QuantumScape, a Solid-State Imposter, Signals Delay in Battery Commercialization
The company’s employees won’t even purchase the stock at a discount as real solid-state battery competition intensifies.
July 30, 2021
QuantumScape (QS), a self-proclaimed developer of solid-state lithium batteries for electric vehicles, is signaling its battery technology may not be commercialized as soon as the market is expecting. In the prior quarter’s 10-Q, QuantumScape provided the following timeline for commercialization:

“We are developing our battery technology with the goal of enabling commercial production in 2024.”

In the latest 10-Q, QuantumScape included new language signaling the timeline for commercialization may be pushed out by as much as a year:

“We are developing our battery technology with the goal of enabling commercial production between 2024 and 2025.”

Commercially viable solid-state batteries, according to QuantumScape, may require several dozen to more than one hundred cell layers. The company is currently developing a 4-layer cell and recently announced it is testing a 10-layer cell. The latest filing includes new language in which QuantumScape raises concerns over its ability to manufacture batteries with the number of layers necessary to be commercially viable:

“We will need to substantially improve our manufacturing processes to increase throughput required for higher layer counts and to achieve the cost, performance and volume levels required for commercial shipments.”

Solid-state batteries— those with solid rather than liquid electrolytes— are more energy dense, providing an electric vehicle more range. Likewise, a solid-state battery is less likely to swell due to temperature changes, leak, and catch fire. Though QuantumScape claims to be developing a solid-state battery, critics argue (Slide 31) the company’s batteries contain liquid and aren’t truly solid-state.

When asked whether the batteries it’s developing are truly solid-state, QuantumScape doesn’t answer in the affirmative. The company says it uses an “organic gel electrolyte”. In the prior quarter’s 10-Q, QuantumScpae emphasized the importance of its gel and confirms its catholyte is liquid:

“Our cathodes use a conventional cathode active material such as NMC along with a gel made of an organic polymer and organic liquid catholyte.”

In its latest quarterly filing, QuantumScape omitted the above statement. It also seems to place less emphasis on the importance of its gel and liquid catholyte— it included the word “gel” just once in the latest filing, down from three times the prior quarter. The filing also contains new language that seems to suggest that while QuantumScape will continue testing gel and liquid catholytes, more of the company’s attention has turned to solid catholytes:

“The solid catholyte is part of our ongoing research and development investigation into inorganic catholytes.”

We suspect QuantumScape is highlighting the potential for a “solid catholyte” more prominently in the latest quarterly filing due to increased competition from companies investors may perceive as purer plays on solid-state technology. Solid Power, which is going public via a SPAC, says its electrolyte is truly all-solid and suggests battery developers using gel or liquid electrolytes are actually hybrids rather than solid-state.

QuantumScape’s latest filing doesn’t seem to inspire much confidence that it will be able to replace its gel or liquid catholyte with a solid. Though it appeared in the prior quarterly report, QuantumScape omitted the following line from its current 10-Q which refers to the development of inorganic or solid catholytes:

“...that could replace the organic gel made of an organic polymer and organic liquid currently used.”
Related: SLDP, STEM, FREY, GWH, NRGV, EOSE, ADN, CBAT, ENVX, RMO, BWA, CMI
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