QS - Earnings call transcript Q1 2022 | QuantumScape Corporation

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Operator

Good day, and welcome to QuantumScape’s Second Quarter 2021 [ph] 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 2022 Earnings 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 the our Before quarterly our that is

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

cause that Our expectations materially cause could factors may are actual to differ cite these regarding those results not and from other projected. results risk content that Form actual Actual and and outcomes. voted are periods differ uncertainties beliefs from There financial subject matters to the materialize. future may the and predicting uncertainties of materially for statements to risks by reasons results our in the SEC XX-K in forward-looking filings, including that difficulty we our

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

Jagdeep Singh

also XX-minute Since using we we that cells repeated operation blocks. of charge fast the have to battery At metrics as pressure, we of demonstrated including then, up end believe energy compelling our capable XXXX, over single-layers time. platform, data we John. and key but charging zero not showing metal a building is advancement you, only Thank delivering benefit range and further performance chemistry, can this shown single-layer chemistries unveiled on multilayer solid-state with conventional lithium of scale density, such fly

gold-standard we our XXXX XX-layer our conditions note XXX with retention to to call, into February cycling earnings with results under progress by and energy showing and demonstrated now XX-layer steady pleased our cells. similar on layers first the XX X-layer are cycles behavior have single test over our and cell continued very We that

lithium-metal anode-free proprietary our expansion to the to cell while is goals uniaxial sales of to architecture designed for our to anodes. our We demonstrate cell proprietary format of addition, details XXXX forward represent believe and be key one look sharing is the flexible this in proprietary characteristic the in of our format, an additional XX-layer accommodating In encouraging unlock these we is enough cell on future. format. This which benefits volume proof-of-concept, results result

requires these on While materials results, commercializing our done can goals processes, more pleased improving we product focus remains that we This as our before share and production work we improvements to continued to the well tools our note design. are achieve quality, a consistency processes on in and be technology. our of incorporating as

expect and engineering, through We to to on production a encounter our have execute plan. continue range encountered challenges and and of we as work technical,

strengthen around challenges of parallel patents over successfully In cells, addressing our layer and a increase However, over this operations. separator production, production XXXX up the goal peak has scale key key One to X,XXX. our working constraint we technology we of building which up been of been starts our IP portfolio, ramp on have our also have further with XXX to these for front to weekly the and the applications. is separator counts built films, we believe with moat of the now consists patent of

our compared starts us increase XXXX. We to to and manufacturing process, tooling component better our throughput process better and only quality production consistency, tooling engineering more control. due a in also continuous-flow scale-up over confidence the improve build but of allows not improvements Increased only also throughput of made to exiting QX equipment our possible can that quality, deliver and to The to of core but higher-throughput in as also report line. our new, process. increased X thesis other This has us to Phase we films critical less tasks, separator test, larger-scale our automation on separator new of continuous-flow average are such happy to exiting weekly than on to therefore was recorded X,XXX testing perform a that cells fraction significant by X,XXX XXXX, iterating QX allocate our allows not manufacturing

qualification coming quarters, X our and the delivery our and complete we to take QS-X Over expect lines and across Phase many X and lines. continuous-flow more large-scale pre-pilot the Phase of tools engineering

and the battery we MWh mutual to revenue. production OEM charging milestones adopting a announcement and A-sample deal global XX joint but improve Upon in shift provides pathway both lower GWh technology in reserves core proposition substantially are higher capacity for new to A-sample QS-X, of interest simultaneously simultaneously. capacity, this but energy. a up in that to Automotive is cells our speed line. The agreement vein, players our to lower required. also energy, and latest demonstrate QX by of new third generation leading power announced customer customers venture agreement XX certain that power solid with to production target between the and power, The achieving cell cells deal one have facility This functionality with the order subject make affirms We dozens agreements. battery U.S.-based value forced XXXX. in in or lithium-metal chemistries are Top is automotive generally core pre next X believe to we've fifth potential to cells. to strong is automotive today offer higher delivery -pilot energy both at the choice a of the to OEM layers of In the is planned technology. continue on least intended frontier announced customer battery sampling energy have to establishing state on the The technical of and that annual a We performance milestones,

long-term in focused the the our on a grit, substantial complex to laying Since manufacturing capabilities, and markets represents XXXX, determination, our is is has that execution. expect that word vision. execution we strategy inflection public results. process, we undertaking been XXXX a operational yield Battery and and Lastly, strategic disciplined in foundation in believe development have our what manufacturing an beginning our requires we point team growth and entering this on will shown for be

