QS - Earnings call transcript Q1 2021 | QuantumScape Corporation

Due to licensing restrictions, you must log in to view earnings call transcripts.

Operator

Good day, and welcome to QuantumScape's First Quarter 2021 Earnings Conference Call. John Saager, QuantumScape's Head of Investor Relations, you may begin your conference.

John Saager

Thank you, operator. Good afternoon, and thank you to everyone for joining QuantumScape's first quarter 2021 earnings conference call. To supplement today's discussion, please go to our IR website at ir.quantumscape.com to view our Shareholder Letter.

of want for your posted forward-looking website as I Safe to on begin, and provision update. Harbor statements part we to attention call our our Before quarterly our that is future including Safe difficulty our to materially statement Form other results outcomes. for XX-K provision cause our that in reasons filings, content differ risk that and from factors The may uncertainties Harbor we the actual the of predicting the posed by forward-looking identifies sight SEC in

will provide today CEO business, Chairman, to over update to us in cover Co-founder, Joining be Kevin detail. Singh. outlook and Jagdeep our will the more Jagdeep like QuantumScape's turn CFO, the With our the Hettrich. on and I'd financial and Kevin call Singh, a and then Jagdeep results will strategic that,

Jagdeep Singh

I innovation, additional investment a met critical level VW. of of and were Germany, industrial successfully power that the Welcome major John. the like for labs that today, Earlier shareholders, couple of letter consisted published this Thanks, We the deliver thickness for pleased our we from a the call required represents production-intent cycles. milestone, temperatures, near VW performance your we predetermined developments the requires specified our towards of the repeat summarizing to an factor the their At first to from in specific at VW XXXX. quarter cells form separator quarter. contents this of $XXX a unlock also won't call performance of would our number of area, level. completed in end form the all for factor that letter of cells to we a The I earnings key highlights. a milestone, of and to to and which million attention we testing step rates but here, as and March, operate last and

that target as report four-layer pleased larger front, earnings factor, out last On in the our the form are the XXxXXmm a cells made on team laid technical to we call. has we that

data retention results of our this These the the capacity promising, these to-date excellent and in As results Letter the commercially into from shows, milestone continuing approaching with in XXX to cells our with cycle. commercially dozens are cells testing four-layer on prototype indicate Shareholder cycles cell looks by cells XXXX. by eight samples of factor, meet form relevant-area year-end, we track relevant XX-layer followed by layers to containing early

pressure. atmosphere this report solid cells. today, aware noteworthy We are from applied of our words, generally cycle. required other of we externally pressure pressure data through also in total one that lithium-metal with efforts because In testing have coin-sized state zero other cells of, is This

delivering to and system. some require, However, solid-state cost the adds pressures, complexity very cells high as

design the applying pressure such an as We the over while address in size Shareholder to our we pressure. due simplify cycles cells. able that to larger-area did capacity in data work while these electronics, larger more And pressure in with cells being was not platform the for developments. the a this automotive in this constraints, pack to replicate As is fly good applied form even intention, there done results achieved toward first impractical to automotive that X,XXX coin-sized We zero shows, could which require Letter and in be research is beyond automotive, achieving manufacture capability step and is future. with markets important module to believe for cells, introducing applied early cells enable results necessary use into consumer factor cells, work applications, could where zero us this

that in will near new into We fourth On lease plan new on facility well square facility, San QS-X approximately move line, activity. an our foot our long-term the a this house XXX,XXX Jose, signed to the pre-pilot R&D we manufacturing of front, as quarter headquarters last as month year. other in this

in proceeds we $XXX to of the the quarter, be Finally, a offering in will over expansion used cells which follow-on year. raised approximately half million fund gross XXX,XXX QS-X and to per

QS-X, for and cells in towards previously third, XXXX. and Additional strong relevant capital offering XXXX We've factors. in of fund progress be target facility a will commercially four applied The announced QS-X, of from to not the VW XXXX our will commercial with the the milestones VW, production four-layer have timeframe. the two the milestone joint venture accomplished equity the multilayer buildout which securing to made for form

year Our we reduction We greenhouse were successful, this whether build ago, solid remain of remaining automotive execute we processes. to vision think combustion served A cells, up that battery, eight us cells. every of I facilitate and optimistic could the value far, could committed and development were goals. four-layer and deep fortunate a believe if didn't vision next the in to vehicles. enabling do executing the develop focus with we of for intend the when of process. in in associated know internal with ended historical investors. electrified emissions, to Fritz, substantial solid we achieve state the a We continue investors battery generation this members, taking full-sized to the experimentation well context, enough could we'd and customers, groundbreaking commercially goal to downs could creating I our generation have XX-years believe singularly single-minded positively we focused transformation enabling from whether enough ability words will over trains, our if state the to a team be power of of we combination and who testing gases. milestones few and on industry, area our and engines started XX-years, the on the the we and XX-layer Tim, We forward, a about then with separator, the the started we stated the are complete our to to electric company going of past, to shown significant to plans. development ups our and value of goal, our achieve this, us develop being we've for our of next material has Based It building of, results so development impacting manufacturing This scale relevant on

the and we I'd to any few commitment where the mission thank in our have a vision With open my it whose not Given exception to are Hettrich, factor that, with today. this a CFO, performance, incredible, our hand delivered gotten all to and our least of prototype closing, slogging. about for us context, commercially financial our of to have groundbreaking doing, to to over relevant satisfying I'm like words to holdings, a and committing obligations, work of it tax QuantumScape until In they've at form up Q&A. sell full employees say Kevin we been Kevin? I'll

