QuantumScape (NYSE: QS) is a U.S-based company focused on developing all-solid-state batteries for electric vehicles. Founded in 2010, the company has its headquarters in San Jose, California, and has Jagdeep Singh as its CEO. Other founders include Professor Fritz Prinz of Stanford University and Tim Holme.
Although QuantumScape is still in its research and development stage, the company is already in partnership with Bill Gates and Volkswagen Group, one of the largest automakers in the world. The company went public in late 2020 through a special purpose acquisition company (SPAC) merger with Kensington Capital Acquisition Corp. Its stock soared 49% on its first day of trading and increased to a high of $131.67 by December of that year.
Fueled by investors’ excitement over the potential of its technology, QuantumScape’s valuation hit $54 billion. However, the company’s stock price declined by about 92% in the following months as it became clear that its technology wasn’t quite ready for commercialization. Moreover, increasing competition from other startups and large companies working on solid-state batteries also weighed on QuantumScape’s stock. As of September 14, 2022, QuantumScape had a market capitalization of $4.80 billion.
This QuantumScape competitors analysis will overview the leading companies developing solid-state batteries for electric vehicles. We’ll also discuss the key factors driving the competition in this space and what QuantumScape is doing to stay ahead of its rivals.
Bottom Line Up Front
Commercializing solid-state batteries remains a distant reality due to significant technological, cost economical, and industry chain support challenges. However, that hasn’t stopped companies from jockeying for position in this important emerging market. Among QuantumScape’s chief competitors are Chinese battery giant CATL, U.S.-based Solid Power, and BYD, another Chinese company leading electric vehicle manufacturer.
List of QuantumScape Competitors
QuantumScape’s Growth Strategy
It’s not hard to see why investors were bullish on QuantumScape. The company’s technology has the potential to revolutionize the electric vehicle industry. If successful, its batteries will be smaller, lighter, more energy-dense, and longer-lasting than existing lithium-ion batteries. This technology would dramatically improve electric vehicles’ range and performance while reducing costs.
Part of the company’s growth strategy is to develop the commercial applications of its technology through partnerships with large automakers such as Volkswagen. In 2018, QuantumScape and Volkswagen formed a 50-50 joint venture to mass-produce QuantumScape’s batteries. The two companies agreed to commit an additional 50-50 collective investments to build QS-1 and expand QS-1 cell manufacturing.
The partnership gives Volkswagen access to QuantumScape’s technology and expertise while providing the company with much-needed funding to continue its research and development efforts. The goal is for the joint venture to mass-produce QuantumScape’s batteries by 2025. The joint venture expanded in 2020 with a $200 million investment from Volkswagen.
Besides its partnership with Volkswagen, QuantumScape intends to expand its relationship with other automakers. Subject to other terms of the joint venture agreement, the company has the right to grant licenses to its technology to other automotive original equipment manufacturers (OEMs). QuantumScape currently focuses on EV applications, but its technology applies to other industries, such as consumer electronics and stationary energy storage.
Other QuantumScape growth strategies include expanding its business model beyond venture-funded research and development and partnering with suppliers to reduce manufacturing costs. The company is also looking to further its research and development efforts to improve its manufacturing processes and lower the costs of its batteries.
QuantumScape Competitors Analysis
The QuantumScape competitive landscape comprises startups and large companies focusing on solid-state battery technology for electric vehicles. While it’s not certain when the market for solid-state batteries will take off, Straits Research predicts that it will reach $36.4 billion by 2030, a CAGR of 36.4% from 2022 to 2030. The rising adoption of electric vehicles is the primary driver of this market growth.
Below is a detailed analysis of QuantumScape’s main competitors.
China’s Contemporary Amperex Technology Co. Ltd. (CATL) (SZSE: 300750) is the world’s largest battery manufacturer, with a market share of 34.8%. The company produces lithium-ion batteries for electric vehicles, consumer electronics, and energy storage systems. Apart from batteries, CATL also manufactures battery cells, modules, and packs.
Founded in 2011, CATL has rapidly grown to become a leading player in the battery market. The company has partnerships with several automakers, including BMW, Daimler, Honda, Volvo Cars, and Volkswagen Group. In 2019, CATL supplied batteries to over 30% of all-electric vehicles sold worldwide.
