QuantumScape Stock: What Are The Risks?

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