Q4 2025 QuantumScape Corp Earnings Call

February 11, 2026

Speaker #1: Good day and welcome to QuantumScape's fourth quarter and full year 2025 earnings conference call. Sam Kamara, QuantumScape's Senior Director, Investor Relations, you may begin the call.

Operator: Good day and welcome to QuantumScape's Q4 and full year 2025 earnings conference call. Sam Jaquez, QuantumScape's Senior Director of Investor Relations, you may begin the conference.

Speaker #2: Thank you, Operator. Good afternoon and thank you to everyone for joining QuantumScape's fourth quarter 2025 earnings call. To supplement today's discussion, please go to our website at irquantumscape.com to view our shelter letter.

Sam Kamara: Thank you, Operator. Good afternoon, and thank you to everyone for joining QuantumScape's Q4 2025 Earnings Call. To supplement today's discussion, please go to our website at ir.quantumscape.com to read our shareholder letter. Before we begin, I want to call your attention to the Safe Harbor provision for forward-looking statements that is posted on our website as part of our quarterly update. Forward-looking statements generally relate to future events, future technology progress, or future financial or operating performance. Our expectations and beliefs regarding these matters may not materialize. Actual results in financial periods are subject to risks and uncertainties that could cause actual results to differ materially from those projected.

Speaker #2: Before we begin, I want to call your attention to the Safe Harbor provision for forward-looking statements that is posted on our website as part of our quarterly update.

Sam Kamara: Forward-looking statements generally relate to future events, future technology progress, or future financial or operating performance. Our expectations and beliefs regarding these matters may not materialize. Actual results in financial periods are subject to risks and uncertainties that could cause actual results to differ materially from those projected.

Speaker #2: Forward-looking statements generally relate to future events, future technology progress, or future financial or operating performance. Our expectations and beliefs regarding these matters may not materialize; actual results and financial periods are subject to risks and uncertainties that could cause actual results to differ materially from those projected.

Speaker #2: There are risk factors that may cause actual results to differ materially from the content of our forward-looking statements, for the reasons that we cite in our shelter letter, Form 10-K, and other SEC filings.

Sam Kamara: There are risk factors that may cause actual results to differ materially from the content of our forward-looking statements for the reasons that we cite in our shareholder letter, Form 10-K, and other SEC filings, including uncertainties posed by the difficulty in predicting future outcomes. Joining us today will be QuantumScape CEO, Dr. Siva Sivaram, and our CFO, Kevin Hettrich. With that, I'd like to turn the call over to Siva.

Speaker #2: Including uncertainties posed by the difficulty in predicting future outcomes. Joining us today will be QuantumScape CEO Dr. Siva Sivaram and our CFO, Kevin Hettrich.

Speaker #2: With that, I'd like to turn the call over to

Speaker #2: Siva. Thank you,

Siva Sivaram: Thank you, Sam. I would like to begin by reviewing our progress over the course of 2025. It was an extraordinary year on all fronts for QS. At the beginning of the year, we set aggressive goals for ourselves to baseline the Cobra process, ship Cobra-based QSC5 cells, install equipment for our Eagle line, and expand our commercial engagements. We are proud to report that we succeeded on all 4 key goals. In June, we announced that our breakthrough Cobra process has been integrated into our cell production baseline. This groundbreaking process enables gigawatt-hour-scale production and is a catalyst for our capital-light development and licensing business model. With respect to commercial engagements, in 2025, we expanded our collaboration and licensing agreement with PowerCo, the battery manufacturer of the Volkswagen Group.

Speaker #3: Sam. I would like to begin by reviewing our progress over the course of 2025. It was an extraordinary year on all fronts for QS.

Speaker #3: At the beginning of the year, we set aggressive goals for ourselves: to baseline the COBRA process, ship COBRA-based QSC5 cells, install equipment for our Eagle line, and expand our commercial engagements.

Siva Sivaram: We are proud to report that we succeeded on all 4 key goals. In June, we announced that our breakthrough Cobra process has been integrated into our cell production baseline. This groundbreaking process enables gigawatt-hour-scale production and is a catalyst for our capital-light development and licensing business model. With respect to commercial engagements, in 2025, we expanded our collaboration and licensing agreement with PowerCo, the battery manufacturer of the Volkswagen Group.

Speaker #3: We are proud to report that we succeeded on all four key goals. In June, we announced that our breakthrough COBRA process has been integrated into our cell production baseline.

Speaker #3: process enables gigawatt-hour scale This groundbreaking production and is a catalyst for our capital light development and licensing business model. With respect to commercial engagements, in 2025, we expanded our collaboration and licensing agreement with PowerCo, the battery manufacturer of the Volkswagen Group.

Speaker #3: We also added two major global automotive OEMs to our portfolio of customers, announcing new joint development and technology evaluation agreements. Additionally, in 2025, we issued our first customer billings.

Siva Sivaram: We also added two major global automotive OEMs to our portfolio of customers, announcing new joint development and technology evaluation agreements. Additionally, in 2025, we issued our first customer billings. In 2025, we added two globally renowned ceramic production experts to our QS ecosystems: Murata Manufacturing and Corning. We capped the year with our second annual solid-state battery symposium in Kyoto, where we brought together ecosystem partners, automotive OEM customers, and government officials. 2025 also saw milestones in our technology commercialization roadmap with Cobra-based QSC5 cells shipped to the Volkswagen Group. In September, we made headlines as the Ducati V21L race bike powered by QSC5 cells rode across the stage at IAA Mobility in Munich. This exciting event was the world debut of our solid-state lithium-metal battery technology in a real-world electric vehicle. Finally, over the course of 2025, we installed our pilot cell production line, the Eagle line.

Speaker #3: In 2025, we added two globally renowned ceramic production experts to our QS ecosystems. Murata Manufacturing and Connie. We capped the year with our second annual solid-state battery symposium in Kyoto where we brought together ecosystem partners, automotive OEM customers, and government officials.

Siva Sivaram: We capped the year with our second annual solid-state battery symposium in Kyoto, where we brought together ecosystem partners, automotive OEM customers, and government officials. 2025 also saw milestones in our technology commercialization roadmap with Cobra-based QSC5 cells shipped to the Volkswagen Group.

Speaker #3: 2025 also saw milestones in our technology commercialization roadmap, with COBRA-based QSC5 cells shipped to the Volkswagen Group. In September, we made headlines as the Ducati V21L race bike powered by QSC5 cells rode across the stage at IAA Mobility in Munich.

Siva Sivaram: In September, we made headlines as the Ducati V21L race bike powered by QSC5 cells rode across the stage at IAA Mobility in Munich. This exciting event was the world debut of our solid-state lithium-metal battery technology in a real-world electric vehicle. Finally, over the course of 2025, we installed our pilot cell production line, the Eagle line.

Speaker #3: This exciting event was the world debut of our solid-state lithium-metal battery technology in a real-world electric vehicle. Finally, over the course of 2025, we installed our pilot cell production line the Eagle line.

Speaker #3: On February 4, 2026, we held an inauguration event for the Eagle line with attendance from automotive OEM customers, technology partners, and local and state government officials. Incorporating the innovative COBRA process, the Eagle line is a suite of equipment, materials, and highly automated processes forming the blueprint for production of QSC5 technology.

Siva Sivaram: On 4 February 2026, we held an inauguration event for the Eagle line with attendance from automotive OEM customers, technology partners, and local and state government officials. Incorporating the innovative Cobra process, the Eagle line is a suite of equipment materials and highly automated processes forming the blueprint for production of QSC5 technology. This leads me to our four key goals for 2026. Firstly, we will demonstrate scalable production of the Eagle line. The purpose of the Eagle line is threefold. First, it will produce QSC5 cells to support customer sampling and testing, technology demonstrations, and product integration efforts. Second, the Eagle line will show scalable process steps for production of our battery technology to enable licensing partners to bring our technology to gigawatt-hour scales in their own facilities.

Speaker #3: This leads me to our four key goals for 2026. Firstly, we will demonstrate scalable production of the Eagle line. The purpose of the Eagle line is threefold.

Speaker #3: First, it will produce QSC5 cells to support customer sampling and testing, technology demonstrations, and product integration efforts. Second, the Eagle line will show scalable process steps for production of our battery technology to enable licensing partners to bring our technology to gigawatt-hour scale in their own facilities.

Speaker #3: Third, the Eagle line gives us a platform to develop and test further enhancements and refinements at meaningful scale allowing us to accelerate our advanced development efforts.

Siva Sivaram: Third, the Eagle line gives us a platform to develop and test further enhancements and refinements at meaningful scale, allowing us to accelerate our advanced development efforts. In 2026, we will demonstrate the scalability of the Eagle line through increasingly efficient cell output. Secondly, we will advance automotive commercialization. The automotive market remains our core focus. In 2026, we aim to advance our automotive customers through the stages of our technology development and licensing business model. Working with multiple global auto OEMs, we will use our technology platform to tailor product solutions for vehicle programs, undertake field testing, and implement customer-specific industrialization strategies. Thirdly, we will expand into new high-value markets. Our solid-state battery technology offers a step-change improvement over conventional lithium-ion technology. Batteries are becoming a disruptive force across the entire economy, and we see the opportunity set for advanced energy storage expanding across existing and new applications.

