QuantumScape (QS) announced a secondary stock offering to fund growth and a larger production line, after EV partner Volkswagen (VWAGY) set a timeline for switching to solid-state batteries. QuantumScape stock tumbled.
The solid-state EV battery maker will offer 13 million Class A shares and use proceeds to “to build a larger QS-0 pre-pilot line than recently announced,” QuantumScape said in a release late Monday.
QuantumScape also will use proceeds “to cover its full share of equity contributions to its joint venture with VW for the previously disclosed 20GWh expansion of QS-1 joint manufacturing facility; and for working capital and general corporate purposes.”
Underwriters have an option to buy an additional 1.95 million Class A shares of QuantumScape stock.
Earlier this year, QuantumScape appeared to achieve a major breakthrough in developing solid-state lithium metal batteries. The batteries promise to be safer and cheaper, have a longer life span, charge faster and have more energy density than existing lithium ion batteries.
On Feb. 16, the company revealed it can produce multilayered battery cells, though its four-layer battery is still short of the 12 or so needed to be commercially viable.
But the company is confident enough in its ability to make progress that it decided to build a “pre-pilot” production facility to make “enough batteries for hundreds of long-range battery electric test vehicles per year” by 2023.
Shares lost 10.6% to close at 57.46 in Tuesday’s stock market trading. QuantumScape stock is forming a deep base but there is no buy point yet, according to MarketSmith chart analysis. Volkswagen stock fell 5.85%, but is still well extended past a 20.12 entry off support at the 10-week line.
Volkswagen has partnered with QuantumScape for nearly a decade. In 2018, the companies set up a joint venture to make solid-state batteries and VW now owns a stake in the California-based company.
On March 15, Volkswagen touted solid state cells as “the next quantum leap in battery technology” as it laid out an ambitious plan to make EV batteries and secure battery supplies.
At the same time, VW only expects solid-state battery cells by the middle of the decade and will use new prismatic cells in the interim, from 2023.
Find Aparna Narayanan on Twitter at @IBD_Aparna.
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