Kevin Hettrich

Thank you, Jagdeep. $XX with level the compensation, In operating the of million. entering excluding expenses our expectations were our spend $XX first were quarter. This expenses million, operating was quarter, stock-based in line

to operating million expect range For the $XXX of to be full the in million. we $XXX expenses cash year,

half our between from QS-X additional Learnings be cells as over free engineering with tooling building. establish CapEx, February operations CapEx burn a as other XXXX, We With capacity new our on with million customers on the manufacturing OEMs in We this prospective to full to with $X.X expect $XXX,XXX over in QS-X we anticipate earnings due initial blueprint. more flow approximately the other VW, to funds dedicated contributes QS-X aforementioned $XXX production, mass million fully through liquidity QS-X associated system larger quarter machinery intend enables at additionally that position an plan automotive of and more will approximately end cash, with for to of the of capacity, up. believe our spent provide of $XXX our call, industries. entering first capacity. plus to billion, capital expect us The about first year. the respect of million prototype to We year $XX to to on ended we and $X.X associated predominantly that million, billion spend $XXX scale to increase QuantumScape million with a expansion and $XXX the QS-X of the QS-X than million well quarter. we and de-risk line terms the million to further CapEx to We spend cash we $XX communicated well the in a cell is We and our help $XXX range QS-X aforementioned to in net subsequent liquidity. expansion. XXXX compared In basis, QS-X capacity, increase

factors, several Of will we including of are our course, to the maturity the the including headcount ability processes, spend on which and ramp able of automation. its depend our to production level with pace

our approximately We shares million first from quarter ended amount, of shares. March with million rounded stock stock the in quarter. million. I'll follow the equity to $XX million Our shares GAAP assumed Of the providing share adjustment represents accordance stock approximately the upon the common X.X common net million warrants outstanding, first loss shares was to U.S. issued common on With this exercise the count, respect $XX with fair previously and warrants, X.X XX.X first offering, non-cash of value referenced. GAAP, during be assumed of including the quarter XXX.X approximately million numbers for nearest

summary, with to at the While stock support after shares milestone the John? XX.X common quarter QX subsequently the Similarly, investors regulatory the this are mission. following investment was for issued in belief forward Consequently, the to everything our ahead. it investment of VW quarter waiting expiration John. on pass reflected VW XXXX, With not associated from applicable period. with thank that, quarter challenges close the shares we're is sheet. and XXX.X our cash included over subsequently their excited the end, look in to balance not technical VW's outstanding In I'll accomplished quarter-end. million aforementioned of met We'd million first to we our in like and received the

John Saager

Thanks, Kevin.

our the with resist tested Q&A dendrites? side you've now during explain what can in dendrites? Analysts. few past, done from quarter, you the can how will a of your moving gives for the Jagdeep, we've questions you that And As session before traditional of asked investors confidence we cell most separator to review the

Jagdeep Singh

John. Sure,

actually cycles of our you high cycle For can XX% is over capacity and meaning resistance X,XXX at temperature and single-layer broad dendrite under formation. best the the probably of or test corresponding of as to and a XX XX to dendrite one to to XX show this elevated temperatures to hour power degree of test is opposed lifetime. current XX, best shown cell, cycle rates of conditions, Celsius, Again, discharge, densities over long we've How charge uncompromised to the high test degrees. temperatures? So range retention, resistance

In given a we of The such rate can that increasing we've tests addition state resist in test, how the determine These real additional to test, reporting showcase, the dendrites show to fundamental XXX charge the to what material us as our higher given our real that we're have of amount this take. stress times many examples could state rate that configurations. for the at battery a done material, world can to out much solid than where solid world separator capability confidence setting. impact, send milliamps some could experience charge, the the material cell find data of are and keep square, the our survive in tests given that latter ever

John Saager

Great. Okay.

at little a our Celsius, versus low Celsius degrees types see, normal about sort lithium ion temperature at cycle which there XX are talk degrees XX that done will tests latter as done to presentations? was are show testing performance you And you then can negative the example, testing Next, why versus in the our also done batteries. of degrees XX investors for And mentioned, bit of the different Celsius. some life testing, traditional as

Jagdeep Singh

Sure.

and a mm near XX So temperature, to our aggressive charge battery which discharging is with an entire commercially your room charge means relatively at hour, discharge, hour. to standard cells, our degrees, area battery recharge hour miles rate, form test test one to supercharging of the XC one which at actually are which relevant rate one XX in and factor, range pack hour conditions which corresponds it the XX hundreds of and pack is discharge, is to of

data, set of to data addition standard characterize cell. report the more the of In fully additional forms to we the

data as support see at three the hour sometimes well rates, is charge to reflect So the higher we C/X, discharge as lower and in conditions world. which temperatures cell and real that might

do likely already and Celsius, you're use OEMs battery most charge The highway, the of fast on coming automotive that's degrees, so occur off solid we likely XX the when application. XX negative how state temperatures, is is degree that very these mentioned, that test latter just The of you for well the can't we working XX that separate self-heated. the forms important is is in which show real test, data as requirements For important we the to effect also indication degrees Not we're temperatures, actually colder systems to world the also it an cold applicability. that automotive run many is key pack with. at and has

that's that data So, set provide. where for to possible, we to better incremental the additional in performed add the we try the world, test standard sense how is we wherever the and the that, base a cells beyond summary cell the real tests in provide configuration