Speaker #3: In 2026, we will demonstrate the scalability of the Eagle line through increasingly efficient cell output. Secondly, we will advance automotive commercialization. The automotive market remains our core focus.

Speaker #3: And in 2026, we aim to advance our automotive customers through the stages of our technology development and licensing business model. Working with multiple global auto OEMs, we will use our technology platform to tailor product solutions for vehicle programs, undertake field testing, and implement customer-specific industrialization strategies.

Speaker #3: Thirdly, we will expand into new high-value markets. Our solid-state battery technology offers a step change improvement over conventional lithium-ion technology. Batteries are becoming a disruptive force across the entire economy.

Speaker #3: And we see the opportunity set for advanced energy storage expanding across existing and new applications. In 2026, we aim to seize opportunities where our differentiated solid-state technology can capture significant value.

Siva Sivaram: In 2026, we aim to seize opportunities where our differentiated solid-state technology can capture significant value. And finally, we will go beyond QSC5. As a technology innovation company, we will continue to push the frontier of battery performance as we ramp production of our current QSC5 platform. In 2026, we are focused on further advancements to meet the ever-growing need for energy storage in existing and emerging applications. And this year, we will announce progress along our technology roadmap. To conclude, I'd like to say a word about our strategic outlook. 2025 was a remarkable year, and it would not have been possible without that tireless effort of our outstanding employees. Our ambitious goals for 2026 will require continued disciplined execution on the part of the team. Looking at the broader landscape, the world at large faces important challenges around technology and secure supply chains.

Speaker #3: And finally, we will go beyond QSC5. As a technology innovation company, we will continue to push the frontier of battery performance as we ramp production of our current QSC5 platform.

Speaker #3: In 2026, we are focused on further advancements to meet the ever-growing need for energy storage in existing and emerging applications. And this year, we will announce progress along our technology roadmap.

Speaker #3: To conclude, I'd like to say a word about our strategic outlook. 2025 was a remarkable year, and it would not have been possible without the tireless effort of our outstanding employees.

Speaker #3: Our ambitious goals for 2026 will require continued disciplined execution on the part of the team. Looking at the broader landscape, the world at large faces important challenges around technology and secure supply chains.

Speaker #3: We view this as a golden opportunity. Our mission to revolutionize energy storage has positioned us to offer solutions to these exact challenges. For industry partners who need better batteries, we seek to offer a future-proof technology platform that delivers better performance across the board and continuously improves over time.

Siva Sivaram: We view this as a golden opportunity. Our mission to revolutionize energy storage has positioned us to offer solutions to these exact challenges. For industry partners who need better batteries, we seek to offer a future-proof technology platform that delivers better performance across the board and continuously improves over time. For players across the automotive, data center, robotics, aviation, and defense spaces who are in need of next-generation energy storage to power demanding applications, our technology represents a compelling and unique solution. We believe we have a diverse group of customer and application opportunities, a robust and growing partner ecosystem, and a differentiated technology platform that is both continuously improving and capturing the benefits of increasing scale. Even as we face the many challenges still ahead, we are establishing a strong foundation on which to build the future of energy storage.

Speaker #3: For players across the automotive data center, robotics, aviation, and defense spaces, who are in need of next-generation energy storage to power demanding applications, our technology represents a compelling, unique solution.

Speaker #3: We believe we have a diverse group of customer and application opportunities. A robust and growing partner ecosystem and a differentiated technology platform that is both continuously improving and capturing the benefits of increasing scale.

Speaker #3: Even as we face the many challenges still ahead, we are establishing a strong foundation on which to build a future of energy storage. As a final note, we'd like to express our sincere gratitude to Professor Dr. Fritz Prinze, one of the co-founders of QuantumScape, who is retiring from our board of directors after more than 15 years of service.

Siva Sivaram: As a final note, we'd like to express our sincere gratitude to Professor Dr. Fritz Prinz, one of the co-founders of QuantumScape, who's retiring from our board of directors after more than 15 years of service. We thank Fritz for his leadership, guidance, and friendship through this remarkable period of QS history. With that, I'll turn things over to Kevin for a word on our financial outlook.

Speaker #3: We thank Fritz for his leadership, guidance, and friendship through this remarkable period of QS history. With that, I'll turn things over to Kevin for a word on our financials.

Speaker #3: outlook. Thank you,

Kevin Hettrich: Thank you, Siva. GAAP operating expenses and GAAP net loss in Q4 were $110.5 million and $100.1 million, and for full year 2025 were $472.6 million and $435.1 million, respectively. Adjusted EBITDA loss was $63.3 million in Q4, in line with expectations, and for full year 2025 was $252.3 million within guidance. A table reconciling GAAP net loss and adjusted EBITDA is available in the financial statement at the end of this shareholder letter. For 2026, we expect full year adjusted EBITDA loss to be between $250 million and $275 million as we work towards our goals while continuing to drive greater operational efficiency across the company. Capital expenditures in the fourth quarter were $12.3 million, and for full year 2025 were $36.3 million within guidance. Q4 CapEx primarily supported facilities and equipment purchases for the Eagle line.

Speaker #4: Siva. GAP operating expenses and GAP net loss in Q4 were $110.5 million, and $100.1 million. And for full year 2025, were $472.6 million, and $435.1 million respectively.

Speaker #4: Adjusted EBITDA loss was $63.3 million in Q4 in line with expectations, and for full year 2025 was $252.3 million, within guidance. A table reconciling GAP net loss and adjusted EBITDA is available in the financial statement at the end of this shareholder letter.

Speaker #4: For 2026, we expect full year adjusted EBITDA loss to be between $250 million and $275 million, as we work towards our goals while continuing to drive greater operational efficiency across the company.

Speaker #4: Capital expenditures in the fourth quarter were $12.3 million, and for full year 2025 were $36.3 million, within guidance. Q4 CAPEX primarily supported facilities and equipment purchases for the Eagle Line.

Speaker #4: For 2026, we expect full year CAPEX to be between $40 million and $60 million, the majority of which we plan to invest into the next generation of our technology.

Kevin Hettrich: For 2026, we expect full year CapEx to be between $40 million and $60 million, the majority of which we plan to invest into the next generation of our technology. Customer billings for full year 2025 were $19.5 million. As a reminder, customer billings may vary from quarter to quarter due to fluctuations in activity as we progress through various phases of an agreed scope of work. Customer billings is a key operational metric meant to give insight into customer activity and future cash flows. The metric is not a substitute for revenue under US GAAP. During the quarter, we received $19.5 million in cash from 2025 customer billings. As noted on our Q3 call, due to the related party nature, US GAAP required this amount to be recorded directly to shareholders' equity once certain requirements were met.

Speaker #4: Customer billings for full year 2025 were $19.5 million. As a reminder, customer billings may vary from quarter to quarter due to fluctuations in activity, as we progress through various phases Customer billings is a key operational metric meant to give insight into customer activity and future cash flows.

Speaker #4: The metric is not a substitute for revenue under US GAAP. During the $19.5 million in cash from 2025 customer billings—as noted on our Q3 call—due to the related party nature, US GAAP required this amount to be recorded directly to shareholders' equity once certain requirements were met.

Speaker #4: We ended 2025 with $970.8 million in liquidity and will remain prudent with our strong balance sheet going forward. As always, we encourage investors to read more on our financial information, business outlook, and risk factors in our quarterly and annual SEC filings on our investor relations website.

Kevin Hettrich: We ended 2025 with $970.8 million in liquidity and will remain prudent with our strong balance sheet going forward. As always, we encourage investors to read more on our financial information, business outlook, and risk factors in our quarterly and annual SEC filings on our investor relations website.

Speaker #5: Thanks, Kevin. We will begin today's Q&A portion with a few questions we have received from investors that I believe investors would be interested in.

Sam Kamara: Thanks, Kevin. We will begin today's Q&A portion with a few questions we have received from investors or that I believe investors would be interested in. Siva, can you expand further on why the inauguration of the Eagle line was such a significant milestone and a notable event on QuantumScape's commercialization pathway? Also, how will we use this line to demonstrate scalable production?

Speaker #5: Siva, can you expand further on why the inauguration of the Eagle Line was such a significant milestone and a notable event on QuantumScape's commercialization pathway?

Speaker #5: Also, how will we use this line to demonstrate scalable production?

Speaker #4: Ken, the Eagle Line is an extremely important catalyst for our technology commercialization goals. At the beginning of 2025, we set out the goal of increasing our output of QSC5 cells.

Siva Sivaram: Sam, the Eagle line is an extremely important catalyst for our technology commercialization goals. At the beginning of 2025, we set out the goal of increasing our output of QSC5 cells. When we were ramping volumes for the Munich IAA show, we had a stable baseline to make cells for the Ducati bike. We decided that the processes were sufficiently mature, and it was time to significantly increase the automation of the line to better match the productivity of the Cobra process. In the subsequent 10 months, we designed the line, prototyped it, found partners for equipment, built the tools, installed the tools at QS, qualified the processes on the tools, and released the equipment to the baseline. This was an incredible effort on the part of the team to get it done in such a short time.

Speaker #4: When we were ramping volumes for the Munich IAA show, we had a stable baseline to make cells for the Ducati bike. We decided that the processes were sufficiently mature, and it was time to significantly increase the automation of the line to better match the productivity of the Cobra process.

Speaker #4: In the subsequent 10 months, we designed the line, prototyped it, formed partners for equipment, built the tools, installed the tools at QS, qualified the processes on the tools, and released the equipment to the baseline.

