10-K: QuantumScape 2025 10-K: Solid-State Battery Progress & Losses

QuantumScape's 2025 10-K details continued solid-state battery development, key partnerships, and significant financial losses as it targets commercialization.

Summary

• QuantumScape is a development-stage company with no revenue to date, focused on next-generation solid-state lithium-metal battery technology for EVs.
• The company reported a net loss of $435.1 million for the year ended December 31, 2025, and an accumulated deficit of approximately $3.8 billion from its inception through December 31, 2025.
• Cash and cash equivalents and marketable securities totaled approximately $970.8 million as of December 31, 2025, which is believed to be sufficient for at least the next twelve months.
• QuantumScape completed an at-the-market (ATM) offering in August 2025, generating approximately $264.2 million in net proceeds during 2025.
• A strong partnership with Volkswagen Group's PowerCo SE continues, with PowerCo agreeing to contribute up to $130.7 million for a joint scale-up project over the next two years, subject to milestone completion.
• In 2025, the company conducted the first live demonstration of its solid-state lithium-metal battery technology powering a Ducati V21L electric motorcycle at the IAA Mobility event, utilizing B1 samples of its QSE-5 cell.
• A highly automated battery cell pilot production line was installed in San Jose in 2025, aimed at increasing output and reliability.
• The company shipped B0 prototype samples of its first product, QSE-5 (a ~5 amp-hour cell with >800 Wh/L energy density and <15 minute 10-80% fast charge capability), for automotive customer testing in 2024.
• QuantumScape holds a significant intellectual property portfolio, with over 400 U.S. and foreign patents and patent applications as of December 31, 2025.
• A reduction in force in 2025 impacted approximately 12% of the company's full-time employees as of December 31, 2024, to align the workforce with a capital-light licensing focus.
• A settlement in principle was reached in February 2026 to resolve all shareholder derivative actions, subject to final documentation and court approval.
• The company's Class A Common Stock transferred its listing from the NYSE to The Nasdaq Stock Market LLC (Nasdaq Global Select Market) effective December 23, 2025.

Sentiment

Score: 4

Explanation: StockSavvy.ai views this as a mixed to slightly negative report. While significant technical progress and key partnerships are positive indicators for long-term potential, the continued substantial financial losses, ongoing development challenges, and the explicit need for future capital raises temper the overall sentiment. The reduction in force and asset write-offs also indicate operational adjustments in a challenging pre-revenue phase.

Positives

• Successful first live demonstration of solid-state lithium-metal battery technology powering a Ducati V21L electric motorcycle at the IAA Mobility event in 2025, using B1 samples of the QSE-5 cell.
• Continued strong partnership with Volkswagen Group (PowerCo SE), with PowerCo agreeing to contribute up to $130.7 million for the Project over the next two years, subject to milestones.
• The PowerCo IP License Agreement was amended to provide PowerCo the right to produce up to an additional 5 GWh of QS battery cell technology annually, including for customers outside the Volkswagen Group, bringing the potential maximum production by PowerCo to 85 GWh annually.
• Installation of a highly automated battery cell pilot production line in San Jose in 2025, expected to increase both output and reliability.
• QSE-5 B-samples demonstrated strong performance with over 800 Wh/L energy density and <15 minute fast charge from 10% to 80% of capacity.
• A0 and B0 prototype cells successfully passed automotive safety tests (nail penetration, overcharge, external short circuit, and thermal stability up to 300C) with hazard levels of 3 or lower.
• A top-performing A0 prototype cell achieved over 1,000 full cycle equivalents with over 95% discharge energy retention, surpassing typical EV battery warranty standards.
• Possession of a robust intellectual property portfolio, including over 400 U.S. and foreign patents and patent applications, providing high barriers to entry.
• Strong liquidity position with $970.8 million in cash and cash equivalents and marketable securities as of December 31, 2025, projected to cover working capital and capital expenditure requirements for at least twelve months.
• Completion of the ATM offering in August 2025, raising approximately $264.2 million in net proceeds during the year.

Negatives

• Incurred a net loss of $435.1 million for the year ended December 31, 2025, continuing a trend of significant financial losses.
• Accumulated deficit reached approximately $3.8 billion from inception through December 31, 2025.
• Expects to incur significant expenses and continuing losses for the foreseeable future until significant production of lithium-metal solid-state batteries begins.
• A reduction in force in 2025 impacted approximately 12% of the company's full-time employees as of December 31, 2024.
• Research and development expense decreased by $7.4 million (2%) and general and administrative expenses decreased by $45.2 million (32%) in 2025 compared to 2024, partly due to lower headcount and litigation settlements.
• Wrote off approximately $26.6 million of property and equipment in 2025 for assets with no remaining future benefit, indicating some past investments did not yield expected returns.
• Interest income decreased by $7.4 million (16%) in 2025 compared to 2024, mainly due to a decrease in interest rates.