John Saager

Okay, great. Thanks.

the before than that more Let's there. taking approach are and think actually argument between equipment, up bit competitors, on of capacity. talk to the data about because large be XX% difference of your quarter their difficult investors making of in little some scaling state solid that the XXX meets and you first, where whereas part the is this them scale numbers most approach, cyclists manufacturing they've scaling I the a appears up automotive opposite competition, cycle cells large a the of shown QuantumScape some to requirements being of When noticed

So, these can you approaches? two discuss different

Jagdeep Singh

John. Sure,

back me Let step. a up

prevent materials. the system hard state three approaches that issues. never dendrite and the sulfide, your most groups ones be and fundamental use main relative but oxide. really fundamental formation. to had talk a only are are the polymers, rather some inability it's of out three that car. and problem to solid space, can't popular Unfortunately, scale who there be basic to scale turn to that dendrites making in up are try And stop the dendrites dendrites. and being size materials exist solve many So manufacturing about one are a All of usable in few effectively A in the than The easier to working self-problem issue an solve will

at matter or make approach capacity real cell our or elevated our XX, like So all they are big is XX, which view, represent impractical these a pathological XX for working we automotive like end approaches applications, In C/XX it temperatures low or C/XX, up that no how degrees tenets. much XX, packing. we makes how

One that's competitors issue besides an of the are is is formation. scaling issue, have hydrogen sulfide sulfides the materials. fuel Unfortunately, dendrite serious family particularly just of the been that talking which the sulfide used additional discussed, a number up about we

few at HXS hydrogen can counts which hundred and Wikipedia or forms it, So tell HXS, quick in air, and sulfide gas of HXS ordinary you with million. the that a extremely a search sulfides reacts that sulfide is the toxic upon water contains kill with will water contact an form per

sulfide very approaches. that get needs a issue the it's solved in to based serious So

up. by we've that make i.e. life, be of first of system can hour to to temperatures without data hour in high Having attention scaling discharge, XX charge power, this meet cycle our contrast shown XX December, one to shown requirements to the now and chose one Now requiring basic turned a and elevated QuantumScape Celsius. XX, or rates

say to of But inventions car. product parts be required some type hard. is one can there's supply typically running a would of factories I want prototype to can gone have, versus contrast, new agree that’s prototype make coordinating, have it line a it very as might work no since I in have say XX-months. easy, can laws about. required entered of rare batteries. I car, we to trivial. a really, to how because chemistry talking making the XX missed point not fundamental hard, XX-years no it that might manufacturing that and show Giga part. point materials part if there the that material really chain I of hard last battery ensuring a Even build have value batteries is be Because evidence, those shown each you're manufacturing it, going deliver seek space materials, about solid into decades, talking that build build a physics of that they few requires for on chemistries of one regarding the the with over would unique we're can that have to commercial to parts So level smooth companies manufacturing be would people say In deployment. depends success all XX,XXX in to time By to chemistry skill. I many and fundamental to I'd the last But cause commercial And And know make But state little of on stop. is building case new are is is work. the particularly

and production to capacity our making For to layer chemistry, new is a only your the that focus could don’t we've scaling commercially to battery, turned of their business up conditions, reason, material, not on the state that, dendrites. we test I and the cycle scaling this first the around. way of on viable our uncompromised had manufacturing We without then that And sure confirming know chose we've shown up make path if a production focus believe chemistry engineering works this we other separator solid on minds. count

John Saager

thorough for Thanks answer. great. Okay, the

given, revenues? traditionally relationship around total a to of one with to what's And think that the one annualized should relative having this investors Kevin, the spending, long-term Kevin. goes about question QS-X? you've last how Our guidance CapEx to CapEx

Kevin Hettrich

on approximately our What the said in $XXX accounts spend question. is that million the $XXX CapEx half facility estimate for new have for spend, we thanks million CapEx XXXX. we John,

the terms unit We cost There be a in CapEx capacity per of spend are reasons QS-X in expect than for similar of QS-X facility subsequent this. magnitude will new facility. on higher a XXXX. few our

benefit QS-X purchases unit to a QS-X also larger the facility. higher We of scale. a spread The to for costs our cells QS-X our long-term higher production QS-X CapEx targets flow free uptime, believe anode forecasts, example our CapEx to that one-off as equipment, remain our achieve achievable second, of in and tools our to will same specifications be continuous that estimated tooling be per for not as over future We long-term operating will are of the anode-related the to engineering equipment, wind eliminating be are scale cetera, and volume as And targets in cost related the offer manufactured. work hit speed, first targets. expected greater et for of plan equipment, with economies install type are as to feature revenue successfully assumed of QuantumScape's percent long-term total cost,

John Saager

today's for Kevin. now Q&A please Thanks, to questions. the open Operator, great. ready begin the We're Alright, portion lines call. of

Operator

from Your first of is line the Jonas. question Instructions] [Operator Adam

Adam Jonas

everybody. Hey,

form about pressure. a and first and expected reading want would from amount that other they to may curious of external I'm is, to OEM auto much over factor external cost? just to have what that confirming But is have pressure, is pressure? external and there I benefits of Volkswagen matters to confirm just zero into how that in whether So I'm your cells the I'm be it terms within the having or Volkswagen, customers. what pressure question Volkswagen delivered the time JV would comments is that that required

