QuantumScape Corporation Class A Common Stock Morgan Stanley's 14th Annual Laguna Conference

Yeah. For folks following the story, we're working to commercialize solid-state lithium-metal batteries, which have compelling advantages in all the things you'd care about: smaller, lighter, faster-charging, safer. For those following the story more closely, some of the recent announcements, we started a highly automated pilot line in San Jose called the Eagle Line. On the last earnings call, we announced two new customer verticals alongside automotive, where we've historically focused. We've now added data center and a vertical called Advanced Solutions, which includes things like aerospace, defense, robotics, consumer electronics, and medical devices. Back to automotive, we announced in June a multi-year research agreement with Honda, who together with Volkswagen, those are two of the four top 10 global OEMs with whom we work. There's some nice momentum there.

Maybe that's a nice kind of initial framing, and I'm confident we'll get into all those things with conversation.

We have announced our first product, the QSE-5. That is just over a 5 amp-hour cell. Some of the advertised specs are 844 watt-hours per liter, 301 watt-hours per kilogram. That cell charged between 10% and 80% of state of charge in 12.2 minutes. As we talked about in our recent shareholder letter, when we do side-by-side testing with lithium-ion of different kind of chemistries and form factors, we see equivalent, if not superior, safety performance for the cell. We are very excited by that cell performance. So are our partners. We have worked for a long time with the Volkswagen Group. They have invested over $300 million in the company over private rounds, and then as a public company making contribution under our current collaboration and licensing agreement. In automotive, we have a very capital-light approach. The business model is kind of twofold.

One is to work with top-tier customers who then pay us to do specific development demos and sampling. The goal there is to do confidence building and to help train them and do technology transfer to shift to the licensing part, where the cash inflows are, the potential is quite a bit higher, and those would accrue to us on successful transfer of our technology to their factories. As I mentioned in the opening remarks, we are with four of the top 10 global OEMs. We have nice geography coverage between North America, Europe, and Asia amongst those top four. Together about a year ago at the Munich Auto Show, together with our partners, VW's PowerCo, provided the cells into an Audi design pack that went into a modified Ducati V21L race bike, which went across the stage at the Munich Auto Show.

That was our first vehicle demonstration globally of our solid-state battery technology in a very emotional moment for us to see vehicles powered by ourselves in the public eye. Since then, we started our pilot line in February, which together with the QSE-5 product, of course, the ability to make it scalable at quality is important. The focus of the team, since that February point, has been on bringing up that line, and tracking to both internal and external metrics for it. We mentioned on the earnings call that we are achieving 90% uptime on the equipment, which is a nice kind of marker. We are seeing more process stability, and we set out a goal relative to Q2 2026 production, a kind of pilot line type output levels. We want to double that before the year-end.

If we are able to double that, we see it kind of tracking and having satisfactory output for all the breadth of customer demand we are endeavoring to undertake.

They are internally focused is a good way of saying it. Further increases to uptime, yield, and process maturity and effectiveness are the ways to get there. I mentioned, I think on one of the recent earnings calls that the CapEx you see us incurring is generally not for the Eagle Line. We are already moving beyond our QSE-5 roadmap and to invest into subsequent kind of product generations. Here it is continuing to get more and more out of the existing equipment that we have put in place. That is true of the broader Eagle Line. That is also true of our Cobra separator process that is a sub-component of that Eagle Line.