What happened to the "monster stock" Quantumscape, which saw a 43% surge in the US stock market?

On Thursday, the stock price of battery "unicorn" QuantumScape surged 43% after Volkswagen announced that QuantumScape's solid-state lithium battery had passed a crucial durability test.

According to reports, Volkswagen's battery subsidiary, PowerCo, conducted endurance tests using QuantumScape's solid-state battery, and the results showed that it can achieve an ultra-long lifespan of 500,000 kilometers with almost no range degradation.

PowerCo stated that the QuantumScape battery "achieved over 1,000 charge cycles with a capacity still exceeding 95%," which is crucial for the development of electric vehicles. Frank Blome, CEO of PowerCo, said:

"These results are extremely encouraging and greatly expand the potential of solid-state batteries."

Compared to traditional lithium batteries, solid-state lithium batteries have advantages in many aspects. Therefore, solid-state batteries have long been seen as a breakthrough method to overcome the performance limitations of current electric vehicles, as previously introduced by Wall Street News.

Since the beginning of this year, QuantumScape has accumulated a 38% increase in three trading days and a 73% increase in the past 12 months.

A solution for the next generation of electric vehicles

Solid-state lithium batteries are lithium anode batteries without liquid electrolytes, while traditional lithium batteries mainly consist of positive and negative electrode materials, electrolytes, and separators.

With the support of solid-state lithium battery technology, automakers may be able to achieve the performance of "600 miles of range on a single charge" for electric vehicles at a cost lower than that of fuel vehicles, according to some media reports.

Solid-state lithium batteries not only have longer range, but also offer lower costs, faster charging speeds, and higher safety, making them the "ultimate solution" for the development of the next generation of electric vehicles.

Stan Whittingham, the 2019 Nobel Prize winner in Chemistry, has stated that the most challenging part of manufacturing solid-state batteries is meeting the requirements of high energy density (1000Wh/L), fast charging, long cycle life, and a wide temperature range.

QuantumScape directly addresses this pain point.

The test conducted by Volkswagen on QuantumScape's battery completed over 1,000 charge cycles, equivalent to a driving distance of 500,000 kilometers, and the battery "hardly aged" with still 95% of its capacity remaining.According to Jagdeep Singh, CEO of QuantumScape, the results show that their battery design "achieves excellent performance" and currently no other car battery can demonstrate such a high rate of discharge capacity retention.

Furthermore, previous experimental results have also shown that QuantumScape has significantly reduced the size of the battery through its unique structural design, making QuantumScape's solid-state battery almost the same size as a card, while potentially providing more power at a lower cost.

All of this is expected to help the electric vehicle industry, which has long been constrained by high battery costs.

The market seems to be too excited

However, solid-state lithium batteries are still in their early stages and have not yet been fully commercialized.

Some media outlets believe that QuantumScape is still in its early stages and may not become mainstream, so investors should be cautious about chasing after it. Jagdeep Singh also hinted in his statement on Thursday that we still need to make more efforts to bring this technology to the market.

Previously, after QuantumScape merged with a SPAC and went public at the end of 2020, it "rode the wave" in the bull market of electric vehicles. The stock price soared from $25 to $133 at the end of 2020, and then plummeted 40% at the beginning of 2021, going from hot to cold in a short period of time, which can be described as crazy.

Moreover, QuantumScape is not the only company involved in the manufacturing of electric vehicle batteries. Tesla, BYD, Toyota, and others have also been developing solid-state batteries.

From the perspective of stock price alone, QuantumScape's skyrocketing stock price in this round is not entirely due to the stimulus of the news.

Previously, QuantumScape's stock price had been severely hit, so the starting point of this round of increase was at a low point. In addition, the short squeeze on that day also intensified the rise in the stock price.

According to the media, the short interest ratio of QuantumScape's stock was close to 20% before, which is about 10 times the normal short interest ratio of the S&P 500 index constituents.