug. 16, 2024. ...

Core Viewpoint - QuantumScape is advancing its solid-state battery technology, which is crucial for the future of electric vehicles (EVs), but it remains in the pre-revenue stage and faces significant competition and challenges ahead [2][10]. Group 1: Company Overview - QuantumScape is focused on developing next-generation solid-state lithium batteries for EVs, aiming to improve energy density, charging speed, and safety [5]. - The company went public in November 2020, initially seeing its stock price soar to $132 per share due to investor enthusiasm for EV technology [4]. - QuantumScape has a significant partnership with Volkswagen, which has invested nearly $300 million and formed a joint venture to help scale production [7]. Group 2: Technological Developments - The company is working to address the limited driving range of current EVs, targeting a minimum of 300 miles per charge to compete with traditional vehicles [5]. - QuantumScape's solid-state battery recently passed an endurance test, completing over 1,000 charging cycles and demonstrating the potential for over 500,000 kilometers of driving without significant range loss [7]. Group 3: Financial Position - QuantumScape is currently pre-revenue, with a net loss of $468 million over the past 12 months, indicating ongoing financial challenges as it develops its technology [7]. - A recent agreement with Volkswagen's PowerCo allows for the mass production of QuantumScape's batteries, with a capacity of up to 40 gigawatt hours per year, potentially powering one million vehicles annually [8]. - The deal includes a $130 million prepayment of royalties, extending QuantumScape's cash runway by 18 months into 2028 [9]. Group 4: Market Position and Competition - QuantumScape faces competition from other battery developers, including major players like Toyota and Nio, which may impact its market position [10]. - The stock is characterized as high-risk and high-reward, suitable for investors with a high tolerance for risk and a long investment horizon [10].

Core Insights - QuantumScape is addressing key challenges hindering electric vehicle (EV) sales growth, including range anxiety, charging times, and battery safety [1][3] - The potential market for QuantumScape's solid-state battery technology is significant, as it could alleviate concerns among potential EV buyers [2][3] - The company is on a transitional path in 2024, with plans to introduce its first commercial product and scale up manufacturing processes [4] Company Developments - QuantumScape's solid-state lithium-metal battery technology offers advantages over conventional lithium-ion batteries, such as nonflammable electrolytes, fast charging in approximately 15 minutes, improved battery cycle life, and lower manufacturing costs [4] - The company has a two-stage plan for mass production, currently ramping up the "Raptor" process for low-volume prototypes and preparing for the "Cobra" stage in 2025 [4][8] - A recent partnership with PowerCo, Volkswagen's battery division, is expected to support QuantumScape's EV technology growth and extend its cash balance into 2028 [6][7] Financial Outlook - The capital-light approach from the new agreement with PowerCo is projected to extend QuantumScape's cash runway by about 18 months compared to previous estimates [7] - The partnership sets a framework for mass production that can be utilized with other customers, as the licensing is non-exclusive [7] - Despite the advantages of the new agreement, the company remains speculative, with significant risks associated with achieving production at scale [10]

Core Viewpoint - QuantumScape is positioned as a potential game-changer in the electric vehicle (EV) battery industry with its solid-state battery technology, which could lead to significant long-term returns for investors if successful [2][4]. Company Overview - QuantumScape is currently pre-revenue and faces numerous challenges, including the need to scale and commercialize its technology before running out of capital [5][14]. - The company has recently secured a deal with Volkswagen's PowerCo, which provides a clear path to commercial production and extends its cash runway into 2028, adding 18 months of funding [6][8]. Technology and Innovation - QuantumScape's solid-state battery technology aims to solve critical issues in the EV market, such as improving charging times, extending vehicle range, reducing costs, and enhancing safety [4]. - The company plans to begin production of its first commercialized product, the QSE-5, in 2024, with expectations of generating revenue starting in 2025 [9][10]. Market Context - The EV industry is currently facing challenges, including higher prices and interest rates, which have led to a pessimistic outlook among investors [11]. - Despite these challenges, demand for EVs has surged by 930% since 2019, driven by increased product choice, better charging access, and advancements in battery technology [12]. Financial Projections - Analysts predict that QuantumScape's revenue will be approximately $5 million in 2025, increasing to $58 million in 2026, although this is still below PowerCo's $130 million royalty advancement [10][13]. - The company is in a critical phase that will determine its future, with the next few years being pivotal for its success [9][14].

