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Bill Gates-backed electric car battery startup is on the cusp of changing the industry

Brian Sozzi
·Editor-at-Large
·3 min read

Even after a 60% surge in the stock price this month, QuantumScape (QS) founder and CEO Jagdeep Singh stresses he still isn’t constantly checking the company’s share price. Nope, he just has his head down trying to change the world of electric car batteries.

“I don’t claim to be someone who can predict the near-term stock market behavior. Our focus is to keep our nose to the grindstone, head down, and bring these batteries into real cars on real roads as fast as we can. If we do that, we think there is an opportunity to create a tremendous amount of value regardless of what the short-term stock price does,” Singh told Yahoo Finance Live.

QuantumScape — founded in 2010 by Singh and backed early by Microsoft founder Bill Gates and auto giant Volkswagen — recently took a big stride in bringing a major battery technology to market. And by extension, probably lifting QuantumScape’s market cap well beyond the current $22 billion level as the company moves from pre-revenue stage to serious revenue producer.

Earlier this month, Singh publicly revealed test results for QuantumScape’s solid state battery. QuantumScape’s data showed its battery cell could charge to 80% of capacity in 15 minutes. Further, it retains more than 80% of its capacity after 800 charging cycles, is non-combustable and boasts nearly double the energy density of high-end commercial lithium batteries.

The market took this development to mean two things (and then proceeded to send the stock soaring).

quantumscape
QuantumScape founder and CEO Jagdeep Singh

First, QuantumScape may have developed the battery that addresses some of the biggest problems with electric vehicles: speed to charge and safety. And secondarily, the company’s battery breakthrough may be leveraged across other commercial applications.

Investors who have piled on the QuantumScape bus in the weeks since the public disclosure do assume a great deal of risk, however.

For starters, the company isn’t expected to start production of its solid state batteries until 2025. And when the batteries do ship, they are likely to first go to support electric autos by Volkswagen — which owns 31% of QuantumScape’s outstanding shares after the company’s SPAC debut a few months ago.

“Unfortunately it takes a long time to get batteries into the market, we have to scale up productions and build technologies,” Singh acknowledges.

Meanwhile, it’s unclear if QuantumScape will have to raise more capital before it starts battery production given the capital intensive nature of the business. Singh says the company has $1 billion on the balance sheet and is well capitalized for its battery-making mission.

If Singh could pull off an electrifying future of super batteries, the payoff could be large. The company estimates revenue of $6.4 billion and adjusted operating profits of $1.6 billion by 2028.

Brian Sozzi is an editor-at-large and anchor at Yahoo Finance. Follow Sozzi on Twitter @BrianSozzi and on LinkedIn.

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