What happened
It's pretty clear why QuantumScape (QS 5.69%) shares spiked Tuesday morning. It was the result of news from another company, and it could have serious implications for QuantumScape. Shares of the upstart solid-state EV battery manufacturer were higher by 7.9% at 10:45 a.m. ET.
So what
The jump came after global automaker Toyota held a technical update session that revealed the company's technology strategy regarding EV batteries. It seems Toyota also sees solid-state batteries as the power source for future EVs. Investors believe that's potentially a huge confirmation of QuantumScape's business strategy.
Now what
In Toyota's presentation "Let's Change the Future of Cars," chief technology officer (CTO) Hiroki Nakajima discussed next-generation battery cell technologies. Toyota believes solid-state batteries similar to what QuantumScape is developing are now entering the "practical application phase." The automaker plans to commercialize its version by 2027 or 2028.
QuantumScape has been working toward commercialization of the technology that could lower EV battery costs while making them safer and more efficient. Toyota hopes to increase vehicle range by 20% with its solid-state batteries versus current batteries.
After two years of incremental progress, QuantumScape shipped its first 24-layer prototype battery cells to customers in December 2022. They are now being tested by QuantumScape's automotive partners. The company said it has been happy with initial performance results, including charge speed and capacity retention. It said work needs to continue to improve reliability.
Even after some early development delays, QuantumScape, which counts Volkswagen as a partner, said in its latest earnings report that it has enough cash to extend into late 2025, when it hopes to be close to commercialization. That would give it a lead on Toyota as it also pursues a transition to the new battery technology.
