Prospective Positioning of QuantumScape Stocks in a Decade
QuantumScape, the innovator of solid-state lithium metal batteries, initially sparked investor enthusiasm with its public debut in 2020, soaring from its initial price to an all-time high. However, today, the stock trades around $5, tempered by the reality of years-long commercialization and multimillion-dollar losses.
Despite skepticism, QuantumScape remains a contentious stock for bulls and bears. Bulls anticipate a rebound as commercial shipments rise, while bears fear the company's demise before that point due to intense competition. In a decade, where could its stock end up?
QuantumScape's Near-Term Plans
Straits Research forecasts the solid-state battery market to grow at a CAGR of 36.4% from 2024 to 2032, thanks to increasing usage in electric vehicles (EVs) and other devices. As an early mover, QuantumScape might benefit from this expansion.
Solid-state lithium-metal batteries offer benefits over traditional lithium-ion batteries, including reduced volatility, improved heat resistance, and shorter charging times. However, engineering and production challenges currently limit their use to smaller devices.
QuantumScape aspires to disrupt the EV market with its QSE-5 batteries, boasting an energy density of over 800 Wh/L and quick charging capabilities. To achieve this ambition, the company is transitioning to an advanced production process, the Cobra separator, and will begin shipping samples to car manufacturers in 2024.
QuantumScape: Too Expensive Already?
Bearing an enterprise value of $2.1 billion, a significant part of QuantumScape's future prosperity is already built into its stock price. Analysts expect minimal revenue in years to come, making the stock vulnerable to the slightest misstep.
While the company initially projected commercialization in 2024, it has yet to meet those expectations. If QuantumScape starts generating revenue in 2027 and maintains its original growth trajectory, it might hit the target revenue of $6.4 billion by 2031. If that happens and the stock prices at a reasonable 10 times sales, the company could reach an impressive value of $185 billion, resulting in an 88-bagger gain over ten years.
QuantumScape's Stock in 10 Years
Although facing fierce competition from companies like Blue Solutions and notable players like Toyota and Nio, QuantumScape will likely continue to exist, supported by partnerships like that of Volkswagen. With an anticipated acquisition or impressive growth, the stock could bring substantial returns if investors stay patient. However, its uncertain future makes it a speculative investment at the moment, best approached with disposable funds.
Investors keen on finance and seeking opportunities in the EV industry might consider QuantumScape's stock, given its ambitions in solid-state battery technology. With the potential for significant growth in the solid-state battery market, investors interested in investing money in this sector could view QuantumScape as an appealing option, although the company's stock price currently reflects a significant portion of its potential future success.