Core Viewpoint - QuantumScape Corporation (NYSE:QS) is rated as a buy due to its potential upside if it successfully delivers its solid-state battery products, with recent progress in R&D, manufacturing, and a positive licensing deal with PowerCo strengthening its financial position [4][18]. Business Description - QuantumScape designs and manufactures solid-state lithium-ion batteries for electric vehicles, offering advantages such as enhanced safety, faster charging, and higher energy density compared to traditional batteries [5]. - As of Q2 2024, QuantumScape is not generating revenue and reported an operating loss of $134 million and an EBITDA loss of $72.5 million, indicating it is still in the R&D phase and experiencing cash burn [5]. Positive on Licensing Deal - The licensing agreement with PowerCo includes a $130 million royalty pre-payment, which alleviates financial pressure and extends QuantumScape's cash runway significantly [6]. - This deal also transitions QuantumScape to a more asset-light operating model, potentially leading to higher free cash flow in the future [6]. R&D and Manufacturing Process on Track - QuantumScape's R&D and manufacturing processes are reportedly on track, with robust customer engagements and successful prototype shipments to various sectors [8]. - The prototype testing has shown promising thermal stability, with tests indicating stability up to 300 degrees Celsius, which is significantly higher than conventional lithium-ion cells [8]. Key Milestones and Financial Outlook - A critical milestone is the successful production of a B-sample by the end of 2024, which would indicate the viability of the Cobra manufacturing process [10]. - QuantumScape's balance sheet is projected to sustain operations until it begins generating meaningful revenue, with total cash and equivalents estimated at around $1.2 billion post-PowerCo deal [12]. Valuation - Forecasting revenue is challenging due to the lack of historical data, but management initially expected revenue generation in FY24 and positive EBITDA by FY27. Current projections suggest a delay, with high-volume production not expected until FY25 [14]. - Assuming QuantumScape achieves an EBITDA target of approximately $1.6 billion by 2030, the enterprise value could reach around $19.5 billion, translating to a target share price of approximately $39 [16].

[PART I. FINANCIAL INFORMATION](index=4&type=section&id=PART%20I.%20FINANCIAL%20INFORMATION) [Item 1. Financial Statements (Unaudited)](index=4&type=section&id=Item%201.%20Financial%20Statements%20(Unaudited)) QuantumScape, a development-stage company, reported a net loss of **$123.0 million** for Q2 2024, with total assets of **$1.40 billion** as of June 30, 2024 [Condensed Consolidated Balance Sheets](index=4&type=section&id=Condensed%20Consolidated%20Balance%20Sheets) As of June 30, 2024, total assets decreased to **$1.40 billion** from **$1.50 billion**, while total liabilities increased to **$214.7 million** from **$161.8 million** Condensed Consolidated Balance Sheet Highlights (in thousands) | Balance Sheet Item | June 30, 2024 | December 31, 2023 | | :--- | :--- | :--- | | **Assets** | | | | Cash and cash equivalents | $196,388 | $142,524 | | Marketable securities | $741,467 | $928,284 | | Total current assets | $973,469 | $1,083,517 | | Total assets | $1,396,783 | $1,501,978 | | **Liabilities & Equity** | | | | Accrued liabilities | $66,530 | $10,180 | | Total current liabilities | $112,401 | $57,095 | | Total liabilities | $214,702 | $161,801 | | Total stockholders' equity | $1,180,269 | $1,338,407 | [Condensed Consolidated Statements of Operations and Comprehensive Income (Loss)](index=5&type=section&id=Condensed%20Consolidated%20Statements%20of%20Operations%20and%20Comprehensive%20Income%20(Loss)) For Q2 2024, the net loss increased to **$123.0 million** from **$116.5 million** in Q2 2023, primarily due to higher research and development expenses Statement of Operations Highlights (in thousands, except per share data) | Metric | Three Months Ended June 30, 2024 | Three Months Ended June 30, 2023 | Six Months Ended June 30, 2024 | Six Months Ended June 30, 2023 | | :--- | :--- | :--- | :--- | :--- | | Research and development | $97,746 | $86,453 | $181,593 | $163,394 | | General and administrative | $36,711 | $37,089 | $84,765 | $70,126 | | Loss from operations | $(134,457) | $(123,542) | $(266,358) | $(233,520) | | Net loss | $(122,953) | $(116,507) | $(243,581) | $(221,138) | | Net loss per share (Basic & Diluted) | $(0.25) | $(0.26) | $(0.49) | $(0.50) | [Condensed Consolidated Statements of Cash Flows](index=7&type=section&id=Condensed%20Consolidated%20Statements%20of%20Cash%20Flows) Net cash used in operating activities for the first six months of 2024 was **$123.1 million**, while investing activities provided **$171.8 million** Cash Flow Summary (in thousands) | Cash Flow Activity | Six Months Ended June 30, 2024 | Six Months Ended June 30, 2023 | | :--- | :--- | :--- | | Net cash used in operating activities | $(123,096) | $(119,994) | | Net cash provided by investing activities | $171,810 | $110,448 | | Net cash provided by financing activities | $5,150 | $6,993 | | **Net increase (decrease) in cash** | **$53,864** | **$(2,553)** | | Cash at end of period | $214,436 | $250,363 | [Notes to Condensed Consolidated Financial Statements](index=8&type=section&id=Notes%20to%20Condensed%20Consolidated%20Financial%20Statements) The notes detail accounting policies, the company's pre-revenue status, a new Collaboration Agreement with PowerCo SE, and a **$24.5 million** litigation settlement charge - The company has not yet derived revenue from its principal business activities of developing and commercializing solid-state lithium-metal batteries[23](index=23&type=chunk) - In July 2024, the company terminated its joint venture (QSV) with Volkswagen and entered into a new Collaboration Agreement with PowerCo SE (a Volkswagen subsidiary) to industrialize its QSE-5 battery technology, also removing restrictions on **$134.0 million** of previously reserved funds[137](index=137&type=chunk)[138](index=138&type=chunk) - The company reached an agreement in principle to settle the Securities Class Action Litigation, recording a net charge of **$24.5 million** for the six months ended June 30, 2024, representing a gross settlement of **$47.5 million** offset by a **$23.4 million** insurance receivable[92](index=92&type=chunk) - For the six months ended June 30, 2024, the company recorded a credit in stock-based compensation expense of **$14.8 million** related to the EPA Program, primarily due to the reversal of **$16.9 million** in previously recognized expense for forfeited options[121](index=121&type=chunk) [Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations](index=33&type=section&id=Item%202.%20Management's%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Management discusses the company's pre-revenue status, focus on QSE-5 development, increased operating loss, and belief that **$937.9 million** in cash resources will fund operations into 2028 [Key Trends, Opportunities and Uncertainties](index=33&type=section&id=Key%20Trends%2C%20Opportunities%20and%20Uncertainties) The company's success depends on advancing QSE-5 development, scaling manufacturing, and commercialization, with a new Collaboration Agreement with PowerCo and sufficient cash to fund operations into 2028 - Current R&D focuses on improving energy density, cathode technology, quality, consistency, and throughput for its prototype cells, with the first targeted commercial product being the QSE-5[144](index=144&type=chunk)[145](index=145&type=chunk) - On July 5, 2024, the company entered into a Collaboration Agreement with PowerCo SE (Volkswagen) to industrialize its QSE-5 battery technology, superseding the previous joint venture[154](index=154&type=chunk) - Based on the current business plan, the company believes its cash resources will last into 2028, bolstered by **$288.2 million** net proceeds from an August 2023 public offering[157](index=157&type=chunk) [Results of Operations](index=38&type=section&id=Results%20of%20Operations) For the six months ended June 30, 2024, total operating expenses increased by **14%** to **$266.4 million**, driven by higher R&D and a **$24.5 million** litigation settlement accrual Comparison of Operating Results (in thousands) | | Six Months Ended June 30, 2024 | Six Months Ended June 30, 2023 | $ Change | % Change | | :--- | :--- | :--- | :--- | :--- | | Research and development | $181,593 | $163,394 | $18,199 | 11% | | General and administrative | $84,765 | $70,126 | $14,639 | 21% | | **Total operating expenses** | **$266,358** | **$233,520** | **$32,838** | **14%** | | Loss from operations | $(266,358) | $(233,520) | $(32,838) | 14% | | Net loss | $(243,581) | $(221,138) | $(22,443) | 10% | - The increase in G&A expenses for the six months ended June 30, 2024, was primarily due to a **$24.5 million** net litigation settlement accrual and an **$11.5 million** increase in other legal and