QuantumScape (QS) Morgan Stanley‘s 12th Annual Laguna Conference 2024 summary

Technology development and milestones

• Solid-state lithium metal batteries offer significant improvements in energy density, charge rate, and safety by eliminating the anode and using pure lithium metal.

• Automotive A-samples with over 20 layers were shipped to VW at the end of 2022, showing strong performance and exceeding expectations.

• Marching toward B-sample qualification, with low-volume B-samples targeted for 2024 and high-volume B-samples in 2025.

• Raptor process is operational; Cobra equipment is expected to be installed this year to enable next-stage production in 2025.

• QSE-5 cell, a five amp hour product, is optimized for automotive but also overlaps with consumer applications.

Commercialization and partnerships

• Major collaboration and license agreement with Volkswagen, initially for 40 GWh and expandable to 80 GWh, is non-exclusive and strategically important.

• VW contributes personnel, OpEx, and CapEx, making the business model more capital-efficient and extending the cash runway by 18 months.

• The agreement includes royalty and outperformance sharing, with a $130 million royalty prepay and significant cost savings from not investing in a phase one JV.

• The partnership enhances credibility with other OEMs and strengthens the IP pool, making future collaborations more attractive.

• Six total agreements are in place, with no shortage of demand; focus remains on delivering product.

Market positioning and competition

• Positioned in a premium performance segment, not competing on cost with conventional lithium-ion cells.

• CATL is considered the benchmark in conventional battery design, but no solid-state lithium metal competitor is seen as close.

• QSE-5 targets 800 Wh/L energy density and 15-minute charge time, outperforming current market leaders.

• Automotive market remains the primary focus, with potential for consumer and aviation applications in the future.

• No credible alternative to lithium metal for high energy and power applications; silver-carbon approaches are seen as too expensive.