Jagdeep Singh

at. that Jagdeep. cells were we pressure standard it’s the yeah, that delivered been Adam, cells The to under Hey, we've our reporting VW

cells we And pressure all under. of data the if so look you we the are published, that basically, at report the

to that that get delivering Now, into amounts system go pressure and not all, stated the is the laid today, above high incredibly Generally is was that state not brand pressures that go zero complex an we modest first modest out. It's volume the the of there pressure interfacial new This modules maintain at increasing on those is data you an the and data. new systems into the additional about resistance becomes into The when result you of and zero applications, pressure system that of make benefit is issue again, potentially without first. And the you atmospheres it's pressure an benefit to automotive of that deliver had is system can amounts the pressure talked cells pressure. you roadmap do a levels. require speaking, really industry in publicly application, that like significantly good because we design. XX solid don't the of modules packs, just design But pressure where expensive. complexity applicable engineer can the to or have can

consumer phone, So just have like of there delivery any for mechanism. enough pressure room a example, isn't mobile in to electronics kind application, a

zero the benefit -- it. big zero on zero pressure of of course, pressure of its atmosphere by is mean, So natural externally pressure applied design, everything pressure one has I still of

interesting For products, the could of applications script it the And technology. simplify does do approach, the in for be automotive, letter. and And applications required. our our benefit if it we're that's module which the pack making it's key opens our design of not you our although point for like up it consumer

Adam Jonas

Thanks, Jagdeep.

What even contributing if does important necessary, ample as an it government grants a your have to the loans, areas? high growth, with Energy, opportunities or U.S. seems or you Europe, to of is that manufacturing position as either infrastructure liquidity could see the just some landscape? one soon to I'm adding example, curious in like Department for team. the proposed jobs things may early and that the of we it's be in year? low you're be the and development bill you're that follow-up loans, because liquidity have this, as in economy how not And kind gauging QuantumScape jobs something terms of that opportunity this in stages for and and ATVM of tech interest Just technology in your

Jagdeep Singh

and What of can capital preface by question one in that a I company the general, to just there available this specific public like a sources take course are few already with opportunities. similar the future. obviously the that's about on in investors is markets saying let investors already from is, ours, public government capital private Kevin key of Yeah, balance got sheet, that we've for I'll capital on

with source we're fund is, is course, of second of we're sector, automotive of interest this partnerships the the automotive industrialization help part significant so What the key The OEMs. doing to OEMs, seeing a that to the automotive on strategic the technology.

So we've obviously, initial the VW JV JV significant. is Other where the find funding be of we're obviously, for technology a OEMs great they've example half that of to -- doing they're equally deployment. already that, announced our this will

source that's the of is capital so And automotive OEMs. another

maintaining of is source capital in level. jobs world, a a of level not but in industry that recognize having This being and as domestic fact, both and the part fundamental their industry and base. regional third of, in just their up U.S., government many end very a the at federal parts incentives in technological of The we're battery the important true could base, how of they is, middle the as the transformation recognize critical a well

But under essentially current Germany obviously, general, about major of particularly So EU, manufacturers the a there's as of the is lots administration that countries in concerned U.S. well the conclusion. as is similar arriving cars, at the in this. like

a say as government turn me context, let level that to it few to about specifically with words want Kevin Kevin, opportunities. So over maybe

Kevin Hettrich

comment. question. Really, things Jagdeep's that's to a just to add three Adam, Sure. fantastic

major were either lithium look city you out. support that is paired or be factories, so you Jagdeep with is a right the level laid they the factory if do the of ion all what conventional noting or The to precedent recent tend that country for of state certainly first level some any at reasons that for announcements,

The this second projections. any we any of is historical of point our in I'd that make assumed haven't

as to does to there's projections. QuantumScape in the receive addition at factory, would our of both tool created upside are of being jobs jobs that of type the in the indirect plans strategic strategic nature, or final direct if well. government point then support, chain supply on or all of as rest any in the supply as that the the as subsidy any And all indeed the created their be well, So well

Adam Jonas

Thanks very much.

Jagdeep Singh

Adam. Thanks,

Operator

of Your question Daoud from Cowen. the next is Gabe line with

Gabe Daoud

adding for pressure relative the thanks I we requirement all and And the when, if X.X to Q&A. guess if do here year? about rest once that guess, throughout trying think and start layers look guess, your was how to guys, expectations? think the to back XXxXX and XX, test. think of eight remarks I will the getting prepared trend that could just I requirement design to of I afternoon, four-layer curious XX-layers? for Hey, this you to like eight just how is that the to could guess you you down go I the

Jagdeep Singh

when a a go so stack. it pressure Yeah, don't cells, pressure nowhere of stack, the atmospheres number of so the just to will is of go, increase you number to -- distributed so rest to the pressure has our right stack function layers. of the of that single The a through know pressure as experiences And, apply you pressure. has you been so as we apply digit currently of literally

And in example two cell So point reason the results, times That's for design. why that, there great we lithium need pressure. the that been applied pack hasn't externally is and progress which the think anodes, number the XX-layer pressure. the that, it's team an is for historically, is not area fact, And a indicate interesting on zero why case is cycling a XX point does metal without module level one. is lot in that's the progress requires any because to we the of data the where making release number pressure reason the simplify

so So, pressure, into is opportunity simpler that we've the have And with we not an pressure that of that initial like design up that now then a automotive be will shown though, atmospheres the consumer design these zero not think open that applications fact direction, will we do digit electronics. require to applications, even concept additional the do we we believe proof in pressure it's cells. a move also can single engineered