professional fees, partially offset by a **$22.3 million** decrease in stock-based compensation expense[175](index=175&type=chunk) [Liquidity and Capital Resources](index=40&type=section&id=Liquidity%20and%20Capital%20Resources) As of June 30, 2024, the company had approximately **$937.9 million** in cash, cash equivalents, and marketable securities, believed sufficient to fund operations into 2028 - Principal sources of liquidity as of June 30, 2024, were cash, cash equivalents, and marketable securities totaling approximately **$937.9 million**[178](index=178&type=chunk) - The company believes its cash on hand is sufficient to meet working capital and capital expenditure requirements for at least twelve months and that its cash resources will last into 2028[182](index=182&type=chunk) Summary of Cash Flows (in thousands) | | For the Six Months Ended June 30, 2024 | For the Six Months Ended June 30, 2023 | | :--- | :--- | :--- | | Net cash used in operating activities | $(123,096) | $(119,994) | | Net cash provided by investing activities | $171,810 | $110,448 | | Net cash provided by financing activities | $5,150 | $6,993 | [Item 3. Quantitative and Qualitative Disclosures About Market Risk](index=44&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) The company states there have been no material changes to its market risk exposure during the three months ended June 30, 2024 - There have been no material changes to the Company's market risk during the three months ended June 30, 2024[198](index=198&type=chunk) [Item 4. Controls and Procedures](index=44&type=section&id=Item%204.%20Controls%20and%20Procedures) Management concluded that the company's disclosure controls and procedures were effective as of June 30, 2024, with no material changes to internal control over financial reporting - Based on an evaluation as of the end of the period, the Chief Executive Officer and Chief Financial Officer concluded that the company's disclosure controls and procedures were effective at the reasonable assurance level[200](index=200&type=chunk) - There were no material changes to the company's internal control over financial reporting during the three months ended June 30, 2024[201](index=201&type=chunk) [PART II. OTHER INFORMATION](index=45&type=section&id=PART%20II.%20OTHER%20INFORMATION) [Item 1. Legal Proceedings](index=45&type=section&id=Item%201.%20Legal%20Proceedings) This section directs readers to Note 7 of the condensed consolidated financial statements for information regarding the company's legal proceedings - Information regarding legal proceedings is available in Note 7, Commitments and Contingencies, to the condensed consolidated financial statements[204](index=204&type=chunk) [Item 1A. Risk Factors](index=45&type=section&id=Item%201A.%20Risk%20Factors) The company outlines significant risks across technology development, customer relationships, business operations, and financial aspects, including challenges in scaling production, dependency on PowerCo, and stock price volatility [Technology Development and Scale-Up Risks](index=48&type=section&id=Technology%20Development%20and%20Scale-Up%20Risks) The company faces substantial challenges in developing its solid-state battery and scaling production to high volumes while meeting performance, quality, cost, and safety targets - The company faces significant challenges in developing a solid-state battery cell and producing it at high volumes with acceptable performance, quality, consistency, reliability, and cost[207](index=207&type=chunk) - The company may not be able to establish supply relationships for necessary materials and equipment or may face higher than anticipated costs, which could delay product introduction[217](index=217&type=chunk) - The company relies on complex machinery that has not yet been qualified for large-scale manufacturing, posing risks of unexpected malfunctions, delays, and additional costs[226](index=226&type=chunk) [Customer and Volkswagen Relationship Risks](index=53&type=section&id=Customer%20and%20Volkswagen%20Relationship%20Risks) The critical relationship with Volkswagen's PowerCo carries risks, including no guarantee of meeting IP License Agreement milestones, potential deterrence of other OEMs, and dependency on broader EV adoption - The collaboration with PowerCo (Volkswagen) is subject to risks, and there are no assurances that the company will meet the milestones required to enter into the planned IP License Agreement[235](index=235&type=chunk)[237](index=237&type=chunk) - The strong