QuantumScape (QS) 24 Apr 242024 Q1 Earnings call transcript

Good day, and welcome to QuantumScape's First Quarter 2024 Earnings Conference Call. John Saager, QuantumScape's Vice President of Capital Markets and FP&A, you may begin your conference.

Thank you, operator. Good afternoon, and thank you to everyone for joining QuantumScape's First Quarter 2024 Earnings Call. To supplement today's discussion, please go to our IR website at ir.quantumscape.com to view our shareholder letter.

our want for your posted forward-looking website part I safe to on begin, as provision harbor statements of we to attention call the our Before update. quarterly that is

financial relate generally future or future Forward-looking or statements performance. to operating technology events progress future

and these expectations not materialize. matters Our may beliefs regarding

actual results materially are risk from materially from those our our reasons There are letter, by SEC financial of Actual predicting the we risks uncertainties Form that differ results periods and uncertainties differ in that to and including other that results may cause factors to subject could the to content cause actual future for statements forward-looking outcomes. and cite posed shareholder in difficulty filings, the XX-K projected.

Dr. CEO, Siva I'd QuantumScape's be Sivaram, With our Kevin over will today to us like to CFO, that, the Hettrich. turn call Siva. and Joining

this QSE-X from Ramp At key we Raptor process prototype product, XXXX. fast follow John. move BX process, beginning goals the low-volume Alpha-X product. first XXXX you, our begin our volumes of to production for X Thank we investors and battery our prototype shipment higher of Begin help of laid of out as support prepare to our QSE-X prototype progress to separated Cobra production cells. in year, commercial

as a we margins, collectors a with is We is first The other when most core the serve prototype feedback engagement improvement strengthens represents format This because our amp is of Alpha-X with effective the development the tighter packaging design, with and capabilities the combines QSE-X. is insight critical cycle shipments announced important power Raptor approximately demonstration planned to it cathodes X key thinner intended and battery collaboration. for of FlexFrame The improvements higher our product of cell QSE-X. provides current for the to March preview and automotive XX prospective design. an loading as internal and need design XXXX. platform slimmer customers, which started refinements Alpha-X is launch customer. to efficiency, of in important and cells electrical that our on Alpha-X deliverable performance that into films incorporated it X-layer input customers to our Customer Alpha-X prototype in goals key areas into combined X

we cells. shareholder Alpha-X on our In performance of letter, published features key data X

of which relates XXX-kilowatt first directly vehicle discharge The to translates of prototypes Alpha-X capable equivalent nominally and pack discharge a conventional to compelling over be which XXC We is of designs. power, high-performance X,XXX lithium-ion horsepower. compared a believe power in would acceleration are to in to rates, this cell these applications. up energy hour combination to

EV charge Second, fast of XX% capability fast is from Improving on demonstrated previous feature than applications. minutes. charge an charging have to prototypes less in the important Alpha-X state XX% to XX results, for

Third EV significantly is below temperature low impaired battery performance can be freezing. temperature performance. Conventional ambient drops when

density XX operating Our the across good to cells minus offer of range potential spectrum a celsius. energy and temperatures degrees have hence to down

the Applied Pressure. is in Last, advances

can appear performance under applied technologies externally to high solid-state when a As pressure. deliver battery remainder, some acceptable put

real-world various of pressures cycling pressures reporting as XXX atmospheres. as to solid-state aware are We impractical XX Such from battery results atmospheres using are test high for applications. groups high EV

in In this we within conventional atmosphere, reduced concepts. existing us the and to range ourselves into believe battery to now the Alpha-X prototype, X.X designs, we pack pressure applied allows pack externally have integrate EV present currently

towards and these our performance as the manufacturing consumer we represents for combination represents continue of to reliability up an an applications. improving value capabilities of electronics our forward important target believe zero-pressure ramping We unmatched capabilities We Alpha-X designs sales. proposition. work planned QSE-X for And the step

word production a our on outlook. Now

for improvement customer Raptor of process of internal of improvements, steps process begin to production will process larger downstream testing production parallel, testing production and Alpha-X the QX. cell In BX in continue us serve shipment to Our reliability gather allow increased cell data new QSE-X accelerate samples. and production separator assembly and current-generation will safety to volumes sample from ongoing validate