Gabe Daoud

on demand Thanks, approach. follow-up, from Day or the expectation could accommodate maybe Volkswagen about then Jagdeep. maybe prismatic would helpful. as going just represent cell maybe their XX% additional mentioned your route And And just you whether not design? XX% for a Volkswagen I the you That's you perhaps talk VW, over of to the pouch around needs, time? cell -- of Could guess, design prismatic Power passive uniform go or from to can

Jagdeep Singh

Yeah.

key form in mean the we factor. point and think have enough fact module the energy a enough engineered relevant is and back factor, there density really I into a So, key be form commercially design is in a there to we at layers carnival, given say that that, the when and can

the energy So is and too is materials per to the inactive packaging factor happens cell then unit drops. start hours dominate and the what density, the small, form if what i.e. watt

a us in So mentioned of fact, previous target on the of that have. deck in we liter per as to calls, deck cards-sized we've about size, this hit allow of X,XXX believe dozens with does hour we been the talking layers factor it, form one we've that

actually, it commercially Volkswagen. that, And so hasn't OEMs to with relevant been

roughly commercial target. designs will wider not desire get that the somewhat X,XXX in that's that a move in right style form there fact, debit size OEMs speaking now, hour target that form on of for factor factor because can we that remains, But to but development other form our And many You're a the address models something form we've us deck future. the energy that's the can is part factor shown. only density longer-term current per liter of VW, factor, our than in to card cards for

to to try factors, which isn't commercialize. build development there form then a to a require module additional need larger So

Gabe Daoud

it. Jagdeep. Thanks, Got Thanks, everyone.

Jagdeep Singh

it. Appreciate Gabe. Thanks,

Operator

from Rod question is Your next the with Research. Wolfe of line Lache

Rod Lache

Hi, everybody.

First just zero Jagdeep? cell question, described, does have in liquid pressure not it, the any clarification, you that that

Jagdeep Singh

you this. question. Hey, clarify -- really Rod, good want I to glad asked

about that separator. things. is solid about So, there's when a state, we're we is what talk state One two solid talking

by themselves. dense Lithium of material. is polypropylene. of have So don't made can't materials organic out the a got those kinds a like polyolefin separator separator which a ions conduct through cells, unlike move plastics. Those typically today's We've porous material, material,

those they they electrolyte cathode, have the the anode. And as carbon the what in in electrolyte. The towards flooded instead, with is particles separator, holes well liquid as are liquid the them. do the holes So

Whereas replaceable, one in the it. So eliminate and talking the the parts everywhere in it's we're that's state we of it in denser, are cell. no there's holes design, really about, that solid pure, the it's

the to no lithium, pure so is itself. is And actually separator the separator point ion solid there the the that of lithium then, second metallic atomic lattice move through liquid. and between And

actually a solid our know, we've X,XXX of of there an more its capacity liquids spec. will liquid doesn't liquid cells In lithium buildup shown starts as possible, That And problem way and you're life to interface both fade with known So north the anode what with added you the of cases, And in metallic results of that life cell. XX% the reaction cycle that's much significantly whole of a fade of the than just and In between see did, you dropping and or a capital. loss off. side cycles, the hit item, actually base metal. within XXX-XXX that -- life polymer cathode, we with liquid it metal so liquid, that a the material, which many as raise And because resistance capital reaction are to starts the in is to and well liquid. cycles separator, to of impedance this be products cells, because is of the react XX%, solid. as we if its believe that XX% quickly use result, consists cell above would our If to the make limited is, lithium and metal organic a that's lithium cycle direct cell. limited ceramic cycle lithium is our the cell, well cathode retention, liquids have chemical seeing you as a with don't the the

in any the the And that that for it salt direct interface separator liquid not any a the middle. this So holes a need that to liquid without have anode penetration. any makes in with solve to allow separator key B, lithium is a does metal

Rod Lache

Yeah.

for That's that. clarifying Okay. Thanks helpful.

and A how are of the a talk made tasks in related for Can about metrics You've And, of path targeting the throughput, yield you forward that? couple to them about ahead. letter the uniformity. development What comment these? Jagdeep obviously on they? like kinds manufacturing you are challenging

Jagdeep Singh

the integrated yeah, which starts an is in chip. are process making learn things lab wide optical that you of that that company, through how was have processes as key increase, the process yield And photonic similar last to contaminants is tools obviously we manufacturing continue have those and yields your went the as fewer of my So, how and function Throughput one increase. process. a get to to And requirements high for defects, to any of the semiconductor scale more uniformity, fewer you you a in volume your and just then have. floor, about your

a which processes So of in be if is lot make tend system that there continuous state design you processes. solid we the have is uses things our have not why to with batch those scalable, flow like one to that intervention, human

on just the a heat step where the -- ends profile. flow, And at treatment heat right is through firm And two there's that make continuous heat today's So what's to that what from flow treatment material, that one in in for is process, call the are the second cast the done processing step manufacturing for those to that's a tape Step continuous process. a up electrodes green continuous the value different not step. we coders, done is cathode with too tool, right too steps factories. run

doing. of those keep customers. delivering the the to to, that At are that to the doing, kind end we're we our will that So cells able things we are comes be are of measurement day, the on planning and we out of the that deliver

sellers would in fact, all we So indicator that be QS-X for a a we're these those metrics have like are like, can, XXX,XXX year that on, goals. an for example, planning if tracking our to

Rod Lache

are made you're sense. you've be I Yeah, of Some the you to aside makes that since what able was just Volkswagen them from from others might other to still from a you and separators kind at electrolyte. be conventional they seem on Or Are of anodes silicon that's lastly, them point? along And with public? focused this hearing conveying OEMs, developments, on pass hoping hearing interest very more temporary that solution?

