Patient investors should seriously consider a share position in electric vehicle (EV) battery manufacturer QuantumScape (NYSE:QS). Don’t over-leverage yourself; a $1,000 stake in QS stock should be fine. You might end up regretting it if you miss out on QuantumScape’s potential growth, especially when the company’s “forever battery” hits the market.
Sometimes, the financial market can be frustratingly short-sighted. People want results right now, but truly disruptive businesses need time to develop new products.
QuantumScape has always been unprofitable and isn’t loved by analysts. Nevertheless, don’t dismiss QuantumScape as a future game-changer. If you’re willing to try out a contrarian bet on an audacious EV battery startup, stay tuned as there’s a prime opportunity here.
EV Battery Market Trend Should Boost QS Stock
QS stock, once worth over $100, now trades for less than $8. It’s baffling and frustrating, but it’s also good to know that QuantumScape is past the hype phase. This means contrarian traders can pick up shares at a reasonable price point.
There aren’t many pure-play, publicly listed businesses in the solid state EV battery sector, and QuantumScape is one of them. It’s a smart move to get involved in this industry before it takes off. Market Insights Reports estimates that the global solid state battery market was worth $1.174 billion in 2022. The analysts expect that market to reach $21.612 billion by 2029, expanding at a compound annual growth rate (CAGR) of 51.61% during the projected time frame.
Furthermore, legendary EV industry expert Sandy Munro envisions solid state batteries contributing to the eventual extinction of internal combustion engine (ICE) vehicles:
“When these batteries are in production, there will be no comparison between the current technology or anything petroleum based—[solid state] is the kiss of death for gasoline and diesel.”
It’s a Long, Slow Road to Greatness for QuantumScape
I’ll be perfectly honest. A $1,000 position in QS stock could easily get cut in half before it doubles or triples. That’s because QuantumScape’s financial results aren’t anything to write home about. Moreover, the company is taking its time, advancing its “forever battery” at a gradual pace.
Yet, the payoff could be tremendous. If you haven’t read, Luke Lango’s detailed explanation of QuantumScape’s in-progress “forever battery,” stop what you’re doing and read it right now. Lango provides the nitty-gritty on how QuantumScape’s “more compact, more efficient solid battery that outperforms conventional batteries in terms of energy density and charging speed” will upend the EV battery market in the 2020s.
Disruption doesn’t always happen overnight, though. It’s encouraging to know that QuantumScape has already shipped its 24-layer prototype battery cells to automotive original equipment manufacturers (OEMs).
Plus, QuantumScape’s management reportedly anticipates that the company’s battery production will commence by 2024. So, just sit back and relax, and know that QuantumScape is working diligently to advance its next-gen battery technology.
Try a $1,000 Bet on QS Stock
Ironically, it seems to be taking QuantumScape forever to develop its “forever battery.” But then, technological revolutions don’t necessarily happen in a day or a week.
Clearly, the solid state EV battery market is on an upward trajectory. If you’re willing to be patient with QuantumScape, you might reap outstanding rewards someday. Therefore, feel free to consider your time horizon and risk tolerance, and try out QS stock with a $1,000 long-term position.
On the date of publication, David Moadel did not have (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.