Most of Raptor metrics. serves site or encouraging respect certain downstream completed automation process testing. is equipment heat-treatment the has and that improvements undergoing with upstream to equipment Raptor shown acceptance The the critical-to-quality has

the and by Raptor assembly of simplifying cell In are we addition planned steps to processes materials, a cell consolidating production. smooth enable the ramp increasing also streamlining bill to automation ramp, of process

battery platform process. volumes production methodical realizing separated higher word fast fundamental supporting of of by next of is milestones. tightly technology, commercial for innovations XXXX. Last, equipment bringing requires Cobra cells, the cell vehicle initial and for remain process ambitious market the We While outlook. of to a full prototype engagement to focused The goal, this prototype generation applications. QSE-X learning separator enable of production. specialized intended the our pioneered strategic process of Cobra elements: our Raptor as Cobra production is production, lithium-metal our first our capable potential in QSE-X a serves customer to with also execution necessary Raptor a goal X Achieving differentiated major on electric close singular solid-state on combine

differentiation as performance On have demonstrated. clear, we first to iteration the our point, samples continues successive believe solid-state of be technology of the lithium-metal

on process we increasing On prospective the development our and deployment. automotive intensive we pursue our to product focus to including approach customer continue disciplined our with a partners, And collaboration are customer. launch front, finally,

sharing over financial look outlook. hand While as come. With to that, word ever us, for Kevin to more there I'll forward potential work our on our its months significant about as of over ahead enthusiastic and a technology and the is we still details to are impact we

were million. targeted Siva. expenditures in Capital CapEx low-volume primarily year. QSE-X the quarter first supported $XX.X you, for Thank QX production later this prototype

the be while at conserving statements we $XXX.X between and between letter. We QX. loss our strongly $XXX maintain to guidance prototype end expenses financial found prepare adjusted This the transition the $XX expenditures to process guidance product GAAP cash on primarily our for and million. XXXX we in process the loss and in year extending by were liquidity, to EBITDA QSE-X EBITDA was million billion as full in in commercialization and Cobra Adjusted timeline million industrialization. million higher our EBITDA guidance for as adjusted respectively. million We quarter focusing with million. net loss the from for $XX.X and and $XXX GAAP table to $XXX.X ended our $X.XX reconciling XXXX. operating other well maintain production as full $XXX can for be GAAP our and The shareholder loss As company million, XXXX prototype net of reflects runway, subsequent the positioning improvements. We efforts volume equipment be prepare capital maintain year and

supplement cash venture be would runway. could our will a prudent we raised activity reflect Any We of our continue capital prospectus of business from and further and extend reiterate which owned a cash this markets additional balance with our model, believe ATM our licensing into mix function that to sheet capital our Longer industrialization XXXX. forecast production joint term, runway funds will be including relationships. our wholly second half the requirements extend of under

investors questions begin Thanks, I could give in. Siva, portion we've months few any or as you would initial your impressions first Kevin. CEO? with be investors few We'll believe investors received a interested today's after Q&A that from

since months joined an I QuantumScape. been it's exciting John, X

to is that depth and of team energy customer battery in the have science, pleased extraordinary, QuantumScape interest commitment first of The been intimacy level is with their of equally they I the very The technology level is knowledge the thing at want in is the revolutionizing QuantumScape mention and also involvement impressive partnership exciting. the mission genuinely storage. I've the customers. of from and to

see on of we we from experience of need we in to equipment semiconductors prior the defectancy terms go productivity, progress where can the process my In to path a the with I development, are scaling technology, variability ecosystem et ] where that I need reduction, [ achieve. control, to cetera. from similarities see lot can

can It's being the make the packs is technology getting battery, unclear our lead early that the QuantumScape to current from enthusiasts generation fundamental the given of we meet industry. safety, technologies price buyers. ion-based represents the the for will there the needs next seeing see Today's pressure current how a or make is lithium to battery of compelling battery and made of the EV necessary buyers. headwinds downward the market, charging the car path to with customer that the are time, by choice improvements range, life the I car mainstream more thesis not think validated. cycle ease, the marginal also on company Finally, even in

Thanks, Siva.

or On point, impacted EVs. around environment QuantumScape's macro last you sentiment mentioned Has that of any plans the and conversations? customer growth the

the in are we geographic clearly demand. there variabilities macroeconomic what marketplace. and are that cyclicality seeing some reasons in is There some is John,

specific manufacturer In as addition, some trends well. there are

trends. is I see regards uncomfortable combustion solution of demand EV traditional from not the range strong great and However, with and progress excitement over the is required. term, charging proposition batteries, with in the undeniable. are better still The said long the for battery, the marketplace the customers EVs technology. Having the on that that, from of on solved customers vehicles, long-term of range crop interest safety, faster the A current the variance they're our lithium-ion is we about and times the these marketplace OEM all the that charging see along holistic of offerings. life our a to the automotive battery secular value capability versus given especially the in for conventional

of so from far of solution. XX-year-old do have rate QuantumScape, we think What there. Now capable step technology progress at is we, this demonstrated the the current a in getting change

energy believe density, platform of that state, be cycle technology the battery simultaneously mobility EVs safety choice metal high-power lithium the Solid majority along to marketplace. life. enable a density for and compromise with and free We improved high will offers our anode-free

