QuantumScape targets 2028 start of production for 100-megawatt hour line with Muehlbauer partnership

• “Today, we announced a 100-megawatt hour mass production line with output aimed at meeting the rapidly emerging opportunities for our QSDC and QSAS business verticals.” (President, CEO & Director Dr. Siva Sivaram)

• “In addition, we announced a QS ecosystem partnership with Muehlbauer Group to provide cell assembly equipment for this planned line.” (President, CEO & Director Sivaram)

• “On October 8, we launched the QS PowerBlock for AI data centers… The QS PowerBlock demonstrated 4x the power density and 5x longer run time than the reference specification from OCP.” (President, CEO & Director Sivaram)

• “In Q3, we recorded our first customer billings from Honda… In addition, we have signed an agreement with a new customer… with a leading global player in mobility manufacturing.” (President, CEO & Director Sivaram)

• “We have shipped QSE-5 samples to customers in the defense, aviation and telecommunication sectors, and we recorded our first customer billings from QSAS this quarter.” (President, CEO & Director Sivaram)

• “GAAP operating expenses and GAAP net loss in Q3 were $92.4 million and $84.5 million, respectively.” (Chief Accounting Officer Agnes Tan)

• “Customer billings in Q3 were $9.8 million… We ended Q3 with $819.8 million in liquidity and will remain prudent with our strong balance sheet going forward.” (Chief Accounting Officer Tan)

Outlook

• “For full year 2026, we reiterate our adjusted EBITDA loss guidance of between $250 million and $275 million.” (Chief Accounting Officer Tan)

• “For full year 2026, we reiterate our guidance for CapEx to be between $27 million and $37 million.” (Chief Accounting Officer Tan)

• “Engineering work… is already underway and start of production for this new line is targeted for 2028.” (President, CEO & Director Sivaram)

• Compared with Q2’s VW PowerCo framework updates, management said in Q3: “As part of that process, we have amended our collaboration agreement to eliminate transition payments and are working to add milestones tied to technology advancements.” (President, CEO & Director Sivaram)

Financial Results

• “GAAP operating expenses and GAAP net loss in Q3 were $92.4 million and $84.5 million, respectively. Adjusted EBITDA loss was $60.7 million in Q3, in line with expectations.” (Chief Accounting Officer Tan)

• “Capital expenditures in the third quarter were $4.4 million.” (Chief Accounting Officer Tan)

• “Customer billings in Q3 were $9.8 million… Customer billings may vary from quarter-to-quarter due to fluctuations in activity as we progress through various phases of engagement.” (Chief Accounting Officer Tan)

Q&A

• Yan Dong, Deutsche Bank AG: “what the economic arrangement might be in terms of who owns it, who pays?”; President, CEO & Director Sivaram: “We will provide a capital plan and in the 2027 financial guidance on our Q4 earnings call. We are targeting equipment cost to QS of less than $100 million… we are pursuing nondilutive funding sources, including customers, government, ecosystem and licensing partners.”

• Yan Dong, Deutsche Bank AG: “help size” Honda billings and licensing timeline; President, CEO & Director Sivaram: “We still are keeping our capital-light licensing model to address markets such as automotive… the engagement with Honda has been very, very strong.”

• Mark Shooter, William Blair: asked how QSE-5 was “retune[d]… for the BBU application”; President, CEO & Director Sivaram: “we are 4x better than anything that the OCP spec calls for… we are 5x longer run time… most important than anything else is safety.”

• Mark Shooter, William Blair: asked what changed to “divert from the CapEx-light model” and whether VW could be involved; President, CEO & Director Sivaram: “this line will be directed primarily at the high-value applications, such as aerospace, defense and data center.”

• Ben Kallo, Baird: asked competitiveness across verticals; President, CEO & Director Sivaram: “the supply chain is a big asset for us… we constructed the supply chain to have no dependence on graphite.”

• Ayush Ghosh, Goldman Sachs: asked commercialization timing across verticals; President, CEO & Director Sivaram: “We are looking at both QSDC and QSAS as maybe a faster time to market than the more rigorous QSEV applications… But that does not mean our targets for QSEV has changed.”

• Ayush Ghosh, Goldman Sachs: asked VW restructuring implications; President, CEO & Director Sivaram: “the relationship with PowerCo remains very strong… we are moving the PowerCo engagement towards milestone-based payments… expanding to cover other applications such as the data center and robotics.”

• Gabriel Gonzales, UBS: asked what level of customer interest supports the 100-MWh decision; President, CEO & Director Sivaram: “We have increasing confidence coming from 3 mutually orthogonal directions… the feedback has been very, very strong… ramped up the Eagle Line… a partner such as Muehlbauer coming in and validating the Eagle Line.”

• Gabriel Gonzales, UBS: asked whether awards could come before 2028 SOP; President, CEO & Director Sivaram: “we want to have start of production in 2028, and we want to have multiple customers signed up before that to make sure that the offtake is there.”

Sentiment Analysis

• Analysts’ tone was slightly skeptical and detail-seeking around funding/ownership and demand validation, including “who owns it, who pays?” (Yan Dong, Deutsche Bank AG) and “what sort of level of customer interest supports that decision?” (Gabriel Gonzales, UBS).

• Management’s tone was confident on new-market pull and scale-up, including “Customers want to see the QS PowerBlock in volume” (President, CEO & Director Sivaram) and “Our execution towards our goals has been strong.” (President, CEO & Director Sivaram)

• Compared with Q2’s emphasis on proving Eagle Line ramp and formalizing verticals, Q3’s language centered on committing to a defined scale step, with “Today, we announced a 100-megawatt hour mass production line” (President, CEO & Director Sivaram) and funding framed as “nondilutive funding sources” (President, CEO & Director Sivaram).

Quarter-over-Quarter Comparison

• Q3 introduced a new manufacturing scale milestone: “a 100-megawatt hour mass production line” and a new equipment partner, versus Q2’s focus on Eagle Line performance and the creation of QSEV/QSDC/QSAS verticals.

• Financially, Q3 reiterated the same full-year adjusted EBITDA loss and CapEx ranges stated in Q2, while Q3 added a new disclosed constraint: “Our Chief Financial Officer, Kevin Hettrich, is recovering from a planned medical procedure, and Agnes will cover the financial portion of today’s call.” (Senior Director of Investor Relations Sam Kamara)

• Commercial mix shifted in Q3 toward early monetization in new verticals: “we recorded our first customer billings from QSAS this quarter,” alongside “our first customer billings from Honda,” versus Q2 emphasizing billings growth milestones and VW PowerCo scope revisions.

Risks and Concerns

• Funding and execution risk for scale-up was acknowledged through planning language: “We will provide a capital plan… on our Q4 earnings call” and “site selection… is underway… We will keep it confidential.” (President, CEO & Director Sivaram)

• Variability risk in near-term commercial activity remained explicit: “Customer billings may vary from quarter-to-quarter due to fluctuations in activity.” (Chief Accounting Officer Tan)

• Customer-dependency and timing risk in automotive licensing remained indirect: “those announcements have to come from our customers.” (President, CEO & Director Sivaram)

Final Takeaway

QuantumScape’s Q3 message centered on moving from pilot output to a defined mass-production step, announcing a 100-megawatt hour line with Muehlbauer and targeting 2028 start of production, while framing automotive as a capital-light licensing path and positioning QSDC and QSAS as nearer-term volume opportunities supported by early billings, PowerBlock performance claims, and a plan to pursue “nondilutive funding sources” for the new line.

Read the full Earnings Call Transcript

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