relationship with Volkswagen may deter other automotive OEMs from working with the company, and over-dependence on this single partner could harm the business[238](index=238&type=chunk) [Business and Operational Risks](index=57&type=section&id=Business%20and%20Operational%20Risks) The company operates in a highly competitive and evolving battery market, has a history of financial losses, and faces risks related to cybersecurity, litigation, and global disruptions - The battery market is highly competitive, and the company may not be successful in competing against established lithium-ion manufacturers and other companies developing solid-state batteries[254](index=254&type=chunk) - The company is an early-stage entity with a history of financial losses (accumulated deficit of approximately **$3.1 billion** as of June 30, 2024) and expects to incur significant and continuing losses for the foreseeable future[259](index=259&type=chunk) - The company is involved in various litigation and regulatory matters which could have an adverse impact on its financial position and profitability[270](index=270&type=chunk) [Stock Ownership and Financial Risks](index=66&type=section&id=Stock%20Ownership%20and%20Financial%20Risks) Ownership of the company's stock involves significant price volatility, the capital-intensive business may require dilutive additional funding, and the dual-class structure concentrates voting power - The trading price of the Class A Common Stock has been and may continue to be subject to extreme volatility[295](index=295&type=chunk) - The company's business is capital-intensive, and it may need to raise additional capital, which may not be available on attractive terms and could be dilutive to stockholders[305](index=305&type=chunk) - The dual-class structure of the common stock concentrates voting control with holders of Class B Common Stock, limiting the ability of other stockholders to influence corporate matters[311](index=311&type=chunk) [Item 2. Unregistered Sales of Equity Securities and Use of Proceeds](index=76&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) The company reported no unregistered sales of equity securities during the period - None[340](index=340&type=chunk) [Item 5. Other Information](index=76&type=section&id=Item%205.%20Other%20Information) During the last fiscal quarter, two company insiders adopted Rule 10b5-1 trading plans for the sale of Class A Common Stock - On June 4, 2024, Director Prof. Dr. Jürgen Leohold adopted a Rule 10b5-1 trading plan for the sale of up to **100,236** shares of Class A Common Stock[343](index=343&type=chunk) - On June 6, 2024, CFO Kevin Hettrich adopted a Rule 10b5-1 trading plan for the sale of up to **570,641** shares of Class A Common Stock[344](index=344&type=chunk)

Financial Data and Key Metrics Changes - The company reported capital expenditures of $18.9 million in Q2, primarily for equipment purchases related to QSE-5 prototype production and the Cobra process [24] - GAAP operating expenses were $134.5 million, with a GAAP net loss of $123 million, and an adjusted EBITDA loss of $72.5 million for the quarter [25] - The company ended the quarter with $938 million in liquidity, projecting a cash runway extension into 2028, an 18-month increase from previous guidance [26] Business Line Data and Key Metrics Changes - The licensing agreement with PowerCo allows for an initial production volume of 40 gigawatt hours per year, with an option to expand to 80 gigawatt hours, sufficient for approximately 1 million vehicles annually [17] - The company has shipped Alpha2 prototype cells to multiple customers in the automotive and consumer electronics sectors, indicating robust customer engagement [20] Market Data and Key Metrics Changes - The collaboration with PowerCo is expected to leverage the investments made by automotive OEMs, particularly the Volkswagen Group, to industrialize the company's battery technology [6] - The company sees a significant market opportunity in the next-generation battery sector, potentially worth hundreds of billions of dollars annually [28] Company Strategy and Development Direction - The licensing model is viewed as a capital-efficient path to market, allowing the company to focus on innovation while utilizing PowerCo's manufacturing capabilities [19] - The company aims to develop a global manufacturing ecosystem for its solid-state lithium-metal battery technology, with the PowerCo collaboration serving as a template for future deals [30] Management's Comments on