While quarters believe manufacturing starts, fronts the reporting represent improvements work strong to I'll towards increases in it accomplish remains substantial on milestones. start quarters. that, proprietary With to coming we advances these our turn quality and goal, on this these and in Kevin. film XXXX format, to look our progress We continued our forward materials cell a achieving over

Kevin Hettrich

the expenses In operating quarter, Thank $XX million. our you, were Jagdeep. first

million. loss the was entering spend Our defined expenses and Cash GAAP was This the were in-line our net expectations quarter. as with stock operating of for $XX less the level quarter. for compensation $XX depreciation million based quarter operating expenses

and For sample focus engineering XXXX, be development cash prototype expect expenses cell as on we of line. up $XXX full-year million of to the in to $XXX our A operating million we continue scale range to

and primarily QS facility XX% line. as went dedicated seeing The pressures, within approximately million. We’re on the of million higher OpEx of engineering CapEx tools particularly labor buildout. turning guidance the initial inflationary towards our $XX towards in was first of costs. end we spend of on $XX cash million X $XX range range are was of Phase our QS-X Approximately CapEx signs our guidance QX to remainder CapEx on quarter our progress Campus payments QX our to

details spend the letter. You can read in our about shareholder the of

We continue million second to total of in $XXX of XXXX $XX in expect be $XXX million to to forecast range to CapEx CapEx $XX the be to million. and million range quarter the

majority equipment QS-X expect we XXXX, the QS-X of CapEx. of expanded our of remainder drive the the build to and For out continued campus

We expect during XXXX to CapEx back towards the be more the of heavily year. half investment weighted

achieved of represent that forecast to and into that from we OpEx we Payments engineering A line. B-sample XXXX will into XXXX QS-X rate, to prototype our realize producing resources target line the during from reallocate to investment OpEx as continue engineering growth by goal cells, gains XXXX grow QS-X modestly substantial goal levels we of head in of development We have in continue grow In to the to capital QS-X and respect we will spending cash, CapEx decline received producing its to of spent XXXX, count have automation. our quarter. continue and lines. from to previous with XXXX that towards candidate equipment in our the XXXX manufacturing to and related and slow first lines guidance, investments majority our most our significantly. sample forecast $XX cells for end XXXX, and operations engineering XXXX and With we steadily Consequently on million to from line

with We in enter continue previous to expect liquidity in over with guidance. $XXX million XXXX line to

QS-X most John. sample and the We’re received sample equipment for excited of XXXX, With goals pass production prototype cells the delivery over year. including it to production candidate be A that, and you to a on underway the I toward cells next of B our

John Saager

today's a We'll over begin Thanks, Q&A with investors inbox. we've received the app IR in and Kevin. our Say from few portion questions

question Our from first the Say comes app.

on nearly Can batteries come vehicle QuantumScape? this in there state will why a the in to house? greatest Solid automaker auto with one producers out recently crowded every industry buzzword future. placing will are an solid in top near have claiming be to QuantumScape become you the What state speak threats

Jagdeep Singh

Sure, John.

such improve new, So chemistry battery interest of for on see as in the key all, of or metrics of we state charging and as energy new range times. density batteries level solid the first evidence the performance to disruptive

However, that on data ones improvements show simple keys care we energy solid change and part simultaneously, ion your refer are step or XXX solid to consider and cells we that times any XX conditions, cells just have mean the problem be temperature requirements show we one room state can that the metrics hour testing demonstrating faster key liquid modest over I especially also battery all or [ph] and what better change achieving see mentioned. as to the anyone lithium deliver what degree are of to of and by capable size Celsius, such power performance. of The else meeting gold-standard to charging remains including as drivers fact hard itself doesn’t cycles the The while pressure. delivering is about improvement yet automatically to step

about So scaling on two along believe count that before cart data we're greater can up the now this before the we technology having putting basic scaling Candidly, talking manufacturing. horse. up this, our capability focused scale higher showing and is shown axes: do layer demonstrating

John Saager

Great. Okay.

is current top Our one. is QuantumScape? priority second short for question the the What

Jagdeep Singh

there three priorities. say would I are top

need higher we to to our up first, multilayer So cells scale near count.

need and count. into charge XX-minute to in multilayer our And to the higher cell finally, single-layer capabilities already production we've is new capabilities cells. up scale we repeated incorporate shown we that need that film to Second, cell

with engaged all key throughput and members. our deeply these world-class Now tools achieving to recruit priorities continuing processes, higher deploy and team continuing requires customers and high-quality staying to

have In fact, positions hundreds and welcome open, of we we talented applicants.

