QuantumScape (QS 5.69%) shares popped this morning. Shares of the early-stage electric vehicle (EV) battery maker soared by more than 19% in early trading. The stock remained higher by 14.6% at 11 a.m. ET.
The stock jump came from an operational update -- though not one from QuantumScape.
Advances in solid-state battery technology
Aggressive investors in EV-related sector stocks are reacting to an update from QuantumScape peer and competitor Freyr Battery this morning. The Norway-based company reported a milestone in its progress to develop a commercially viable EV battery that offers several advantages versus the current lithium-ion batteries in use.
Freyr's "semisolid" cell manufacturing process isn't the same technology as QuantumScape's solid-state battery cell technology. But both companies hope to achieve higher-energy-density systems. Higher-energy-density batteries would store a greater amount of energy, resulting in longer battery range for EVs. That could boost demand for EVs from consumers who have anxiety about battery range and recharging availability.
Still several years away
While QuantumScape stock has now jumped by almost 30% over the last month, it is still well below its all-time high, set three years ago. That was a time when investors rushed into speculative EV-related companies with high hopes of a large-scale transition to electric vehicles.
That excitement was premature, as the growth rate in EV sales has been somewhat lower than some expected. Investors hopefully learned to exert patience as successful commercialization of QuantumScape's batteries remains several years away.
But as can be seen from today's stock reaction, any milestone achieved in the advancement of battery technology is a positive development for the sector. Safer, longer-range EV batteries could spur demand, and that's enough for some to jump into QuantumScape shares today. Those investors should just realize the risk remains high and more significant achievements still need to occur.