Operating Environment and Future Outlook - Management expressed excitement about the collaboration with PowerCo, viewing it as a critical step in revolutionizing energy storage and creating shareholder value [7] - The company acknowledges that significant work remains to achieve its ambitions but is optimistic about the potential of its technology in the EV market [7] Other Important Information - The company has made progress in safety testing, demonstrating thermal stability of its prototype battery cells up to 300 degrees centigrade, which could open new markets [22] - The licensing agreement includes a $130 million prepayment of royalties contingent upon satisfactory technical progress, which will contribute to the company's cash runway [17][67] Q&A Session Summary Question: Why is the PowerCo deal significant for QuantumScape? - The deal demonstrates the value created for customers and shareholders, allows rapid scaling of technology, is non-exclusive for future deals, and represents an efficient resource allocation [31] Question: How does this agreement benefit investors compared to the previous joint venture? - The capital-light approach frees up previously earmarked funds and reduces expected costs for industrializing technology [32] Question: What is the timeline for the partnership and commercialization? - The timeline for B-sample production and other goals remains unchanged, with immediate collaboration work beginning [38][48] Question: How will the joint collaboration team operate? - A joint scale-up team of around 150 experts will begin collaboration activities, transitioning to a PowerCo facility as production ramps up [45] Question: Will more deals like this follow? - The company expects significant interest in its technology but will be strategic in selecting future partners [50] Question: Can you provide details on the monetization of the PowerCo agreement? - Specific details on the royalty structure are outlined in the contract, but the company will not disclose further details [53] Question: How does the $130 million royalty prepayment affect cash runway? - The prepayment is contingent on technical progress and is factored into the cash runway forecast [56][67] Question: Are there discussions with eVTOL companies? - The company is in conversations with eVTOL companies, but its primary focus remains on the automotive sector [75]

Financial Performance - GAAP operating expenses for Q2 were $134.5 million, with a GAAP net loss of $123.0 million; Adjusted EBITDA loss was $72.5 million[12] - The company maintains its full-year 2024 guidance for Adjusted EBITDA loss to be between $250 million and $300 million[12] - Operating expenses for the three months ended June 30, 2024, were $134,457 thousand, up from $123,542 thousand for the same period in 2023, indicating an increase of approximately 11.5%[30] - Research and development expenses rose to $97,746 thousand for the three months ended June 30, 2024, compared to $86,453 thousand for the same period in 2023, marking an increase of about 13.2%[30] - Net loss attributable to common stockholders for the three months ended June 30, 2024, was $(122,975) thousand, compared to $(116,521) thousand for the same period in 2023, reflecting a loss increase of approximately 5.5%[30] - The GAAP net loss attributable to common stockholders for the three months ended June 30, 2024, was $122,975,000, compared to a loss of $116,521,000 for the same period in 2023, representing an increase of 3.9%[32] - Adjusted EBITDA for the three months ended June 30, 2024, was $(72,513,000), compared to $(63,522,000) for the same period in 2023, indicating a decline of 14.9%[32] - Non-GAAP operating loss for the three months ended June 30, 2024, was $(86,632,000), up from $(73,550,000) in the same period of 2023, reflecting a 17.8% increase in losses[32] - Basic and diluted net loss per share for the three months ended June 30, 2024, was $(0.25), compared to $(0.26) for the same period in 2023, indicating a slight improvement in loss per share[30] Cash Flow and Liquidity - The company ended Q2 with $938 million in liquidity, supporting its ongoing development and production efforts[12] - Cash, cash equivalents, and restricted cash at the end of the period increased to $214,436 thousand from $250,363 thousand at the beginning of the period, showing a decrease of about 14.3%[31] - Net cash used in operating activities for the three months ended June 30, 2024, was $(65,151) thousand, compared to $(57,675) thousand for the same period in 