Shares of solid-state battery technology company QuantumScape (QS 2.15%) have been soaring this week, extending the volatility the stock has seen since the company began trading publicly. The shares were holding near their all-time lows when investors got news that made them excited to own QuantumScape once again. Entering the final trading day of the week, QuantumScape stock was near its weekly high, up about 24%.
The stock gains can be attributed to both company-specific news as well as more macro trends this week. After a sell-off to start the week, both the S&P 500 and the Nasdaq Composite regained those losses as the week progressed. And news that came from a QuantumScape Securities and Exchange Commission filing last Friday has helped shares soundly outperform the markets for the week. The company said it has signed an agreement with a second automotive manufacturer -- and it's one of the world's top ten by revenue.
The technology of solid-state batteries for use in electric vehicles has yet to be commercialized, but QuantumScape has been making progress in its development. Volkswagen was an early investor in the company, and news of interest from a second large automaker brings more legitimacy to the technology in investors' eyes.
QuantumScape believes it has a ceramic material that can be used as a solid-state separator in the battery cell to help overcome slow charging times and improve performance and fire safety compared to current lithium-ion batteries. Earlier this year, the company announced it had successfully built its first multilayer battery cell with four layers, which confirmed the technology is workable. In July, the company said it had successfully produced, and begun testing, its first 10-layer battery cells. This is the level needed to produce a commercially viable product.
This week's news helps support the results from the company. Though left unnamed, the latest automotive manufacturer to sign on to work with QuantumScape has agreed to collaborate with the company and evaluate prototypes of the solid-state battery cells, according to the SEC filing.
QuantumScape said the company has already evaluated early versions of the battery cells, and it also has agreed to purchase capacity from the company's pre-pilot production line facility, which should begin production in 2023.
After Monday's sell-off, many stocks, including those in the speculative EV sector, roared back. QuantumScape was no exception, and it had company-specific news to help boost those gains. It's not surprising that shares bounced back strong off of lows this week.