So we're in world. positively the impacting interested

John Saager

Okay.

fact question good? a where final more" do from on to a the on are and, the resource Our more battery? plan finite can by how Say model that a actual batteries lithium lithium with "less you less volatile time, app, hope get mass will become is you you Do create navigating per

Jagdeep Singh

So and turned I and be the irreversibly life, engines and cathode that end to there forth discharge. combustion reaches battery lithium charge and burned With which when important unlike And can lithium note back simply that is and between and it's in not shuttled recycled. the still anode consumed, of HXO. into lithium think it's is COX during battery, gasoline is

in is handle make is lithium excess zero The excess that a many solutions, means we I'd use have of back anode, which cycling foils design, cathode. that's which second and an unlike lithium on we point the other The require the lithium. forms lithium or anode-free that lithium we anode metal only lithium in other forth

turns lot actually of crust. in In lithium there's the addition, it out Earth's a

one for once free polluting carbon per so chain. Holme, zero supply Tim of the million that X lithium approach eliminate battery finally, cars need less CTO, the most enough anode, our uses should I is more, for the And year Our the billion XXX also anode talking estimated we of for years. steps about while we're on out there's point

netted So the believe different fundamentally this fuel-based solutions. out, from we is fossil

ways to Of we, sustainable as lithium most the an need course, to we do to use. industry, continue extract find the

John Saager

or film XX XX Does number Two quarter need were QuantumScape change other last XX All layers performance accommodate XX. for to in right. sizes to an the film received. more smaller from questions x x some increasing of Why size requirements?

Jagdeep Singh

our the our times. short higher that's the can In us tool balance in our quality, run, size sizes, of what longer to needs. driven There's number customer equipment lead films, is film meets customer requirements. by throughput, between which production So make we a run, adjust a requirements, area if key enables

John Saager

Okay, for on proprietary the that accomplished? cell remains considered year the thanks. before to format is done What be goal

Jagdeep Singh

this give We'd in So it's of get mainly to lot them like this. work does And a to making iterate further on And any to data, on things new out confidence statistics, gives see box just also of of an like bugs. the to the us the course, iterations enough lot us require multiple of a all the before design. design design. checking opportunity

John Saager

right. And in define mean is our Can final line. you for the All talked time better you've what commercialization XXXX, Kevin, question XXXX by Kevin. you about commercialization?

Kevin Hettrich

production of for the C sale the we a define for production currently made C out available we're sample question, to John. Commercialization and as QS-X. cells you Thank third-party, of sample targeting

John Saager

to call. questions. portion begin please Q&A the open Okay. ready Thanks the Operator, line We're much, for now today's so of guys.

Operator

is Thank with of line Cowen. first Daoud the Gabe you. [Operator Instructions] question from The

is line Your open.

Gabe Daoud

afternoon guys. from defined. and the Thanks we I hoping just for all how on start could John, and actually taking questions. for thanks commercialization Hey remarks last Kevin, question that maybe prepared with that's was just my

consistent Is what you by timing messaging? shift that that guys have previously been bit with have previously samples XXXX. XXXX, Or of C little a So noted? you from what a in is

Jagdeep Singh

of is pretty Kevin jumped C it's will course, are before. jump B also Jagdeep, for that commercial the take defined just what as not believe of produced samples, said This QS-X samples. I'll think we We C get but also tooling as the can well. but out we I consistent way, Well, actually used in in meet we've that there, the cells are and And only not requirement samples on with here. let production. be by

So of of the testing processes manufacturing. that for ground and for if able QS-X, course, and to other tooling and do we is early commercial part that. cells of to really for detailed deployment, allow be produce all it's us to can actually And blueprint QS-X the would the really expand our

up running plants So higher and QS-X for manufacturing will into because expanding by we really need that mid-decade. get to basis the be throughput

Gabe Daoud

Jagdeep. Thanks, it. Got

expectations John remarks. So from maybe little one ton a this of to the of has maybe on accommodating about of how just manufacturing questions hit and format just the performing then But this with bit prepared volume been you share expansion. it. format could if around in also just curious And proprietary understand not a does talk again the at how you change, it detail to relative and proprietary But also ready – all this cell if packaging step the quite process?

Jagdeep Singh

Yes.

new key pretty overall the a design. sale part packaging of is So our

manage only Z easier stands than three to a that be news out, expanding cell, is dimensions. it an point good It's engineer means anode-free especially lithium deals it you metal call dimension; we when lithium can – to The able a the you expansion. you metal have uniaxial is As the we have that have we're which to it's cell, package in in with dimension. that uniaxial expansion like one if

over silicon if and it's that expands For you like have manage. harder But so implemented XXX we this it's that's that achieved in we in that in has designed so example, have is three manage as cycles – – letter, the believe things mentioned the we expansion. reported that that And design. we dimensions do in suited in hard anode to that design the that cell to fact, was

what in call But not XXX the demonstrated so that do we as iterations. cycles a that demonstrated done I checked yet package out for iterate. in of we've when And the we So have design year, we're pipe need in a declare to the feel We with but the in keep entitlement, to it we ready box we through get certain It's that working that not that can we has design that level of that that basic bugs to the, a multiple design. that. need goal they're speak. feel that there's encouraged to it's sense has level

Gabe Daoud

in. Okay, got Thanks, back hop I’ll Jagdeep. it.