Speaker #4: This was an incredible effort on the part of the team to get it done in such a short time. As we said in the letter, the Eagle Line enables pilot production of cells for sampling and is a platform to develop technologies for future generations.

Siva Sivaram: As we said in the letter, the Eagle line enables pilot production of cells for sampling and is a platform to develop technologies for future generations. But the most important outcome is to have a blueprint for production. This is what we intend to transfer to our customers so that they can ramp to gigawatt-hour scales in their factories. Success on the Eagle line is to have a blueprint for scale, cost, quality, and cycle time that a customer can deploy into their manufacturing line. This is about demonstrating the technology to our licensing partners for them to take the next step up in scale.

Speaker #4: But the most important outcome is to have a blueprint for production. This is what we intend to transfer to our customers so that they can ramp to gigawatt-hour scale in their factories.

Speaker #4: Success on the Eagle Line is to have a blueprint for scale, cost, quality, and cycle time that a customer can deploy into their manufacturing line.

Speaker #4: This is about demonstrating the technology to our licensing partners for them to take the next step up in scale.

Speaker #5: Thanks, Siva. You've highlighted growing interest beyond automotive. How are you thinking about those opportunities while maintaining focus on automotive commercialization?

Sam Kamara: Thanks, Siva. You've highlighted growing interest beyond automotive. How are you thinking about those opportunities while maintaining focus on automotive commercialization?

Speaker #4: Ken, automotive customers remain our core focus. Still, the biggest and most valuable market for batteries—nothing has changed on that front. The long-term global trend towards electrification is going to continue, and if you think about autonomous vehicles really starting to become mainstream, those fleets make the economic logic for EVs even more compelling.

Siva Sivaram: Sam, automotive customers remain our core focus, still the biggest and most valuable market for batteries. Nothing has changed on that front. The long-term global trend towards electrification is going to continue. If you think about the autonomous vehicles really starting to become mainstream, those fleets make the economic logic for EVs even more compelling. We have a cell and a design that is unique. It is capable of being safer, performing better across a wide temperature range, combining high power and high energy density. These characteristics are highly valuable across other applications. For example, in a data center, you have high ambient temperatures, but you absolutely cannot have a fire in racks with $1 million DPUs. In a drone, you need better energy density but also extremely high discharge power. In addition, our architecture can work with different cathode chemistries, which makes our technology even more versatile.

Speaker #4: We have a cell and a design that is unique. It is capable of being safer, performing better across a wide temperature range, and combining high power and high energy density.

Speaker #4: These characteristics are highly valuable across other applications. For example, in a data center, you have high ambient temperatures—but you absolutely cannot have a fire in racks with million-dollar GPUs. In a drone, you need better energy density, but also extremely high discharge power.

Speaker #4: In addition, our architecture can work with different cathode chemistries, which makes our technology even more versatile. We can offer a differentiated and no-compromise solution to these emerging applications, and these markets are growing rapidly.

Siva Sivaram: We can offer a differentiated and no-compromise solution to these emerging applications, and these markets are growing rapidly. It's a logical step for us to pursue these markets.

Speaker #4: It's a logical step for us to pursue these

Speaker #4: markets. Thanks,

Sam Kamara: Thanks, Siva. Kevin, how would you assess QuantumScape performance in 2025, and how are you thinking about achieving the company's 2026 objectives while maintaining operational and capital efficiency?

Speaker #5: Siva. Kevin, how would you assess QuantumScape's performance in 2025 and how are you thinking about achieving the company's 2026 objectives while maintaining operational and capital

Speaker #5: Efficiency? They characterized 2025 as a

Kevin Hettrich: I characterize 2025 as a strong year for QuantumScape. We executed on our key objectives for the year, and just as importantly, we did so with a high degree of financial discipline. We delivered approximately a 10% year-over-year improvement in Adjusted EBITDA loss, narrowing from $285 million to approximately $252 million. That improvement reflects a sustained company-wide focus on cost-effectiveness. We made deliberate choices that improved our cost structure, for example, advancing value engineering efforts across the Eagle line as well as optimizing our real estate footprint. These actions allowed us to make meaningful technical progress while improving capital efficiency. 2025 was also an important validation year for our development and licensing model. Under this structure, we said we could generate customer-related cash inflows ahead of earning licensing royalties. During the year, we demonstrated that capability by achieving our first customer billings, totaling $19.5 million.

Speaker #4: strong year for QuantumScape. We executed on our key objectives for the year and just as importantly, we did so with a high degree of financial discipline.

Speaker #4: We delivered approximately a 10% year-over-year improvement in adjusted EBITDA loss, narrowing from $285 million to approximately $252 million. That improvement reflects a sustained company-wide focus on cost-effectiveness.

Speaker #4: We made deliberate choices that improved our cost structure. For example, advancing value engineering efforts across the Eagle Line, as well as optimizing our real estate footprint.

Speaker #4: These actions allowed us to make meaningful technical progress while improving capital efficiency. 2025 was also an important validation year for our development and licensing model.

Speaker #4: Under this structure, we said we could generate customer-related cash inflows ahead of earning licensing royalties. During the year, we demonstrated that capability by achieving our first customer billings totaling $19.5 million.

Speaker #4: Finally, we exited 2025 with $970.8 million of liquidity, leaving us with a strong balance sheet for this next phase of execution. Looking ahead to 2026, we believe our plan is well aligned with the goals we've laid out and, importantly, it allows us to advance those objectives while we further improve efficiency and monetize the platform we've built.

Kevin Hettrich: Finally, we exited 2025 with $970.8 million of liquidity, leaving us with a strong balance sheet for this next phase of execution. Looking ahead to 2026, we believe our plan is well aligned with the goals we've laid out, and importantly, it allows us to advance those objectives while we further improve efficiency and monetize the platform we've built. Regarding efficiency, our plan is to continue to systematically, methodically, and iteratively drive efficiency gains across the organization via the activities you'd expect: ongoing value engineering, higher equipment uptime and throughput, and further improvements in yield and reliability. We're well along in deploying machine learning and AI tools to accelerate development cycles and improve engineering productivity. On monetization, we expect customer billings in 2026 to increase relative to 2025 levels as we deepen and expand customer engagements.

Speaker #4: Regarding efficiency, our plan is to continue to systematically, methodically, and iteratively drive efficiency gains across the organization via the activities you'd expect: ongoing value engineering, higher equipment uptime and throughput, and further improvements in yield and reliability.

Speaker #4: We're well along in deploying machine learning and AI tools to accelerate development cycles and improve engineering productivity. On monetization, we expect customer billings in 2026 to increase relative to 2025 levels as we deepen and expand customer

Speaker #4: engagements. Okay.

Sam Kamara: Okay. Thanks so much, Kevin. We are now ready to begin the live portion of today's call. Operator, please open up the line for questions.

Speaker #5: Thanks so much, Kevin. We are now ready to begin the live portion of today's call. Operator, please open up the line for

Speaker #5: questions. Thank you so much.

Operator: Thank you so much. As a reminder to our teleaudience, if you do have a question, press star 11 and wait for your name to be announced. To remove yourself, press star 11 again. One moment for our first question. It comes from Mark Shooter with William Blair. Please proceed.

Speaker #6: And as a reminder to our teleaudience, if you do have a question, press star 11 and wait for your name to be announced. To remove yourself, press star 11 again.

Speaker #6: One moment for our first question. Nick comes from Mark Schutter with William Blair. Please

Speaker #6: proceed.

Speaker #7: Hi, team. Thanks

Mark Shooter: Hi, team. Thanks for taking my question, and congrats on commissioning the Eagle line. My question here is, with this new manufacturing technology, I know there's a lot of improvement in throughput and yield, but I'm wondering if there's an ability to increase the surface area of your ceramic separator and therefore maybe increase the cell size. Is this possible, or is this on your technology roadmap?

Speaker #7: Thank you for taking my question. And congrats on commissioning the Eagle Line. My question here is: with this new manufacturing technology, I know there’s a lot of improvement in throughput and yield, but I’m wondering if there’s an ability to increase the surface area of your ceramic separator and therefore maybe increase the cell size.

Speaker #7: Is this possible, or is this on your technology roadmap?

Speaker #8: Mark, thank you. Thanks for the question. The Eagle Line clearly enables us to do all the things you just said: improving yield, improving uptime, improving operational efficiency, improving materials utilization.

Siva Sivaram: Mark, thank you. Thanks for the question. The Eagle line clearly enables us to do all the things you just said: improving yield, improving uptime, improving operational efficiency, improving materials utilization, so that we can show our customers the efficiency with which we can make cells. Equally importantly, the Eagle line and the Cobra line are set up to be adaptable to making the line useful for every customer for their specific needs. Our aim is to use the Eagle line as the backbone so that when we industrialize for a specific customer for specific needs, we can adapt the line to make that happen. That's exactly what we are using as this transfer platform. So the Eagle line acts as the scalable blueprint for us to take a core technology platform and adapt it to every one of our customers' specific needs.

Speaker #8: So that we can show our customers the efficiency with which we can make cells. Equally importantly, the Eagle Line and the Cobra Line are set up to be adaptable to making the line useful for every customer for their specific needs.

Speaker #8: Our aim is to use the Eagle Line as the backbone so that when we industrialize for a specific customer with specific needs, we can adapt the line to make that happen.

