With its stock price down about 72% year-to-date amid an overall cooling in the SPAC craze, QuantumScape founder and CEO Jagdeep Singh has a message to the market.
The upstart solid state battery maker remains on track with everything it said it would do when it debuted via a SPAC transaction late in 2020.
Singh said on Yahoo Finance Live the company is still eyeing commercialization of its battery technology in the 2024-2025 timeframe. Its key partner and backer Volkswagen will be the first recipient of those batteries. Prototypes of the batteries will be delivered in 2022 to original equipment providers (namely Volkswagen).
Singh says the company is not looking at a capital raise in the near-term to support the build out of its manufacturing footprint.
QuantumScape said it plans to enter 2022 with $1.3 billion in total liquidity.
"I think what's encouraging is to see us tracking well to that timeline," Singh said of the start of commercialization of its batteries.
QantumScape was founded in 2010 by Singh and backed early by Microsoft founder Bill Gates and auto giant Volkswagen. Both continue to be investors in QuantumScape.
In early December, Singh publicly revealed test results for QuantumScape’s solid state battery. QuantumScape’s data showed its battery cell could charge up to 80% of capacity in 15 minutes. Further, it retains more than 80% of its capacity after 800 charging cycles, is non-combustable and boasts nearly double the energy density of high-end commercial lithium batteries.
Singh highlighted another key milestone hit just a week ago.
"We now have 10-layer [battery] cells. Of course that's a big deal because while the single layer cells demonstrate that the chemistry works and we can make these solid state cells and the performance is better than has ever been reported before, and starts to close the gap with combustion engines. We needed to stack those into multiple layers to make bigger cells. The results make us feel like we are going to be able to hit our targets in 2024 and 2025 timeframe to commercialize," explained Singh.
J.P. Morgan analyst Jose Asumendi recently initiated coverage of QuantumScape at a Hold rating with a $35 price target. QuantumScape shares currently trade at $22.
"We are mindful of the various risks associated with scaling up industrial production," Asumendi wrote in a research note to clients. JPM's Hold rating acknowledges such risks, but places a bit more confidence in QuantumScape sticking to its production timeline.
Added Asumendi, "We estimate the company will be able to execute its business plan as presented to investors in Oct’20, wherein QS’ solid state battery will be commercially produced from two facilities QS-1 and QS-2, with an annual production capacity of 91GWh (910k vehicles). Under this scenario, the company estimates that they would be able to generate revenues of $6.4 billion and EBITDA of $1.6 billion (25% margins)."