QuantumScape makes a breakthrough in its battery tech — as race to create a solid-state battery heats up
Backed by heavyweights like Bill Gates and Volkswagen, QuantumScape is looking to solve the electric vehicle industry’s billion-dollar problem — slow charging and short-ranged batteries.
On Feb. 17, QuantumScape announced a technological breakthrough of their battery tech in their quarterly earnings report — sending shares up over 13%.
Electric vehicle demand is about to explode…
From 1.7m EV sales in 2020 to 8.5m in 2025, a growth of 5x. If EV makers are going to meet demand, they’ll need a lot more EV car batteries. But a sudden increase in demand and supply chain issues are leading to a shortage in battery supplies…
- The pandemic slowed down the global supply chain of sourcing and processing raw materials.
- The number of companies that can produce a large volume of the high-quality chemicals needed to make lithium batteries are scarce.
But supply isn’t the only problem with these batteries. There are limitations with existing lithium batteries — they’re slow to charge and hold a short battery life…
The solution: solid-state batteries
Founded in 2010, QuantumScape is developing solid-state lithium batteries for electric cars. Compared to existing lithium batteries, solid-state batteries can charge faster and hold a longer range — enabling EVs to drive nearly double the distance on one charge.
In 2020, QuantumScape went public via SPAC, growing 13x before falling 65%. Astoundingly, the company is generating zero revenue, has yet to launch a product and is worth over $20b.
The company’s tech could be a game-changer but to get there, it must:
- Achieve technological breakthroughs — building multilayered batteries and moving beyond the prototype stage.
- Creating a reliable manufacturing line that is capable of large production volumes to meet customer demands.
Over the past 2 years, Volkswagen invested $300m in QuantumScape and committed to using its batteries — but only if it can meet production volumes at competitive pricing.
Industry experts don’t expect solid-state batteries to be widely available until 2030. That’s 7 years later than the expected 2023 timeline QuantumScape is forecasting.
So far, no solid-state battery developers have gone past the prototype stage…
For investors… Flawless execution required
Dozens of competitors are also racing to release their own solid-state battery…
- Toyota is expected to release its own solid-state battery in 2021.
- Ford and Hyundai invested in Solid Power, a solid-state battery startup — which expects commercial production in 2026.
To justify its valuation, QuantumScape will have to execute flawlessly, scale-up production and fend off dozens of competitors while developing a solid-state battery.