Silicon Valley EV Battery Developer QuantumScape Debuts on Wall Street After its Merger with Kensington Capital

author: Eric Walz   

Silicon Valley-based solid state battery developer QuantumScape is now officially a publicly traded company after its debut on the New York Stock Exchange (NYSE) on Friday.

The company, which is headquartered in San Jose, California, is the latest company tuning to Wall Street to raise capital this year, after it completed a reverse merger deal with Kensington Capital Acquisition Corp.(NYSE: KCAC), a special purpose acquisition company (SPAC). 

The deal, which was first announced in September, resulted in QuantumScape becoming a publicly listed company, which aims for an enterprise value of over $3 billion.

The company's stock is trading on the NYSE under the ticker symbol "QS". 

The transaction will result in net proceeds of approximately $680 million to QuantumScape, including through a $500 million fully committed private investment in public equity (PIPE). Funds from the transaction are expected to fully support the new company through the start of production in the second half of 2024.

"Today marks a big step in the evolution of our company," said Jagdeep Singh, Founder and CEO of QuantumScape. "This transaction allows QuantumScape to fund development and commercialization of our OEM-validated battery technology as we look forward to playing our part in the electrification of the automotive powertrain, helping transform one of the world's largest industries and fostering a cleaner future for all." 

QuantumScape has been working on solid state EV batteries for the past decade. The company was founded in 2011 and holds around 200 patents and patent applications related to solid-state battery technology. The company's mission is to revolutionize energy storage to enable a sustainable future.   

In June 2018, German automaker Volkswagen invested $100 million in a joint venture with QuantumScape for the industrial-level production of solid-state batteries. At the time, the investment made Volkswagen QuantumScape's largest automotive shareholder. 

Volkswagen followed up its initial investment in June of this year when the automaker announced an additional investment of up to $200 million, just two months before QuantumScape announced its intent to go public in a merger with Kensington Capital. 

The goal of the investment was to further develop solid-state batteries for Volkswagen's future electric vehicles. Two years ago, Volkswagen successfully tested QuantumScape's early-stage solid-state battery sample cells running at automotive rates of power, which the company said was an "industry first" achievement.

"The solid-state battery will mark a turning point for e-mobility", said Axel Heinrich, Head of Volkswagen Group Research in June. 

QuantumScape's solid-state lithium-metal batteries are designed to be safer, and to deliver greater range, faster charge times and improved cycle life, than today's conventional lithium-ion battery technology.  

A solid-state battery of roughly the same size as a standard EV battery can achieve a range comparable to that of a combustion engine vehicle. However, developments in solid state battery technology have moved at a slow pace. To date, no other battery maker has been able to achieve the level of performance sufficient for mass-production. But the technology does show promise.

"We are making technological progress with our partner QuantumScape," said Thomas Schmall, Chairman of the Board of Management of Volkswagen Group Components in June, the unit responsible for developing EV batteries for the automaker. Volkswagen says that solid-state batteries would more than double the range of its electric vehicles.

QuantumScape's deal with Kensington Capital follows other high-profile reverse mergers this year to raise new capital, including hydrogen fuel cell truck startup Nikola Motor Company, electric truck maker Lordstown Motors and lidar manufacturer Velodyne. The three companies all went public in reverse merger deals with SPACs.

QuantumScape is also backed by Microsoft founded Bill Gates, both personally and through his company Breakthrough Energy Ventures, a venture capital firm that Gates founded in 2015 to help accelerate innovations in sustainable energy. 

Eric Walz

Originally hailing from New Jersey, Eric is a automotive & technology reporter covering the high-tech industry here in Silicon Valley. He has over 15 years of automotive experience and a bachelors degree in computer science. These skills, combined with technical writing and news reporting, allows him to fully understand and identify new and innovative technologies in the auto industry and beyond. He has worked at Uber on self-driving cars and as a technical writer, helping people to understand and work with technology.