Is QuantumScape Stock a Buy Now?

Key Points

• QuantumScape's solid-state lithium-metal battery technology aims to achieve higher energy density, faster charging, and improved safety compared to traditional lithium-ion batteries.

• The company has partnered with PowerCo, Volkswagen Group's battery manufacturing arm, to produce its technology and support a capital-light business model.

• Analysts predict that meaningful revenue won't materialize until 2027, with a surge forecast for 2028.

• 10 stocks we like better than QuantumScape ›

QuantumScape (NYSE: QS) is leading the charge to revolutionize energy storage with its innovative solid-state lithium-metal battery technology for electric vehicles and other applications. Its cutting-edge battery technology promises higher energy density and faster charging times, while also significantly improving safety compared to traditional lithium-ion batteries.

The company has made headlines recently as its battery technology progresses, and the stock has surged 265% from its 52-week low. Here's what investors need to know about QuantumScape's investment prospects and what to expect from the company over the next several years.

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Image source: Getty Images.

QuantumScape's battery technology ambitions

Last year, QuantumScape partnered with PowerCo, the battery manufacturing arm of the Volkswagen Group. Volkswagen has been a significant investor in QuantumScape since 2012, committing around $380 million, and is the company's largest shareholder. QuantumScape's collaboration with PowerCo looks to advance its QSE-5 technology platform, with the goal of scaling up production at PowerCo's facilities.

PowerCo is the "anchor customer" in QuantumScape's expanding technology ecosystem, as the company aims to develop a capital-light licensing model and expand its partnerships with customers worldwide. Instead of incurring heavy manufacturing investments, QuantumScape would license its technology to these partners, reducing its exposure to manufacturing risks and capital demands.

QuantumScape is focused on broadening its range of potential licensing agreements with other automotive manufacturers. It also aims to strengthen its relationships with technology partners and key players across the battery value chain.

This recent news sent the stock soaring

One of QuantumScape's primary goals coming into 2025 was to bring the Cobra separator process into baseline production.

Cobra represents a "step-change innovation in ceramics processing" designed to enable a significant improvement in separator productivity. This new process offers a 25 times improvement in heat treatment speed and requires only a fraction of the physical space per film start (compared to its prior-generation Raptor process).

In June, the company announced that its Cobra separator process had reached baseline production, a key step toward commercializing its batteries. The successful baselining of Cobra is crucial for enabling higher-volume B1 sample production of their QSE-5 cells, which will be used in a launch program designed to showcase them, with field testing scheduled to commence in 2026. Since the announcement, the stock has surged 190%.

Be mindful of the timeline and its finances

One thing investors should be aware of regarding QuantumScape is that it is a company in its early growth stage. The company has not generated any revenue to date and continues to incur losses as it spends heavily on research and development. QuantumScape posted an operating loss of $123.6 million in the first quarter and expects to incur significant expenses and ongoing losses into the future.

Capital expenditures in the first quarter of 2025 were $5.8 million, primarily supporting equipment and facilities for higher-volume QSE-5 B1 sample production using the Cobra separator process. The company's full-year capital expenditure guidance for 2025 is between $45 million and $75 million.

QuantumScape reported $860.3 million in cash and equivalents at the end of the first quarter and anticipates this cash runway is enough to extend into 2028. This runway has expanded since it announced its licensing agreement with PowerCo, which is expected to lower costs and capital requirements compared to previous joint venture arrangements.

Is QuantumScape a buy today?

I'm excited about the potential of QuantumScape's groundbreaking battery technology, which has the potential to transform energy storage in the future. However, the company is still in the early stages of development and testing, and will continue to incur losses as it brings its vision to life.

Analysts have noted that we should not expect meaningful revenue from QuantumScape until 2027, with projections of $51.6 million that year, followed by a significant leap to $265 million in 2028. Until then, we're looking at a story-driven stock that will attract attention but may not offer as much upside from here, especially given its recent surge.

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Courtney Carlsen has no position in any of the stocks mentioned. The Motley Fool recommends Volkswagen Ag. The Motley Fool has a disclosure policy.