QuantumScape Corp Q3 FY2024 earnings call

• Began producing low volumes of first B Sample cells of QSE-5, with measured energy density 844 watt hours per liter, capable of fast charging from 10% to 80% in over 12 minutes, and being anode-free solid-state-lithium metal cells. • Raptor separator production process is now the baseline, a major improvement in film quality, performance, heat treatment time, and energy consumption from previous technology. • Joint work with PowerCo of Volkswagen Group kicked off in Q3, with collaboration on industrializing QSE-5 platform, including PowerCo contributing skilled personnel. • Q3 CapEx was $17.9 million, GAAP operating expenses $130.2 million, GAAP net loss $119.7 million, adjusted EBITDA loss $71.6 million.

No detailed financial performance by traditional product segments provided. Focus is on QSE-5 product, Raptor separator production, and collaboration with PowerCo.

• Tightened full year adjusted EBITDA loss guidance to $280 million to $300 million, higher end of original range. • Lowered CapEx guidance to $60 million to $75 million due to deal-related efficiencies, non-deal-related savings, and shift in certain payments from 2024 to 2025. • Ended Q3 with $841 million in liquidity, cash runway projected to extend into 2028, with deal with VW PowerCo offering a capital-efficient path.

• Uncertainties in predicting future outcomes that could cause actual results to differ from projections. • Risks in commercialization and achieving gigawatt-hour scale production of the technology.

Q: Can you elaborate on the significance of entering B Sample phase of automotive qualification cycle?

A: Siva Sivaram stated the QSE-5 cell is better in major performance specs like range, charging speed, temperature operation, and safety compared to other announcements, representing a new high water mark for the battery industry.

Q: Key learnings from Raptor running into higher volume line?

A: Siva Sivaram said Raptor is a platform for learning to structure, improve, and enhance the Cobra process, allowing systematic improvement in performance.

Q: Specific issues PowerCo solving vs QuantumScape for B Sample deliveries?

A: Siva Sivaram explained QuantumScape focuses on solid-state battery technology and cell design, while PowerCo contributes expertise in scaling up high volume manufacturing processes, supply chain, and automation.

Q: Cobra process and shared responsibility?

A: Siva Sivaram noted PowerCo commits to capital for building, ramping, and running factories, QuantumScape provides expertise in cell technology, with royalty model in place where QuantumScape gets payments based on PowerCo's volume production.