QuantumScape (QS) Q4 2025 Earnings Call Transcript

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Date

Feb. 11, 2026 at 5 p.m. ET

Call participants

• President/CEO — Siva Sivaram
• Chief Financial Officer — Kevin Hettrich

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Takeaways

• COBRA process integration -- Management stated, "breakthrough COBRA process has been integrated into our cell production baseline," enabling gigawatt-hour-scale production and underpinning the capital-light development and licensing model.
• Expansion of commercial agreements -- Collaboration and licensing with PowerCo (Volkswagen Group) expanded, and two additional global automotive OEMs joined as portfolio customers with new joint development and technology evaluation agreements.
• Customer billings -- Customer billings for 2025 were $19,500,000, representing the company's first customer cash inflows under its development and licensing business model.
• Eagle Line installation -- The Eagle Line, QuantumScape (NYSE: QS)'s pilot cell production line using the COBRA process, was installed and inaugurated, establishing a scalable blueprint for customer manufacturing at gigawatt-hour scale.
• COBRA-enabled QSE-5 shipments -- QSE-5 solid-state cells produced with the COBRA process were shipped to the Volkswagen Group, and demonstrated on the Ducati V21L race bike at IAA Mobility in Munich during a world debut for the technology.
• Liquidity -- Year-end 2025 liquidity stood at $970,800,000, with management emphasizing continued prudence in balance sheet management.
• Adjusted EBITDA loss -- Adjusted EBITDA loss in Q4 was $63,300,000; full-year 2025 loss was $252,300,000, within guidance, indicating a narrowing of adjusted EBITDA loss by approximately 10% from the prior year's $285,000,000.
• Operating expenses and net loss -- GAAP operating expenses and net loss for Q4 were $110,500,000 and $100,100,000, respectively; for full-year 2025 these figures were $472,600,000 and $435,100,000.
• Capital expenditures (CapEx) -- Q4 CapEx was $12,300,000; full-year 2025 CapEx of $36,300,000 fell within previous guidance. 2026 CapEx is guided to $40,000,000-$60,000,000, primarily supporting technology advancement.
• 2026 operational goals -- Management outlined four 2026 goals: demonstrate scalable Eagle Line production, advance automotive commercialization, expand into new high-value markets, and progress beyond the QSE-5 platform.
• Flexible form factor capability -- The Eagle Line and COBRA process are described as adaptable for customer-specific cell formats, enabling customization in capacity and cathode selection.
• Supply chain partnerships -- Two new ceramic production partners, Murata Manufacturing and Corning, joined the ecosystem, supporting scalable ceramic separator manufacturing.

Summary

Management emphasized rapid execution against stated 2025 objectives, particularly the on-time installation of the highly automated Eagle Line, now serving as both a validation and technology-transfer platform for key licensing partners. The call highlighted the expansion of commercial relationships, including ongoing collaboration with PowerCo (Volkswagen Group) and the addition of two new major OEMs, as well as the company’s first customer billings, which are central to the capital-light licensing model. Cost discipline was evidenced by a year-over-year improvement in adjusted EBITDA loss, along with a sizable liquidity position to support strategic initiatives. Looking ahead, management presented clear 2026 priorities focused on scaling manufacturing technology, deepening automotive partnerships, and targeting new addressable markets, all anchored by the adaptable Eagle Line platform and continued technology innovation beyond the QSE-5 product line.

• Management confirmed, "Our relationship with them and the focus with which we are working together is as good as ever," directly addressing external reports on Volkswagen’s battery funding changes.
• The Eagle Line's primary role is to provide a "blueprint for scale, cost, quality, and cycle time that a customer can deploy into their manufacturing line," explicitly positioned as a customer transfer platform.
• Full-year 2026 adjusted EBITDA loss is projected between $250,000,000 and $275,000,000, with CapEx guidance reflecting continued emphasis on R&D and efficiency.
• Management described the business model as "capital-light," with adaptability for various end-market applications via licensing, contract manufacturing, or partner manufacturing, all designed to minimize QuantumScape's direct capital outlay.
• Partnerships with supply chain leaders such as Murata and Corning are intended to support both technology scaling and supply security, as no anode or graphite suppliers are required given the architecture.
• OEM and partner engagement remains high, with customers present at major launch events and management reporting "customer interest has been very strong" in solid-state battery adoption.
• No KPIs for the four 2026 goals were disclosed publicly, but management stated that each is internally measured by quantitative metrics, with progress promised in future updates.