Risks

• Significant challenges in developing solid-state battery cells and producing them at higher volumes with acceptable performance, quality, consistency, reliability, throughput, safety, and costs.
• Delays or failures in accomplishing development objectives may delay or prevent successful commercialization of the technology and negatively impact the business.
• Inability to overcome engineering challenges in increasing lateral dimensions, reducing thickness and defects, and increasing production volume of separators.
• Uncertainty that the current cell design meets all automotive requirements.
• Potential delays and cost overruns related to equipment installation, reliability, utilities infrastructure, and operations start-up of the pilot line.
• Inability to substantially improve production processes to increase yield and throughput to achieve the cost, performance, and volume levels required for commercial shipments.
• The cost, performance characteristics, or other specifications of the battery falling short of targets or customer/partner requirements.
• Reliance on third-party suppliers for necessary materials, components, or equipment, which could lead to disruptions, delays, and increased costs due to global supply chain issues, geopolitical events, or tariffs.
• Inability to adequately control costs associated with operations and components, or achieve projected cost advantages.
• Reliance on complex machinery for operations, with risks of unexpected malfunctions, repairs, and spare parts availability.
• Inability to attract and retain customers, including licensees, during the product development stage or for higher volume commercialization of the technology.
• Early obsolescence of production equipment due to design or production process changes.
• Risks related to the relationship with Volkswagen and PowerCo, including failure to achieve milestones, increased reliance on PowerCo, and potential conflicts of interest.
• Concentration of agreements and relationships that can restrict business operations, commercialization opportunities, and revenue generation.
• Exposure to partner and customer-related risks in scaling business operations.
• Challenges to accurately estimate the future supply and demand for batteries incorporating the technology.
• Inability to protect or assert intellectual property rights, including risks of unauthorized use, infringement claims, and adverse decisions on patent applications.
• Challenges to successfully compete in an evolving and highly competitive battery market, including from conventional lithium-ion and other solid-state battery developers.
• Dependence on consumer adoption of EVs for future growth and success, which is subject to various factors like charging infrastructure, battery performance, and economic conditions.
• Uncertainty related to expanding into new markets and applications.
• Historical and continuing financial losses, with expectations of higher losses in future periods.
• Risks and tradeoffs related to pursuing a variety of business models (sole manufacturing, joint ventures, licensing).
• Unfavorable changes to initial assumptions and analyses affecting the achievement of technical, pre-production, and production objectives.
• Issues with operations of or disruptions to IT and communications systems, including cybersecurity threats and data breaches.
• Increased exposure to artificial intelligence related risks and challenges.
• Evolving scrutiny over sustainability practices and value propositions.
• Involvement in litigation, regulatory actions, or government investigations and inquiries.
• Exposure to product liability claims due to third-party use of batteries.
• Exposure to risks and regulations in various jurisdictions where activities are conducted, including anti-corruption, anti-bribery, and sanctions laws.
• Adverse effects of inflation and changing interest rates.
• Negative impacts from epidemics, pandemics, and other outbreaks.
• Evolving or unfavorable global trade policies and export/import regulations related to the battery and EV industries.
• Environmental and safety risks related to battery technology development and production.
• Volatility of the Class A Common Stock market price.
• Dilution to stockholders in the event of sales of substantial amounts of Class A Common Stock in the capital markets.
• Inability to raise additional capital on favorable terms, if at all.
• Manipulative activity by short sellers.
• Changes to reasonable estimates and probability-based assumptions that can affect results of operations.
• Concentration of capital stock ownership among certain insiders and the dual-class structure of Common Stock may prevent other stockholders from influencing significant corporate decisions.
• Anti-takeover provisions in the Certificate of Incorporation or Bylaws and under Delaware law that could make an acquisition more difficult, limit attempts by stockholders to replace or remove management, and limit the market price of Class A Common Stock.
• Limits to stockholders' ability to obtain a chosen judicial forum for disputes.
• No cash dividends to stockholders in the foreseeable future.
• Challenges attracting and retaining key employees and qualified personnel.
• Natural disasters and other catastrophic events outside of control.
• Volatile global economic conditions due to real or perceived financial crises.
• Changes in U.S. or foreign tax policies.
• Limitations to the use of deferred tax assets to offset future taxable income.
• Insufficient insurance coverage for future losses or claims.
• Inability to comply with the Nasdaq Global Select Market (Nasdaq) continued listing standards.
• Significant expenses and administrative burdens as a public company.
• Failure to maintain an effective system of internal controls which may lead to a material weakness.
• Complexity of financial transactions and the associated accounting and financial reporting requirements.
• Limitations in disclosure controls and procedures that may not prevent or detect all errors or acts of fraud.
• Changes to analyst publications about the company, its business, or the market.

