QuantumScape Corporation (NYSE: QS) shares are trading lower in Wednesday’s after-hours session on the heels of the company’s second-quarter report. Here’s a rundown of the results and a look at what’s driving the action.
QuantumScape reported quarterly losses of 26 cents per share, which missed the analyst consensus estimate of a loss of 20 cents.
The company ended the second quarter with over $900 million in liquidity. Its goal is to continue to look for opportunities to optimize spending and be wise with its strong balance sheet.
“The company sees its cash runway extending into the second half of 2025. Any funds raised from capital markets activity, including under an ATM prospectus supplement, would further extend this cash runway,” said QuantumScape.
“We are happy to report that we have shipped high cathode-loading unit cells to multiple automotive partners, in line with our development roadmap. This is an important milestone because this level of cathode loading is close to our commercial-intent cathode design for energy-dense cells and represents a significant step toward delivering a commercial product.” said the company in a letter to Zenger News.
“In our view, when combined with the 24-layer capability we have already shown in our A0 prototype cells and other planned improvements, these shipments represent a validation of our ability to achieve industry-leading energy and power performance for our first commercial product.” said the company.
From an operational perspective, as reported on the Barrons, the company made progress. The company tested battery cells stacked with 16 layers, achieving battery performance similar to their single-, four-, and 10-layer cells. QuantumScape has to build up its battery cells, which are a little like a deck of cards, layer by layer to prove its tech can work inside a vehicle that will charge hundreds of times and travel tens of thousands of miles over its life.
QuantumScape’s solid-state battery technology is years away from commercialization, but it’s promising. These batteries promise lower cost, better charge time, more safety, and greater longevity than conventional lithium-ion batteries.
Still, with sales a long way off, investors are left measuring the company against its milestones. Next up for the company are cells with more layers and the construction of a pilot manufacturing plant. The pilot plant, dubbed QS-0, will help demonstrate that the cells can be manufactured at scale. QS-0 should be shipping samples to automotive customers at some point in 2023, according to the company.
Recently, investors have been shunning more speculative growth stocks. At the close of Tuesday trading, QuantumScape stock was off about 35% year to date. Similarly, the Russell 1000 Growth index was down 20% year to date. For comparison, the S&P 500 and Dow have shed 12% and 9%, respectively, so far this year.
Produced in association with Benzinga
Edited by Eunice Anyango Oyule and Judy J. Rotich