Speaker #8: That's exactly what we are using as this transfer platform. So the Eagle Line acts as the scalable blueprint for us to take a core technology platform and adapt it to every one of our customers' specific needs.

Speaker #5: Yeah. Mark, as you mentioned, those are probably the three vectors we'd expect our automotive customers to work with, either it'd be choice of cathode, capacity to sell, and cell format.

Kevin Hettrich: Yeah. Mark, as you mentioned, those are probably the three vectors we'd expect our automotive customers to work with, either it'd be choice of cathode, capacity to sell, and cell format. Our Cobra process is capable of those, and as is the Eagle line. And that exactly fits into that first of our two phases of our business model, working together with customers to customize our technology platform to their product solutions, earning the first line of cash flow, and longer-term setting up that much larger licensing opportunity.

Speaker #5: Our Cobra process is capable of those and as is the Eagle Line. And that's exactly fits into that first of our two phases of our business model, working together with customers to customize our technology platform to their product solutions, earning the first line of cash flow and longer-term setting up that much larger licensing opportunity.

Speaker #7: Yeah. Thank you, gentlemen. I appreciate the color there. Just as a follow-up, maybe put a finer point. And the reason why I ask about the surface area increase, maybe larger cells, is what I thought I heard from the PowerCo arrangement is that the QuantumScape cells need to fit into the unified cell architecture.

Mark Shooter: Yeah. Thank you, gentlemen. I appreciate the color there. Just as a follow-up, maybe put a finer point. And the reason why I asked about the surface area increase, maybe larger cells, is what I thought I heard from the PowerCo arrangement is that the QuantumScape cells need to fit into the Unified Cell architecture. And I'm wondering if that can be done with the current size, the QSC5, or is that a larger cell that you need to develop?

Speaker #7: And I'm wondering if that can be done with the current size, the QSE5, or is that a larger cell that you need

Speaker #7: to develop? Yeah.

Siva Sivaram: Yeah. As you just said, the QSC5 cell is a certain aspect ratio, providing us with about 5.6 amp-hour and about 21 watt-hour cell. The UFC is a larger form factor, and every customer has their specific need for what they need for their application. And fully knowing that, we use this as the adaptable baseline. The Eagle line will show what the platform is from which we can adapt it to make it bigger, smaller, whatever we need to. And that's the whole point of establishing one stable baseline from which we can build for different customers.

Speaker #8: As you just said, the QSE5 cell is a certain aspect ratio, providing us with about 5.6 amp-hours and about 21 watt-hours per cell. The UFC is a larger form factor.

Speaker #8: And every customer has their specific need for what they need for their application. And fully knowing that, we use this as the adaptable baseline.

Speaker #8: The Eagle Line will show what that platform is from which we can adapt it to make it bigger, smaller, whatever we need to. And that's the whole point of establishing one stable baseline from which we can build for different

Speaker #8: customers. Very

Mark Shooter: Very helpful. Thank you.

Speaker #7: helpful. Thank you.

Speaker #6: Thank you. Our next question comes from Winnie Dong with Deutsche Bank. Please

Operator: Thank you. Our next question comes from Winnie Dong with Deutsche Bank. Please proceed.

Speaker #6: proceed. Hi.

Winnie Dong: Hi. Thank you so much for taking my questions. In your prepared remarks, you alluded to various verticals, including data centers, robotics, and aviation as potential applications outside of automotive. And I think in the past, consumer electronics was also a potential application as well. I was wondering if you can help us understand: is there one vertical where your technology is more suitable than the other ones? For instance, I'm just trying to understand, for example, stationary storage. A lot of companies that are starting out with this are trying to use LFP. So just curious, why is lithium metal just as good or even better for some of these applications? Thank you.

Speaker #9: Thank you so much for taking my questions. In your prepared remarks, you alluded to various verticals, including data centers, robotics, and aviation, as potential applications outside of automotive.

Speaker #9: And I think in the past, consumer electronics was also a potential application as well. I was wondering if you can help us understand, is there a is there one vertical where your technology is more suitable than the other ones?

Speaker #9: For instance, I'm just trying to understand, for example, stationary storage, a lot of companies that are seeking after this are trying to use LFP.

Speaker #9: So just curious, why is lithium metal just as good or even better for some of these

Speaker #9: applications? Thank you. Yeah.

Siva Sivaram: Yeah. So Winnie, let me start out, and Kevin has some strong views on the subject that he'll continue on. Clearly, the architecture that we have developed with the ceramic separator provides you what we call a no-compromise solution, meaning concurrently, at the same time, we can deliver high energy density, high power density in both charge and discharge, better safety capability, cycle life. And because we eliminate the anode, we have better, and because the formation is so short, we can deliver a better cost profile. Each of these markets that we just talked about have unique needs. For example, as you asked, the consumer electronics product is very big on volumetric energy density.

Speaker #5: So Winnie, let me start out and Kevin has some strong views on the subject that he'll continue on. Clearly, the architecture that we have developed with the ceramic separator provides you what we call a no-compromise solution, meaning concurrently, at the same time, we can deliver high-energy density high-power density in both charge and discharge better safety capability, cycle life, and because we eliminate the anode we have better and because the formation is so short, we can deliver a better cost profile.

Speaker #5: Each of these markets that we just talked about have unique needs. For example, as you asked, the consumer electronics product is very big on volumetric energy density.

Speaker #5: We are trying to make sure that we size the opportunity, work with customers, and move rapidly so that we can take our no-compromise cell and fit it into the appropriate platform, appropriate form factor, and quickly get to market.

Siva Sivaram: We are trying to make sure that we size the opportunity, work with customers, move rapidly so that we can take our no-compromise cell and fit it into the appropriate platform, appropriate form factor, and quickly get to market. That's the idea behind. And as you would expect, the automotive market still is the larger market, and we remain focused on it. And logically, the automotive market also takes the longest time to develop, qualify, and deploy into larger fleets. These are just facts of the marketplace that we work with. But the cell itself is so useful across different markets that we do think it's logical for us to take that leap.

Speaker #5: That's the idea behind. And as you would expect, the automotive market still is the larger market, and we remain focused on it. And logically, the automotive market is also takes the longest time to develop, qualify, and deploy into larger fleets.

Speaker #5: These are just facts of the marketplace that we work with. But the cell itself is so useful across different markets that we do think it's logical for us to take that leap.

Speaker #5: Yeah. As Siva mentioned, we're starting from a good place with that no-compromise battery with the advantages Siva laid out. We see opportunities over the fullness of time across the broad set of energy storage applications.

Kevin Hettrich: Yeah. As Siva mentioned, we're starting from a good place with that no-compromise battery. With the advantages Siva laid out, we see opportunities over the fullness of time across the broad set of energy storage applications. I believe you listed several potential applications. Consumer electronics tends to really get excited about the volumetric energy density advantage. AI demonstrators, data center safety, drones, and anything that flies loves the gravimetric savings and the power. And the grid, at least for the major load-shifting application, values cost per round-trip cycle. So we believe we can offer compelling solutions in all these spaces. And as a management team, it's our job: how many of these do we do in parallel, and in what order do we sequence them to both delight our customers and to optimize returns for our shareholders?

Speaker #5: I believe you listed several potential applications. Consumer electronics tends to really get excited about the volumetric energy density advantage, AI identifiers, data center safety, drones, and anything that flies loves the gravimetric savings, and the power, and the grid, at least for the major load shifting application.

Speaker #5: Values cost per round-trip cycle. So we believe we can offer compelling solutions in all these spaces. And as a management team, it's our job to determine how many of these we do in parallel and in what order we sequence them, to both delight our customers and optimize returns for our shareholders.

Speaker #5: And everything we just discussed about, we're intending in goal number three that we laid out in our letter today, expand into high-value markets.

Kevin Hettrich: Everything we just discussed about. We're intending in goal number three that we laid out in our letter today, expand into high-value markets.

Speaker #8: And Winnie, the whole thing is enabled by the Eagle Line. The Eagle Line allows us the flexibility of going and trying these out because we have the ability to make more samples for more customers, and that is what makes this whole thing possible.

Siva Sivaram: And, Winnie, the whole thing is enabled by the Eagle line. The Eagle line allows us the flexibility of going and trying these out because we have the ability to make more samples for more customers. And that is what makes this whole thing possible.

Speaker #9: Got it. Thank you. My second question is on the year's empathetic guidance. I was wondering if it can help us flush it out in terms of the opex, and also in the context of some of the billable help that you can get from your partner as a result of the partnership.

Winnie Dong: Got it. Thank you. My second question is on the 2024 guidance. I was wondering if you can help us flesh it out in terms of the OpEx and also in the context of some of the billable help that you can get from your partner as a result of the partnership. Thank you.

Speaker #9: Thank

Speaker #9: You. So, and then, Winnie, if—

Kevin Hettrich: And then, Winnie, could you help me with the color around which aspect? And then you were asking about color on billings. Is that a correct rephrasing of your question?

Speaker #5: You helped me with the color around which aspect, and then you were asking about color on billings. Is that a correct rephrasing of your question?

Speaker #9: Yeah. Essentially, you're guiding to you have the years' empathetic guidance. I'm just curious, in the context of existing partnership, I think in the past, you've mentioned getting operational help from some of these partners.

