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QuantumScape Seeks $859 Million to Fund Pilot Line Expansion

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Gabrielle Coppola
·2 min read
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(Bloomberg) -- QuantumScape Corp., an electric-vehicle battery startup that went public via a reverse merger, said it’s seeking to raise as much as $859 million to fund expansion of a pilot production line.

Shares of the San Jose, California-based company have rallied 18% since Feb. 15, the day before it announced it cleared a key hurdle in the development of its solid-state battery technology. At the time, it also said it would build a 200,000 square-foot pilot line in California to make prototype cells for partner Volkswagen AG and other potential auto customers.

QuantumScape is now seeking to more than double the capacity of that pilot line, dubbed QS-0, it said in a regulatory filing Monday. It wants to provide more prototype cells to VW and other automakers, plus prospective customers in other industries, according to the filing.

The company will use proceeds from selling shares to build the pilot line and secure a lease for it in the second half of 2021, with the aim of starting production of prototype cells in 2023.

QuantumScape shares fell as much as 8.6% to $58.79 in pre-market trading in New York on Tuesday, a day after the stock sale was disclosed. The offering is expected to be priced after the market closes Wednesday, according to a person familiar with the matter.

QuantumScape shares spiked late last year after it merged with the blank-check company Kensington Capital Acquisition Corp. and have swung wildly since then.

It’s among a group of companies developing solid-state batteries, an innovation that could dramatically speed up adoption of electric vehicles. The batteries are seen as a safer, cheaper alternative to the lithium-ion batteries currently used in the industry.

Proceeds will also be used to fund QuantumScape’s portion of a battery manufacturing facility it plans to build as part of a 50-50 joint venture with VW. That facility, dubbed QS-1, will produce 21 gigawatt hours of batteries.

VW has committed to using QuantumScape’s battery technology in its EVs through a joint venture if enough batteries can be produced at competitive prices.

The automaker is obligated to invest another $100 million in QuantumScape if its batteries meet certain technical specifications by March 31, according to the filing. QuantumScape will complete the required tests shortly before that date, and if the milestone isn’t met and VW doesn’t waive the requirement, the battery maker warned it won’t receive the financing.

(Updates with pre-market trading in the fifth paragraph.)

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©2021 Bloomberg L.P.

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