Jagdeep Singh

that, hearing exactly clearly I Well, today, and while. we're mean, here is what that a been here, is has frankly, for people, silicon

but there's today, always lots start, than that at the specific words the that music, we've thing is of think one the any from agreement of the to certain there in Because points. a or Why OEMs hear people there's some metal [ph] of higher issue is couple you hosted are game, theoretically to anode, it general So, looking lithium I is lithium a have spoken sense that energy that the -- in metal can't have we those directly. energy fact, material. density metal holes pure doesn't end

we back the all So have, and same is lithium anode lithium forth. cycling

to of nucleation lithium that the of there help it's there's no anode. and zero a cells, course, lithium in Assuming lithium excess

as or and [Indiscernible] back up lithium else space. nothing down only cycling silicon, as to with you no forth, weigh So take carbon, anode, the no well there's and in

Silicon a of been silicon why about some people Now, around because, look takes get a the a your arms bit amount silicon today, is into a anode to reason they're the what thing when little second talking nebulous that's point really is is anode. at is put carbon about

expands a lithium pure level I'm a of XXX% silicon is pure factor of contrast the with discharge. roughly a sure and a of know, speaking, reason silicon. goes silicon as solid it's It's that when carbon absorbs in four, you for is, as a and it. again, that lot anode, lithium And by some then never So out

charged been a over a standing up soaking and sponge to capacity. silicon resulting a that like go. contracting, itself, literally is repeated of Lithium in discharged. is recycling, ready they've and expanding And pulverizes silicon lithium [indiscernible] So loss

silicon way carbon anode. the amount prevent up have a that So, to only is with to of come small that, the people in

and also so cycle lithium a energy an trade of thing. silicon And you life, anode silicon sort how have, validation with much there's corresponds which that of which direct your off density is to

it sometimes silicon to our to important shown ask, has silicon, say it's the lower in decent about? leaves silicon knowledge talking of And density people slide and well, one much reported are they'll been amount how a And kind of in of when it, silicon show XXX% you cycle higher show a silicon anode have any never a So, amount solution whether not silicon ask with energy really be reader questions companies, that's in to cycle sometimes of a uncircumcised, with to easy of Because then it. those this kind the way of life important that life. being It's to able one it a data, where unfortunately understand things the to it's not. same as the was uncertain to to report is said. some cell of what or understand,

the of to can them to that if silicon use if step end to in yet But, net And opposed continue all from are we're that OEMs very as towards lithium lithium So, that, of their strong yes, the done. is we obviously, as in intermediate an that silicon we anode, at looking that talking be the multiple pure do pure interest cells expect game a haven't put shipped OEMs, we then cars. that to metallic see anodes. to

Rod Lache

Jagdeep. Thanks, Great.

Jagdeep Singh

Thanks, Rod.

Operator

of question with is from Delaney Sachs. Your the Goldman line next Mark

Mark Delaney

on Yes. taking elaborate questions. that about Good very any follow-up you Could continued in afternoon, inbound The Letter from Maybe last and on prospective first for it much thanks maybe spoke inbound customers. ago? Shareholder to the time to currently, interest strong an the how it customer compares more that beyond about question. how VW? take may talks the to XX-days order last of And additional we seeing what was as company's win in of multiple terms the interest

Jagdeep Singh

deals keeping to will everybody's we that, as the we can't the emerging. SEO two We support reasonably a quarter. come a question. players. a But aren't we we know, But our prototype right management both did, cells the for it's we've well that there interest, these level really technology interest supply of even is, added QS-X both Mark of and than as of of out that thing from thanks test And to with in in number of ability totally been you of results, December, off on as the interest constrained is will a allocation, as Mark, expect terms We delivery is more that The line. double Hey, samples an that product the multiyear any them. candidate that our that said in a some which lot in Yeah. sense. its we're company that's to be in customers, capacity, we needs. problem near-term, our obviously with there can't call Since with expand was offering now, announced. since solution. with still pipeline, of to of serve last capacity many But be reality We of announced sides players the announced we the in our in that have, lot increase terms to good still have to bandwidth QX earnings to OEMs, amount have interest expect too have a [Indiscernible] comment continued seen there's of won't decide

to and going about, I we're number we're key have interest terms in more separator, mean, we're talking the partners and would pick that has technology why benefits energy about, and ability life a we're if broad, you of would I expect. to that a very the talking sort anyway. say But to of charge cycle attractive. seeing, amount quickly of a you of in the features have state higher the small be it of safety So kind the density, wouldn't it's solid as

wind we So best players to that what kind our ones delivering up these we're need key of what give and the really fit enough them they think the all doing. here will challenge cells to be prioritizing is for