Winnie Dong: Yeah. Essentially, you're guiding to you have the year's EBITDA guidance. I'm just curious, in the context of existing partnerships, I think in the past, you've mentioned getting operational help from some of these partners. Is it being considered within the outlook? And yeah. Thank you.

Speaker #9: Is it being considered within the outlook? And

Speaker #9: then yeah. Thank you. Yeah.

Kevin Hettrich: Yeah. So that's a great question. So to answer what you just mentioned first, so yes, our CapEx guidance is inclusive of help either from OEM partners or ecosystem partners. That's all baked in. And by the way, there is significant resource being put in by all of those three. In terms of just some color, the CapEx guidance is relatively flat year-over-year. But I would point out that the team is seeking to take on a lot more with expanding and deepening the automotive partnerships, as well as expanding into new high-value markets. There's all sorts of activities behind that, as well as pushing the frontier of battery development. So our goal is to deliver much more with the same resource base, improving efficiency to shareholders.

Speaker #5: So that's a great question. So, to answer what you just mentioned first—yes, our empathetic guidance is inclusive of help either from OEM partners or ecosystem partners.

Speaker #5: That's all baked in. And, by the way, there is significant resource being put in by all of those three. In terms of just some color, the empathetic guidance is relatively flat year-over-year, but I would point out that the team is seeking to take on a lot more with expanding and deepening the automotive partnerships.

Speaker #5: As well, as expanding into new high-value markets, there's all sorts of activities behind that, as well as pushing the frontier of battery development. So our goal is to deliver much more with the same resource space, improving efficiency to shareholders.

Speaker #8: But Winnie, just to be clear, for this year, Kevin just announced $19.5 million of billings and cash received. And that, as he has pointed out, has gone directly into equity, and that is not part of the EBITDA loss that we just announced.

Siva Sivaram: But Winnie, just to be clear, for this year, Kevin just announced $19.5 million of billings and cash received. And that, as he has pointed out, has gone directly into equity, and that is not part of the EBITDA loss that we just announced.

Speaker #5: Correct. And as I mentioned in the comments, please expect that to be lumpy quarter-to-quarter. We do this type of agreed development work with customers and ecosystem partners.

Kevin Hettrich: Correct. And as I mentioned in the comments, please expect that to be one foot or quarter-to-quarter as we do this type of agreed development work with customers and ecosystem partners, as well as our desire to improve on it 2026 versus 2025.

Speaker #5: As well as our desire to improve on it, that 2026 versus 2025.

Speaker #9: Got it. That's very helpful. I'll pass along. Thank you.

Winnie Dong: Got it. That's very helpful. I'll pass along. Thank you.

Speaker #10: Thank you so much. Our next question comes from the line of Joseph Spack with UBS. Please proceed.

Operator: Thank you so much. Our next question comes from the line of Joe Spak with UBS. Please proceed.

Speaker #11: Thank you. Good afternoon. First question is, just if I compare the slide you put out today versus prior, it looks like that conditional cash inflows is now $150 million.

Mark Shooter: Thank you. Good afternoon. First question is just, if I compare the slide that you put out today versus prior, it looks like that conditional cash inflows is now $150 million. Last time, it was $261 million. Can you detail what changed there?

Joseph Spak: Thank you. Good afternoon. First question is just, if I compare the slide that you put out today versus prior, it looks like that conditional cash inflows is now $150 million. Last time, it was $261 million. Can you detail what changed there?

Speaker #11: Last time, it was 261 million. Can you detail what changed

Speaker #11: there? If you just

Kevin Hettrich: Just to rephrase or maybe to clarify, when we expanded the development and collaboration and licensing agreement with Volkswagen last summer, there's an opportunity to earn up to $131 million worth of those development-type payments. Is that what you're referring to, Joe?

Speaker #5: to rephrase, or maybe to clarify, when we expanded the VW, the development and collaboration, and licensing agreement with Volkswagen last summer, there's an opportunity to earn up to 131 million dollars' worth of those development-type payments.

Speaker #5: Is that what you're referring to, Joe?

Speaker #11: Yeah. You put on slide 16, on the slide detailing your relationship with PowerCo, it says 150 million plus of conditional cash inflows. If I look at the last quarter slide, that 150 was

Mark Shooter: Yeah. You put on slide 16, on the slide detailing your relationship with PowerCo, it says $150 million-plus of conditional cash inflows. If I look at the last quarter slide, that 150 was 261.

Joseph Spak: Yeah. You put on slide 16, on the slide detailing your relationship with PowerCo, it says $150 million-plus of conditional cash inflows. If I look at the last quarter slide, that 150 was 261.

Speaker #11: 261. Let

Kevin Hettrich: Let me pull that up and revert with you in a few minutes. I don't have that in front of me. I will revert it with you on that.

Speaker #5: me pull that up and revert with you in a few minutes. I don't have that in front of me. I will revert it with you on that.

Speaker #11: Okay. Next question then, just obviously, PowerCo is a deep and important partner here. There had been some reports that Volkswagen sort of slashed the funding there.

Mark Shooter: Okay. The next question then, just obviously, PowerCo is a deep and important partner here. There had been some reports that Volkswagen sort of slashed the funding there. Just curious if that sort of you felt that at all, if that sort of impacted your business or your work with them, or if it's even increased some of your urgency to diversify to other customers.

Joseph Spak: Okay. The next question then, just obviously, PowerCo is a deep and important partner here. There had been some reports that Volkswagen sort of slashed the funding there. Just curious if that sort of you felt that at all, if that sort of impacted your business or your work with them, or if it's even increased some of your urgency to diversify to other customers.

Speaker #11: Just curious if that sort of if you felt at all, if that sort of impacted your business or your work with them, or if it's even increased some of your urgency to diversify to other customers.

Speaker #8: Yeah, so Joe, our work with PowerCo is continuing on unchanged. Their commitment to us is very, very good. Our relationship with them and the focus with which we are working together is as good as ever.

Siva Sivaram: Yeah. So Joe, our work with PowerCo is continuing on unchanged. Their commitment to us is very, very good. Our relationship with them and the focus with which we are working together is as good as ever. We are both working towards a set of agreed-upon scope of work that has not changed, and we are continuing to build them the way we have agreed in that $131 million deal that Kevin just talked about. So in July of last year, we agreed on a scope of work, and our partnership is as strong as ever. And the work itself is lumpy, as in the way it is planned, up and down, but we are doing very well with respect to Volkswagen. That does not mean we are not working with other customers.

Speaker #8: We are both working towards a set of agreed-upon scope of work that has not changed. And we are continuing to build them the way we have agreed in that $131 million deal that Kevin just talked about.

Speaker #8: So, in July of last year, we agreed on a scope of work. And our partnership is as strong as ever. And the work itself is lumpy, as in the way it is planned and up and down.

Speaker #8: But we are doing very well with respect to Volkswagen. That does not mean we are not working with other customers. As we announced in the letter, we have added two new large global auto OEMs to our portfolio with whom we are working.

Siva Sivaram: As we announced in the letter, we have added two new large global auto OEMs to our portfolio with whom we are working with. We have also announced additional technology development and technology evaluation agreements with them together. This is in a good place. The customer interest has been very strong, and the Volkswagen and PowerCo relationship still remains very, very strong.

Speaker #8: And we have also announced additional technology development and technology evaluation agreements with them together. So this is in a good place. The customer interest has been very strong.

Speaker #8: And the Volkswagen and PowerCo relationship still remains very, very strong.

Speaker #11: Okay, last question for me. And you touched on some of this, and I just sort of want to better understand how you're thinking about it, because you talked about new end markets, opportunities, energy storage, robotics.

Mark Shooter: Okay. Last question for me. And you touched on some of this, and I just sort of want to better understand how you're thinking about it because you talked about new end markets, opportunities, energy storage, robotics, and exciting stuff. But if I look at what you've done with the auto business, you've effectively left the commercialization, industrialization to PowerCo and other partners. So as you move to these other end markets, how is it if you're not making a sort of a standard cell? And I understand Eagle line sort of helps you sort of do different form factors or different cells, but aren't you going to need to sort of reach out individually to help sort of scale these different form factors for these opportunities?

Joseph Spak: Okay. Last question for me. And you touched on some of this, and I just sort of want to better understand how you're thinking about it because you talked about new end markets, opportunities, energy storage, robotics, and exciting stuff. But if I look at what you've done with the auto business, you've effectively left the commercialization, industrialization to PowerCo and other partners. So as you move to these other end markets, how is it if you're not making a sort of a standard cell? And I understand Eagle line sort of helps you sort of do different form factors or different cells, but aren't you going to need to sort of reach out individually to help sort of scale these different form factors for these opportunities?

Speaker #11: Exciting stuff. But if I look at what you've done with the auto business, you've effectively left the commercialization and industrialization to PowerCo and other partners.

Speaker #11: So as you move to these other end markets, how is it if you're not making a sort of a standard cell, and I understand il(l)egal line sort of helps you sort of do different form factors or different cells.

Speaker #11: But aren't you going to need to sort of reach out individually to help sort of scale these different form factors for these opportunities? It just seems maybe a little bit more difficult as you go to some of these other end markets where there might be some more bespoke use cases versus the old strategy, which was doing yourself.

Mark Shooter: It just seems maybe a little bit more difficult as you go to some of these other end markets where there might be some more bespoke use cases versus the old strategy, which was doing it yourself. But maybe I misunderstand that sort of.

