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Buy The Dip In QuantumScape Stock?

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QuantumScape (NYSE: QS), a startup that is working on solid-state lithium metal batteries for electric vehicles, has seen its stock price decline by almost 39% over the last month (twenty-one trading days) considerably underperforming the S&P 500 which remains down by about 1% over the same period. While the stock saw meaningful gains in late October and early November, driven by a broader interest in electric vehicle-related stocks following the COP26 climate summit and the passage of the $1 trillion-plus U.S. infrastructure bill, investors appear to have turned more cautious on growth stocks, as U.S. inflation surges and the Federal Reserve turns increasingly hawkish with interest rate hikes looking likely a real possibility in 2022. QuantumScape has been particularly badly hit, as it currently generates no revenues, with meaningful sales likely to happen only around 2026, and with profitability potentially further away.

So is QS

QS
stock likely to fall further in the coming weeks and months or is a recovery looking more likely? Per the Trefis machine learning engine, which analyzes historical stock price movements, QS stock has a pretty solid 62% chance of a rise over the next month (21 trading days). See our analysis QuantumScape Stock Chance of Rise for more details.

Five Days: QS -9.7%, vs. S&P 500 -1%; Underperformed market

(26% event probability)

  • QuantumScape stock declined 9.7% over a five-day trading period ending 12/14/2021, compared to the broader market (S&P500) which declined 1% over the same period.
  • A change of -9.7% or more over five trading days has a 26% event probability, which has occurred 85 times out of 329 in the last year.

Ten Days: QS -18%, vs. S&P 500 1.7%; Underperformed market

(19% event probability)

  • QuantumScape stock declined 18% over the last ten trading days (two weeks), compared to the broader market (S&P500) which rose by 1.7%.
  • A change of -18% or more over ten trading days has a 19% event probability, which has occurred 63 times out of 324 in the last year.

Twenty-One Days: QS -39%, vs. S&P 500 -0.8%; Underperformed market

(4% event probability)

  • QuantumScape stock declined 39% over the last twenty-one trading days (about one month), compared to the broader market (S&P 500) which fell by -0.8%
  • A change of -39% or more over twenty-one trading days has a 4% event probability, which has occurred 13 times out of 313 in the last year.

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[9/22/2021] What’s New With QuantumScape Stock?

QuantumScape (NYSE: QS), a startup that is working on solid-state lithium metal batteries for electric vehicles, saw its stock rally by close to 16% in Tuesday’s trading after it said that it signed an agreement to work with another top global automaker, marking its second big partner after Volkswagen, which owns a meaningful stake in QuantumScape. Although QuantumScape didn’t disclose the name of the new OEM partner, it said that it was among the top ten global players by revenue. The OEM has apparently evaluated QuantumScape’s early battery cells and will evaluate advanced prototypes of solid-state battery cells as well. The OEM will also purchase about 10 megawatt-hours (MWh) of batteries from QuantumScape’s QS-0 pre-pilot production line, which is expected to begin manufacturing in 2023. The deal should give investors some confidence that the secretive startup is making progress with its development. QuantumScape has never publicly showed off any prototypes and it last provided notable updates on its technology back in December 2020.

So is QS stock likely to rise further in the coming weeks and months or is a correction looking more likely? Per the Trefis machine learning engine which analyzes historical stock price movements, QS stock has a 73% chance of a decline over the next month. See our analysis QuantumScape Stock Chance of Decline for more details.

To be sure, QuantumScape stock is going to continue moving based on news flow rather than fundamentals for the next couple of years. The company is looking at a 2025 timeline to start delivering batteries that it can install and test in production vehicles and we are only likely to see meaningful revenues thereafter. Key factors that could drive the stock in the meanwhile include the company’s deal making with automotive majors and its progress with producing larger batteries at scale without defects. QuantumScape has integrated its cells to produce single-layer and four-layer battery cells and is in the process of testing ten-layer battery cells, which could be key to use in commercial applications.