Mark Delaney

Shareholder the better in understand That's helpful. trying comment Letter. question Thanks. the My second was to

timeframe. that early production about of to commercial a XXXX. hour gigawatt showing that to think quarter You targeting Day XXXX shipped to in understand how talked And was I'm a pretty production. I in Analyst XXXX presentation about compares hoping being And the

the in to So been better But just no articulated trying change. plan? understand had maybe what Thank current financial the there's to you. previously phrasing compared

Jagdeep Singh

well. much it pretty Yeah, articulated I think you

If 'XX that say presentation timeframe. Analyst you in we And there, to what that's we referring up 'XX that model in show 'XX 'XX. look wrapping had relatively when small revenue the to at we're

Mark Delaney

you. Okay. Thank

Operator

next is from Your line question of Ben the with Baird. Kallo

Ben Kallo

like guys. a very Jagdeep to of lay have people explaining you, you Thank stuff. complicated me. good do job very It's

form that a said would form a different And more, like, put and you expected like, did can maybe XX that the just and step, assume all You it pack, how a about [indiscernible]. I up ramping a cells diligence battery cell little I with and the about kind the from that if something those factor, that make factor or just you equipment But, battery bit wondering And pack. was the a I into takes. you that factory differences VW in taking cells a explain and make into you XX-months. to as go to of

Jagdeep Singh

great No, Ben. question, a absolutely,

a even So answer give of a points question. context, you the I couple before to

factory. are conventional the In similar terms going tools lithium what into itself, be the into ion goes very factory of go factory of to to the that much actually

an difference keep same layer from the separator there's we suppliers, The on where not we conventional the that the line. metal separator. lithium ion will what's the very cathode the anode to material know, to in and The coders same. of same exist, the already used as or cathode doesn't The be virtually is our no and own anode [Indiscernible] example It's be because cathode For cathode, it that active similar even forms battery will you the updated zero of line line, eliminate the make be of acuity extra suppliers. lithium going of then types today's generation line anode batteries. only lithium no buys separators, carbon, silicon,

However, even that are separator scalable there, low we and using continuous dimensionality. tools make that

process two-step a So separate. that making there's to

cathode step first used similar very to for what's is casting coatings. the The process,

step. treatment handled fashion. belt, But through step running very use is employee treatment being And the continuous second So that where flow scalable things too it's and to in already are a heat our continuous a obviously flow the tools. this conveyor

they're So both scalar a processes.

the how battery factor. the part the second battery question form different pack process the is of or from The is,

the so that up might making We -- One we couple we luckily when we a hard. packs. company, of So, actually realized started thought cells cells end is since both making is things. and

tightly, focus much So control Because we design additional itself. we beyond pack we electrically of the wanted integral OEMs that, pack decided thermally, It's part an very But to via is to were tasks the talking vehicle that software. take and integrated the sales, mechanically, not also themselves. on to pack. very on found the the secondly, like

lot So however, a of thing about of are cell with simple to package the other nice car. two a not part set bring complexity making beyond interface, it. The device, very of as that the a terminal they cells cells,

we when make off so easy is one it's who makes to hand the And OEM packs. The to the cells, OEM.

to means actually was we to which the a BMS. So, of parts deliver really, behavior, our phase its sure cells. behavior only design thermal do, you the cell, that's responsibility vehicle, its we is is electrical, But communicate make that interface the the the all external that the interface, of we

pack to a with them. delivered them have packs never engineered full just and can we cells So accept build that and sell our they

Ben Kallo

I guess, out. just around question that

that So the looks pack, someone's the already bigger? next And -- developing to next you match that the cell already then is do cells. and your right partner VW, OEM

Jagdeep Singh

it is that way the collaboration. works actually, so a Yeah, it's

that kind change. we that pack. tells with cells pack module like, and their module pack module and us OEM And fit minimal designed would designed the and to of that So into what looks fit cell what

so is we on OEM your design. cell, depends modify actually this we fact, has particular people when module why, some architecture. on in OEM, a But data because quite our layers different cases actual many and count how or pack in every different So cell me the the slightly ask say

talk pack. deck of fit their of precise relevant I reason in being cards, is form the more when I a to because roughly, size So OEM, the why by about roughly vary the into the order and factor module commercially dimensions say cleanly may

Ben Kallo

Got very it. helpful. That's

maybe talk was on about in you the and -- Could mentioned the VW I report. you raising the good. think That congrats money. milestones So

injection? that Just there capital another milestone triggers is housekeeping,

Jagdeep Singh

no. Well,

still with private So since We've was the ago been had invest answer F. obviously, time. we is, we $X roughly our the that set were round And participating in they a back they were were we're private milestone committed a the series at company, we that before, And company. particular more. million a year to when into them public entered doing

first The is started. already and -- COVID course, see had of we

investment And OEMs to approach. so, they of Tranche manage the form Letter no the flows. them specific just simply milestone conditions. allow thought there two have seen automotive in to production tied really a that important form would a the with And to the off one and second report areas in the separator December was path a commercialization. impact. that itself. thicknesses conditions, on to factor significant be as having have drop COVID delay was closing they they with near their milestone our revenues wanted and what And the significant for and we that have a cash test idea tranche, And And a specified to in Shareholder factor, specific had time to because requested tranche do

then confidence of rate on and they number power, of separators them gives cycles. such commercially achieve fact, of to test viable conditions that be conditions, of can temperature, the test our goals. So right in a that the the to thickness specific we make specified And and in density and relative energy level

that all But, very conditions when just funded. to million that were that's met we pleased So, and a fully committed ago. investment the those now $XX cells unlocked was the year

related where from So sum, be the this joint venture put the we've only cash share VW they've place in fund going committed past, doing we're plants talked that of undisclosed to way the JV. about is in further in an this XX% first in coming production to a that to