move quarter. explain our this into Narrowing Can focus development map? us Great. of picture getting road how series And how goal your this fits our to Alpha-X into big Okay. ultimate does production? towards you

final striving QSE-X, power an our The A automotive called Alpha-X major product we automotive We uses and are sample, approximately development, typically And B stones ability stages sample evaluate XXXX. cell we production This and the feedback started sample, big shipping the customer to B series give Raptor X was can end stepping same sample the production. our a John, A first almost is cell gives customers. the Alpha-X the in we achieving which deliver and Alpha-X performance by capabilities picture prospective capacity. a improve. on a to samples other of structure QSE-X has as so C the for to followed completed which all to delivered from cell is industry product a amp perspective, are to by and rapid of iterate the characteristics quarter year. launch Alpha-X, last the the in year. than began in methodically this films

align Kevin, you map? does road development product turning now. to Great. capital How with current runway our our

of We liquidity XXXX. and guidance into ended $X of the with on balance QX reiterated the over our billion second of half cash sheet

believe, the balance that high XX% for to solid-state for hours strength with per prospective QSE-X our a the of product continue small we source into and in Cobra targeting processes whom equipment is being liter volume, and value. we our The to a company. create of Our forecast electrolyte and competitive to XX% make XX-minute from customer, install serve program sheet, separator QSE-X advantage develop and invested Raptor charge XXX-watt Finished our capacity, launch is proprietary closely and we deploy things capital work our launch. believe times visibility fast the approximately

capital We business model as the scale and efficiency of well larger benefits and expect facilities with due the capital to structure. subsequent due equipment to process to improve maturity as operational

us funding, Some options government incentives. are: of sources available customer those nondilutive use prepayments traditional of including debt, to The and of

of including constraints of and available, ready QuantumScape, please addition, sheet bandwidth. We're the today's we strength ventures questions. from of begin for benefit licensing. JVs live licensing the and the joint now balance enables opportunity reduce funded of penetration the up line the call. set CapEx beyond QuantumScape's open have In full to portion and business the Operator, by operational partner market models

first UBS. the from Your Instructions] Spak [Operator question line of comes Joseph with

Gabriel is for on Joe. This

commercialization the wanted Just details map. dive quickly deeper some regarding to on of the road

sample by way sample Is high-volume to to done, You're of year final to it that year gigawatt-hour end call year a XXXX of But year commercialization right sort B about and and sample delivering half C that's period. a scale sometime B online. end of 'XX half think the Raptor probably so stage. Cobra in We're another of production at for and 'XX production looking those up that or in some the about ramping the early get once sometime full prototype getting prototypes this?

picture. are question always the short-term for and you both deliverables focused Look, overall the on thank and Gabriel, thinking. longer-term we

guidance what in strict XXXX XXXX the giving in time. we milestones and are on and we term, short sure We make every deliver need meaning to hit the them

closely very, it when very And we probably them and about are working tell outside. our with to launch We prospective will come talk we can us allow customer.

give So for calendar and would high-volume QSE-X now, prototypes. we is B and sample 'XX, end 'XX. into all have B guidance calendar for you low-volume At go we can calendar the the we samples done of of next year 'XX

So that's outside. the guidance we have given

bridge. related a the there. appreciate And litigation as just to in second adjusted disclosed EBITDA Kevin. I details the follow-up, you question Understood. quick expense is My your

was on item? this? a you generally, viewing be this mean, should Just are How just looking we I a at go-forward line basis? onetime how this

most The The approved, we've quarterly approval if one settlement as class in to been net Yes. once reports. settle conclude and found subject our will an has to final million the annual court. fees. shareholder members is settlement EBITDA to the the securities matters, past approximately is adjusted in question. agreement $XX.X the class with what associated the and and in table and pending to finalized principle -- for Thanks end preliminary for ongoing and This litigation. final letter action legal The described notice legal and net the at loss litigation accrual documentation, of of of settlement significant expense the the includes

Truist Your next with the line Securities. comes from Jordan Levy of question

able changes this include for sort the point increasing I'm were some that and of And the around The of a mentions you've just means like to Raptor. new as start. you out all things simplification, of in Siva, contemplated consolidating steps these the bill of downstream Thanks to the in these to reference all maybe detail. developments process that that simplifying details letter? think designs? been and in line automation. are curious, Raptor for materials assembly are already shareholder maybe Or process of kind any shareholder letter I streamlining processes cell is the

said B are right in Jordan, been being decent assembly acceptance the that, so willing these continuously run afterwards. sure as I'm take very cell margin And example, credit through process the of to get were and steps, we site establish cases. towards year, process and some customers, revision well coming when have Having that one robust, we the implemented of a moves of these. go we'd back for the and major at try we all have to then Raptor, We And more then this of samples automation samples, In to many And that where of baseline, steps automate these and sufficient are get is give ensure and feedback. a for get we data upstream everything. those, step end that their make they sure just one this there going had planned, them right is were trades get tests to we methodical. are behind. forward. Alpha-X, can such it make we amount and them that the enough can of downstream is

where process robust next we job seeing. the are them So what of then of That's automating moving and to steps know good streamlining we the a have you continuously done our step.

