The electric-vehicle battery start-up
QuantumScape
is starting the year with a bang.
Shares were up 50% in late trading Thursday, at $9.75 apiece, while the
S&P 500
was down slightly and the
Nasdaq Composite
had fallen 0.3%.
Volkswagen
appears to be the main reason for that huge one-day move.
VW is a partner of QuantumScape’s, investing in and testing its solid-state EV battery technology. Solid state, in this instance, refers to a lithium-only anode battery with no liquid electrolyte. Most batteries have a liquid of sorts to facilitate the flow of electric charge between the anode and cathode—the two sides of a battery.
Solid-state batteries promise to offer lower costs, faster charging, greater range, and improved safety versus existing technology. They could eventually make possible EVs that cost less than a gasoline car and go 600 miles per charge.
Right now, though, solid-state batteries are still new. They aren’t ready to be subjected to the rigors of automobile production and use.
Wednesday, Volkswagen’s battery company, PowerCo, offered an indication of progress, saying that QuantumScape’s solid-state battery cell had “significantly exceeded the requirements in the A-sample test and successfully completed more than 1,000 charging cycles.”
A-samples are early-stage parts supplied to auto makers. The ones that would go into a vehicle ready for driving would be called D-samples: parts very close to what go into production vehicles.
“The tests were carried out in a PowerCo laboratory and yielded results which we view as an affirmation of QS’s technology,” wrote Baird analyst Ben Kallo in a Wednesday report. He rates shares Hold and has a $5 target price for the stock.
It’s a good result, but is may not account for all of the 50% move. QuantumScape shares have been badly beaten up, so their starting point accounts for some of the gain.
Shares traded above $114 in 2020, shortly after the company closed a merger with a special-purpose acquisition company. At nearly $10 a share, the company is valued at about $4.9 billion, while the original SPAC deal valued it at about $4.5 billion.
Another factor is the short interest—the proportion of the stock available for trading that has been borrowed for bets that the price will fall. Short sellers borrow stock and sell it, aiming to buy the shares back later at a lower price.
High short interest can exacerbate trading volatility. The short interest in QuantumScape is approaching 20%, about 10 times the normal short interest of a stock in the S&P 500.
With the huge move Thursday, QuantumScape was up about 38% so far in 2024, and 73% over the past 12 months.
Write to Al Root at [email protected]
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