Shares of electric vehicle (EV) battery start-up QuantumScape (QS 5.69%) were trading higher on Wednesday after the company said it had hit a key milestone on its development path.
As of 2 p.m. ET, QuantumScape's stock was up about 7.2% from Tuesday's closing price.
QuantumScape hit an important milestone this week
QuantumScape said in a statement that it has begun shipping a new prototype battery to its automaker customers for evaluation. The prototype battery, called Alpha-2, incorporates many of the improvements QuantumScape has made to its design and production processes over the past year. Delivering it to customers is a milestone in the company's 2024 plan.
QuantumScape said that the new Alpha-2 prototype has only six layers (versus 24 in its last prototype), but it's more energy dense thanks to cathodes with more active material and a series of smaller improvements that add up to a more efficient package for the battery, with less internal space wasted.
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The company said that while the Alpha-2 isn't a full-size commercial product, it incorporates the key features of the full-size and close-to-production "Beta-0" prototype it's aiming to ship later this year. In the meantime, the Alpha-2 allows QuantumScape's automotive customers to test the performance and reliability of a battery with the most significant improvements made over the last year.
Who are those customers? Volkswagen is one; it owns about 15% of QuantumScape. The battery start-up is believed to have at least one or two other automakers evaluating its prototypes, but it hasn't yet said which.
A slow-motion race toward a critical goal
Battery technology advances very slowly. QuantumScape has been at this for over a decade. But it's now getting close: If all goes well -- something that isn't common in the battery development space -- it could begin volume production of its batteries before the end of next year.
Is that likely? Investors hope so: QuantumScape's current cash pile is expected to last until mid-2026.
We'll know more when QuantumScape gives its first-quarter update next month.