Industry glossary

• COBRA process: QuantumScape’s proprietary manufacturing approach designed to enable high-volume, capital-efficient solid-state battery cell production at gigawatt-hour scale.
• QSE-5: QuantumScape’s first minimum viable product, a solid-state lithium-metal battery cell platform characterized by a ceramic separator, high energy density, and safety improvements over traditional lithium-ion batteries.
• Eagle Line: Pilot-scale, highly automated production line at QuantumScape, utilizing the COBRA process to demonstrate scalable manufacturing, enable customer sampling, and serve as a technology transfer blueprint.
• PowerCo: Battery manufacturing subsidiary of Volkswagen Group and a principal commercial and development partner of QuantumScape.

Full Conference Call Transcript

Siva Sivaram: We set aggressive goals for ourselves to basically grow the COBRA process, ship COBRA-based QSE-5, install equipment for our Eagle Line, and expand our commercial engagements. We are proud to report that we succeeded on all four key goals. In June, we announced that our breakthrough COBRA process has been integrated into our cell production baseline. This groundbreaking process enables gigawatt-hour-scale product and is a catalyst for our capital-light development and licensing business model. With respect to commercial engagements, in 2025, we expanded our collaboration and licensing agreement with PowerCo, the battery manufacturer of the Volkswagen Group. We also added two major global automotive OEMs to our portfolio customers, announcing new joint development and technology evaluation agreements.

Additionally, in 2025, we issued our first customer billing. In 2025, we added two globally renowned ceramic production experts to our U.S. ecosystem: Murata Manufacturing and Corning. We capped the year with our second annual Solid-State Battery Symposium in Kyoto, where we brought together ecosystem partners, automotive OEM customers, and government officials. 2025 also saw milestones in our technology and industrialization roadmap. COBRA-enabled QSE-5 cells shipped to the Volkswagen Group. In September, we made headlines as the Ducati V21L race bike powered by QSE-5 cells rode across the stage at IAA Mobility in Munich.

Siva Sivaram: This exciting event

Siva Sivaram: was the world debut of our solid-state lithium-metal battery technology in a real-world electric vehicle. Finally, over the course of 2025, we installed our pilot cell production line, the Eagle Line. On 2026-02-04, we held an inauguration event for the Eagle Line with attendance from automotive OEM customers, technology partners, and local and state government officials. Incorporating the innovative COBRA process, the Eagle Line is a suite of equipment, materials, and highly automated processes forming the blueprint for production of QSE-5 technology. This leads me to our four key goals for 2026. Firstly, we will demonstrate scalable production of the Eagle Line. The purpose of the Eagle Line is threefold.

First, it will produce QSE-5 cells to support customer sampling and testing, technology demonstrations, and product integration efforts. Second, the Eagle Line will show scalable process steps for production of our battery technology to enable licensing partners to bring our technology to gigawatt-hour scale in their own facility. Third, the Eagle Line gives us a platform to develop and test further enhancements and refinements at meaningful scale, allowing us to accelerate our advanced development efforts. In 2026, we will demonstrate the scalability of the Eagle Line through increasingly efficient cell output. Secondly, we will advance automotive commercialization.

The automotive market remains our core focus, and in 2026, we aim to advance our automotive customers through the stages of our technology development licensing business model. Working with multiple global auto OEMs, we will use our technology platform to tailor product solutions for vehicle programs, undertake pre-testing, customer-specific industrialization strategy, and implement high-value markets. Thirdly, we will expand into new markets. Our solid-state battery technology offers a step-change improvement over conventional lithium-ion technology. Batteries are becoming a disruptive force across the entire economy, and we see the opportunity set for advanced energy storage expanding across existing and new applications. In 2026, with differentiated solid-state technology, we aim to seize opportunities where our technology encapsulates significant value.

And finally, as a technology innovation company, we will go beyond QSE-5.

Siva Sivaram: battery performance.

Siva Sivaram: As we ramp production of our current QSE-5 platform, in 2026, we are focused on further advancements to meet the ever-growing need for energy storage in existing and emerging applications. And this year, we will announce progress along our technology roadmap. To conclude, I would like to say a word about our strategic outlook. 2025 was a remarkable year, and it would not have been possible without the tireless effort of our outstanding employees. Our ambitious goals for 2026 will require continued disciplined execution on the part of the team. Looking at the broader landscape, the world at large faces important challenges around technology and secure supply chain. We view this as a golden opportunity.

