QuantumScape's Progress and Partnership with Volkswagen: Is it a Buy Now?

QuantumScape, a solid-state lithium-metal battery technology company, has reached a milestone in its commercialization journey, marking progress towards electric vehicles with greater energy density, faster charging, and improved safety. The company has a strategic collaboration with Volkswagen and holds $797 million in liquid assets, which it believes will fund operations through 2029. Despite the progress, investors should consider the company's early stage and the potential risks and challenges ahead.

QuantumScape, a solid-state lithium-metal battery technology company, has reached a significant milestone in its commercialization journey. The company has made progress towards developing electric vehicles (EVs) with greater energy density, faster charging, and improved safety. QuantumScape recently expanded its collaboration with Volkswagen's battery company, PowerCo, to manufacture its QSE-5 battery technology [1].

The collaboration agreement includes milestone-based payments totaling up to $131 million over two years, in addition to a previously announced $130 million royalty pre-payment [1]. This capital infusion extends QuantumScape’s cash runway into 2029, providing the company with more flexibility as it advances towards commercialization [2].

QuantumScape's technology breakthrough, particularly the rollout of its Cobra separator process, has already advanced into baseline production, offering a 25-times improvement in heat treatment speed compared to its prior Raptor process [1]. This increased efficiency and productivity are crucial milestones in helping QuantumScape scale up production.

However, the company remains speculative and continues to incur losses as it spends on research and development. In the second quarter, QuantumScape reported a net loss of around $114 million. Despite this, the company holds $797 million in liquid assets, which it believes will fund its operations through 2029 [1].

Investors should consider QuantumScape's early stage and the potential risks and challenges ahead. The company needs to scale up production and have its batteries undergo field testing, which will be on the docket in 2026. Additionally, the broader electric vehicle (EV) sector's development and competition from other battery developers could impact QuantumScape's long-term demand trends and market share [1].

While QuantumScape has the potential to deliver excellent returns, it remains a high-risk stock with a long road ahead. The company's success will depend on its ability to validate its technology, scale up production, and capture additional deals with original equipment manufacturers.

References:
[1] https://www.fool.com/investing/2025/08/17/is-quantumscape-stock-a-buy-now/
[2] https://www.nasdaq.com/articles/will-vwagys-backing-turn-qs-battery-powerhouse