QuantumScape (QS 2.00%) is a challenging stock to value. Its solid-state batteries sound promising, but it hasn't commercialized them to generate any meaningful revenue yet. However, its volatile stock could deliver life-changing gains if it successfully scales its business.
What does QuantumScape do?
QuantumScape develops solid-state batteries that use solid electrolytes rather than liquid electrolytes used in traditional lithium-ion batteries. That difference gives them higher charging capacities, shorter charging times, and better thermal resistance than their lithium-ion counterparts, but they're also more expensive and more challenging to mass-produce.
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QuantumScape's QSE-5 battery has an energy density of 844 Wh/L (watt hours per liter) and can be rapidly charged from 10% to 80% in 12.2 minutes. Most lithium-ion batteries for electric vehicles (EVs) have an average energy density of 300-700 Wh/L and a fast-charging time of 20 minutes to an hour. So in theory, the QSE-5 could revolutionize the EV battery market.
QuantumScape co-developed those batteries with its top investor, Volkswagen (VWAP.Y +0.09%), over the past decade. It originally planned to commercialize its first batteries in 2024, but a combination of technical, manufacturing, and industrialization challenges prevented it from doing so. It's now aiming to start its earliest commercial shipments by the end of 2026.
NASDAQ: QS
Key Data Points
Why could QuantumScape be a life-changing stock?
For 2026, analysts expect QuantumScape to generate $5 million in revenue (from its initial battery shipments for tests and pilot programs) while incurring a net loss of $390 million.
Those numbers might seem grim, but it expanded its partnership with Volkswagen last July and secured additional milestone payments, extending its cash runway through 2029. It's also been shifting its production from its older Raptor separator process to its newer Cobra process, which will boost its cell reliability, equipment productivity, and overall yields.
That sweeping upgrade could finally enable QuantumScape to mass-produce and commercialize its first batteries. Assuming that happens, analysts expect its revenue to surge to $61 million in 2027, and likely soar even higher through the end of the decade. According to Grand View Research, the solid-state battery market could expand at a 31.8% CAGR from 2026 to 2033. If QuantumScape matches analysts' targets for 2027, then grows its top line at a 30% CAGR over the following six years, it could generate $294 million in revenue in 2033.
With a market cap of $5.5 billion, QuantumScape might still seem richly valued at 19 times its projected 2033 sales. However, Wall Street's forecasts might be too conservative if this fledgling company locks in more automakers before its top competitors.
QuantumScape is still a speculative, pre-revenue company. But if you think it has a shot at broadly replacing lithium-ion batteries across the growing EV market, then it's worth accumulating right now as the bulls look the other way.
