This move has reignited debate among investors: is this a moment to buy, or is much of the upside already priced in? The rest of the article will examine what’s driving the stock, what risks remain, and what investors might consider before deciding.
What Is QuantumScape & Why the Hype?
QuantumScape is an American company based in San Jose, California, that develops solid-state lithium-metal batteries meant for electric vehicles. It was founded in 2010 by Jagdeep Singh, Tim Holme, and Fritz Prinz at Stanford University.
Its technology aims to replace parts of current lithium-ion batteries that limit performance. For example, QuantumScape uses a proprietary ceramic solid separator between the cathode and anode instead of standard organic polymer separators. That separator allows safer operation, since the ceramic does not burn, and supports using a pure lithium-metal anode.
Another key aspect is their “anode-free” design. In this design, the battery cell is manufactured without an anode material. During the first charge, lithium metal forms the anode in situ. This makes possible higher energy density while reducing materials and potentially simplifying production.
Strategic partnerships add to the interest. In July 2024 QuantumScape struck a deal with Volkswagen’s battery division, PowerCo, granting non-exclusive license to produce up to 40 gigawatt-hours per year using QuantumScape’s technology, with an option to expand to 80 GWh. That level would be sufficient to supply batteries for many hundreds of thousands of EVs annually.
Finally, the company has made recent progress on scaling production of one of its core innovations, the Cobra separator process. The Cobra equipment has been installed for heat treatment and baseline separator production. This marks a major step toward producing larger sample volumes and eventually meeting commercial demands.
These technological features combined with licensing deals and production milestones are behind market interest and “the hype.” The promise is for better performance, range, safety, and eventually lower cost, but with significant technical risk and execution effort still ahead.
Recent Milestones & Catalysts
In mid-2025, QuantumScape announced that its Cobra separator process had entered baseline production, a milestone that moves it closer to large-scale manufacturing. In its press release, the company described Cobra as replacing its earlier “Raptor” method, with materially improved throughput and a smaller equipment footprint. According to company statements, Cobra enables about 25x faster heat treatment compared to Raptor, a change that could lower costs and speed scaling.
Following the announcement, QuantumScape’s stock jumped around 20% after hours as markets reacted to the news. The development is viewed by many as a key validation of QuantumScape’s ability to shift from lab-scale innovation to pilot manufacturing.
Another important catalyst is the expanded collaboration with Volkswagen’s battery arm, PowerCo. In July 2025, QuantumScape and PowerCo announced that PowerCo would add up to $131 million in milestone-based payments over two years, tied to scale-up targets. The expanded agreement gives PowerCo earlier access to the QSE-5 pilot production line in San Jose and rights to produce up to 5 gigawatt-hours of QSE-5 cells annually under license.
In its Q2 2025 earnings update, QuantumScape reported liquidity of $797.5 million and extended its cash runway into 2029. The capital strength, combined with recent technical and licensing progress, provides the company a more stable footing as it moves toward commercial milestones.
Together, the Cobra production milestone and enhanced PowerCo deal stand out as the most significant recent catalysts, each reducing a portion of the execution risk investors have long warned about.
Financials, Risks & Challenges
QuantumScape remains in the pre-commercial stage, which means it has not yet recorded meaningful revenue from product sales. In its Q2 2025 report, the company posted a net loss of US$114.7 million and an adjusted EBITDA loss of about US$63 million. At the end of that quarter, QuantumScape held US $797.5 million in liquidity, which management says supports operations through 2029 assuming key technical and commercial milestones are met.
Costs remain high. Operating expenses are driven largely by research and development. In Q2, R&D expenses were over US $100 million. Capital expenditures are more modest but rising, especially for equipment and facilities needed to scale up production of sample batteries using the new Cobra separator process.
The challenges are many. First, scaling technology from lab or pilot scale to full-commercial battery cell volumes is difficult. The company needs to maintain high yields, consistency, safety, and reliability when building multi-layer cells under tighter manufacturing tolerances.
Second, dependency on external funding and milestone payments adds risk. Some funding comes from a licensing deal with Volkswagen’s PowerCo under terms that require hitting specific milestones. If those are delayed or missed the timing and amount of incoming cash could be adversely affected.
Competition is another threat. Other firms in the solid-state battery field such as Toyota, Factorial Energy and various Asian manufacturers are pushing forward aggressively. Some may have advantages in scale, supply chain, or government backing. This raises the possibility of being overtaken or having margins compressed.
In addition, valuation seems aggressive relative to current performance. The market cap is high, with investors pricing in large future potential despite the lack of commercial revenue. That increases the risk of correction if expectations are not met.
Bull vs Bear Case
Optimists see QuantumScape as one of the few companies capable of making solid-state batteries commercially viable. The company’s Cobra separator milestone and its expanded partnership with Volkswagen’s PowerCo strengthen the belief that its technology can transition from laboratory success to limited production.
Supporters argue that QuantumScape’s ceramic separator and anode-free design give it a technological edge that could deliver higher energy density and faster charging times than current lithium-ion batteries. The long-term payoff, if the company succeeds, could be significant, since global electric-vehicle demand continues to grow and automakers are seeking safer, lighter, and more efficient battery solutions.
The company’s solid liquidity position of nearly $800 million, and a cash runway projected into 2029, also provide it with time to solve remaining technical and scaling challenges.
Skeptics, however, point to the long history of battery startups that failed to move from prototypes to commercial-scale production. The company still faces years of engineering validation, potential delays, and manufacturing complexity. Even if QuantumScape’s cells perform as expected, it may take until the second half of the decade to reach consistent mass production.
Competition from large, well-funded automakers and battery suppliers is intensifying, meaning others could reach the market first with similar or cheaper technology. Finally, the lack of current revenue and the stock’s high volatility make it a speculative investment.
For investors with a low tolerance for risk, the bear case is clear: the company’s success depends on multiple unproven steps that must all align before solid-state batteries become a commercial reality.
Conclusion & Investor Takeaway
QuantumScape stands at a critical stage in its development. The company has made notable progress, particularly with the Cobra separator process and its deepening partnership with Volkswagen’s PowerCo, which together suggest meaningful technical and commercial momentum. However, the absence of commercial revenue and continued operating losses underline how early the company still is in its journey.
For investors, QuantumScape represents a high-risk, high-reward opportunity. Those who believe in the long-term potential of solid-state batteries may see value in holding a small, speculative position while monitoring production milestones and partnership updates.
More cautious investors may prefer to wait until QuantumScape demonstrates stable output or signs its first commercial supply contracts. Ultimately, the decision depends on individual risk tolerance and investment horizon. QuantumScape’s breakthroughs are promising, but execution will determine its future.
As Techi.com recently noted in its coverage of emerging battery technologies, innovation in this sector often takes longer than expected to reach market scale. For now, QuantumScape remains a company with impressive scientific progress but a long road ahead before profitability and market validation.
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