|From: Glenn Petersen||8/25/2021 5:58:35 PM|
|Why the Hype Around Battery Startup QuantumScape Is Discharging|
The former stock-market darling still has a market value of $10 billion, which is a lot to take on little but hope and trust
By Stephen Wilmot
Heard On The Street
Wall Street Journal
Updated Aug. 25, 2021 12:45 pm ET
QuantumScape’s battery research has produced some promising test results, but details of its technology have been limited. PHOTO: NICHOLAS ALBRECHT FOR THE WALL STREET JOURNAL
This column is part of the Heard on the Street Stock Picking Contest. You’re invited to play along with us here.
As a black-box company in a technical industry, battery startup QuantumScape QS -0.23% was always an unlikely investor darling. Chances that it can revive the early hype around its early-stage technology seem slim.
The company, which went public last fall via a special-purpose acquisition company, says it has hit on a wonder material that could, based on initial testing, enable the manufacture of “solid state” batteries with pure lithium anodes. This would be a breakthrough innovation, extending battery range, supporting fast charging and reducing costs. Electric vehicles might finally be as cheap and easy to fill with power as today’s gas ones.
QuantumScape became a stock-market sensation, with a strong following among individual investors. Valued at $3.3 billion in the deal that brought it to market, the company reached a peak enterprise value of more than $30 billion as 2021 dawned, according to FactSet (more, factoring in stock options and other forms of share issuance).
A steadily falling share price has since brought that number back to about $7.3 billion. Even that is out of kilter with peers. Solid Power, another solid-state startup, agreed to merge with a SPAC in June at an enterprise value of $1.2 billion. British peer Ilika is capitalized at less than $300 million.
The difference can only be justified if QuantumScape really has found the holy grail of battery research. This isn’t clear. The company hasn’t disclosed details of the revolutionary ceramic material at the heart of its cell design, making it impossible for scientists to verify. The test results it has published are promising as far as they go, but that isn’t far.
After years of secrecy, the newly public company said in December that the single-layer cells it tested through repeated charges and discharges retained more than 80% of their power even after 800-plus cycles, implying they could be driven hundreds of thousands of miles. It also said they performed at very low temperatures, and could be recharged to 80% of their power in under 15 minutes. These are impressive numbers, but old industry hands cautioned that achieving the same results with multiple layers of electrodes—an essential step toward making batteries big enough to power cars—would be tough.
Since then, the company has focused on increasing the layer count, first to four layers and then 10. A tweet Wednesday showed that its four-layer cells retained their power for 800 cycles under test conditions. The company hasn’t given updates on low-temperature operation or fast charging.
In April, activist short seller Scorpion Capital accused QuantumScape of running a “pump and dump SPAC scam,” which the startup’s chief executive has denied. Even battery experts who give the company’s reports the benefit of the doubt say it faces massive hurdles at the manufacturing stage and that its timeline is wildly ambitious. QuantumScape wants to enter commercial production some time in 2024 or 2025.
Some investors might be comforted by the backing of Volkswagen. In reality, the German automotive giant’s ongoing support may say more about the strategic priorities of Chief Executive Herbert Diess, a big fan of electric vehicles, than about QuantumScape. VW also got in cheap: It paid $300 million in various installments for a 17.7% stake, implying an equity value of $1.7 billion.
Factoring in stock options, QuantumScape’s “diluted” equity value is now $10 billion. It is a lot to take on little but hope and trust.
Write to Stephen Wilmot at firstname.lastname@example.org
Why the Hype Around Battery Startup QuantumScape Is Discharging - WSJ
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|To: Carkey who wrote (15)||9/24/2021 4:57:15 PM|
|"Solid-state batteries are set to see rapid increase in demand after 2030, eventually outpacing current lithium-ion batteries"|
Maybe... prove you can make one that works better and cheaper than the existing tech (and its improvement over time) before hyping the sales potential ?
I did wander past a QS advert recently... and poked at it briefly...
What I noted was that they were touting their "progress" in making bigger/better packages delivering larger numbers expressed in Amp hours...
But, if you do the math based on the area they provided x the # of layers... really all they were doing was using more of the same material with the same function in a larger package... and calling that improvement?
That's the sort of "improvement" you get if you power your flashlight with four batteries instead or two ?
Would be far more convincing if they published actually meaningful figures of merit rather than irrelevant data when claiming "improvement" in function... ? So, I did go back and look at the language they used... and they were actually careful to NOT claim it as improvement in function... rather than improvement in packaging into a bigger size with "more" in it.. not any "more" coming out of it ?
FWIW... I'm not long QS or any other... and not short QS or any other... rather than having an interest as I used to work on this and related tech in my own lab back in the... late 1990's. So, know the potential... just don't see that there's actually been a lot of progress made recently in advancing toward realizing it... yet.
Worth watching the space to see IF there is progress of that sort made... and then, WHEN there is... maybe useful to sort potential winners and losers...
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|To: Clark Kent who wrote (21)||9/24/2021 5:38:19 PM|
|Could be the news is just cover for Bill Gates discovery that there are ants at his picnic ? |
Did the SPAC see the backers exit or just enable them to exit... later ?
Otherwise, "San Jose-based QuantumScape declined to identify the automaker, but said the company was a "second top ten" automaker by global revenue"... leaves you wondering... which VW subsidiary would that be ?
