QuantumScape (QS) Receives a Nod From Soros Fund Management as Battery Plays Such as FREYR (ALUS) and StoreDot Continue To up the Ante

This is not investment advice. The author has no position in any of the stocks mentioned. WCCF TECH INC has a disclosure and ethics policy.

QuantumScape (NYSE:QS), the company that is spearheading efforts to commercialize solid-state batteries, is currently stuck in an unenviable spot. With commercial product launch not expected until around 2025, the stock remains susceptible to a lack of positive catalysts in the interim.

Now, a recent 13F filing by Soros Fund Management has provided a rare spate of optimism. As per the details, the fund has accumulated over 3.31 million QuantumScape shares, equating to a stake of over 1.5 percent based on a total float of over 207 million shares.

AMD presents Ryzen 5000 C-Series series for Chromebooks with up to eight Zen3 cores and 15W TDP levels

In another positive development, the CEO of QuantumScape, Jagdeep Singh, stated during the company’s Q4 2020 earnings call recently that the solid-state battery manufacturer is targeting the delivery of a viable prototype cell to customers by 2022:

“We believe that if we achieve these milestones, we will be on track to achieve our goal of delivering prototype battery cells to our customers in 2022.”

As a refresher, QuantumScape is attempting to simplify the structure of solid-state batteries by doing away with a permanent anode. To wit, as an “anode-free” lithium-metal battery, the company claims to deliver enhanced energy density as well as safety. This anode-free construct – where the deposition of lithium ions on the anode current collector forms a temporary anode that then disintegrates during the discharge process – reportedly delivers superior energy density and safety as compared to conventional Li-ion cells.

According to the thread posted on QuantumScape’s official Twitter account, the company has now completed over 1,100 test cycles of its solid-state battery, corresponding to real-life usage of 300,000 miles for a 300-mile battery pack and 500,000 miles for a 500-mile battery pack. Crucially, the company claims that its battery has retained over 80 percent of its capacity, equating to a Coulombic Efficiency (CE) – a ratio of the total charge extracted from the battery to the total charge put into the battery over a full cycle – of over 99.991 percent. Bear in mind that the benchmark for commercial feasibility is 80 percent capacity retention over 800 charge cycles. Nonetheless, QuantumScape has used relatively benign testing conditions, employing a 1C rate of charging/discharging at 30 degrees Celsius. The company also claims that its batteries can fast charge to 80 percent capacity in 15 minutes.

As far as the product development roadmap is concerned, QuantumScape has successfully stacked up to four layers of its cells in a 30mm-by-30mm form factor. Eventually though, the company aims to increase these layers to between 8 and 10. It also plans to employ a 70mm-by-85mm form factor for its battery cells. The company plans to start building around 100,000 cells per annum at its autonomous facility, known as QS-0, from 2023 onwards.

In the meantime, as we’ve discussed previously, QuantumScape continues to face tough competition from conventional Li-ion battery plays. To wit, the Israeli startup StoreDot announced back in January that it would start offering engineering samples of its new Li-ion battery that can be charged in just 5 minutes. In a clear departure from the industry norm, StoreDot’s battery cells utilize metalloid nano-particles instead of graphite in the anode, significantly boosting the charge efficiency. Moreover, FREYR recently signed a Definitive Agreement to merge with the SPAC Alussa Energy Acquisition Corp. (NYSE:ALUS). The combined company would utilize the proceeds from this transaction to “produce battery cells at a 43GWh capacity by 2025”. This would make FREYR one of the largest battery cell manufacturers in Europe. The company aims to deliver low-cost batteries, with inputs sourced ethically from sustainable supply chains. FREYR also has a strategic licensing partnership with 24M Technologies – an MIT spinoff. This collaboration aims to develop a new cell architecture, allowing varied cell production in a single facility. The startup employs semi-solid-state technology, based on 78 issued patents and over 108 pending patents, that aims to reduce material costs.

Battery tech is one of the most interesting areas of innovation currently, with the field attracting not only a large number of players but also ample financing aimed at facilitating a transition to an all-electric future. In this backdrop, QuantumScape’s ability to navigate this increasingly competitive landscape remains a crucial variable for the trajectory of its stock price.