QuantumScape: What does the company do and why is the stock rising?

QuantumScape EV Battery
QuantumScape develops batteries for electric vehicles

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.

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.

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.

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.

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