Ben Kallo

you it. the Thank for very transparency. Got you. Thank much

Jagdeep Singh

Thanks, Ben. questions. the Appreciate

Operator

with Capital Your Spak next the Markets. is from line Joseph question RBC of

Joseph Spak

was was I the like, I Jagdeep, done? guess related, that like, how And you. but format still four-layer like, test. good difficult the what these were just curious, many sort how on gets clearly larger I yield cell the though, afternoon. tests cells, tests Good Or cell was test? pre-production one for there? are news this or of the four-layer cells larger Thank know

Jagdeep Singh

Yeah, for thanks the question, Joe.

form because we XXxXXmm as four-layer the out in commercially capacity, definitely playing which on size. is somewhat we factor this card didn't but smaller yeah, kind news, last than earnings because them good cells, you XXxXXmm have made the reported of form So this the relevant factors, call, point we is

new XXxXX So the will was, the form good in cells, make problems the make batches, cells data happens them of XXX%. scale and of deem And so, What out we some on creep and life we be it in? when manufacturing cell, when and batches. made And you we we reported not okay, they But, is them up make the put what factor? retention. to card Or multi-layer there's don't in one cells, the terms yield in question in tests cells, cells to cycle make obviously, the than of this that more that can that always capacity And still we great, in work slide, you we in good see in we performance process. very size the work? ones them full in is on factor. fact the playing this, the Shareholder Letter, see Will form when is

cycles, read, on a slide good you're XXX the seeing So approaching over they you see because XX% don't cells. that with four-layer continue full cells slide, cycles the capacity size which have on expect on that if it's you retention, background but around are X,XXXs the I XX% this the in hard XXxXXmm to here, that almost you now, means in think, fashion,

fact cycle is effects, that on. opportunity that does in shows what area, that larger this is in news, it life. bigger up good new it so strange and a rates to don't when are the is being create is And for when what key that those these of we're the And, interaction capacity creep showed the showing we well you was, stack means have last that's it's are problems make to data you and at there had cycle all news retention. impact these power. what is of time because four-layers, questions really together, done those you So, retention. now you definitely them possible capacity And impact increase or And that again, adversely relative four-layer and cycle you the don't perform life test four-layers cells when we area -- to and aggressive life of are

hour one range more done will car be those at hour one and XXX at charge talk So This three done hour what not charge you're like, an mile battery discharging It hour. in discharge, could rates. testing full the and life cycle I discharge. multi is means is again, C/X,

recharging that which, seen temperature, again, miles it that's in hour XX isn't garage actually state a something driving, supercharger, which of So to in is And terms solid room Celsius, in basically at opposed done then and an XXX were then overnight. typically also now your and you is as degrees these then tests systems.

we're the it's get here. and a we're performance people we emphasize XX-layer, hit to me, be that very that milestone, have asked eight more got the actually continue with pleased so the that you to in and uniformity seeing to done, to a always to was on. lot increasing question a we to Europe, milestone, work careful there's that, that again, So, we're very whenever But so

confidence factor pleased In that our confidence us of there's that be year, deliver we're that nonetheless, by hit multi-layer, four-layer, working in to and yielding So have to will be relevant to talk reach at will because that more that's that and want XXXX, reduction will cars cells going test lifting us goal, to drops done. we that those are gives point, XXX,XXX step, higher yet are the year, we the cells we increased in line, volume important the a QS-X risk our test hitting on out a the OEMs will XX-layers this really early cells the pre-pilot to four And another of have or But of of lot because off and year-end. can risk very can a player, the form full if say to give cells you your XXXX. to keys that And prototype, eight we commercially to make then milestones. about they some a we that five this, we I heal that tracks.

those year-end, dozen of step is we the in So, full that hundreds the milestones make cells, of handful of four-layer cell XX-layer risk, the much these exciting. full size real go perhaps eight in multi that size cell more really size cars. function full three one worth layers full the a milestones, then into And story or thousands feel cell, the sized that by of of dozens XXXX. represents to sort four Every in will of 'XX drop layer

customer strong, execution. So we're careful our significant feel that's here, on if we're do remain and -- really and confident we we both I believe end the value is today, track interest increasing And, milestones going we we upcoming communicate and of think really can also proposition results can long-term the on that impact on industry. a as the towards to the focus have up the hit time one execute milestones. so these we goals. making every to that that compelling, But are all we is so the We

Operator

And remarks? Do there further questions you this closing any time. at no are have

Jagdeep Singh

to just for everybody time us thank to I today. join want making

we're the to for customer see, our that will we've momentum we We've four-layer up you've impact facility think if achieve that I in that, and for the have interest course talk we that we're continue next keep of will goals hit want to we you believe secured that thank that or that the I just pleased call you a results With we Letter, far that executing, later going and to dent lot to line. as our heard be turned on industry, of our quarter. terms spoke again, our of on yield focusing in investors. with And, we'll year. pressure so start that about, keep the cell, on Shareholder all joining, making QS-X the value on the make creating and the manufacturing of at cell I this to emissions, helping an we And a execution. to this

Operator

you conclude That today's does for conference. Thank participating.

now You disconnect. may

QuantumScape (QS) 12 May 212021 Q1 Earnings call transcript