The stock price of QuantumScape Corporation skyrocketed 57.45 percent on its public debut day. The stock, identified as QS on the New York Stock Exchange (NYSE), listed for $23.50, and closed at $37 per share on the same day.
QuantumScape, a company that was quietly developing high-performance batteries for Electric Vehicles (EVs), has shot in the limelight overnight. It stocks rose by more than 50 percent in a single day of trading, and that too on its debut on the NYSE. Very rarely, if ever, does a stock perform this spectacularly. The frenzied trading of the QuantumScape Corporation’s stock happened after it merged with Kensington Capital Acquisition Corp. The merger happened through a Special Purpose Acquisition Company (SPAC).
What is QuantumScape, and what does the company do?
QuantumScape specializes in batteries. These aren’t standard lithium-ion batteries, and neither are they small. The company is attempting to make batteries for Electric Vehicles (EVs). Moreover, QuantumScape will reportedly manufacture these batteries for all types, sizes, form-factors of vehicles.
Bill Gates-backed QuantumScape Founder and CEO Jagdeep Singh on the company’s solid-state batteries: “It’s a fundamentally different kind of battery. It’s been kind of a holy grail since the mid-70’s but no one’s been able to … [meet] the requirements until now.” pic.twitter.com/39yYyutewO
— Yahoo Finance (@YahooFinance) November 24, 2020
What makes QuantumScape different from the majority of EV battery manufacturers, including Elon Musk’s Tesla, is that the company specializes in solid-state lithium metal batteries. As the name suggests, these batteries do not have any liquid in them.
Nearly every battery that powers an EV today needs a liquid electrolyte in between the positive and negative electrodes. However, the presence of the liquid increases the danger of leakage. Moreover, a liquid electrolyte isn’t the most optimum medium, but it is the most practical. Scientists and engineers have long attempted to make high-capacity, high-density solid-state batteries, but haven’t yet succeeded on commercially viable terms or scale.
A huge milestone for QuantumScape – first day as a public company! So thrilled and excited to join the company at such an exciting stage as we focus on bringing breakthrough solid-state lithium-metal battery technology to accelerate the EV transition and a cleaner future for all! pic.twitter.com/NBqCIxJtX7
— Asim Hussain (@HussainAsim) November 27, 2020
Solid-state batteries can offer offer a much higher range and exceptionally faster charging time. Additionally, their technologies could be more cost-effective. It is no wonder that Microsoft co-founder Bill Gates and Volkswagen have already backed QuantumScape. Moreover, Tesla co-founder and former Chief Technical Officer JB Straubel is on the board of the company.
When Will QuantumScape Solid-State Lithium Metal Batteries Enter Commercial Production?
Jagdeep Singh and Tim Holme started QuantumScape about 10 years ago. What makes the QuantumScape’s batteries different is the presence of a solid material called solid-state electrolyte. The company claims such batteries are a lot safer than the traditional lithium-ion batteries with liquid or gel-based electrolyte.
A huge milestone for QuantumScape – first day as a public company! So thrilled and excited to join the company at such an exciting stage as we focus on bringing breakthrough solid-state lithium-metal battery technology to accelerate the EV transition and a cleaner future for all! pic.twitter.com/NBqCIxJtX7
— Asim Hussain (@HussainAsim) November 27, 2020
It is important to note that the company merely indicated it has a design. Additionally, it has a solid-state electrolyte by eliminating the anode completely. But, it hasn’t indicated how far it still has to go, before commercial-grade, as well as modular, solid-state lithium metal batteries for vehicles are ready.
Hence, QuantumScape’s rocket rise in the stock market could be attributed to the high-profile backers and the recent merger of the company with Kensington Capital Acquisition Corp. The latter’s founder has worked as an automotive investment banker for more than two decades.