Jagdeep Singh

Gabe. Sure,

Operator

line next question Mr. The with is from you Srini Daoud. Pajjuri Thank SMBC. the of

line is open. Your

Srini Pajjuri

congrats Thank previous the going said one cycles performance. Jagdeep, is I you just think than four you've layer, you look you consistently back of the layers XXX it's the guys. XXX history, XX and And at XX if layers and at progress, been on the the on layer. to greater and question, kind cycles

expect happening? when on And that we hit more you to is So the that here see it's there to if should when hit improve room going layer? XXX, to do XX

Jagdeep Singh

question. good a It's Yes.

XX to our all. mature first fully We at what with So if to includes happy and basically we make and improving get not we're any simultaneously. when deliver which of discharge, that conditions, conditions so sales, hitting pressure. eventually, back modest cycles get call design. have one XXX we gold-standard degree then charge And so to cycles you on hundreds met look testing and get cycles the at under keep we temperature, Celsius, those room expensive at We pressure, designs be history, power levels hour

what data reported call to to year have cycles. But going than importantly, cycles. is of be sample in can A with over and these layers. and to actually XX of said also cells, goal the XXX we additional time, it's that previous get sample our year XXX that to We the cells the for the more snapshot other A we've on past is even our So a used these kind coming target in over hope report a

targeting will of layers gold-standard dozens achieving our we capable be conditions. So believe currently are that we test of

targeting we're for this what aggressive So goal, that's year. it's an and

Srini Pajjuri

technology Okay. question. then Thanks one for that. And

product time. than recent minutes fast Interestingly, at state of XX of kind the Kia for you're that have look I the I they're talking charging of if and of XX one. haven't targeting think in the I about I and XX%. mean charging of minutes from EVX, solid announcements, you Hyundai, is one especially don't your example, to benefits some less XX% new tested.

it to just think don't fast production, when And comes go legit an So less XX% – then improving claims mean But less XX%. you of – advantage know could into or the could battery trying understand, when how much you charging, traditional it do be if even have? are. to be I to XX you'll that than how those seems than given

do you? of in going that for where terms fast you longer So charging term see

Jagdeep Singh

great it. a I'm is glad This and question, you asked

If graph letter, a the point actually question. you look problem the The trade you to fact, relatively Power-Energy the you that at that, make Performance shareholder off charge have our exact if called we It's in you is, addresses that this density the Frontier. today is And a battery battery. have shifting energy do can quickly. can key of

energy, So power; high conventional you a optimize meaning or and but for but take can from optimize it power, meaning higher energy either it chemistry power energy. lower low

that in we that curve, you curve first shareholder graph, our the capable that shows graph, on cases what I it's of are believe So the today letter, on X think Page lower of.

leading In on vehicles see have fact, that One power different the two the energy are is they trade-off. top-selling that other on a today. similar that actual relatively but from operating the points on there and that are the longer chemistries, they're you points And AGV EV. curve data is high-performance market are

watt about of EV XX-XX to you what the on so with conversely, question watt okay, our a has someone only but of has to long-range cell, at when cell? it think, power per that particular real letter, energy charge And hear they top-selling the So we type hours XX%, about high-performance a but Is the XXX level. XX-minute this example minutes, longer, north XX-minute cell. cell the EV can the or minutes charge, saying per cell but charge takes XXX in So power show in ask is, XX charge liter hours to it I of, order has liter.

you kind to beauty can So out frontier the by is energy power push right. what the and of the the whole chemistry, we're of doing curve changing

today. you lithium-ion both power you can QuantumScape with points at you power the cell higher look still there can have on what But chemistry. QuantumScape in energy you make operating you or and is cell. curve we achievable the cases, what’s the than have higher top, energy multiple And with if see available believe So a a that conventional chemistry, QuantumScape

life So that’s power, you point have full all the package the at ask Again, problem. – cycle energy, to the ask primaries key those the it looks hand [ph] have what you look to what’s and back to comes the like, really together. is what’s what’s the

Kevin Hettrich

from charge is to One vehicle a of power, range. and minor point add of time perspective, to energy that is, course, course,

