In 2021, the electric vehicle (EV) industry was poised for significant advancements. However, since then, the growth in EV sales has noticeably decelerated, and some prominent companies in the sector are facing increasing controversy rather than drawing investor interest.
Reflecting this trend, QuantumScape, a next-generation battery manufacturer, has seen its popularity diminish. This change may present an opportunity for those considering it as a potential stock investment.
### The Market Unplugs
A $1,000 investment in QuantumScape stock made on April 16, 2021, would be valued at less than $107 four years later, a sharp drop of nearly 90%. As investors began to retreat from the EV sector, there was a corresponding withdrawal from companies like QuantumScape, which is still in its technology development phase and currently generates no revenue.
Despite this, QuantumScape is advancing a compelling product through development. The company aims to introduce a solid-state EV battery that offers significantly greater range on a full charge and faster recharging times compared to the current lithium-ion products. QuantumScape’s technology is also notably durable; recent tests have shown that its battery cells retained over 95% capacity after more than 1,000 charging cycles.
### Charged with Potential
QuantumScape has the support of a substantial financial backer, Volkswagen, a key investor that has committed hundreds of millions of dollars to the company. According to agreements between the two companies, Volkswagen’s battery division will license QuantumScape’s technology to power its EVs once it has completed development. It is estimated that QuantumScape’s batteries could potentially power up to one million new Volkswagen vehicles annually.
Investing in a pre-revenue company that has yet to demonstrate product sales can be unsettling. However, QuantumScape’s technology appears to hold significant promise, and with a financially robust partner, the company is unlikely to face insolvency in the near future. While QuantumScape stock represents a risky investment, it holds considerable potential for those willing to take on such risk.
