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Want to Make a Venture Bet on Unproven Battery Technology?

QuantumScape wants to build a battery that puts EVs on par with internal combustion engines. It’s got a $1 billion war chest and is backed by famous investors like Bill Gates, Jeremy Grantham, and Tesla cofounder J.B. Straubel.

Caleb Dismuke
Caleb Dismuke
3 min read

QuantumScape went public in September via a SPAC (special purpose acquisition company). Its ticker symbol is QS and is up 62% YTD.

If you choose to invest, understand that this is a highly speculative bet. It’s got a high ceiling and low floor. It could be worth billions or zero.

What they're trying to do

On almost every performance metric, EVs lag internal combustion engines.

QuantumScape wants to level the playing field by inventing and manufacturing the world’s first solid-state battery.

What’s a solid-state battery? From Wired:

Instead of a conventional liquid electrolyte—the stuff that ferries lithium ions between electrodes—it uses a solid electrolyte. Also, the battery’s negative terminal, called its anode, is made from pure lithium metal. This combination would send its energy density through the roof, enable ultra-fast charging, and would eliminate the risk of battery fires.

This video explains the difference between the batteries we use today (lithium-ion) and solid-state batteries.

The data

On Tuesday, December 8, QuantumScape's cofounder and CEO, Jagdeep Singh, publicly revealed test results for the company’s solid-state battery.

From Wired:

Singh says the battery resolved all of the core challenges that have plagued solid-state batteries in the past, such as incredibly short lifetimes and slow charging rate.

According to QuantumScape’s data, its cell can charge to 80 percent of capacity in 15 minutes, it retains more than 80 percent of its capacity after 800 charging cycles, it’s noncombustible, and it has a volumetric energy density of more than 1,000 watt-hours per liter at the cell level, which is nearly double the energy density of top-shelf commercial lithium-ion cells.

Competitors

With a potential market worth $82 billion by 2027, competition will be vicious.

Toyota will debut its solid-state battery at the 2021 Tokyo Olympics. But admits that mass production won't be ready until 2025 or 2030.

A six-year old startup called Solid Power is also producing a line of solid-state batteries and has partnerships with Ford, BMW, and Hyundai.

The bottom line

Like I said at the top. This is a highly speculative bet with a wide range of potential outcomes.

Christopher Robinson, a senior analyst at Lux Research, thinks it'll be 5-10 years before solid-state batteries are used in mass production. So patience is mandatory.


Did QuantumScape Just Solve a 40-Year-Old Battery Problem?
Earlier this year, the startup claimed to have a revolutionary solid-state lithium-ion cell that could change EVs forever. Now it has data to prove it.
Volkswagen-backed QuantumScape to go public via SPAC to bring solid-state batteries to EVs – TechCrunch
QuantumScape, the solid-state battery company backed by Volkswagen Group, has agreed to merge with a special purpose acquisition company Kensington Capital Acquisition Corp. as it aims to raise the capital it needs to commercialize solid-state batteries for electric vehicles. The merger will give Qu…
Legendary investor Jeremy Grantham made an accidental $265 million profit on a SPAC deal after previously criticizing blank-check companies
Despite his gains, Grantham views SPACs as a ‘reprehensible instrument, and very very speculative by definition.’
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Caleb Dismuke

Enjoy writing, cooking, and brainstorming business ideas.