CATL is also one of the few battery manufacturers with a strong presence in both the Chinese and European markets. Its competition with QuantumScape will likely intensify as both companies vie for a share of the rapidly growing solid-state battery market. However, both companies face performance indicators and cost economic constraints that the companies must address before solid-state batteries become commercially viable.
Given CATL’s significant market share, QuantumScape must differentiate its product offerings to gain a competitive edge. The company’s partnership with Volkswagen gives it a strong foothold in the European market. Still, it will need to expand its partnerships with other automakers to gain a larger share of the global solid-state battery market.
Financially, CATL is in a strong position to invest in solid-state battery technology. The company generated CNY 130.355 billion ($20.1 billion) in revenue in 2021, up from CNY 50.319 in 2020. Its net profit for 2021 was CNY 15.931; as of September 14, 2022, CATL’s market capitalization was CNY 1.06 trillion.
2. Solid Power
Solid Power (NASDAQ: SLDP) is a US-based startup that develops all-solid-state batteries for electric vehicles. Doug Campbell, Sehee Lee, and Conrad Stoldt founded the company in 2011 after spinning from the University of Colorado. The company received its first round of funding from DARPA in 2012 and has since raised $381.6 million after seven rounds.
Solid Power’s primary focus is developing a cost-effective all-solid-state battery that can power electric vehicles for over 500 miles on a single charge. The company is also working on improving the safety and reliability of its batteries. In 2017, the company announced a partnership with BMW to jointly develop next-generation batteries for electric vehicles.
Ford Motor Company joined the partnership in 2021 and, together with the BMW Group and Volta Energy Technologies, led a series B funding that saw the company raise $135 million. Solid Power went public in 2021 with a blank check company merger led by SPAC Decarbonization Plus Acquisition Corp. III. The deal valued Solid Power at $1.2 billion.
As a startup, Solid Power lacks its competitors’ scale and manufacturing capabilities. The company will need to secure additional funding to ramp up its production capacity. The deal to take it public raised $542 million, which will help the company expand its operations. But it will need to continue to raise money to compete with larger battery manufacturers.
Solid Power is a much more direct competitor to QuantumScape than CATL. The company is targeting the same market with a similar product offering. But given its smaller size, Solid Power will need to continue to raise money to compete with QuantumScape and other larger battery manufacturers. As of September 14, 2022, Solid Power had a market capitalization of $1.144 billion.
BYD Company Ltd. (SEHK: 1211) is a Chinese multinational automobile manufacturer based in Shenzhen, Guangdong Province. The company was founded in 2003 and has become one of the world’s largest electric vehicle manufacturers. In 2021, BYD sold over 593,743 all-electric vehicles, making it the third largest EV manufacturer in the world.
BYD’s business model centers on electric vehicles, batteries, and solar power. The company manufactures various EVs, including passenger cars, buses, and trucks. Given the company’s vertically integrated business model, it has an advantage in terms of cost and technology.
BYD and QuantumScape compete for the same customers: EV manufacturers. BYD has a significant advantage over QuantumScape due to its scale and manufacturing capabilities. The company is also vertically integrated, which gives it an advantage in terms of cost and technology.
As one of the leading companies with patents for solid-state batteries in China, BYD will be a formidable competitor for QuantumScape in the future. Although BYD has not yet commercialized a solid-state battery, it is expected to do so soon. The company’s market cap as of September 14, 2022, was $101.17 billion.
4. Toyota Motor
Toyota Motor Corporation (NYSE: TM) is a Japanese multinational automobile manufacturer headquartered in Toyota, Aichi, Japan. Founded on August 28, 1937, by Kiichiro Toyoda, the Toyota brand is the world’s largest-selling automobile manufacturer, with a 10.5% global market share.
Toyota’s main business is the production and sale of automobiles. The company also has a significant presence in the financial services, logistics, and technology industries. Although Toyota has not yet commercialized a solid-state battery, it is working on the technology and is expected to do so soon. As of July 2022, the company had over 1,300 patents for solid-state batteries.
Unlike QuantumScape, Toyota doesn’t plan on using solid-state batteries for EVs immediately. The company is instead focusing on using the technology for hybrid vehicles. Toyota believes that EVs will eventually use solid-state batteries, but the company doesn’t think the technology is ready yet.
