In 2021, the electric vehicle (EV) industry stood at the cusp of an exciting future. Since then, though, EV sales growth has slowed notably, and some of the top names in the industry are attracting more controversy than investor interest.
Reflecting this, next-generation battery maker QuantumScape's (QS 2.46%) popularity has faded like a sputtering electrical charge. But maybe this makes it a bargain stock buy.
The market unplugs
A $1,000 play on QuantumScape stock made on April 16, 2021 would be worth less than $107 four years later. That's a sharp deceleration of nearly 90%.
If investors were bailing from the EV industry as a whole, you can bet they were speeding far away from a company that is still in the development stage with its technology and doesn't produce revenue.
Yet QuantumScape has quite the compelling product making its way through the development process. Its goal is to bring to market a solid-state EV battery that offers far more range on a full charge, and recharges much quickly, than the currently standard lithium-ion products.
QuantumScape's tech is also rugged; recent testing indicated that when charged, its battery cells managed to fill to over 95% capacity after more than 1,000 charging cycles.
NASDAQ: QS
Key Data Points
Charged with potential
Meanwhile, QuantumScape has a muscular financial backer -- Volkswagen, a key investor that's plowed hundreds of millions of dollars into the company.
Under agreements between the two, Volkswagen's battery unit will license QuantumScape's technology to power the automaker's EVs once it exits the development stage. It's estimated that the latter's batteries could power as many as one million new Volkswagen vehicles annually.
It's nerve-rattling to invest in a pre-revenue company that hasn't proven it can sell product. Yet QuantumScape's technology appears to be extremely promising, and with a deep-pocketed partner it likely won't be going under anytime soon (if at all). QuantumScape stock is a risky investment for even the hardiest market players, but I think it's got a good chance to fly. I'd be a buyer of this stock.