Joseph Spak: It just seems maybe a little bit more difficult as you go to some of these other end markets where there might be some more bespoke use cases versus the old strategy, which was doing it yourself. But maybe I misunderstand that sort of.

Speaker #11: But maybe I

Speaker #11: misunderstand that sort of thing. You know, this

Siva Sivaram: Joe, this is a very perceptive question. I'm glad you asked. The licensing and capital-led business model is not a single flavor. There are a lot of different ways of doing the same thing: have made rights, having contract manufacturing, having our partners manufacture for others, having customer-provided manufacturing abilities. There are many different ways of doing it. As long as we are not spending the capital to build it, we can do this very well. And these markets are fully amenable to these business models. So we are exploring those with our new customers. I am not saying that we rule anything out, but our preference has always been to a license and capital-led business model. So I'm glad you asked this question. Even in these markets, such different variations on this theme are very possible.

Speaker #8: is a very perceptive question. I'm glad you asked. The licensing and capitalized business model is not a single flavor. There are a lot of different ways of doing the same thing.

Speaker #8: Have made rights, having contract manufacturing, having our partners manufacture for others, having customer-provided manufacturing abilities. There are many different ways of doing it. As long as we are not spending the capital to build it, we can do this very well.

Speaker #8: And these markets are fully amenable to these markets, to these business models. So we are exploring those with our new customers. I'm not saying that we rule anything out, but our preference has always been to a license and capitalized business model.

Speaker #8: So, I'm glad you asked this question. Even in these markets, such different variations on this theme are very

Speaker #8: So, I'm glad you asked this question. Even in these markets, such different variations on this theme are very possible. Thank you.

Mark Shooter: Thank you for that. I appreciate it.

Joseph Spak: Thank you for that. I appreciate it.

Speaker #11: I appreciate it.

Speaker #8: We you for that.

Kevin Hettrich: I did have a chance to look at the slide you referenced. The prior reference to 260 or 261 is when you sum both parts of the economics with Volkswagen together, the $130 million prepay and the up to $131 million of development payments. That's the former number you referenced. In this latest round, as footnoted, what we're doing is we're having more of a backwards-looking view where we're only counting the billings to date plus the 130. So it's a different cut at the same two numbers. There's nothing changed contractually.

Speaker #8: I did have a chance to look at the slide you referenced. The prior reference to 260 or 261 is when you sum both parts of the economics with Volkswagen together: the $130 million prepay and the up to $131 million of development payments.

Speaker #8: That's the former number you referenced. In this latest rev, as footnoted, what we're doing is we're only— we're having more of a backwards-looking view where we're only counting the billings to date plus the $130.

Speaker #8: So it's a different cut at the same two numbers. There's nothing changed contractually.

Speaker #11: Okay. So nothing changed with that other with that delta, that sort of more potentially to come.

Mark Shooter: Okay. So nothing changed with that delta, that's sort of more potentially to come. Okay.

Joseph Spak: Okay. So nothing changed with that delta, that's sort of more potentially to come. Okay.

Speaker #11: Okay. Correct.

Speaker #8: Correct. It's more looking at the bird in the hand relative to billings, as opposed to the bird in the bush with the 'up to.'

Kevin Hettrich: Correct. It's more looking at the bird in the hand relative to billings as opposed to the bird in the bush with the up to.

Speaker #11: Thank you for that. I appreciate it.

Mark Shooter: Thank you for that. I appreciate it.

Joseph Spak: Thank you for that. I appreciate it.

Speaker #8: Yep.

Kevin Hettrich: Yep.

Speaker #1: Thank you. Our next question comes from Mark Delaney with Goldman Sachs. Please.

Operator: Thank you. Our next question comes from Mark Delaney with Goldman Sachs. Please proceed.

Speaker #1: proceed. Hi.

Mark Shooter: Hi. Good evening. Thank you for taking the question. Do you have a mic on for Mark? Maybe kind of starting on your goal for the Eagle line and scaling that, and congrats on getting that installed. Can you maybe help provide some context for where some of the key metrics for that line are today, like yields, production time, and things like that, and how you see that scaling over the course of the year and what's needed to then, exiting the year, get to commercial transfer to your licensing partners? Thank you.

Aman Gupta: Hi. Good evening. Thank you for taking the question. Do you have a mic on for Mark? Maybe kind of starting on your goal for the Eagle line and scaling that, and congrats on getting that installed. Can you maybe help provide some context for where some of the key metrics for that line are today, like yields, production time, and things like that, and how you see that scaling over the course of the year and what's needed to then, exiting the year, get to commercial transfer to your licensing partners? Thank you.

Speaker #12: Good evening. Thank you for taking the question. Do you have Iman on for Mark? Maybe kind of starting on your goal for the Eagle line and scaling that. And congrats on getting that installed.

Speaker #12: Can you maybe help provide some context for where some of the key metrics for that line are today? Yields and production time and things like that.

Speaker #12: And how you see that scaling over the course of the year and what's needed to then exiting the year get to commercial transfer to your

Speaker #12: licensing partners. Thank you. Yeah.

Siva Sivaram: Yeah. Amon, thank you for the question. So last year, we had a manual line with which we were producing cells for applications such as the IAA Mobility demonstration and the Ducati bike. We developed a very stable baseline, and we decided that was a good time to convert it to be a much more highly automated line so that we can match the output of the highly productive Cobra line to the cell-making line. And so in the 10 months since, since March of last year, we have literally conceived the line, designed it, found the build partners for the equipment, built the equipment, and brought them over here, installed them, qualified them, developed the process, transferred the process, and then converted it into the baseline, and we are running it. And that's what we inaugurated last week this time. Now, this is a manufacturing prototype pilot line.

Speaker #8: Iman, thank you for the question. So, last year, we had a manual line with which we were producing cells for applications such as the IAA Munich demonstration and the Ducati bike.

Speaker #8: We developed a very stable baseline, and we decided that was a good time to convert it to be a much more highly automated line so that we can match the output of the highly productive Cobra line to the cell-making line.

Speaker #8: And so, in the 10 months since—since March of last year—we have literally conceived the line, designed it, found the build partners for the equipment, built the equipment and brought them over here, installed them, qualified them, developed the process, transferred the process, and then converted it into the baseline, and we are running it.

Speaker #8: And that's what we inaugurated last week this time. Now, this is a manufacturing prototype pilot line. And so this is what we are using to convince and work with our partners who are going to be working with us hand in glove, watching how this is done.

Siva Sivaram: So this is what we are using to convince and work with our partners who are going to be working with us hand in glove, watching how this is done. So all of the metrics that we normally use in a pilot production facility such as uptime, meantime between failure, meantime to assist, meantime to repair, yields, reliability, quality, cycle time, cost, all of these kinds of metrics have to be made efficient so that our customers come and work with us and say, "Okay, now I am ready to go take this line and convert it to our need in my own factory to scalability." So these are the things that what you just asked is what we will be very, very, very closely monitoring as we ramp it up. We are in a good place, and we'll continue to work with our customers.

Speaker #8: So all of the metrics that we normally use in a pilot production facility, such as uptime, mean time between failure, mean time to assist, mean time to repair, yields, reliability, quality, cycle time, cost—all of these kinds of metrics have to be made efficient so that our customers come and work with us and say, 'Okay.'

Speaker #8: Now I am ready to go take this line and convert it to our need in my own factory to scalability. So these are the things that, what you just asked, is what we will be very, very, very closely monitoring as we ramp it up.

Speaker #8: We are in a good place, and we'll continue to work with our customers, and we need to show this to our customers who are here with us watching this.

Siva Sivaram: We need to show this to our customers who are here with us watching this. When we inaugurated the line here, the customers were actually here with us as we got this started.

Speaker #8: And when we inaugurated the line here, the customers were actually here with us as we got this started. And just one other—some other dots to connect.

Kevin Hettrich: Just some other dots to connect. The Eagle line is certainly called out in our first corporate goal for 2026, demonstrate scale of production with the Eagle line. As Siva was mentioning, it's central to the other three. Without that type of prototype and sampling and demo volume, that is the currency with which we can advance automotive commercialization, new and existing, as well as gives us the currency to expand into new high-value markets. And it also gives us other parts for internal use to do development on to support that beyond QSE-5 roadmap. That Eagle line we demonstrated last week is really important to set up a successful 2026.

Speaker #8: The eagle line is certainly called out in our first corporate goal for 2026, demonstrate scaleable production with the eagle line. As Siv was mentioning, it's central to the other three.

Speaker #8: Without that type of prototype, and sampling and demo volume, that is the currency with which we can advance automotive commercialization—new and existing—as well as gives us the currency to expand into new high-value markets.

Speaker #8: And it also gives us other parts for internal use to do development on to support that beyond the QSE-5 roadmap. So that Eagle line we demonstrated last week is really important to set up a successful 2026.

Speaker #8: Now, having said all that, Iman, this is the unsexy part of the work. This will be systematic, methodical, iterative improvement of every one of those so that the customers see—and work with us to see—the rate of progress on all of them.

Siva Sivaram: Now, having said all that, Amon, this is the unsexy part of the work. This will be systematic, methodical, iterative improvement of every one of those so that the customers see and work with us to see the rate of progress on all of them. So this is not new thing. I have done this many times in the past, and the employees know what it is that we need to do here at QS. So we'll get that going.

