QuantumScape Shares Surge 16% on Volkswagen Partnership
Shares of QuantumScape (QS) surged over 16% on Wednesday, following a major partnership announcement. Despite the stock's recent performance, The Motley Fool's Stock Advisor team did not include QuantumScape in their list of top 10 stocks for investors to buy now.
QuantumScape, a battery technology company, has secured an anchor investor and customer, Volkswagen's battery subsidiary PowerCo. PowerCo has committed to investing an additional $131 million in QuantumScape. The two companies recently demonstrated a modified Ducati motorcycle powered by QuantumScape's battery cells at Volkswagen's press conference in Munich.
QuantumScape's shares have more than doubled in the past three months, reaching a market cap of over $8 billion. However, the company has not yet generated first sales from its core product or proven its profitability. It has, nonetheless, entered into a joint development agreement with another global automaker and an agreement with Murata Manufacturing to explore ceramics production in Japan.
QuantumScape has also partnered with Corning (GLW) to jointly develop ceramic separators for commercial use in solid-state lithium-metal batteries. This partnership aims to scale up production of critical components for QuantumScape's battery technology, bringing the company closer to commercialization. QuantumScape is targeting field testing of its battery cells in 2026.
QuantumScape's recent partnership with Volkswagen and its progress towards commercialization have driven its stock price up. However, investors should consider the company's valuation and its lack of sales and proven profitability before investing in the stock market.
