What happened

QuantumScape (QS -0.72%) reported its third-quarter update last night, and the stock spiked early today. That 2.5% jump didn't hold, though, and the stock dropped as much as 6% during the day. As of 3:10 p.m. ET on Thursday, shares of the solid-state electric vehicle (EV) battery maker were still down 5.2%. 

So what

There was no major advancement announced by the company this quarter. It continues to work on setting processes and parameters to be able to run what it calls a "sample campaign" for its 24-layer battery cell. That campaign is intended to validate all the parameters needed to produce a commercial version of the product that can begin to be shipped to automotive customers. 

The initial jump in the stock might have come when investors saw that the company now plans to end the year with lower capital expenditures than originally expected. That will result in liquidity of more than $1 billion, compared to the prior projection of $950 million. 

Now what

The validation and commercialization process is tedious, and in the current economy, investors want to see returns on capital spending. That is still several years away for QuantumScape, however. That helps explain why the stock is down more than 60% year to date. 

QuantumScape still sees huge opportunity in the long term, however. It expects its lithium-metal batteries to be safer by dissipating excess heat during fast charging and to offer higher energy density for longer travel distances between charges. 

Besides use in EVs, the company believes there's a large opportunity for its technology in consumer electronics. But investors will need to continue to be patient, and the market is nervous about near-term economic forecasts right now. Investors interested in speculating with QuantumScape will likely have more opportunities before any market-moving results are achieved.