Speaker #8: So, this is not a new thing. I have done this many times in the past, and the employees know what it is that we need to do here.

Speaker #8: At QS. So, we'll get that going.

Speaker #12: Appreciate the color there. Thank you. And maybe tying that to my follow-up here, Kevin, you talked about 40 to 60 million of CAPEX. Can you maybe help to mention that across some of the spending you've kind of outlined in your goals, whether that's for the eagle line and scaling that versus expanding some of the QSE5 technology and potential incremental spend related to expanding to some of these other end markets and how should we think about that level then being sustained beyond '26 in terms of further continuing to explore those

Mark Shooter: Appreciate the color there. Thank you. And maybe tying that to my follow-up here, Kevin, you talked about $40 to 60 million of CapEx. Can you maybe help dimension that across some of the spending you've kind of outlined in your goals, whether that's for the Eagle line and scaling that versus expanding some of the QSE5 technology and potential incremental spend related to expanding to some of these other end markets? And how should we think about that level then being sustained beyond 2026 in terms of further continuing to explore those opportunities? Thank you.

Aman Gupta: Appreciate the color there. Thank you. And maybe tying that to my follow-up here, Kevin, you talked about $40 to 60 million of CapEx. Can you maybe help dimension that across some of the spending you've kind of outlined in your goals, whether that's for the Eagle line and scaling that versus expanding some of the QSE5 technology and potential incremental spend related to expanding to some of these other end markets? And how should we think about that level then being sustained beyond 2026 in terms of further continuing to explore those opportunities? Thank you.

Speaker #12: opportunities? Thank you. That's

Kevin Hettrich: That's a good question, Amon. The bulk of the spend goes towards the fourth goal of going beyond the QSE5 and the bulk of the CapEx spend from $40 to 60 million as you referenced. There is CapEx in the other categories, but with the maturity of the QSE5 platform, for example, in the case of the expansion into new high-value markets or doing custom development for OEMs, it's more incremental on the choice of cathode or dimensions or form factor. That's more of an incremental spend as opposed to a core development spend. As a technology licensing company, it is our core job to develop and pilot and transfer high-performance battery technology to our customers and partners. Capital is required to push that frontier. And this is the type of magnitude we think investors should expect going forward for that steady-state advanced runway development.

Speaker #8: A good question, Iman. The bulk of the spend goes towards the fourth goal of going beyond the QSE-5, and the bulk of the CAPEX spend is from $40 to $60 million, as you referenced.

Speaker #8: There are categories, but with the maturity of the QSE-5 platform—for example, in the case of expanding into new high-value markets or doing custom development for OEMs—it's more incremental on the choice of cathode, or dimensions, or form factor.

Speaker #8: That's more of an incremental spend as opposed to a core development spend. As a technology licensing company, it is our core job to develop, pilot, and transfer high-performance battery technology to our customers and partners.

Speaker #8: Capital is required to push that frontier and this is the type of magnitude we think investors should expect going forward for that steady state advanced runway development.

Speaker #8: And I would also like to draw a contrast with this type of spend under a technology licensing model with that of a full-blown manufacturing company which requires billions of dollars of investment for gigawatt-hour scale done before years before that factory even comes online.

Kevin Hettrich: I would also like to draw a contrast with this type of spend under a technology licensing model with that of a full-blown manufacturing company, which requires $ billions of investment for gigawatt-hour scale done years before that factory even comes online. So we think that our choice of business model is in the best interests of shareholders.

Speaker #8: So we think that our choice of business model is in the best interests of shareholders.

Speaker #12: Thank you. And maybe just on that point too, quickly, can you kind of dimension what are the goals you're trying to hit for the QSE-5 beyond the QSE-5 platform that you're spending on?

Mark Shooter: Thank you. And maybe just on that point, to quickly, can you kind of dimension what are the goals you're trying to hit for the QSE5, beyond the QSE5 platform that you're spending on? I apologize if you've discussed it before. I don't have it off the top of my head.

Aman Gupta: Thank you. And maybe just on that point, to quickly, can you kind of dimension what are the goals you're trying to hit for the QSE5, beyond the QSE5 platform that you're spending on? I apologize if you've discussed it before. I don't have it off the top of my head.

Speaker #12: I apologize if you've discussed it before. I don't have it off the top of my head.

Speaker #8: No, Iman, last year we put out our blueprint on how we move forward as a technology company. The QSE5 is our first minimum viable product.

Siva Sivaram: No, Amon, last year, we put out our blueprint on how we move forward as a technology company. The QSE-5 is our first minimum viable product. Clearly, as we move up the S-curve rapidly, we need to make the performance metrics better on every aspect of it and keep moving this up. Every 18 to 24 months, we will be coming up with new upgrades on this that we need to come and show you all, show our customers, and show our shareholders where we are spending the money to move the technology frontier forward. That's where this is headed from the QSE-5 moving up.

Speaker #8: Clearly, as we move up the S-curve rapidly, we need to make the performance metrics better on every aspect of it and keep moving this up.

Speaker #8: And every 18 to 24 months, we will be coming up with new upgrades on this that we need to come and show you all, show our customers, and show our shareholders where we are spending the money to move the technology frontier forward.

Speaker #8: That's where this is headed, from the QSE-5 moving on.

Speaker #12: Thank you very much.

Mark Shooter: Thank you very much.

Aman Gupta: Thank you very much.

Speaker #2: Thank you. Our next question comes from the line of Ben Kalo with Baird. Please proceed.

Operator: Thank you. Our next question comes from the line of Ben Calo with Baird. Please proceed.

Speaker #13: Hey, good evening, guys. It was great to see you last week. One thing I noticed when I was visiting is your supply partners there.

Winnie Dong: Hey. Good evening, guys. It was great to see you last week. One thing I noticed when I was visiting is your supply partners there. I just want to get a sense of how they're thinking about your future or potential customers outside of Volkswagen. And I know you guys have done a lot of work with supply chain, so if you could talk about that and just how that helps you with new potential customers.

Ben Kallo: Hey. Good evening, guys. It was great to see you last week. One thing I noticed when I was visiting is your supply partners there. I just want to get a sense of how they're thinking about your future or potential customers outside of Volkswagen. And I know you guys have done a lot of work with supply chain, so if you could talk about that and just how that helps you with new potential customers.

Speaker #13: I just want to get a sense of how they're thinking about your future or potential customers outside of Volkswagen. And I know you guys have done a lot of work with supply chains, so if you could talk about that and just how that helps you with new potential customers.

Speaker #8: Ben, great to see you last week. Thank you for being here. You're 100% correct—the QS ecosystem is very important to us. This level of technology change cannot be done by a single company.

Siva Sivaram: Ben, great to see you last week. Thank you for being here. You're 100% correct. The QS ecosystem is very important to us. This level of technology change cannot be done by a single company. It requires a whole ecosystem to move this forward, whether it be in capital equipment, whether it be in advanced materials, whether it be in things like software and AI systems. There are places where we need help. Murata and Corning being able to take over and run the manufacturing for the ceramic separator is a big step forward for last year. In our solid-state symposium that we hosted in Kyoto, we brought together similarly our tool vendors from across the world to be there. And you saw some of these suppliers here in QS who helped us build the Eagle line.

Speaker #8: It requires a whole ecosystem to move this forward, whether it be in capital equipment, whether it be in advanced materials, or whether it be in things like software and AI systems.

Speaker #8: There are places where we need help. Murata and Corning being able to take over and run the manufacturing for the ceramic separator is a big step forward for last year.

Speaker #8: In our solid-state symposium that we hosted in Kyoto, we brought together, similarly, our tool vendors from across the world to be there. And you saw some of these suppliers here in QS who helped us build the Eagle line.

Speaker #8: These folks are very excited about the possibility of us expanding further into other form factors, into other markets, into new customers—both in the automotive and non-automotive spaces.

Siva Sivaram: These folks are very excited about the possibility of us expanding further into other form factors, into other markets, into new customers, both in the automotive and non-automotive spaces. We are counting on their support, and we will be expanding the ecosystem continuously to make sure that we can bring this along. And again, Kevin is very passionate about our secure supply chain, and let him talk about that.

Speaker #8: We are counting on their support, and we will be expanding the ecosystem continuously to make sure that we can bring this along. And again, Kevin is very passionate about our secure supply chain and let him talk about that.

Speaker #8: There's sort of a mention in the ecosystem we're building where there's customers, there's cell manufacturers and suppliers of materials and equipment. As you add more activity to it, it makes the whole stronger.

Kevin Hettrich: As Siva mentioned, in the ecosystem we're building where there's customers, cell manufacturers, and suppliers of materials and equipment, as you add more activity to it, it makes the whole stronger. Certainly, from the view of a cell manufacturer or a supplier of equipment or materials, more additional end markets and expanding and deepening automotive relationships is a good place to sell their goods and services into. But then from the flip side, if you're a QSE-5 customer or manufacturer that sells, having a ready supply chain with the world's leading examples in their respective spots only strengthens the value proposition as well. So we're very excited with the progress that we made in 2025, and our goal is to continue that moving forward into 2026.

Speaker #8: Certainly, from the view of a cell manufacturer or a supplier of equipment or materials, more additional end markets and expanding and deepening automotive relationships is a good place to sell their goods and services into.

