What happened
After tumbling nearly 6% through the first three days of the week, shares of QuantumScape (QS 5.69%) are roaring back today. The solid-state battery company reported second-quarter financial results yesterday after the market closed, and investors are coming out in droves to show their enthusiasm for what QuantumScape had to say about its progress toward commercialization of its batteries.
As of 10:55 a.m. ET, shares of QuantumScape have rocketed 26.9% higher.
So what
Achieving a significant milestone last quarter, QuantumScape reported that it has shipped high cathode-loading unit cells to several automakers. These cells, which the company claims have a higher energy density than batteries found in most electric vehicles today, had a greater cathode consistent with what the company had hoped to produce earlier in the year. Speaking to the importance of the development, management stated in its letter to shareholders that "these shipments represent a validation of our ability to achieve industry-leading energy and power performance for our first commercial product."
Another positive takeaway from the quarter was the company's progress in advancing its manufacturing capabilities. QuantumScape plans on increasing throughput by scaling up manufacturing processes in two stages. The company completed the first of these stages last quarter, and it reaffirmed its belief that it anticipates initial production to begin by the end of the year.
Now what
Skeptics predicate the bear case for solid-state battery companies like QuantumScape on the belief that there are formidable technological hurdles that prevent the companies from achieving wide-scale production. The company's progress in delivering high cathode-loading unit cells, however, is yet another step that QuantumScape has taken toward proving the skeptics wrong.
It's no wonder that investors are charged up about clicking the buy button today, but it's important for potential investors to recognize that an investment is still speculative at this point.
