10-Q: QuantumScape Reports Q1 2025 Results, Cites Progress in Solid-State Battery Development

Sentiment:

Quarterly Report 25 April 2025 4:06 PM

QuantumScape Corporation reports a net loss for Q1 2025 while continuing to focus on the development and commercialization of its solid-state lithium-metal batteries.

Capital raiseThe company sold 0.2 million shares of Class A Common Stock under its ATM offering for net proceeds of $1.0 million during the quarter.The company may need to seek additional equity or debt financing if its current resources are insufficient to satisfy its cash requirements.

Worse than expectedThe company reported a net loss of $114.4 million for Q1 2025.The company has an accumulated deficit of $3.5 billion since inception.The company is a development-stage company with no revenue to date.

Summary

QuantumScape Corporation, a development-stage company focused on solid-state lithium-metal batteries, reported its Q1 2025 financial results.
The company had no revenue and a net loss from operations of $123.6 million for the quarter, with an accumulated deficit of $3.5 billion since inception.
Research and development expenses increased to $95.6 million from $83.8 million in the same period last year.
General and administrative expenses decreased to $28.0 million from $48.1 million year-over-year.
The company's cash and marketable securities totaled $860.3 million as of March 31, 2025.
QuantumScape believes its current cash resources will last into the second half of 2028.
The company sold 0.2 million shares of Class A Common Stock under its ATM offering for net proceeds of $1.0 million during the quarter.
QuantumScape is focused on improving the quality, consistency, and reliability of its solid-state battery cells and increasing throughput.
The company is working with PowerCo to industrialize its solid-state lithium-metal battery technology.
QuantumScape shipped the first B0 prototype samples of its QSE-5 cell in 2024.

Sentiment

Score: 5

Explanation: The sentiment is neutral. While the company is making progress in its technology development and has a strong cash position, it is still in the development stage with no revenue and significant losses.

Positives

QuantumScape's general and administrative expenses decreased by 42% year-over-year.
The company believes its current cash resources will last into the second half of 2028.
QuantumScape is collaborating with PowerCo to industrialize its solid-state lithium-metal battery technology.
The company shipped the first B0 prototype samples of its QSE-5 cell in 2024.
The company is focused on improving the quality, consistency, and reliability of its solid-state battery cells and increasing throughput.

Negatives

QuantumScape reported a net loss of $114.4 million for Q1 2025.
The company has an accumulated deficit of $3.5 billion since inception.
QuantumScape is a development-stage company with no revenue to date.
Research and development expenses increased by 14% to $95.6 million.

Risks

QuantumScape faces significant challenges in developing and scaling up the production of its solid-state battery cells.
The company relies on third-party suppliers for necessary materials, components, and equipment.
QuantumScape may not be able to adequately control the costs associated with its operations and the price of raw materials.
The company's future growth depends on consumer adoption of EVs.
QuantumScape is subject to risks related to its relationship with Volkswagen and PowerCo.
The company may need to raise additional capital, and there is no guarantee it will be available on attractive terms.
QuantumScape is subject to evolving environmental and safety regulations.
The company is involved in ongoing litigation and regulatory actions.

Future Outlook

QuantumScape believes its current cash resources will last into the second half of 2028 and is focused on continuing to develop and commercialize its solid-state lithium-metal batteries.

Management Comments

The team of scientists, engineers, technicians, and other staff is highly motivated and committed to solving these challenges ahead.

Industry Context

QuantumScape is operating in the highly competitive and rapidly evolving battery market, focusing on solid-state battery technology as a potential replacement for conventional lithium-ion batteries in electric vehicles and other applications. The company's success depends on its ability to overcome technical and manufacturing challenges, secure supply relationships, and establish partnerships with automotive OEMs.