Future Outlook

QuantumScape expects to incur significant expenses and continuing losses for the foreseeable future until significant production of its lithium-metal solid-state batteries begins. The company aims to continue improving battery cell performance, production processes, and cost reduction. It plans to expand relationships with other automotive OEMs beyond Volkswagen and explore opportunities in other large and growing markets including consumer electronics, data centers, and defense.

Management Comments

• "We believe that our technology will enable a new category of battery that meets the requirements for broader market adoption."
• "We believe no other lithium-metal battery technology has demonstrated the capability of achieving automotive rates of power with acceptable battery cycle life at modest levels of pressure (approximately 3 to 4 atmospheres (atm))."
• "We believe that a battery technology that can meet these requirements will enable an EV solution that is much more broadly competitive with ICE vehicles."
• "To our best knowledge, we are the only company that has been able to demonstrate a solid-state separator for lithium-metal batteries capable of resisting dendrite formation at higher power densities such as those required for automotive applications, and fast charging, for at least 800 cycles at around 25 C."
• "We believe our ability to develop this proprietary solid-state electrolyte-separator will enable the shift from lithium-ion to lithium-metal batteries."
• "We believe our battery technology may provide significant improvements in energy density compared to todays conventional lithium-ion batteries."
• "We believe our battery technology will enable significant benefits across battery capacity, charging rate, safety, and cycle life while minimizing cost."
• "We believe our battery technology is intended to meet the five key requirements we believe will enable mass market adoption of EVs."
• "We believe that the manufacturing of our solid-state battery cells at scale provides us with a structural cost advantage because our battery cells are manufactured without an anode."
• "We believe that our cash on hand will be sufficient to meet our working capital and capital expenditure requirements for a period of at least twelve months from the date of this Report."

Industry Context

StockSavvy.ai notes that QuantumScape operates in a rapidly evolving and highly competitive EV battery market, characterized by a global shift from internal combustion engines (ICE) to electric vehicles (EVs). While conventional lithium-ion batteries have seen gradual improvements, QuantumScape aims for a 'step change' with its proprietary solid-state lithium-metal technology to address fundamental limitations in range, charging time, and safety. The industry faces challenges such as raw material availability, the adequacy of EV charging infrastructure, and intense competition from established players like Panasonic, Samsung SDI, and CATL, as well as other development-stage companies such and consortiums like Toyota and China's All-Solid-State Battery Collaborative Innovation Platform. Chinese production has significantly driven down lithium-ion battery costs, posing a substantial competitive pricing challenge for new entrants.

Comparison to Industry Standards

• QSE-5 B-samples achieved over 800 Wh/L energy density and <15 minute fast charge from 10% to 80% capacity, which is generally faster than today's conventional lithium-ion batteries can deliver without materially degrading battery cycle life.
• A0 and B0 prototype cells demonstrated thermal stability up to 300C in safety tests, significantly higher than conventional high-energy lithium-ion cells, which burst into flames between 174C and 185C.
• The top-performing A0 prototype cell achieved over 1,000 full cycle equivalents with over 95% discharge energy retention, exceeding the cycle life and capacity retention implied by battery warranties for many of today's best-selling EVs in the U.S. market (typically ~70% of rated capacity for 8-10 years or 100,000-150,000 miles).
• The company claims a structural cost advantage by eliminating the anode host material and associated manufacturing costs compared to traditional lithium-ion batteries, though this is an estimate subject to numerous assumptions.
• Chinese battery pack prices in 2025 were approximately 56% lower than costs in Europe and approximately 44% lower than costs in the United States, highlighting a significant cost benchmark for global battery manufacturers.

Management Changes

Corporate Governance

Legal Proceedings

• Two shareholder derivative suits filed in February 2021 in the U.S. District Court for the Northern District of California against 11 officers and directors, consolidated into one action, alleging breaches of duties. The company is the nominal defendant, and Volkswagen Group of America Investments, LLC (VGA) is also named. The action is currently stayed.
• A shareholder derivative suit filed in October 2024 in the U.S. District Court for the Northern District of California against current and former officers and directors and VGA, alleging breaches of duties. Deemed related to the consolidated action and currently stayed.
• Four shareholder derivative suits filed in the Court of Chancery of the State of Delaware in June through August 2022 against current and former directors and officers, consolidated in September 2022 and stayed. A consolidated amended complaint was filed on July 30, 2024.
• A shareholder derivative action filed in the U.S. District Court for the District of Delaware on February 22, 2024, against current and former directors and officers, alleging breaches of duties and a claim for contribution related to a settled securities class action. The action is currently stayed.
• Two additional shareholder derivative actions filed in the Court of Chancery of the State of Delaware in May 2024 and October 2024 against current and former directors and officers, alleging breaches of duties. The May 2024 action is currently stayed.
• A settlement in principle to resolve all the above-described derivative actions was reached in February 2026, subject to final documentation, notice to stockholders, and preliminary and final court approval.
• The company is a defendant in two Private Attorneys General Act (PAGA) wage-and-hour actions filed in Santa Clara County Superior Court by former employees, along with a related class action in arbitration, alleging violations of California's Labor Code. These actions are presently stayed.
• An agreement in principle to settle the PAGA claims was reached in April 2025.
• Litigation-related accrual was approximately $4 million as of December 31, 2025, down from $12 million as of December 31, 2024.