Our mission to revolutionize energy storage has positioned us to offer solutions to these exact challenges. For industry partners who need better batteries, we seek to offer a future-proof technology platform that delivers better performance across the board and continuously improves over time. For players across the automotive, data center, robotics, aviation, and defense spaces, who are in need of next-generation energy storage to power demanding applications, our technology represents a compelling and unique solution. We believe we have a diverse group of customer and application opportunities, and a differentiated technology platform and growing partner ecosystem

Siva Sivaram: continuously improving.

Siva Sivaram: And capturing benefits of increasing scale. Even as we face the many challenges still ahead, we are establishing a strong foundation to build the future of energy storage. As a final note, we would like to express our sincere gratitude to Professor Dr. Fritz Prinz, one of the cofounders of QuantumScape Corporation, who is retiring from our board of directors after more than fifteen years of service. We thank Fritz for his leadership, guidance, and friendship through this remarkable period of QuantumScape Corporation’s history. Thank you. With that, I will turn things over to Kevin for a word on our financial outlook.

Kevin Hettrich: Tila.

Kevin Hettrich: GAAP operating expenses and GAAP net loss in Q4 were $110,500,000 and $100,100,000. And for full year 2025,

Kevin Hettrich: were $472,600,000 and $435,100,000, respectively. Adjusted EBITDA loss was $63,300,000 in Q4, in line with expectations, and for full year 2025, was $252,300,000 within guidance. A table reconciling GAAP net loss and adjusted EBITDA is available in the financial statements at the end of the shareholder letter. For 2026, we expect full year adjusted EBITDA loss to be between $250,000,000 and $275,000,000 as we work towards our goals while continuing to drive greater operational efficiency across the company. For 2026, Q4 CapEx primarily supported facilities and equipment purchases for the Eagle Line. Capital expenditures in the fourth quarter were $12,300,000, and for full year 2025 were $36,300,000, within guidance.

We expect full year 2026 CapEx to be between $40,000,000 and $60,000,000, the majority of which we plan to invest into the next generation of our technology. Customer billings for full year 2025 were $19,500,000.

Kevin Hettrich: As a reminder,

Kevin Hettrich: customer billings may vary from quarter to quarter due to fluctuations in activity as we progress through various phases of an agreed scope of work. Customer billings is a key operational metric meant to give insight into customer activity and future cash flows. The metric is not a substitute for revenue under U.S. GAAP. During the quarter, we received $19,500,000 in cash from 2025 customer billings. As noted on our Q3 call, due to the related party nature, U.S. GAAP required this amount to be reported directly to shareholders’ equity once certain requirements were met. We ended 2025 with $970,800,000 in liquidity, and we will remain prudent with our strong balance sheet going forward.

As always, we encourage investors to read more on our financial information, business outlook, and risk factors in our quarterly and annual SEC filings on our Investor Relations website.

Siva Sivaram: Thanks, Kevin. We will begin today’s Q&A portion with a few questions we have received from investors or that I believe investors would be interested in. Siva, can you expand further on why the inauguration of the Eagle Line was such a significant milestone and a notable event on QuantumScape Corporation’s commercialization pathway? Also, how will we use this line to demonstrate scalable production? And the Eagle Line is an extremely important catalyst for our technology commercialization goals.

Kevin Hettrich: At the beginning of 2025,

Siva Sivaram: we set out the goal of increasing our output of QSE-5 cells. When we were ramping volumes for the Munich IAA show, we had a stable baseline to make cells for the Ducati bike. We decided that the processes were sufficiently mature, and it was time to significantly increase the automation of the line to better match the productivity of the COBRA process. In the subsequent ten months, we designed the line, prototyped it, formed partners for equipment, built the tools, installed the tools at QuantumScape Corporation, qualified the processes on the tools, and released the equipment to the baseline. This was an incredible effort on the part of the team to get it done in such a short time.

Siva Sivaram: As we said in the letter,

Siva Sivaram: the Eagle Line enables pilot production of cells for sampling and is a platform to develop technologies for future generations. But the most important outcome is to have a blueprint for production. This is what we intend to transfer to our customers so that they can ramp to gigawatt-hour scale in their factory. Success on the Eagle Line is to have a blueprint for scale, cost, quality, and cycle time that a customer can deploy into their manufacturing line. This is about demonstrating the technology to our licensing partners for them to take the next step up in scale. Thanks, Siva. You have highlighted growing interest beyond automotive.

