SLDPW - QuantumScape: The Valuation Makes No Sense
2024-06-18 22:19:48 ET
Summary
- QuantumScape is developing solid-state battery technology for EVs, potentially reducing uncertainty about battery longevity and offering advantages over current batteries.
- Despite the advantages of next-gen batteries over current EV batteries, there is still high uncertainty about the technology's commercialization timing.
- The next-gen battery industry is already extremely competitive, despite not yet generating revenues. Large corporations and even governments pour tens of billions into R&D.
- The company's $2.5 billion market cap is ridiculous compared to Tesla's market cap in 2011, despite Tesla already generating $200 million in revenue at that time.
Investment thesis
Last summer I was considering buying a new car and an electric vehicle [EV] was a tempting option due to its more attractive total ownership cost. However, at the end of the day, I bought an internal combustion engine [ICE] vehicle due to the uncertainty about the longevity of an EV's battery. It appears that the solid-state battery technology developed by the company named QuantumScape ( QS ) might decrease the level of uncertainty regarding the longevity of EV batteries. Apart from the battery longevity, the technology potentially has other advantages over batteries which are currently deployed in the EV industry. However, the commercialization looks far from now as QS is yet to generate revenue and Wall Street analysts do not expect the company to generate profits in the foreseeable future....
QuantumScape: The Valuation Makes No Sense