Comparison to Industry Standards

QuantumScape is competing with established lithium-ion battery manufacturers like CATL, LG Energy Solution, and Panasonic, which have significant production capacity and established relationships with automotive OEMs.
The company is also competing with other companies developing solid-state battery technology, such as Solid Power and Toyota.
QuantumScape's QSE-5 cell targets an energy density of over 800 Wh/L and <15 minute 10% to 80% fast-charging capability, which would be competitive with or superior to current lithium-ion battery technology.
The company's collaboration with PowerCo, Volkswagen's battery company, is similar to other partnerships between battery developers and automotive OEMs, such as Solid Power's partnership with BMW and Ford.

Legal Proceedings

The company is involved in various legal proceedings, including securities class action litigation, shareholder derivative litigation, and private attorneys general actions.
In April 2024, the parties reached an agreement in principle to settle these consolidated actions.
The court granted final approval of the settlement in January 2025 and final judgment was accordingly entered in the action.
As of March 31, 2025, there is no outstanding liability related to this matter.
In October 2024, the parties reached an agreement in principle to settle the action and a final approval hearing is scheduled for July 11, 2025.
In April 2025, the parties reached an agreement in principle to settle the claims.

Related Party Transactions

Volkswagen as a related party stockholder is an approximately 26.2 % and 24.0 % voting interest holder of the Company as of March 31, 2025 and December 31, 2024, respectively.

Stakeholder Impact

Shareholders: The company's stock price may be affected by its financial performance, progress in technology development, and relationships with key partners.
Employees: The company's ability to attract and retain qualified personnel is critical to its success.
Customers: The company's ability to deliver high-performance, reliable, and cost-effective solid-state batteries will impact the adoption of EVs.
Suppliers: The company's relationships with suppliers are important for securing necessary materials, components, and equipment.
Creditors: The company's financial condition and ability to raise capital will impact its ability to meet its debt obligations.

Next Steps

Continue improving the quality, consistency, and reliability of solid-state battery cells.
Increase throughput of separator production.
Advance manufacturing processes to include more automation.
Build out the pilot line in San Jose, California.
Work with PowerCo to industrialize solid-state lithium-metal battery technology.
Continue working closely with automotive OEMs to make solid-state battery cells widely available.

Key Dates

Date	Description
2010	QuantumScape Battery, Inc. (Legacy QuantumScape) was founded.
November 2020	QuantumScape became a publicly traded company through a business combination with Kensington Capital Acquisition Corp.
December 2021	The Company granted stock options for the purchase of an aggregate of approximately 14.7 million shares of the Company's Class A Common Stock to the Company's Chief Executive Officer at the time and other members of the Company's management team pursuant to the EPA Program.
December 2022	The remaining 2.1 million stock options under the EPA Program were granted to members of the Company's management team under the same terms as those in the initial grant in 2021, representing the final grant pursuant to the EPA Program approved in December 2021.
February 2023	The Company entered into separate Distribution Agreements with J.P. Morgan Securities LLC, Cowen and Company, LLC, Deutsche Bank Securities Inc. and UBS Securities LLC, as sales agents, pursuant to which the Company is able to, from time to time, issue and sell common stock with an aggregate offering price of up to $400 million (the ATM offering) under the prospectus supplement to the Form S-3 filed on February 28, 2023 (File No. 333-266419).
August 2023	The Company completed an underwritten public offering of 37.5 million shares of its Class A Common Stock for an aggregate purchase price of $ 288.2 million, net of issuance costs of $ 11.8 million (the August 2023 Public Offering).
July 5, 2024	The Company entered into the PowerCo Collaboration Agreement with the goal of industrializing the solid-state lithium metal battery technology we intend to use in our first planned productthe QSE-5 Technology.
July 11, 2025	A final approval hearing is scheduled for the Delaware Class Action settlement.
March 31, 2025	End of the quarterly period.
April 18, 2025	The number of shares of the registrants Class A Common Stock, par value $0.0001 per share outstanding was 515,685,016, and the number of shares of the registrants Class B Common Stock, par value $0.0001 per share outstanding was 43,241,267.
April 2025	The parties reached an agreement in principle to settle the claims 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.
April 25, 2025	Date of report.

Keywords

QuantumScape, solid-state batteries, lithium-metal batteries, PowerCo, QSE-5, electric vehicles, battery technology, financial results, research and development, commercialization

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