One of Toyota’s competitive advantages in the solid-state battery industry is its relationships with suppliers. The company has close ties with Panasonic, one of the world’s leading manufacturers of lithium-ion batteries. Toyota is also a major shareholder in Subaru, a car manufacturing company with a keen eye on solid-state batteries.
It will be an understatement if we say that QuantumScape will face some tough competition from Toyota in the future. The Japanese car manufacturer is a behemoth with a market cap of $200.959 billion as of September 14, 2022. But if QuantumScape can successfully commercialize its solid-state battery technology earlier, it will have a significant advantage over Toyota.
5. LG Chem
LG Chem Ltd. (KRX: 051910) is a South Korean multinational chemicals company headquartered in Seoul, South Korea. LG Chem is the world’s second-largest manufacturer of lithium-ion batteries, with a market share of 21.5%, according to Statista. The company supplies batteries to electric vehicle manufacturers such as Audi, Renault, and Tesla.
LG Chem’s advancements in the solid-state battery space are noteworthy. In 2021 the company announced that it had developed a “breakthrough” all-solid-state battery technology that promises a more than two-fold increase in energy density compared to current lithium-ion batteries. The company aims to commercialize its polymer-based solid-state batteries by 2026.
Given the company’s significant research and development capabilities and experience in mass-producing lithium-ion batteries, LG Chem will be a major competitor for QuantumScape. It has better manufacturing capabilities and can scale up production faster than QuantumScape. However, LG Chem doesn’t have as much head start in the solid-state battery race as QuantumScape does.
The South Korean company will be a tough competitor for QuantumScape, but there is still a chance for the latter to emerge victorious. Even with LG Chem’s manufacturing advantages, it will be difficult for the company to catch up to QuantumScape if the latter can commercialize its technology first.
QuantumScape SWOT Analysis
Below are the strengths, weaknesses, opportunities, and threats of QuantumScape:
- First mover advantage in the solid-state battery market
- Advanced technology with the potential for higher energy density
- Strategic partnerships with Volkswagen and Bill Gates
- Strong research and development capabilities
- Highly experienced management team
- No commercial products yet
- High dependence on Volkswagen
- Limited manufacturing capabilities
- Lack of scale
- The growing global market for electric vehicles
- Partnerships with other automakers
- Expanding into new applications for solid-state batteries
- Increasing investment in solid-state battery technology
- Competition from established automakers
- Slow adoption of solid-state batteries by the automotive industry
- High cost of manufacturing solid-state batteries
- Risks associated with commercializing new technology
QuantumScape Competitors Analysis (FAQs)
Question: Does QuantumScape have a future?
Answer: QuantumScape has a bright future. The company is a leader in solid-state battery technology and has the potential to revolutionize the electric vehicle industry. It intends to begin its pre-pilot production facility in 2023 and start mass production by 2025.
Question: Is QuantumScape a good investment?
Answer: QuantumScape is a risky investment. The company is yet to commercialize its technology and has no revenue. However, it has strong partnerships with Volkswagen and Bill Gates, and its technology has the potential to disrupt the electric vehicle industry. A long-term investment in QuantumScape could pay off handsomely.
Question: Does Volkswagen own QuantumScape?
Answer: Volkswagen does not own QuantumScape. The company has a 50-50 joint venture with QuantumScape to develop solid-state battery technology for electric vehicles. As the majority shareholder, two members of Volkswagen’s Board of Management sit on QuantumScape’s Supervisory Board.
Question: What are the best solid-state battery Stocks?
Answer: The best solid-state battery stocks are those of companies that are leaders in developing and commercializing this cutting-edge technology. QuantumScape, Toyota Motor, LG Chem, and CATL are all companies to watch in the solid-state battery space. Other players, such as Solid Power, Albemarle, and Samsung SDI, are also worth watching.
Commercializing the solid-state battery is a pivotal event that will change the electric vehicle landscape. Currently, QuantumScape is in the best position to succeed in this race. The company has a first mover advantage, advanced technology, and strong partnerships. However, it faces stiff competition from well-established players such as LG Chem and Toyota Motor.
For investors looking to profit from the solid-state battery revolution, QuantumScape is a risky but potentially rewarding investment. If the company can successfully commercialize its technology, it could see enormous returns. However, there is no guarantee of success, and QuantumScape faces many risks. Investors should carefully consider these risks before investing.