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Why QuantumScape Stock Jumped Today

By Howard Smith – Nov 15, 2021 at 3:43PM

Key Points

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Last week's 25% move in QuantumScape's stock has continued into the new trading week.

What happened

Many stocks in the electric vehicle (EV) sector had big gains last week, and solid-state battery developer QuantumScape (QS -4.94%) was no exception, with a jump of more than 25%. That momentum continued Monday morning as the stock moved up double digits once again, with an 11% surge in early trading. As of 2:43 p.m. ET, those gains had moderated, but the stock was still up 4.2%. 

So what

On a macro level, renewed investor interest and investment in EV stocks came from the passage of a new federal infrastructure bill that has funds directly allocated to boost the development of the sector. That bill has $5 billion intended to help increase the electrification of transit buses and another $7.5 billion to grow charging infrastructure needed to help transition the country from internal combustion to electric-powered vehicles. 

Lab-coated employees working in a QuantumScape laboratory.

QuantumScape laboratory. Image source: QuantumScape.

Now what

QuantumScape is working on commercializing solid-state batteries to power electric vehicles. The technology has yet to be proven at that scale, but the company has been making progress. It has successfully developed multi-layer, solid-state lithium-metal battery cells that are in the process of being tested by potential commercial customers. 

QuantumScape also had independent third-party testing performed that verified the company's conclusion last year that the battery cells could meet "automotive relevant conditions" related to temperatures, cycles, and discharge rates. 

QuantumScape co-founder and CEO Jagdeep Singh said of the test results: "With the publication of this report, we will continue to focus on our product roadmap goals and delivering cells to our customers."

A bet on QuantumScape is a bet that the technology will successfully be commercialized. That remains to be seen, but so far, the company has been moving in the right direction and progressing according to its plan. With significant new federal spending coming from the infrastructure package, investors are thinking that QuantumScape stock is a good speculative bet right now. 

Howard Smith owns shares of QuantumScape Corporation. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.

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