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|From: Glenn Petersen||9/29/2021 6:38:58 AM|
|Volkswagen, Ford, Other Big Auto Makers Push to Make Solid-State Batteries the Next Big Thing for EVs|
Hurdles remain in effort to replace lithium-ion batteries, which are considered flammable
By William Boston
Wall Street Journal
Sept. 28, 2021 3:48 pm ET
Silicon Valley startup QuantumScape in December said it had achieved a breakthrough, successfully testing batteries using its solid-state material. PHOTO: NICHOLAS ALBRECHT FOR THE WALL STREET JOURNAL
In the race to build a cheaper and longer-range electric car, auto companies are pouring more money into a technology long considered a moonshot: solid-state batteries.
Today, most electric vehicles use lithium-ion batteries, which have become more powerful and affordable over the years but have limitations, including the risks of catching fire.
The configuration has the potential to deliver faster charging times and make the packs safer by eliminating the flammable electrolyte solution used in lithium-ion batteries, auto executives and analysts say.
Still, the technology remains costly and relatively unproven in real-world applications, a hurdle that is expected to take years to solve for the mass market.
Toyota Motor Corp. is pursuing in-house development of solid-state battery cells. Earlier this month, the Japanese auto maker said it needed more time to develop the technology for fully electric cars, though it would use smaller solid-state batteries in hybrid vehicles for now.
Other major car companies, such as Volkswagen AG , Ford Motor Co. and Bayerische Motoren Werke AG have invested in solid-state battery startups to help them perfect the technology and make it ready for mass production.
A number of leading battery startups have so far received around $2 billion in investment from auto makers and financial investors, the consulting firm AlixPartners LLP estimated, with half of that going to QuantumScape Corp. , whose investors include Bill Gates and Volkswagen AG .
Workers in QuantumScape’s lab in San Jose, Calif. Volkswagen is among the company’s investors. PHOTO: NICHOLAS ALBRECHT FOR THE WALL STREET JOURNAL
The pressure to build a better battery has grown in recent years with car companies betting big on electric vehicles. Investment globally in plug-in models has increased 40% over the past year, said John Loehr, managing director of automotive at consulting firm AlixPartners.
Solid-state technology remains a longer-term endeavor. Mr. Loehr said it could be close to a decade before such batteries are ready for mass production, but auto makers are investing now to gain expertise and ready their manufacturing operations, he added.
“They don’t want to get caught where everybody else has this technology and they don’t,” Mr. Loehr said.
Advances in lithium-ion battery technology in the 1980s and 1990s gave birth to Tesla Inc., the first commercially successful electric car maker. Since then, lithium-ion batteries using a liquid electrolyte have improved in the travel range they can deliver between charges and are significantly cheaper than when they first appeared.
But the lithium-ion batteries also have drawbacks. General Motors Co. recently recalled about 142,000 Chevrolet Bolt electric cars to fix a manufacturing defect linked to battery fires. Some car companies have had to recall electric vehicles because of fire concerns involving the battery and warn customers not to fully charge their cars or park them in garages until the problem was fixed.
Industry executives and analysts say that using solid-state technology would make the batteries safer, because the core material is less likely to be combustible.
One big hurdle with the lithium-ion batteries is that as the energy density rises, the risk of catching fire increases, said Tim Bush, a battery technology analyst with UBS Research.
“If we get rid of electrolyte and replace it with solid material, we no longer have a safety risk, and energy density could go to twice as much as what we have today,” Mr. Bush said.
No one has yet succeeded in building solid-state batteries that can be mass produced and plugged into millions of cars. But some startups are hopeful they can achieve that goal by teaming up with auto manufacturers who have more than a century of mass production experience.
In December, the Silicon Valley startup QuantumScape said it had achieved a breakthrough, successfully testing batteries using its solid-state material.
In March, VW said its battery scientists independently verified QuantumScape’s tests in their own lab and agreed to invest an additional $100 million in the startup, bringing its total investment in the company to $300 million. QuantumScape has a market value of roughly $10.5 billion.
VW also agreed in principle to build a pilot facility to make EV-ready solid-state batteries using QuantumScape technology. Final approval of the pilot line is still outstanding, awaiting a decision from the German government on whether it will financially aid the project.
“Solid-state technology is the game-changer,” Frank Blome, who leads battery development at VW, said in March.
Following the QuantumScape news, BMW and Ford announced in May they were investing $130 million in Solid Power Inc., which is developing a solid-state battery.
Solid Power CEO Doug Campbell said the company would build a pilot line to begin building “automotive scale” solid-state batteries next year.
“We believe if the next technology comes it will be solid state,” Oliver Zipse, chief executive of luxury car maker BMW, told reporters on the sidelines of the Munich auto show in September.
Although a believer in the technology, Mr. Zipse is skeptical about how fast it could be ready for mass production, because of unknowns about the costs of manufacturing and its ability to work safely in extreme hot and cold climates.
“What’s not solved yet is the cost,” he said. “An electric car and the battery have to function in a very wide band of temperatures,” he added.
Toyota last year built a prototype vehicle using solid-state batteries and ran it through a range of tests. Masahiko Maeda, Toyota’s chief technology officer, said this month that the tests showed that these batteries had higher output than conventional lithium-ion ones. But it also found that they had a short service life.
“To solve this and other issues, we need to continue development, mainly of solid electrolyte materials,” Mr. Maeda told reporters at the company’s technology event.
Write to William Boston at email@example.com
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Appeared in the September 29, 2021, print edition as 'Auto Makers Seek Solid-State Batteries As the Next Big Thing for Electric Cars.'
Volkswagen, Ford, Other Big Auto Makers Push to Make Solid-State Batteries the Next Big Thing for EVs - WSJ
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