Combining the allure of solid-state batteries, celebrity VC investors and SPAC financing has allowed QuantumScape to land $1 billion in the bank and a valuation of $13 billion even though it has not reached the pre-production phase and won't have significant revenue until late in this decade.
QuantumScape claims to have solved the solid-state battery riddle that has stumped generations of battery scientists. It has created a commercially viable, rechargeable lithium metal battery with enough oomph to make it a contender to displace the internal combustion engine.
With potential energy density exceeding 400 watt-hours per kilogram, solid-state battery deployment could mark the tipping point for adoption of electric vehicles and open up massive transportation markets. QuantumScape's battery employs lithium metal anodes (referred to by the company as "solid state"), which could be the key to the next wave of EV battery performance gains, according to the findings from BMW shown in the chart below.
QuantumScape CEO Jagdeep Singh points out that only 2 percent of vehicles in the U.S. are electric. He attributes that to charge time, cost and poor battery energy density. In Singh's view, a battery that addresses these limitations can serve the remaining 98 percent of the trillion-dollar automotive market.
Keep 'em separated
Among its many innovations, QuantumScape has replaced the polymer separator used in conventional lithium-ion batteries with a ceramic separator, enabling the use of an anode of metallic lithium instead of one made of carbon or carbon-silicon. The metallic lithium anode is formed in situ when the finished cell is charged.
A viable lithium-metal anode would allow higher energy density than is possible with conventional anodes and therefore longer driving range with the potential of faster charging, long cycle life and improved safety – qualities that are fundamental to changing the minds of those reluctant to purchase an EV.
However, QuantumScape's ceramic separator appears to be expensive and difficult to produce.
A battery expert tells Canary Media:
"I believe that retail investors and perhaps even the technical staff at Volkswagen have been severely underestimating the scale of the challenges facing QuantumScape. Manufacturing defect-free ceramic separators at meters-per-second speed is very unlike other manufacturing challenges faced by the battery or PV industry previously. This is insanely hard. Elon Musk always pounds his chest about "production hell" and how difficult making cars is. Making these ceramic separators will be at least 10× harder than any technical challenge Tesla [has] faced."
Analysts and industry folk point out the clear parallels between lithium-ion storage and the silicon PV markets when it comes to the pace of price declines, growth trajectories and their displacement of coal generation.
A business parallel with solar that the storage industry might want to avoid is how the photovoltaic market coalesced around a narrow set of Chinese-made silicon technologies after a U.S. venture capital frenzy that set the solar investment clock back a decade. Manufacturability, cost reduction and actual industrial policy won the solar market for China, rather than exotic science.
Here's a QuantumScape parallel that was faced by many now-defunct solar startups: When QuantumScape was founded 10 years ago, lithium-ion batteries cost $250 per kilowatt-hour. If and when the company does bring its technology to market in 2026, lithium-ion batteries will be below $90 per kilowatt-hour, and QuantumScape's cost assumptions will be ancient history.
At the same time, the firm will have to face down a global lithium-ion manufacturing infrastructure with fleets of already-depreciated factories.
As David Roberts reported, one battery camp sees conventional lithium-ion batteries as having too big a lead for any other technology to catch up. But Roberts also cites the findings of Breakthrough Batteries, a report by more bullish analysts at RMI who believe that other battery chemistries will start to find niche applications and scale up in the mid-2020s.
Others firms working on solid-state technology include Ionic Materials, SES (formerly Solid Energy; General Motors is an investor), Sion Power (also using sulfides) and Prieto Battery. Toyota has made significant investments in solid-state battery development based on sulfides, as has Samsung.
Sakti3 was a solid-state battery developer that was acquired and then quickly shut down by vacuum builder Dyson. Seeo, which had developed a polymer electrolyte, was acquired by Bosch and then promptly shuttered. Apple owns a number of solid-state battery patents from its acquisition of the now-defunct Infinite Power Solutions.
She blinded me with science
Battery specifications have been prone to such distortion over the last few centuries that organizations have adopted processes to spot the red flags that Thomas Edison warned us about.
Cell Press has a standardized data reporting for batteries. The U.S. Council for Automotive Research has its own battery test procedures. Here's a blog post from research university ETH Zurich with tips on navigating battery spec disinformation. A team at Carnegie Mellon University is attempting to quantify the hype cycle for new battery technologies.
Scorpion Capital, a little-known short-seller, suggested last week in a lengthy and vituperative screed that QuantumScape had falsified or ambiguously presented battery performance data. QuantumScape’s share price plunged by 10 percent after the report hit, and the company lost more than $1 billion in market value. Short sell accomplished.
QuantumScape responded with a tweet thread, stating that it “stands by its data, which speaks for itself. We have provided higher transparency than any other solid-state battery effort we are aware of, with details on current density, temp, cycle life, cathode thickness, depth of discharge, cell area, pressure.”
The battery pioneer has revealed more performance data than most battery builders. But for all its claims of transparency, the findings have not been verified by an independent third party.
After 10 years in business, QuantumScape is just now testing a battery sample the size of a hearing aid or watch battery. This test cell is only one layer of what will be a 100-layer assembly with different characteristics and packaging than the single-layer device.
Readers have contacted your humble narrator, urging me to press QuantumScape for more detailed specs on operating voltage range, nominal voltage of the cell, terminal charge voltage, energy density per weight, energy density per volume, power density per weight, power density per volume, “C” characteristics and the number of complete charge-discharge cycles it can withstand before dropping below 80 percent of its original capacity.
QuantumScape does provide glimpses of these specifications – but not always at a level of rigor that would satisfy a sophisticated customer or scientific review board.
Like any good citizen or battery nerd seeking scientific rigor, Steve LeVine of The Mobilist wonders why QuantumScape "doesn’t simply put all the doubts to rest by paying for an independent, third-party validation of its system."
That doesn't seem a lot to ask for a now-public company.
After 10 secretive years in business, QuantumScape went public in November on the New York Stock Exchange via a reverse merger with Kensington Capital Acquisition and backing from Volkswagen, Breakthrough Energy Ventures, Khosla Ventures, Kleiner Perkins, Capricorn Investment Group and other big names.
Despite its substantial war chest and aspirational rhetoric, QuantumScape is still a development-stage startup facing enormous technology and scaling risk as it attempts to move from lab to production.
It’s a testament to the difficulty of developing a new battery technology that it has taken more than a decade and hundreds of millions of dollars just to bring this device to the edge of pre-pilot production.
There's still a long way to go. According to a battery expert close to the company:
"Anyone who gives you a technical roadmap beyond two to three years in the world of battery technology is simply saying, 'A very long time, and we don't know how long.' Any pronouncements about VW putting these things into cars in 2025 are ridiculous — it's anyone's guess."
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