Srini Pajjuri

longer-term Thank it. question, Jagdeep, Got last my be question, then promise. you. one Right. this And will I

third early capacity. days to next we know before should get least to top next and we So, that the at beyond about you and road -- something JV Thank you the it’s XX plan? lead have customer from is to could years? that, XX but that talked make I a signing or down Or it there, gigawatts is interest an expect potentially you. a that a five of up five-year lot of milestones saying the

Jagdeep Singh

we on. as can will we mean deploying, guys it’s we agreement something start as we start with these no, will soon And deploying. reach can I as as and soon work that

build a lines base level that hours to with defined we that QS-X sort to will produce high QS-X glad a to get earlier, really to precursor an once a be of capacity this efficient really the point you and be this I’m at number. that larger of expansion. any should higher-capacity get to able cells, big any compelling gigawatt the The about As good jump scale-up. out, opportunity we we we’re we line real said particular done JV U.S. producing is news -- factories have for is because use more blueprint here is there is is going factory because But and to

operating believe larger the In still than currently fact, I largest factory. particular battery is

real a So factory. it’s

Srini Pajjuri

you. Thank it. Got

Jagdeep Singh

Absolutely.

Operator

Pajjuri. of question The next George with Mr. Gianarikas line Baird. the from you is Thank

open. is line Your

George Gianarikas

good Thanks taking for guys, my Hi question. afternoon.

there, your long-term given you about sort have maybe things what if out could building around First, you’re and getting closer to please? procurement you agreements approach that materials talk of

Jagdeep Singh

I’ll take product shipping is Jagdeep. guess a we’re in way Yes. the commercially. I that news still is not This good that.

the consuming our So that modest. our volumes -- materials is currently we’re relatively

to to us So, some which supply. gives work teams of agreements, and time That relative in our we we don’t those with the have to the materials needs material any suppliers chain immediate can providers, believe leading working and supply are address with put place issues procurement that we have.

where this know, We lot sort as attention be the we’re with the with partnership that solid of future share I’ll obviously the the of People suppliers a be want helpful part one likely case, that as well. finally, in of lot that’s a also puck state. want going, And with have say that sector of then Volkswagen, sentiment players think EVs the partnership that to you largest of the speak. to Volkswagen we to of relative is is of getting to working And batteries is sort of the and they suppliers if automotive our And the that go a so could clout. future. to be

putting contractual of turn finalized kind we the in right get we’re And like far, on need reception players place obviously, warm the and and we But that these actual the into relatively work with. suppliers so engaged agreements partnerships. we feel with the of so seen part And commitments. right we’ve to

George Gianarikas

mean, as kind role around software just the term, talks not consider do I you package you’d to what -- as see playing know something time? your more, in about adjunct. that you one software that of that do a of Longer you offering sure one software. an I’m competitors And you’ll give for analytics well? OEMs is Thanks.

Jagdeep Singh

are it of of that and reliable reliable kind very a screening effective on and It like making things talking be a the and films not manufacturing software machine you’re models to on so side. you’re of what learning Well, can be software relative We use parts identifying to depends and whether do on. and likely tool about. lot

So, we strong some key very there. have partnerships suppliers some with

of manufacturing suppliers an that our some processes. playing fact, and metrology model In in increasing role deep learning are

machine to you’re players models trying is to if try or it’s in production is It’s that to just already in referring the performing dendrites, being our late. AI in dendrite belief detect formation, However, if too use learning formed that too the your be late. to to cell that’s are candid, system

if identify change try cannot your to slow protocol and the down somehow lot or are with of And software the metal then We’ve you a formation your any sort to with to metal there’s of dendrite. or we experience using of dendrite You dendrite. stop going try a lithium dendrites charge law had years de tell and doesn’t over the can to that type, win, lithium prevent material protocol of facto going to your fundamentally is dendrite, if it’s win. distance growth

to a that is some to viable operation accept the automaker rely don’t think failing. we prevent on dendrite know could strategy. that’s of a risk battery of and the in don’t we any going from think I models it middle of So, that predictive

-- So key, is, those the dendrite. models to machine way learning I’ll the in There isn’t manufacturing but point guess, in distinction high draw use deploying key you’re production tremendously I operando prevent try I’m sure what our not a referring AI value a and there’s to viable the models, really, to, to software, models view, again, the on relative side. to

George Gianarikas

You guess correctly. in back guys. go Thanks queue. I’ll

Operator

Dong Deutsche of Bank. Gianarikas. is line next you the Wendy from Thank The question Mr. with

open. is Your line

Wendy Dong

and walk you’ve talk was can you of the my large-scale us if of to taking QX just wondering you line like of take so the year? the can And taking maybe of in shareholder mentioned starts say X,XXX sort already question. a Hi, letter. that visibility would you of I far thanks for we’re And end I way to there. the since about And end that you’re would follow-up. you’re that equipment you you through then half goal have by almost the ahead how film have

