QuantumScape Jumps on Battery Tech Breakthrough and Soros Stake

QuantumScape  (QS) - Get Report jolted higher Wednesday after the battery maker revealed a new breakthrough in its battery technology and after billionaire George Soros’s investment firm disclosed that it has taken a stake in the startup.

QuantumScape shares were up more than 15% after the company disclosed that a new breakthrough in its battery technology could alter the landscape of electric vehicle battery range and re-charging speeds.

The San Jose-based company, which is attempting to pioneer solid-state lithium-metal batteries for electric vehicles, said it was able to produce multilayer battery cells, a crucial stumbling block in taking its technology from the lab to the real world.

“While there is still a lot of work to be done and we could encounter new challenges as we increase our layer count, this is an incredibly important result, and we are excited to have this so early in the year,” CEO Jagdeep Singh said in a letter to investors that was part of the company’s first quarterly financial report.

QuantumScape is one of several startups and incumbents working on developing solid-state batteries, an innovation that holds the promise of dramatically speeding up EV adoption by providing automakers with a safer, cheaper alternative to current lithium-ion batteries.

Following a virtual showcase of its prototype battery, QuantumScape in December said its battery prototype can charge to 80% capacity in 15 minutes, “faster than either conventional battery or alternative solid-state approaches are capable of delivering.”

That was enough to convince Soros and his team to invest. Soros Fund Management on Tuesday disclosed a $4.6 billion stake in QuantumScape, part of the billionaire philanthropist’s investment firm’s move to boost its exposure to technology.

Meantime, in a research note to clients, Wedbush Securities analyst Dan Ives on Wednesday called QuantumScape “the poster child stock for the EV global demand story,” calling the company’s ability to produce a battery cell that can charge up to 80% of capacity in 15 minutes a "game changer" if scaled up at mass volumes.

“In a nutshell, QS is a solid state battery play which could be viewed as an alternative to lithium-ion and could significantly lower the cost of electric vehicles down the road and change the economics behind an EV vehicle,” Ives said.

Shares of QuantumScape were up 15.26% at $58.37 in trading on Wednesday.