Speaker #8: But then, from the flip side, if you're a QSE5 customer or manufacturer, the cells having a ready supply chain with the world's leading examples in their respective spots only strengthens the value proposition as well.

Speaker #8: So, we're very excited with the progress that we made in 2025, and our goal is to continue that moving forward into 2026. And Ben, equally important is the people you did not see in that group.

Siva Sivaram: Ben, equally important is the people you did not see in that group. You did not see a graphite supplier. You did not see an anode supplier. Securing the supply chain is as much for us about making sure that the suppliers that we need are there as much as making sure that we are not unduly dependent on any one material from any one place. So that also helps us in securing our supply chain.

Speaker #8: You did not see a graphite supplier; you did not see an anode supplier. It is as much for us about making sure that the suppliers that we need are there as it is about making sure that we are not unduly dependent on any one material from any one place.

Speaker #8: So that also helps us in securing our supply

Speaker #8: chain. Thank

Speaker #13: We see OEMs retrenching or retreating—or however you want to characterize it—and there's excess cell capacity out there. I just wonder how that impacts your discussions with new potential customers. Yeah, I'll leave it there.

Winnie Dong: Thank you. We see OEMs retrenching or retreating or however you want to characterize it. And there's excess cell capacity out there. And I just wonder how that impacts your discussions with new potential customers. Yeah, I'll leave it there. Thank you, guys.

Ben Kallo: Thank you. We see OEMs retrenching or retreating or however you want to characterize it. And there's excess cell capacity out there. And I just wonder how that impacts your discussions with new potential customers. Yeah, I'll leave it there. Thank you, guys.

Speaker #13: Thank you, guys.

Speaker #8: Ben, thank

Siva Sivaram: Ben, thank you. Yes. So clearly, there is turbulence in the marketplace, at least in the US. However, the folks, especially at the senior levels in these companies as we talk to, consistently are more optimistic about the long term. We see the fact that electrification as a longer-term trajectory is still the right way to do it. The more we see about, for example, self-driving vehicles, navigation systems, you start to see there are other vectors that are forcing the EV conversion. So every customer we talk to is upbeat about two things: electrification, but in particular, solid-state batteries. Both are things that they come to talk to us, and we sense that excitement with our partners.

Speaker #8: Yes, so clearly, there is turbulence in the marketplace, at least in the US. However, the folks, especially at the senior levels in these companies, as we talked to, consistently are more optimistic about the long term.

Speaker #8: We see the fact that electrification as a longer-term trajectory is still the right way to do it. The more we see about, for example, self-driving vehicles' navigation systems, you start to see there are other vectors that are forcing the EV conversion.

Speaker #8: So every customer we talk to is upbeat about two things. Electrification, but in particular, solid-state batteries. Both are things that they come to talk to us.

Speaker #8: And we see a sense of that excitement with our partners. And we hope you can see that. Some of these themes were certainly playing out in 2025.

Kevin Hettrich: And we hope you can see that. Some of these themes were certainly playing out in 2025. And against that backdrop, we expanded the our PowerCo collaboration agreement. We signed two new joint development agreements. We added a new technology evaluation agreement. We think that is consistent with the excitement that Siva mentioned. And while you use the word retrenchment, the automotive industry still is growing. It still is very much a growth sector. So the short, medium, and long-term prospects, we think, are still of growth.

Speaker #8: And against that backdrop, we expanded the BW PowerCo collaboration agreement. We signed two new joint development agreements. We added a new technology evaluation agreement.

Speaker #8: We think that is consistent with the excitement that Siva mentioned. And while you use the word 'retrenchment,' the automotive industry still is growing. It still is very much a growth sector.

Speaker #8: So the short, medium, and long-term prospects, we think, are still of growth.

Speaker #13: Great. Thank you, guys. Appreciate

Winnie Dong: Great. Thank you, guys. Appreciate it.

Ben Kallo: Great. Thank you, guys. Appreciate it.

Speaker #13: it. Thank

Operator: Thank you. Our last question comes from Laisha Sack with HSBC. Please proceed.

Speaker #2: You. Our last question comes from Laisha Sack with HSBC. Please.

Speaker #14: Hi, Siva. Hi, Kevin. How are you? Thanks for having us last week. I just have one question because my previous answer was already answered. But I wanted to know if you have any KPIs that you can share with us on how you will measure the goals that you set for—

Laisha Zaack: Hi, Siva. Hi, Kevin. How are you? Thanks for having us last week. I just have one question because my previous answer already answered. But I wanted to know if you have any KPIs that you can share with us on how you will measure the goals that you set for 2026.

Speaker #14: 2026. Laisha, it was great to

Siva Sivaram: Laisha, it was great to see you last week. Thank you. Thank you for being here. Clearly, the four goals that we have outlined are all very quantitative for us inside the company, whether it is about the Eagle line demonstrating the efficiency and scaling of the Eagle line for the purposes we just talked about, whether it is about making sure that we expand or advance our partnerships in the automotive markets, whether it is to go beyond the QSE5 and expand into high-value markets. Each of those is an extremely important vector for the company to continue to progress on. We will continue to update you as we progress on each of those, and you will see this progress as we give you an update.

Speaker #8: See you last week. Thank you. Thank you for being here. Clearly, the four goals that we have outlined are all very quantitative for us inside the company.

Speaker #8: Whether it is about the Eagle line demonstrating the efficiency and scaling of the Eagle line for the purposes we just talked about, whether it is about making sure that we expand and advance our partnerships with the automotive markets, or whether it is to go beyond the QSE-5 and expand into high-value markets.

Speaker #8: Each of those is a extremely important vector for the company to continue to progress on. We will continue to update you as we progress on each of those, and you will see these progress as we give you update and our job is to make sure that just like we did in last year, tell you what we are going to do and then do as we say and on time and give you guidance updates.

Speaker #8: Each of those is an extremely important vector for the company to continue to progress on. We will continue to update you as we progress on each of those, and you will see this progress as we give you updates. Our job is to make sure that, just like we did last year, we tell you what we are going to do and then do as we say, on time, and give you guidance updates.

Siva Sivaram: Our job is to make sure that, just like we did in last year, tell you what we are going to do and then do as we say, on time, and give you guys those updates.

Speaker #14: Okay. That makes a lot of sense. And just one last thing. I know you mentioned that your focus is still automotive, but when you're eventually start looking at other applications, does the eagle line require major adjustments depending on the segment that you cater to?

Laisha Zaack: Okay. That makes a lot of sense. And just one last thing. I know you mentioned that your focus is still automotive, but when you eventually start looking at other applications, does the Eagle line require major adjustments depending on the segment that you cater to, and will this imply a higher CapEx also for the customers? You said that the blueprint is easily adjustable to each customer's needs, but does this imply that they need to invest more to adjust to whatever they want to create depending on the market or segment that the customer is in?

Speaker #14: And will these imply a higher capex also for the customers? You said that the blueprint is easily adjustable to each customer's needs. But does this imply that they need to invest more to adjust to whatever they want to create?

Speaker #14: Depending on the market or segment that the customer is in,

Speaker #8: Yeah, it's an interesting dilemma, Laisha. This is the reason we chose the licensing business model. In the battery business, every customer wants their unique form factor.

Siva Sivaram: Yeah. It's an interesting dilemma, Laisha. This is the reason we chose the licensing business model. In the battery business, every customer wants their unique form factor. If we try to set up a line for every one of them, it becomes untenable. What we have done is a foundational technology, a scalable blueprint that we can do it. But any change that we do for any specific customer, clearly, we expect that as part of the earlier payment, we would be working with them on financial arrangements to make sure it is done so that we stay capital light. And when we take our technology roadmap and show it to our customers, we clearly set the expectation that we intend to be a capital light licensing company.

Speaker #8: If we try to set up a line for every one of them, it becomes untenable. What we have done is a foundational technology, a scalable blueprint that we can do it.

Speaker #8: But any change that we do for any specific customer, clearly we expect that, as part of the earlier payment, we would be working with them on financial arrangements to make sure it is done.

Speaker #8: So that we stay capital-light. And when we take our technology roadmap and show it to our customers, we clearly set the expectation that we intend to be a capital-light licensing company.

Speaker #8: company. Okay.

Laisha Zaack: Okay. Well, thank you so much, Siva. Congrats again on the inauguration.

Speaker #14: Well, thank you so much, Siva. And congrats again on the—

Speaker #14: inauguration. Thank you,

Siva Sivaram: Thank you, Laisha.

Speaker #8: Laisha: Thank you, ladies and gentlemen.

Operator: Thank you, ladies and gentlemen. This concludes our Q&A session for today, and I will pass it back to Siva Sivaram for closing comments.

Speaker #2: And this concludes our Q&A session for today. I will now pass it back to Siva Sivaram for closing comments.

Speaker #8: Thank you, operator. Finally, today, I want to recognize the entire QuantumScape team for their execution in Q4 and throughout 2025. And I want to thank our shareholders for their continuous support.

Siva Sivaram: Thank you, operator. Finally, today, I want to recognize the entire QuantumScape team for their execution in Q4 and throughout 2025. I want to thank our shareholders for their continuous support. We look forward to updating you on our progress in the months ahead. Thank you.

Speaker #8: We look forward to updating you on our progress in the months ahead. Thank you.

Operator: Concludes our conference. Thank you all for participating, and you may now disconnect.

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