Is QuantumScape's Share Price A Watch?
T he electronic vehicle (EV) industry is on fire with new entrants constantly emerging as either startups (NIO, Lucid Motors) or legacy automakers (Ford, Volkswagen) releasing electric models. This article was originally written by MyWallSt. Read more market-beating insights from the MyWallSt team here. The drive is fueled by government regulations, technology advancements, and an ever-growing global charging infrastructure. On the technology front, we land on companies like QuantumScape (NYSE: QS), a solid-state EV battery company that was founded in 2010 by a Stanford University professor and two students. Higher energy density, faster charging times, fire-related safety, operation in sub-zero temperature due to a lack of wet components, and cost benefits. The Bull Case for QuantumScape  Currently, you can get an internal combustion engine (ICE) vehicle that goes 300 miles per tank and takes no longer than 10 minutes to fill up. QuantumScapes solid-state batteries come closest to matching these specs compared to wet batteries and more as they can cover 30% more range, achieve an 80% charge in 12 minutes, and are less prone to overheating than the liquid-type batteries currently on the market. These groundbreaking figures attracted the attention of investors like Bill Gates, JBStraubel, and Volkswagen; in fact, Volkswagens investment is so far up to $300 million, which was issued in $100 million tranches every time a new technical milestone was achieved by QuantumScape. Of the many patents the company holds, one of its most important developments is in its playing card sized, hair-thin, flexible ceramic separator that can function in temperatures lower than those that render competitors parts inoperable. This is a powerful advantage and moat against other players in the field. And speaking of the field, EV is not the only sector wherein solid-state batteries can be advantageous; QuantumScape can also make batteries for telephones, tablets, and airplanes which are already starving for battery advances. The company has enough cashon hand ($1.53 billion) until it finally goes to market. The Bear Case for QuantumScape  QuantumScape is 11 years old and has yet to produce a viable battery. Many experts feel that the promise of solid-state batteries is akin to the promise of cold fusion: only 10 years away, every 5 years. In fact, a white paper published by Sila Nanotechnologies last year predicts a $50 per kilowatt-hour (kWh) (currently $126 kWh) fast-charging traditional wet battery cell within the next 5 to 10 years, and solid-state, if successful, to be relegated to a niche market. Another challenge seen by the bears is the fact that not only has there never been a solid-state batterymanufactured for sale, but if the company can in fact scale mass production of the units. The struggle is further magnified by the fact that an entirely new factory would need to be built to accommodate the new solid-state tech and that can cost billions. In an effort to raise capital, the company has raised its outstanding shares tenfold in the last 6 months, thereby diluting shareholder value. Finally, theres the question of competition and its an important one as none other than tech behemoth Apple plans on releasing its own EV and battery in 2024; other competitors include financially superior companies like Samsung, Panasonic, LG Chem, and EV superstar Tesla. Investors should be wary of this opportunity until they see a viable product on the market. Dont fear the inevitable stock-price surge in that event, as the sky would be the limit should QuantumScape deliver on its promise of an honest-to-goodness solid-state battery. Co-founder Jagdeep Singh  2. November 27, 2020 via a SPAC merger with Kensington Capital Acquisition Corp  3. Total Addressable Market (TAM) of $230 billion by 2030  MyWallSt gives you access to over 100 market-beating stock picks and the research to backthem up. Our analyst team posts daily insights, subscriber-only podcasts, and the headlines that move the market. Start your free trial now! IMAGEREPLACEMENTPLACEHOLDER