QuantumScape focusing on disrupting EV industry with solid-state battery

California-based battery company, QuantumScape, continues to focus on disrupting the electric vehicle battery industry, which has relied on lithium ion batteries, by building a better, smaller, cheaper and safer solid-state battery.

“Our goal is to make better batteries for EVs and close the [cost and performance] gap with internal combustion engines,” co-founder and CTO Tim Holme said. “We believe our technology is capable of breaking into the mass market.”

The aim is to commercialize the solid-state battery in 2024 or 2025, to be ready for a predicted surge in the number of EVs on the road worldwide in the 2030s.

McKinsey predicts a robust increase in demand for EVs in the next decade, from about 1% of annual global sales in 2016 to almost 20% of annual global sales by 2030. EV sales globally rose 65% from 2017 to 2018, and then grew just 9% in 2019, according to McKinsey. Then, after a pandemic-related slowdown in Q1 of 2020, U.S. EV sales have accelerated in 2021 with sales up 201% in Q2 of 2021 compared to 49.5% for all new vehicle sales, according to Kelley Blue Book.

Meantime, California has set a goal for all new car sales to be zero emission by 2035. Carmakers are getting on board. General Motors has pledged to sell only zero-emissions models by 2035 and become carbon neutral by 2040; Ford has pledged to become carbon neutral by 2050.

QuantumScape was founded in 2010. Since 2012, the company has been working with Volkswagen, which has invested $300 million in the project as QuantumScape meets key performance metrics for solid state batteries. The companies plan to begin a joint pilot program by 2023.

Since their invention 30 years ago, lithium ion batteries have been the mainstays of the EV industry. The total market for lithium ion batteries grew by 17% and manufacturers increased production capacity in larger markets, according to McKinsey.

Lithium ion batteries Vs. solid-state batteries

Currently, lithium ion battery costs are about $137 per kWh, and are expected reach $101/kWh by 2023 – inching closer to the one-time industry goal of $100 per kWh, according to research company BloombergNEF. Battery pack cost has shifted now to an even more ambitious $60/kWh, according to some reports.

Lithium ion batteries continue to improve about 1-2% a year, Holme said. QuantumScape seeks to achieve significantly more improvements with its solid-state batteries.

QuantumScape - Solid-State Battery diagram vs conventional Li-ion battery - image courtesy of QuantumScape
QuantumScape – Solid-State Battery diagram vs conventional Li-ion battery – image courtesy of QuantumScape

The company seeks to lower battery cost by 15-20% relative to what the cost of lithium-ion batteries will be in several years.

Lower cost could be a game-changer. Despite the impressive global growth, EV ownership in the United States is still just 2.3%, according to Automotive News. While EVs are popular among self-described environmentally conscious consumers, according to surveys by GE, the American Automobile Association, and CarMax, the higher upfront cost of electric vehicles is a drawback for other potential buyers.

At 30 percent of the total, battery expense remains a key cost driver. A study by Deloitte showed that the top three considerations for consumers buying an EV are vehicle price, reliability, and cost to charge.

QuantumScape also is working to create a smaller battery — with 30-50% less volume than Tesla’s state-of-the-art batteries, and 80% less volume than other batteries. Solid-state batteries eliminate the liquid electrolyte in lithium-ion batteries. Less volume also will help lower costs because raw material costs and total vehicle weight will be lower.

“We cut a big part of the volume and weight of our battery, which reduces the weight of the car,” Holme said.

QuantumScape’s other objectives are to achieve an 80% charge in 15 minutes compared to 50% in 15 minutes for lithium ion batteries, increase battery power, lengthen battery lifetime, increase battery range per charge, improve the temperature range to operate well in low temperatures compared to lithium ion batteries, improve the recharge rate, and improve safety.

Last year, the company gained significant attention after an initial public offering on Nov. 27. Share prices soared from $23.50 a share to $37 at the close of the first day of trading and continued to climb, hitting about $84 a share in early January 2021.

Then, SeekingAlpha published stories claiming that the company had overstated the success of its batteries and violated federal securities laws, resulting in a significant share price drop and class action lawsuits. In April, short seller Scorpion Capital called the company a “pump and dump scam.” Company leaders denied the claims and said they were considering a lawsuit against Scorpion. Share prices were about $21 as of Sept. 14.

The company continues to work on addressing challenges to build that better battery.

Key remaining tasks for QuantumScape, Holme said, include:

  • Improving the separator process.
  • Increasing the layer count in multi-layer cells.
  • Improve the volume manufacturing process.

“We need to improve quality consistency and throughput as we ramp up the pilot line,” Holme said.