QuantumScape (QS +0.92%) shares are sinking today. The stock of the electric vehicle (EV) battery technology company was down by 9.2% as of 11 a.m. ET. But that comes after shares rocketed as much as 50% higher yesterday before closing the session up 43%.
There was good reason for the stock's surge yesterday. So investors should wonder whether today's drop is providing a compelling opportunity.
NASDAQ: QS
Key Data Points
EV game changer
QuantumScape's technology could have a major impact on the EV industry. Traditional lithium-ion batteries used for EVs use graphite anodes. That technology has limitations on vehicle range due to a low energy density. That also results in batteries losing charging capacity over time. QuantumScape has worked to replace the graphite with anode-free lithium metal. That would provide the highest energy density for EV batteries and go a long way toward addressing consumer hesitancy related to range anxiety.
Yesterday, a unit of Volkswagen Group that has been testing QuantumScape's battery cells for the global automaker reported it achieved more than 1,000 charging cycles while maintaining over 95% of charging capacity. That means a typical EV would be able to drive for more than 300,000 miles without the battery losing its charging capacity and needing replacement. QuantumScape's solid-state batteries would also charge faster and have less fire risk.
More work to do
Frank Blome, CEO of Volkswagen unit PowerCo, called the results encouraging. He added, "We are convinced of the solid-state cell and are continuing to work at full speed with our partner QuantumScape toward series production."
These were early-stage laboratory tests, though. So there is still much work to do for commercialization of the technology. QuantumScape doesn't expect to be in a position to go to market with its batteries for at least two more years.
That helps explain why some investors are selling the stock today after yesterday's massive jump. But for investors thinking about the long term, and realizing this would still be a highly speculative investment, today's drop could be a time to buy into QuantumScape's potentially game-changing technology.
