Why Is QuantumScape (QS) Stock Powering Up Today?

  • QuantumScape (QS) stock is back in the green today.
  • The battery maker is rising on some positive manufacturing news.
  • QuantumScape has begun shipping 24-layer prototype battery cells for testing,
The entrance to QuantumScape Headquarters QS stock
Source: Tada Images / Shutterstock.com

QuantumScape (NYSE:QS) stock is rising today on an important product update. The electric vehicle (EV) battery innovator announced this morning that it has shipped its first 24-layer prototype lithium-metal battery cells. Known in the industry as A0 samples, the cells have been sent to automotive original equipment manufacturers (OEMs) to be tested. This represents a major step forward for QuantumScape in terms of getting its products to market and into EVs.

After weeks of trending downward amid hostile market conditions, QS stock is finally rising again. This news may be exactly what the company needs to end an otherwise difficult year on a positive note.

Let’s take a look at today’s announcement and what it means for QS stock investors.

What’s Happening With QS Stock?

QS stock began today by falling, but it has already rebounded. As of this writing, shares are up 5% for the day. These gains may not initially seem like much, but investors should remember that QuantumScape is currently battling highly unfavorable market conditions. In an economy driven by severe interest rate hikes, investors tend to shy away from risker plays. What’s more, as a pre-revenue company, QuantumScape is still seen as a speculative play. That makes any type of growth worth noting.

These macroeconomic headwinds have made for a difficult season for QS. But today’s news has already signaled a turnaround that could easily continue. It’s very important for a company like QuantumScape to demonstrate progress getting its batteries to market. This recent shipping update proves that its operations are moving forward. The company describes the move as a “key public milestone” for 2022, highlighting the progress it represents:

“With 24 layers, each comprising a solid-state separator, a cathode, and an in-situ-formed lithium-metal anode, these prototype cells have capacities in the multi-amp-hour range, a range the company believes is relevant for a variety of applications, including automotive and consumer electronics.”

After receiving the cells, OEMs will be able to begin the process of testing, allowing them to provide feedback on how the tech performs. Of course, the company still has a significant amount of work to do on these batteries. But this testing is an important phase of product development. According to the statement, the company expects to improve quality and consistency in the years ahead as it moves toward full commercialization.

The Road Ahead

It is also worth noting that QuantumScape’s new cell format contains A0 cells, representing the completion of another important production achievement. As the company states:

“This new architecture is a hybrid between prismatic and pouch cells designed to support the uniaxial expansion and contraction of the lithium metal during charge and discharge.”

InvestorPlace’s Luke Lango notes that QuantumScape’s technology has tremendous potential to revolutionize EV batteries and other important areas of technology. For this reason, Lango has maintained a bullish stance on QS stock, believing it can soar by more than 10x by the end of the decade. While its progress has been slow, today’s news is a good indicator that QuantumScape is on track for accomplishing its goals.

On the date of publication, Samuel O’Brient did not hold (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.

Samuel O’Brient has been covering financial markets and analyzing economic policy for three-plus years. His areas of expertise involve electric vehicle (EV) stocks, green energy and NFTs. O’Brient loves helping everyone understand the complexities of economics. He is ranked in the top 15% of stock pickers on TipRanks.

Article printed from InvestorPlace Media, https://investorplace.com/2022/12/why-is-quantumscape-qs-stock-powering-up-today/.

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