Kevin Hettrich

A And this is the point. a up cells. say towards the engineering the visibility for it brought on we that of have say have visibility majority then candidate B year to We’ve produce good excellent come candidate as I would X equipment at sample producing primarily set to start-up goal sample line is we to tooling I’d that’s line order this into year, this that next that land QS-X. Phase cells, of there, year

Wendy, was remind there part. was the visibility of can that part second the a question, if So me you

Wendy Dong

Yes…

Jagdeep Singh

depends make making reported reason the constrained our quantities, the simple higher like cells because It only on our on able don’t films to actually tool equipment. film the partner, process from automation, our to test with that tool film make tools. we’re to everything tool start. now, and also Yes, we’ve validate need qualifying to we been a starts, but film right? has new and new us known needs I things has to that films We’ve a for we customers some When over know, X,XXX pleased with pretty for year vendor, those not be that deliver develop to firm do new starts the for, that we quite time average weekly more

films, part those And all and for an increase of times. our of films supply lead long need or to different course, development there’s tough insatiable of is manufacturing increase And new for demand the capacity throughput separators So activities. have or of tools. tools you

nonlinear, more step-function increasing like tends capacity a to increase. So be relatively

continuous bit, they’ve bigger parts throughput, letter tools those been metrics higher key we're when QX larger in have a less new great out that's X that graphs the of a that we in we metrics with fact, really – this important those that new, X,XXX use And seeing that not key separator. flow And in in fact quality. of our a a but pointed that continuous key what's little they’re and the qualified the seem a one you tools, films in, not to born more at make has on gone it's QX shareholder we better out performance but for sign operational. only about few we’ve And X,XXX in get – which some so are been think quarter letter would shareholder is the look we from point, than those on out. these the the we deploy exactly if thesis only quality I but could is as films, There's flow of and get the that, tools of on the Page it's they technical might we

throughput, So really we're it's greater getting to are key a everything kind out. things of not the getting course but of We're already And we quality those win. two do. better films double

shape year yeah, can for that including films. We the end there, this the was the believe that. we goal that the be year, to X,XXX if by A-sample. pretty we're the rest have tracking we pleased good means we and So, goal should relative And we're in get – goals of to the we're then of

Wendy Dong

layers” sort for then And to another XX-layers, of “several more that. XX is before jump ground for Thanks – dozen XX I'm dozen is you to to there you I one guess understand... a metal after before things. you instance to me. several just what's cover trying jump have or from there like,

Jagdeep Singh

developed. obviously I mean, are

to development going clearly mean, layer and Yeah, I our are assembling cells that high be teams have higher Sorry. accounts.

I doubts we be of in that's up technology milestone the count, layers because a, meaningful in believe can scaled whether put layer which of most will terms just is we probably the be bet. some ways they think the about to in point dozens the any

so but most We’ve shown and work. have very those different of But I similar. layers, cells that scale think four I we've important up think retention the and multi the what far that we've XX probably can just is layers performance layers cells risk cycling of went so single scale these from is isn't the we to that encouraging. far, super part capacity to shown

milestones cells the you having is in important back if well, some try of at to of value. do what look achieve about, It's just this cells and even you this not, customers performance we degrade this be get we got much so if A-sample as an, layer dozens when XXXX, hard the similar. these that we questions doesn't that happens intermediate when far we're you tell When should and remember point, to shown one, So year. capacity, results more X shareholder is four, and fundamentally cells, build correctly XX so is you think can Page the similar that is announced first multi-layer it's that XX, some add because were what no. about of up around, letter, able at show performance you very that layers really we which, to to make we and we've performance. really have are similar scale our because the on excited are, believe on, cells curve is I retain performance which on, committed or This And we

be us. a we So be it'll will easy be important there think transformational. get if think fairly but won't I for can milestone It I quite that

Wendy Dong

question. my taking for Thanks

Jagdeep Singh

Absolutely.

