The EV trade appears to be alive and well. Today, shares of QuantumScape (NYSE:QS) surged around 8% on news that its solid-state batteries could see a massive demand boost. Investors in QS stock have cheered the news, and the market appears to be heating up on this stock.
Let’s dive into what the news means for investors, and why this stock is surging right now.
Investors in QS Stock Are Betting On Solid-State Batteries
Investors have begun to reignite their interest in QuantumScape of late. This stock surged to all-time highs of more than $130 per share late last year on speculation the company could be close to achieving battery supremacy.
Its solid-state battery cells provide potentially game-changing technology for the EV sector. Recent announcements the company’s backer Volkswagen (OTCMKTS:VWAGY) is looking to switch to multilayer solid-state battery cells has furthered the excitement around this stock.
Well, multilayered solid-state battery cells recharge faster, have lower costs and improved battery life. These factors are what some believe approximate the “holy grail” of battery technology innovation.
EV automakers have been working hard to find such breakthroughs in battery performance. Accordingly, companies like Volkswagen have partnered with QuantumScape in a bid to grow their EV market share faster. Currently, companies like Tesla (NASDAQ:TSLA) have a massive head-start. However, holding the “holy grail” in the race to battery technology supremacy is the new “arms race” investors are paying attention to right now.
The Bottom Line
Volkswagen is planning on integrating QuantumScape’s battery technology in its vehicles by the middle of the decade. Indeed, that’s a long timeline for investors bullish on its products to wait. However, this appears to be one of those long-term opportunities with near-term upside right now. As more breakthroughs are announced, investors could continue to pile into this trade.
If other companies pile into solid-state batteries, QuantumScape could outperform, due to its early mover advantage. I would highly encourage EV investors to take a look at the “picks and shovels” options in the EV space right now. Battery makers like QuantumScape with large backers like Volkswagen are attractive for a reason right now.
On the date of publication, Chris MacDonald did not have (either directly or indirectly) any positions in the securities mentioned in this article.