QuantumScape (NYSE:QS) looks fully charged on Tuesday, with shares up nearly 16% in pre-market trading. Investors are celebrating what looks like a massive victory for the solid-state battery company, and a massive victory for electric vehicles. So what happened? And what do you need to know about QS stock this morning?
Remember, QuantumScape is a recent addition to the public markets. Although the battery startup has been around since 2010, QS stock just began trading after closing its reverse merger with Kensington Capital. Now, investors are paying close attention to the battery technology to get a feel for the upside potential.
Today, QuantumScape just made that process a whole lot easier. Earlier this morning, the company shared performance data on its solid-state battery technology. According to the report, these batteries are capable of working at very high rates of power and can enable a 15-minute charge to 80% capacity.
As the company tells it, this is faster than both conventional batteries and solid-state competitors. Additionally, QuantumScape shared that its battery technology can last for “hundreds of thousands” of miles and is safe to operate at a wide range of temperatures.
So what is the big deal? Well, solid-state batteries are a massive disruption, and importantly, they promise to disrupt and elevate the electric vehicle market. Unlike traditional batteries that use liquid electrolytes, the thinking is that solid-state batteries will be faster and safer than current lithium-ion batteries in EVs. And remember, there are seemingly dozens of electric vehicle companies ramping up operations now. QS stock is rising on its potential — will the data attract new customers?
Why This Matters for QuantumScape and QS Stock
So why does this news really matter?
There are two answers to that question. The first is that as a new entrant to the public markets, investors may be starting to really dive into research. When trading as Kensington Capital, QS stock looked hot because of the SPAC craze. Now, the company needs to prove itself. With the release of its solid-state battery technology data, it is taking a major step in the right direction.
However, the second reason offers much more potential for investors. Broadly, Wall Street has accepted that the future of transportation is electric. But there are real challenges to consumer adoption. For instance, some consumers might prefer the performance aspects of an internal combustion vehicle. And on top of that, limited driving ranges create some anxiety. Although plans to build out a national charging network helps ease those concerns, better batteries would go a long way.
In that context, just think about the QS stock news. The company is saying that its batteries are high performance and that they charge quickly. In just 15 minutes, an EV could be back on the highway to power through a road trip.
Keep an eye on this news and how electric vehicle makers react. Investors should also note that QuantumScape is hosting a battery showcase at 11 a.m. Eastern. There, the company could share more about its technology and its role in the EV market.
On the date of publication, Sarah Smith did not have (either directly or indirectly) any positions in the securities mentioned in this article.
Sarah Smith is a Web Content Producer with InvestorPlace.com.