Operator

Thank line your Chris Dong. open. Snyder you, Ms. question The with is from is next UBS,

Chris Snyder

wanted of follow to cell design. Thank made multilayer you. on And the I around comments just up those up the actually scaling

So at at we're year time, increase, the will counts. it it we've on six in that to about think which the increase least letters layers, of of adding test level the four Xx the the only XX increases? was that? though is percentage is even seems ago results XX doing way A better gotten. like the about now does magnitude company up doing think company based layers, the the assume absolute shareholder it's layers about company How I been has in these the a

ramp, how end? you get Just to by trying work some around about as color to deliver thinks A-sample year dozens layers the the of company more with that

Jagdeep Singh

building bigger way assemble of we is and into blocks think mean, we I blocks. about building we that, building make think then unit the blocks I the it Yeah. cells,

layer time. like add at not it's So we one a

So of there a effect of sort opposed a of percentage to sort as of is more effect. kind linear

starts look and you right? And exponential an In the I are a, infinity. four-layers, and it you looking letters seeing then right? sort exponential progress. a the took us it rapid of the simply last in of need as there way can to don't true time X, mean And to of you curves, the you the apply one shows that, a that the So XX, now relatively time go need enough Every quarter that sense we you to main was can at cell, no films, kind gives we you and the it you're again, extrapolate films, curve, go to to this all have at But four another, constraints one-layer XX make times of you almost fact, in capacity fact the you from graphic of really you're to of on just one if layer that a can't you key cells. one XX just that because we've number see up curve making look had if getting is axis film time when increased slide enablers. X,XXX most Page single

So we Again, that's a if goal. the to if day year. I very we happy at exciting. of the to progress can it. dozen the said goal see been it, a it's We'll our of few ambitious pretty on. have end do is see it's things But But publicly a one this we're think we hit hit layers that

Chris Snyder

films for them I to ask weekly X,XXX company when that. over of does the to then the that up No, is pretty essentially from is Really exit X% up the correctly, understanding talk sure of the of second X old company's production the of a X,XXX meeting separators to separator translate the significantly bit of says of output shareholder quality starts its and assessment QX, good or X,XXX which charts that process? production averaging the separator wanted to I'm scaling and so question, my the about I make Then Page on specifically about film helpful. production appreciate just letter,

Jagdeep Singh

X% from? sure reference sorry, See, making come the there? I the the number. understood X% where What's does I'm

Chris Snyder

the well, be the over the where Oh, that's seems green – to line. crossing just line blue

Jagdeep Singh

It's line I'm Yeah. Yeah, sorry. not That X%. is XXX%.

is the X.X, fraction it's X.X. So

line So black XXX%. that the in top is

So make question. is we for important quality it's because are wanted a these you probably they metrics graphs this mean. point. an share not clear But Thank what good because showing, to these what asking,

or that whether quality On that's to of we use If couple left are the determine proprietary level good quality is of of quality that you the film. of the line bad, bar we shows X-axis is green that that reference a a we're quality film. right bad looking that The a films performance the metrics to have a particular metric that the good we line, for. different or metrics is vertical

like on metric had previous we right the, hand XX% is the of time see the that looks you process is hand the good, curve, what maybe that. I films XX%, know was red don't were producing left that on XX% So of the the maybe and metric, which

lines, over well With that fact process the that higher a the that the in new much threshold XX% XXX% have continuous meet We're using seeing blue the That rightmost films, tools. we a metric. which in of is or case fraction new we performance in have. pushing the over flow XX% of fact

are have you once that them all what’s that’s I earlier. for good use films, of is threshold those the meeting the number can mentioned higher. exciting films So course, the of is you And much functions

You cells, to can use build to customers. them get the

to them use build functionality. to different cells levels, can test You different

for and can tool – use to can development. production a you drive them You them process

you showing the higher that a be lot just before. saw couple of to what chart of to these what general for metrics a is a These here. has ones, the there’s to have. kind can we want still films quality quality these the metrics, films. need than films a meaningfully not is of with quality I but to This only – are which tools better use we the we’re quite for to work overall is of number making uses here quality see. also the the is careful is that we that So is as on performance higher the new the to he's this films do is a to key get on And improve going our But of improved win-win. producing main goals. And very film, part are throughput particular

Chris Snyder

clarifying the and Thank you you for color access. I all appreciate that on

for So that. thank you

Jagdeep Singh

Absolutely.

Operator

Research. with is The question Wolfe David Mr. next Bell Snyder. Thank from you,

open. is line Your

David Bell

Congrats clarify when happening question. to on why on and wanted Thanks assessment just Could the larger quarter. your go little you taking to point team has guys. from these as what up been the a for I tooling are last follow bit. the continuous throughput? my actually Hey improvements to more you scale

