QuantumScape Stock Looks a Little Less Risky After Its Most Recent Report

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nThe search for the holy grail of lithium battery design is going remarkably well for QuantumScape (NYSE:QS), though QS stock hasn’t made any significant moves as a result.

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Its recently-released investor presentation showed promising results in its solid-state battery technology.

QuantumScape is currently the front-runner in commercializing solid-state batteries and is an ideal investment opportunity for investors with a high-risk tolerance.

The company has a strong economic moat backed by automotive giants such as Volkswagen (OTCMKTS:VWAGY). Its patents and trade secrets solidify its position in the business.

Moreover, the market for solid-state batteries is colossal and is expected to reach over $44 billion by the conclusion of 2024.

With massive committed capital from various entities and a robust balance sheet, the company has the resources to invest in its R&D and commercialization efforts continually. That makes QS stock is a high-risk-high reward investment that is likely to bear a lot of fruit once the company’s objectives come to fruition.

Solid Progress So Far

Results for QuantumScape’s single-cell batteries have been encouraging so far. It is the first battery that the company plans to produce on a massive scale.

Though it is working on more exciting four- and 10-layer batteries, the single-layer battery cell is off to an incredible start with energy cycling at an amazing 80% as the result of its anode-less technology. The anode-less technology enables the lithium to cycle faster than a traditional lithium-ion battery.

Furthermore, results for the company’s four-layer battery have also been heartening. The battery is denser than a single-layer cell and has four layers of lithium metal chemistry and electrolyte separators. Therefore, it is more powerful and can be effectively used for electric vehicles and larger machines.

Perhaps the company’s most intriguing technology is its 10-layer battery which has multiple use cases. Its application may have a far-reaching impact on the proliferation of EV technology and in a clean energy future.

The only problem with the 10-layer battery is the lack of cycles. It only has a capacity of 40 cycle snapshots, which is likely to improve with time. However, if QuantumScape can nail the 10-layer battery, its real-world applications are immense and can transform multiple technologies for the better.

Strong Outlook

Quantumscape is in pole position to become a leader in battery technology. The latest investor presentation shows that it’s on track to commercializing its batteries with some interesting developments ahead.

Moreover, the report dispels many of the concerns surrounding four-layer and 10-layer batteries. The report shows that these batteries can effectively hold up under an abundant number of cycle snapshots and can operate under low temperatures.

Additionally, its peers have shown more promise than other OEMs, potentially leading to contracts with solid-state battery teams as we advance.

The global energy market is set to grow at an incredible pace, and most of it will come from electric vehicles. According to estimates, the EV market could potentially grow to $44.24 billion in a couple of years.

Moreover, it has more than $1.5 billion in cash, covering several years of R&D expenses. QuantumScape has a robust balance sheet and key partnerships, which will facilitate a fast scale-up.

Bottom Line on QS Stock

QuantumScape is inching closer to making solid-state batteries a reality. The latest investor presentation has reaffirmed my belief in the long-term potential of the stock.

Looking ahead, it needs to ensure that it continues to meet its objectives to continue investor confidence. Liquidity is not much of an issue at this stage, and it seems to have enough resources to see its plans past the finish line.

QS stock has a strong long-term case in the evolving EV battery sector despite its fair share of risks.

On the date of publicationMuslim Farooque 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

Muslim Farooque is a keen investor and an optimist at heart. A life-long gamer and tech enthusiast, he has a particular affinity for analyzing technology stocks. Muslim holds a bachelor’s of science degree in applied accounting from Oxford Brookes University.