QuantumScape (QS) stock dropped 15% to $9.28 yesterday, erasing much of its recent rally. The decline followed its second-quarter earnings and a $131 million expansion of its partnership with PowerCo, Volkswagen’s (VWAPY) battery unit.
Elevate Your Investing Strategy:
- Take advantage of TipRanks Premium at 50% off! Unlock powerful investing tools, advanced data, and expert analyst insights to help you invest with confidence.
The agreement builds on an earlier deal from July 2024. PowerCo is now positioned to manufacture up to 85 gigawatt-hours of battery cells per year using QuantumScape’s platform. That capacity could support battery supply for nearly one million vehicles annually.
Delays Continue to Weigh on Sentiment
QS’s management also highlighted progress on the manufacturing side. The company has transitioned to its next-generation Cobra separator process. This step is designed to improve efficiency. The process enables faster heat treatment and cuts equipment use. Management said it is over 25 times quicker than the company’s earlier method.
Still, delays in commercial timelines continue to weigh on sentiment. QuantumScape now expects meaningful production to begin in late 2025 or later. Challenges at the company’s pilot line, including issues with layer uniformity and material sourcing, have pushed back the launch.
Insider selling also raised investor concerns. Over the last three months, Chief Technology Officer Timothy Holme sold an estimated 358,000 shares. Director Fritz Prinz sold nearly 930,000 shares. Together, the two reduced their stakes by 17% and 85%, respectively. On the upside, institutional investors have been adding to positions. UBS and NewEdge Advisors both increased holdings last quarter. The company ended Q2 with $797 million in liquidity and extended its cash runway forecast into 2029.
Is QuantumScape a Good Stock to Buy?
Wall Street analysts remain divided on QuantumScape. Of the four most recent ratings, one is a Buy, two are Hold, and one is a Sell. The average QS stock price target is $7.33, implying a potential downside of 21.01% from the current level.