Jagdeep Singh

control. films of how give basically is short more you works. that give These The control. tools to to the example zones tools bigger Each a are process profile. with the have as answer applies different specific David different make process you come processed. just it sense so one And better Yes, zone a

could means it And tool gets have to have into as time, you isolation films. of example, the allows conditions set you spillover for environment, one process sort you different actually the of better zones, zone. the don’t bigger, different between as which temperature, adjacent different So you have a of

because in less control coming that So the playing for have quality actual room the has the that’s automation films answer thesis terms in and see out our But of of to better quality films. even this make general, of with key was these it’s one, still, really that coming higher And sort short to more likely a example, quality this more thesis – is the produce but tools throughput of thesis, very and you us are though this control, concrete great it’s scale allow the been will better part is, one error. just of our human tightly up what that again, films. to better process would out get

David Bell

shifting comment evolved to nickel quarter, they Are up? that Jagdeep. change technology? they auto to over your you battery leverage have And just the to really your last conversations want quickly go come Thanks issues direction looking to the can how with the chemistry, with as directions OEMs on have

Jagdeep Singh

tie right. our One automaker use choose, that right? our a to the works system. about ion with If nickel, is And Which that. Well, I’ll cathode you a right? they don’t system phosphate couple that lithium course, lithium they is as shown know, of things ion say a phosphate, we means system actually can agnostic, we’ve

in your goes the ends if of costs no up overall I’ll more make anode, being whatever system anode same because cost materials course an we going up, one the in with system that point else established no or then as anode costs anode, supply have lithium a less all precursors. we’ve And our overall, well is general, say material of then believe exists has key we baseline, that then don’t if second what which material to key separator anode mentioned have something that The I’ll cathodes, price active an requires that nickel before materials carbon more or your right. also as the on and its is The design than or spot of chains means but that everybody for for metal pays is right? costs. is effective lower processing silicon So already

first raw like Anode summarize, to exist. we requirements, feel principles relative of some our has So advantages doesn’t right? fundamental kind system materials to

and our specific as uses agnostic materials to is cathode separator global Our precursors. commodities

So it’s deal like This for put architectures. the to when conventional better suited to industry these architecture have ideal constraints to is it’s it together, feel deal all probably with. with –while not supply not than constraints I you these all

David Bell

today? we’re me you of Could you’ve seeing the sort what of other Jagdeep. me. actually and one more sample one sense cells of give just pre cells many same Thanks a to that OEMs layer how for XX largely And delivered and [indiscernible] the A quick size, OEMs data reporting here

Jagdeep Singh

specific the numbers I don’t any so I So can’t actual you give know there. numbers,

I’m actually don’t and to he multiple both can the think I in applications. by we, in of we’ve I cell. isn’t if disclosed. that another one I tested out wrong, And XX-layer that with testing But entered I say down were in shipped sales real want automotive that successfully as say cells publicly letter generations we quickly scroll out yes, just [indiscernible] multiple that point anything time we points not think shareholder across also fact, QX, phase customer our to customers the

want that. house are of in develop design bugs statistics with to the show the finally, get we I our thing that lithium, think metal. chain The So capability previous all terms – commodities needing as processes your right? advantages to an we I cells what when through provide add stick separator in new said and of to notes. anode one certainly, to a that’s of is and I’m is or question through being But mentioned I some going it. And that’s we uses to level customers. cell that well. then production reliability as Our And not relative have quick on as cathode lithium go based confidence global the when thing may call still of I a you iterations course data need about we what of and work we that supply that one is having we agnostic. in resources. a

the an on into even, to is design. there. also has our And that goes So front, that still is the have anode which an cathode lithium we be advantage, less system, call if that you

foil. So we don’t need need lithium foil, for example, there’s some metal that lithium approaches lithium

our the you in actually And the lithium lithium any so cycling on and can’t in have a less that. lithium the than back which case, anode, only forth cell

have this cathode is that a again could mode. has you’re like, operate of So supply system that’s no that’s you kind that’s required separator to we industry in agnostic in has ideal going crunch mode commodity probably robust resources most the for it’s the these the and or anode But system having less, the feel be silicon, kind of lithium global the if for anode in to this not times. carbon, on

David Bell

for my Jagdeep. Thanks taking questions. Thanks

Jagdeep Singh

Absolutely.

Operator

Mr. Singh Mr. you, time. I’ll additional the turn over questions now There remarks. for to Thank at any are waiting conference Bell. no this closing

Jagdeep Singh

Yes.

And on tax options, QuantumScape sale everyone the covering stocks to a through sell quarter. that until satisfying customer. note, committed I’d that a we again joining look to to next shares deliver of of seeing related say with to to thank I’m acquisition like obligations and to forward personal I’d of So the exception expenses and on an like QuantumScape note, for prototype hold. not I automotive exercise everyone

Operator

That call. concludes XXXX your Thank the participation. for QX QuantumScape earnings you

disconnect You your now lines.

QuantumScape (QS) 27 Apr 222022 Q1 Earnings call transcript