there, that litigation quarter, disclosed, the that. for OpEx of maybe just online? of know so curious start these where should that broadly, been all change I I'm That step Does to have just expense of up, your be been came you just you but shaping total Cobra more assuming EBITDA but in you you. processes reiterated for this for get thinking as just makes come related then, accounted might Kevin, kind some might as and in the how all I'm Appreciate about have sense. the And that all think to Raptor And may going, maybe that OpEx. seeing at we guidance,

million guidance EBITDA loss adjusted $XXX the reiterate of $XXX did to year. in million the we Yes,

the QSE-X You could prototypes. think it up volumes monotonically over slightly we as increasing year the as broadly ramp of of

comes from Dorsheimer Your William the of question Blair. next line Jed with

Siva.

Shooter Mark the CEO. on on Congrats quarter for Jed. have as You first

Just for than practice, in charging. graphite. question know that a to hotspots. current key has control density that's EVs lithium fast I kinetics pretty about avoid hard the to it's your the data transfer XX%. is better and I from charge theoretically XX% lithium to know surface But impressive metals

you impacted are is I'm under fast protocol the guys charge cycle-life how So seeing? wondering, testing

perceptive Very have question. we that shown. is thank you. This Mark, something repeatedly

data both charging earlier a our normally in than it with that about our sister demonstrated cycles much of the is with data. that with experience their normal That's have cells have we number on talking that would We more day-to-day. and substantive customer C/X car

So the over data again sure core one one the This strength. on truth technology. and we ceramic substantive shown reasonably matter the been doing configuration of and that has our and cycle lithium charge of major this making with over charging have it is, metal other that, the along separator, has of differentiators innovations, cycling side an our repeatedly plating of anode-free fast together. The at is been in fast a

data letter. As that you the we can see in all in from have Alpha-X the of presented shareholder

demonstrated continue data, have for it. that we to we prior you validate in and So

Or like thinner could see bit a And potentially the improvements. so there are quest more I'm color. Raptor. a and My benefits you a if separator? the That's goes wondering Cobra? next for cost Do Awesome. speed we a as a dig Raptor Thanks it on significant achievement. towards for and other improvement in

Yes.

of another data magnitude is output. are Cobra letter the and throughput we unit showed order an terms much of the better, of on in the good. That per Cobra last terms the in in -- equipment of So Raptor for Raptor very clearly order productivity advantage Raptor earnings magnitude, is two. is very, and and of better footprint

critical quality density We and us is, talked to to the we energy metrics better about. what of power targeted density Cobra help true case to However, expect will Raptor our continue are both in and continue we've Cobra. Raptor, some that do that see achieve that also on

next Your Instructions] Sunderland. line from [Operator the question Davis comes of

you the made a on maybe feedback just far know any might or since Or there's launch customer? prospective it's communicated? month from if I but not, I only the announcement, wondered so any this been when how if timeline be

Yes.

So we films -- reason shipped we protocol. launch data. be that entire mentioned customer and in data we to labs prospective the as our to This sister customer, in the own will press release. have test published the continue with we confidential, cells, our including in Those is parallel test that

Where We in customer. the are which -- of the samples, our have do we Alpha-X shown cells early letter. corresponding our the analogous show already results shareholder that performance the to the shipped were earnings same sister

very a but one if seen turned are around of any guys in there's change just Got any have changes you guys months? that of on of partnerships, headlines, of EV maybe if course, Or Have negative the lots follow-up. couple just to seems negative it. new could front? about thinking been last you how the potential level helpful. more in I as And customers just That's excitement add engagement the with

the level it been no interest The with, customers. the or been good. was Yes. been I customers with. we interest has ones from did has of that that in They truly level from scripted There very, on the letup the the question that asking our we very earlier me have of questions. about commitment closely working engage the are talk in John

some the work secular been was that And not I continuing to demand is geographic some to has we that are are headwinds overall company our our with in issues. Clearly, is today. We saying the our customers customers, there's working remained and partners we've cyclicality, thesis Clearly, with, has short-term earlier, there marketplace as enthusiasm interest there the commitment there working are changed. Clearly, There among closely is conditions, with. unchanged. are But the there's technology, the some changes. working with some which manufacturer-specific the macroeconomic with we our differences. on some

time, will closing further the there no Instructions] over now [Operator back this I remarks. QuantumScape call questions. are for ahead. Please to At management go turn

I'd Thank on We progress us that, today. With look sharing you. you. all coming to more forward joining Thank like months. in you to the thank our for