Related Party Transactions

• Volkswagen Group, including its affiliates Volkswagen Group of America, Inc. (VWGoA) and Volkswagen Group of America Investments, LLC (VGA), is a major investor, holding approximately 26.2% voting interest as of December 31, 2025, and 24.0% as of December 31, 2024.
• PowerCo SE, a battery cell company wholly owned by the Volkswagen Group, entered into an Amended and Restated Collaboration Agreement (PowerCo Amendment) in July 2025 for the industrialization of QS technology based on QSE-5.
• PowerCo has agreed to contribute up to $130.7 million for the joint scale-up project over the next two years, subject to the completion of certain technical milestones and other project goals.
• During the year ended December 31, 2025, the company received $19.5 million from PowerCo as a capital contribution under the collaboration agreement, which was recorded as Additional Paid-In Capital.
• Volkswagen holds the right to designate two directors to the company's Board; currently, Dr. Gnther Mendl (Head of Battery Center of Excellence, Volkswagen AG) and Sebastian Schebera (Head of Strategic Partnerships, Volkswagen AG) are members of the Board.
• VGA is named as a defendant in certain shareholder derivative litigation.

Stakeholder Impact

• Shareholders face potential for dilution from future capital raises, continued volatility of the Class A Common Stock, and limited influence over significant corporate decisions due to the dual-class stock structure and concentrated ownership. No cash dividends are expected in the foreseeable future. Positive impact is contingent on successful technology commercialization and partnership achievements.
• Employees experienced a reduction in force in 2025, impacting approximately 12% of full-time employees, which could affect morale and future recruiting efforts. The company offers equity participation and market-competitive compensation programs.
• Customers (automotive OEMs) stand to benefit from advanced solid-state battery technology offering greater energy density, faster charging, and enhanced safety, but face risks if development or production milestones are delayed or not met.
• Suppliers are critical to the company's development and production, with reliance on third-party suppliers for materials and equipment, posing risks of disruptions and increased costs.
• Creditors may view the company's ongoing financial losses and need for future capital raises as a risk, although current liquidity is deemed sufficient for at least 12 months.

Next Steps

• Continue to develop commercial battery technology and manufacturing capabilities, including improving quality, consistency, and reliability for higher volume manufacturing.
• Further develop and validate volume manufacturing processes to enable higher volume manufacturing by licensing partners and minimize manufacturing costs.
• Increase the yield of the solid-state separator and increase utilization of manufacturing equipment.
• Expand relationships with other automotive OEMs beyond Volkswagen to make solid-state battery cells widely available.
• Explore opportunities for solid-state battery technology in other large and growing markets, including consumer electronics, data centers, and defense.
• Continue to invest in research and development to improve battery cell performance, production processes, and reduce cost.
• Successfully operate and ramp up the pilot line to provide sufficient quantities of separators and cells for internal development, customer sampling, and QSE-5 cells.
• Advance current production processes to include more automation, such as automated film handling, and use higher volume equipment and processes.
• Complete development of the first commercial product (QSE-5) and subsequent cell designs that may require different capacity, layer counts, or dimensions.
• Conduct additional safety tests under different conditions, including on aged cells, and with a much larger sampling of cells to ensure statistical significance.
• Conduct research and development focused on battery module and pack design to support the integration of solid-state battery cells into complete battery systems.

Key Dates

Recommendation

QuantumScape demonstrates promising technological advancements in solid-state batteries and has secured a critical partnership with Volkswagen's PowerCo. However, the company remains in a pre-revenue stage, incurring substantial and ongoing losses, and faces significant hurdles in scaling production and achieving commercialization. While the long-term potential is high, the immediate financial performance and inherent risks associated with novel technology development warrant a cautious "hold" recommendation. Investors should monitor progress on production scale-up, milestone achievements with PowerCo, and overall cost management.

Keywords

Solid-state battery, lithium-metal battery, EV technology, QuantumScape, PowerCo, Volkswagen, QSE-5, battery development, energy storage, automotive OEM, intellectual property, pilot production line, financial losses, SEC filing, 10-K, electric vehicles, battery manufacturing, corporate governance, risk factors, capital raise