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Solid-state lithium battery researcher QuantumScape Corporation's shares have made significant gains on the market at the start of trading today after the company disclosed that it had entered into an agreement with another large automobile manufacturer for its battery cells. QuantScape disclosed the development in a filing with the Securities and Exchange Commission (SEC), as it claimed that another top ten global carmaker is now working with the company for its solid-state battery technology. The news comes as a breath of fresh air for the firm that has massively bled out its share price value over the course of this year, after its public listing through a special purpose acquisition company (SPAC) generated strong retail investor interest.
QuantumScape Announces 10MWh Purchase Commitment From Large Carkmaker For Early Stage Vehicles
Today's announcement comes as a boost to the company already in a partnership with the German automotive giant Volkswagen. The pair will set up a joint venture battery pilot manufacturing plant.
QuantScape's filing with the SEC today reveals that the second automaker partnered up with the company has also evaluated the battery researcher's early-stage cells.
As the filing reads:
QuantumScape Corporation (the “Company”) recently signed an agreement with a second top ten (by global revenues) automotive original equipment manufacturer (“OEM”) in which the OEM committed to collaborate with the Company to evaluate prototypes of the Company’s solid-state battery cells, and to purchase 10 MWh of capacity from the Company’s pre-pilot production line facility (“QS-0”) for inclusion in pre-series vehicles, subject to satisfactory validation of intermediate milestones.
The OEM has already evaluated early cells, and the intermediate milestones consist of more advanced prototypes of the Company’s cells, expected to be delivered before QS-0 starts production in 2023.
The QS-0 is the company's first facility designed to commence early stag manufacturing of its battery cells. QuantumScape is one of the few companies out there that is researching solid-state batteries for electric vehicle use. These batteries are believed to have several advantages over the current ones powering electric vehicles. These advantages include safety benefits due to fewer combustible materials and longer vehicle range due to the highly dense materials.
The facility mentioned by the researcher in its filing today is its first early or pilot stage manufacturing plant. In an investor update shared at the end of the second quarter this year, QuantumScape revealed several details about its current research projects and the facility.
It outlined that the QS-0 pre-pilot manufacturing plant will be located in San Jose, California, and for it, the company had leased a 197,000-acre facility. Additionally, QuantumScape also stated that it had placed orders for 'long lead-time equipment, implying that the machines which will fill up the plant will take some time before they are delivered to the company.
Sharing details for cell production, it revealed that:
Underlying the progress outlined above is a “learn fast and iterate” approach to development. We run enormous numbers of tests on our cell designs, including more than 500,000 tests and measurements in Q2. To supply this data pipeline, we need large volumes of cells. As we bring production volumes up to 200,000 cells per year at QS-0, we believe our ability to assemble statistically significant datasets and refine our technology will benefit accordingly. This will accelerate the development process, serve the testing and sampling requirements of additional engaged prospective customers, and help us to finalize the industrialization blueprint for QS-1, our pilot-line gigafactory joint venture with Volkswagen.
The company's shares were up by 14% by 10:30 ET today, and since the start of this year, QuantumScape has lost more than 50% of its market value, with current market capitalization standing at $9.8 billion.