QuantumScape (QS), a company specializing in the development of solid-state lithium metal batteries, presents a challenging situation for investors due to its lack of commercially available products. Currently, it’s not earning significant income and is accumulating substantial losses, yet its market capitalization stands at a staggering $6.1 billion.
Despite appearing uncertain in the current market, QuantumScape has surged approximately 25% in the last year and is approaching its highest point within the past year. We’ll delve into why this speculative stock continues to increase – and whether it could potentially rise further within the next 12 months.
QuantumScape wants to reshape the EV battery industry
QuantumScape’s batteries, unlike traditional lithium-ion ones, operate using solid electrolytes rather than liquid ones. This unique feature allows them to store more power, charge quicker, and manage heat better compared to their lithium-ion counterparts. Yet, the production of these solid-state batteries is challenging and costlier, which is why they’re primarily used in devices like pacemakers and wearables instead of larger items such as consumer electronics and electric vehicles (EVs).
QuantumScape aims to shift the current market view by introducing its QSE-5 battery for electric vehicles (EVs), boasting an energy density exceeding 800 watt hours per liter and capable of being charged from 10% to 80% in under 15 minutes. In contrast, typical lithium-ion batteries employed in most EVs offer a density ranging between 300 and 700 Wh/L, with charging times averaging 20 minutes to an hour. Over the past ten years, QuantumScape has collaborated with Volkswagen in developing these high-performance batteries.
Why did QuantumScape’s stock rally over the past year?
Initially, when QuantumScape became a public company towards the end of 2020, they declared they would bring their initial battery products to market by 2024. However, failing to meet this timeline, they subsequently extended the launch date to 2026 instead.
The initial setback due to delays significantly deterred many early investors. Subsequently, the company’s stock dropped dramatically from its peak of $131.67 on December 22, 2020, down to a record low of $3.40 per share on April 8, 2025. However, QuantumScape’s stock has surged more than threefold since then for three fundamental reasons.
In late June, QuantumScape began the initial production of its advanced Cobra separator method, which represents a substantial improvement over its existing Raptor process. This upgrade is expected to enhance cell durability, increase equipment efficiency, and boost overall yields. The company plans to utilize the Cobra process to manufacture large quantities of its QSE-5 batteries for the first time. Deliveries of these samples to automakers could pave the way for the widespread commercialization of QuantumScape’s designs.
In the second development, QuantumScape decided to abandon the costly strategy of producing batteries at their own factories and instead switched to a less capital-intensive licensing approach. This model involves allowing other automakers to use QuantumScape’s technology in exchange for higher-margin fees, royalties, and milestone payments. Their initial customer under this new model is PowerCo, a division of Volkswagen. To conclude, QuantumScape has confirmed that it expects to begin earning revenue from its first field tests next year, despite analyst predictions of only $4.5 million in revenue with a significant net loss of $430 million in 2026. This projected loss notwithstanding, this would still be a significant milestone for their business.
Where will QuantumScape’s stock be in a year?
2027 predictions indicate a surge in its revenue to approximately $60.2 million, accompanied by a reduction in net loss to around $371 million. This growth is anticipated due to its partnership with PowerCo and orders from additional automakers. Additionally, the new manufacturing alliance with Murata, designed to enhance production of ceramic film for separators, is expected to bolster this expansion.
Despite QuantumScape’s stock appearing pricey with valuations over 100 times its projected sales for 2027, its growth prospects over the next year may be restrained, offering limited upside. Furthermore, during market downturns, it might not provide significant protection against losses, which could explain why insiders have been selling shares in the last quarter.
In simpler terms, QuantumScape could be a wise choice for long-term investment in the upcoming decade if you believe it will secure an early lead in the emerging solid-state battery market. However, due to its current reliance on news headlines and lack of substantial earnings, it may experience drops or remain stable over the next year.
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2025-07-20 11:12