2023, indicating an increase in cash outflow of approximately 12.9%[31] - Proceeds from maturities of marketable securities were $509,204 thousand for the three months ended June 30, 2024, compared to $261,440 thousand for the same period in 2023, representing an increase of about 94.9%[31] Assets and Liabilities - Total current assets decreased from $1,083,517 thousand as of December 31, 2023, to $973,469 thousand as of June 30, 2024, representing a decline of approximately 10.2%[29] - Total liabilities increased from $161,801 thousand as of December 31, 2023, to $214,702 thousand as of June 30, 2024, reflecting an increase of about 32.5%[29] - Total stockholders' equity decreased from $1,338,407 thousand as of December 31, 2023, to $1,180,269 thousand as of June 30, 2024, reflecting a decline of approximately 11.8%[29] Production and Technology Developments - QuantumScape announced a licensing agreement with PowerCo, extending its cash runway into 2028, an 18-month increase from previous guidance[1] - The agreement includes a $130 million prepayment of royalties and a non-exclusive license for an initial production volume of 40 GWh per year, with an option to expand to 80 GWh, sufficient for approximately one million vehicles annually[2] - The Raptor process is on track to enable initial low-volume B-sample production of the QSE-5 product, with Cobra set to facilitate higher-volume production next year[6] - Prototype cells based on the Alpha-2 design demonstrated thermal stability up to 300°C, significantly higher than conventional lithium-ion cells, which fail between 174°C and 185°C[9] - The collaboration with PowerCo is expected to minimize the time to gigawatt-hour scale production and potentially quadruple capacity compared to the previous joint venture arrangement[20] - The partnership with PowerCo is seen as a template for future collaborations, leveraging their industrial expertise to address production challenges[4] Other Financial Information - Stock-based compensation for the three months ended June 30, 2024, was $47,825,000, slightly down from $49,992,000 in the same period of 2023[32] - Depreciation and amortization expense for the three months ended June 30, 2024, was $14,119,000, compared to $10,028,000 for the same period in 2023, showing a 40.8% increase[32] - Interest expense for the three months ended June 30, 2024, was $(11,454,000), compared to $(6,717,000) for the same period in 2023, indicating an increase in interest costs[32] Legal and Forward-Looking Statements - The company is currently involved in a pending settlement of a securities class action litigation, which may impact future financial results[32] - Forward-looking statements indicate that the company anticipates future developments in its battery technology and operational plans, although specific outcomes remain uncertain[34] - The company emphasizes the importance of reviewing reconciliations of non-GAAP financial measures to GAAP measures for a comprehensive understanding of financial performance[33]

Core Viewpoint - QuantumScape's stock has seen a significant rise, particularly a 66% increase in July, recovering from earlier losses and now up 17% year-to-date, raising questions about its potential for future growth [2][8]. Group 1: Company Developments - QuantumScape is focused on developing solid-state batteries for electric vehicles, claiming these batteries offer advantages over traditional lithium-ion batteries, such as faster charging and longer range [3][10]. - The company has a partnership with Volkswagen, which is a key factor in the current bullish sentiment surrounding QuantumScape [6]. Group 2: Financial Performance - In Q1 2024, QuantumScape spent $14.1 million on capital expenditures (capex) and projected a full-year capex between $70 million and $120 million. Additionally, it spent $84 million on research and development in the first three months of the year [5][12]. - QuantumScape is currently a pre-revenue business, which means its operating losses are expected to continue impacting its balance sheet and liquidity [13][15]. Group 3: Market Position and Valuation - As of now, QuantumScape has a market capitalization of approximately $4 billion, which raises concerns about justifying such a high valuation given that the company has not yet monetized its products [14]. - The stock has been highly volatile, with a 29% decline from January to June 2024, contrasting with the overall market performance where the S&P 500 gained 14% and the Nasdaq Composite rose by 18% [8][15].