See our indicative theme of Electric Vehicle Component Supplier Stocks – which includes stocks of companies that make EV components and raw materials for batteries.

[9/9/2021] How Will Toyota’s Big Battery Bet Impact QuantumScape Stock

QuantumScape (NYSE: QS), a startup that is working on solid-state lithium metal batteries for electric vehicles, has seen its stock decline by about 6% over the last week (five trading days) compared to the S&P 500 which remained roughly flat over the same period. The decline comes as Toyota, the world’s largest automaker, indicated that it was looking to invest over $13.5 billion by 2030 to develop battery technologies, focusing on not just the next generation of lithium-ion batteries, but also on solid-state batteries, which QuantumScape specializes in. The Japanese automaker also provided a short look at a prototype vehicle running with solid-state batteries. Although Toyota has been developing solid-state tech for a while now and apparently holds the most number of patents in the space, its recent announcements likely hurt QuantumScape stock. So will the decline continue for QuantumScape stock, or are gains looking more likely? Per data from the Trefis Machine Learning engine, which analyzes historical stock price information, QS stock has a 57% chance of a decline over the next month. See our analysis on QuantumScape Stock Chances Of Rise for more details.

So is QS stock still worth a look for longer-term investors? We don’t think Toyota’s recent announcements really change the picture for QuantumScape. Significant competition is to be expected in the solid-state battery space, which is viewed as the “holy grail” of sorts in the battery industry, as it could increase the range of EVs, reduce charging times, while also making EVs safer. Several startups, established companies, and academia have research and development projects related to the tech and it’s probably a given that there will be multiple successful players. However, QuantumScape remains one of the few pure-play publicly listed bets on the solid-state battery space. While QuantumScape remains risky, due to the company’s secretive nature, the stock remains down by about 85% from its all-time highs, making the risk to reward prospects much more palatable for investors.

[7/26/2021] QuantumScape Stock: What Are The Risks?

Investors don’t really know what to make of QuantumScape (NYSE: QS), a startup that is working on solid-state lithium batteries for electric vehicles. The stock trades at about $22 per share, down by about 83% from its all-time highs, although it remains up by over 120% since it was listed last year. The solid-state lithium anode rechargeable batteries that the company is developing are viewed as the “Holy grail” of sorts in the battery industry, as they could increase the range of EVs by as much as 50%, reduce charging times to under 15 minutes, while also making EVs safer by avoiding the use of flammable liquids. However, there are three major risks that we see for the stock at this point.

QuantumScape has apparently achieved some pivotal breakthroughs in solid-state battery technology, but there’s no way for investors to really test the company’s claims around its technology, apart from its press releases and presentations. Although secrecy is standard practice in the battery development process, this is risky for investors in a publicly listed company with a market cap of almost $10 billion. While investors can take some comfort from the fact that the company has big-name backers, including Volkswagen Group and Bill Gates, their risk to reward expectations might be different from smaller investors. Even if the technology development is on track, commercialization, that is, taking it from the lab into mass production for hundreds of thousands or potentially millions of units, could also be tricky. Another concern is likely to be the competition. There’s a lot of research around solid-state batteries by startups, establish companies and academia, and it’s probably realistic to assume that QuantumScape won’t be the only player with the tech. Toyota expects to unveil a functional prototype with a solid-state battery as early as this year and apparently holds the most patents relating to solid-state batteries. In comparison, QuantumScape plans to commence pilot production from 2024 onward.

See our indicative theme of Electric Vehicle Component Supplier Stocks – which includes stocks of companies that make EV components and raw materials for batteries.

[7/12/2021] Down 20% Over The Last Month, Is It Time To Buy QuantumScape Stock?

QuantumScape (NYSE: QS), a startup that is working on solid-state lithium metal batteries for electric vehicles, has seen its stock price decline by close to 9% over the last week (five…



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