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QuantumScape said it was working with a prospective launch customer in the automotive sector for the first commercial product.
Courtesy Quantumscape
Shares of electric-battery start-up
QuantumScape
were soaring Thursday, following the company’s second-quarter earnings report. But weren’t the reason for the stock surge.
For the second quarter,
QuantumScape
(ticker: QS) reported a loss of 26 cent a share on no sales.
The company is still pre-sales. It works on solid-state EV batteries. Solid-state in this instance refers to a solid electrolyte, the part of the battery that facilitates the flow of electric current. Solid-state batteries are next-generation technology that promise longer range, lower costs, better safety and faster charging. All those are good things, but the technology hasn’t yet been proven commercially.
Wall Street was looking for loss of 20 cents. The loss was wider than estimates but the stock was surging 25%. The
S&P 500
and
Nasdaq Composite
were up about 0.5% and 1.1%, respectively.
Investors are focused on something else. In its second-quarter update, the company announced it was working with a prospective launch customer in the automotive sector for the first commercial product.
That means sales. Currently, Wall Street projects the company will generate revenue in the first quarter of 2025.
“QuantumScape appears to be at least on track with timelines provided last quarter (if not slightly ahead),” wrote Truist analyst Jordan Levy in a report. He said the company was “gaining momentum” but still rates shares Hold because of a “balanced near-term risk/reward profile.” Levy’s target price is $10 a share. QuantumScape stock is trading at more than $12 a share.
Along with EV commercialization, QuantumScape reiterated it also was working on stationary energy storage applications.
Battery storage can be paired with solar and wind power to make those power-generation assets more reliable.
Tesla
(TSLA) already sells utility-scale battery storage products.
Storage is another market for QuantumScape, but the EV launch pattern is the main reason shares were higher Thursday.
QuantumScape stock has risen about 107% this year. The shares were still off from all-time highs of almost $133 a share reached in December 2020.
Write to Al Root at allen.root@dowjones.com