How are you thinking about those opportunities while maintaining focus on automotive commercialization? Siva: Automotive customers remain our core focus. It is still the biggest and most valuable market for batteries. Nothing has changed on that front. The long-term global trend towards electrification is going to continue. If you think about autonomous vehicles really starting to become mainstream, those fleets make the economic logic for EVs even more compelling. We have a cell and a design that is unique. It is capable of being safer, performing better across a wide temperature range, combining high power and high energy density. These characteristics are highly valuable across other applications.

For example, in a data center, you have high ambient temperatures but you absolutely cannot have a fire

Kevin Hettrich: racks. It is a million-dollar GPUs.

Siva Sivaram: In a drone, you need better energy density, but also extremely high discharge power. In addition, our architecture can work with different cathode chemistry, which makes our technology even more versatile. We can offer a differentiated and no-compromise solution to these emerging applications. These markets are growing rapidly. It is a logical step for us to pursue these markets.

Kevin Hettrich: Thanks, Siva.

Siva Sivaram: Kevin, would you assess QuantumScape Corporation’s performance in 2025? And how are you thinking about achieving the company’s 2026 objectives while maintaining operational and capital efficiency?

Kevin Hettrich: I characterized 2025 as a strong year for QuantumScape Corporation. We executed on our key objectives for the year, and just as importantly, we did so with a high degree of financial discipline. We delivered approximately a 10% year-over-year improvement in adjusted EBITDA loss, narrowing from $285,000,000 to approximately $252,000,000. That improvement reflects a sustained company-wide focus on cost effectiveness. We made deliberate choices that improved our cost structure, for example, advancing value engineering efforts across the Eagle Line, as well as optimizing our real estate footprint. These actions allowed us to make meaningful technical progress while improving capital efficiency. 2025 was also an important validation year for our development and licensing model.

Under this structure, we said we could generate customer-related cash inflows ahead of earning licensing royalties. During the year, we demonstrated that capability by achieving our first customer billings, totaling $19,500,000. Finally, we exited 2025 with $970,800,000 of liquidity, leaving us with a strong balance sheet for this next phase of execution. Looking ahead to 2026, we believe our plan is well aligned with the goals we have laid out, and importantly, it allows us to advance those objectives while we further improve and monetize the platform we have built.

Regarding efficiency, our plan is to continue to systematically, methodically, and iteratively drive efficiency gains across the organization via the activities you would expect: ongoing value engineering, higher equipment uptime and throughput, and further improvements in yield and reliability. We are well along in deploying machine learning and AI tools to accelerate development cycles and improve engineering productivity. On monetization, we expect customer billings in 2026 to increase relative to 2025 levels as we deepen and expand customer engagements.

Siva Sivaram: Okay. Thanks so much, Kevin. We are now ready to begin the live portion of today’s call. Operator, please open up the line for questions.

Operator: Thank you so much. And as a reminder to our tele-audience, if you do have a question, press 1-1 and wait for your name to be announced. To remove yourself, press 1-1 again. One moment for our first question. It comes from Mark Haywood Shooter with William Blair. Please proceed.

Mark Haywood Shooter: Hi, Siva. Thanks for taking my question, and congrats on commissioning the Eagle Line.

Aman S. Gupta: And my question here is, with this new manufacturing technology, I know there is a lot of improvement in throughput and yield, but I am wondering if there is an ability to increase the surface area of your ceramic separator, and therefore maybe increase the cell size. Is this possible, or is this on your technology roadmap?

Siva Sivaram: Mark, thank you. Thanks for the question.

Kevin Hettrich: The Eagle Line clearly

Siva Sivaram: enables us to do all the things you just said: improving yield, improving uptime, improving operational efficiency, improving materials utilization, so that we can show our customers the efficiency with which we can make. Equally importantly, the Eagle Line and the COBRA line are set up to be adaptable to making the line useful for every customer for their specific needs. Our aim is to use the Eagle Line as the backbone so that when we industrialize for a specific customer for specific needs, we can adapt the line to make that happen. That is exactly what we are using as this transfer platform.

So the Eagle Line acts as the scalable blueprint for us to take a core technology platform and adapt it to every one of our

Kevin Hettrich: customers,

Siva Sivaram: specific needs.

Kevin Hettrich: Yeah. Mark, as you mentioned, those are probably the three vectors we would expect our automotive customers to work with: either the choice of cathode, capacity of the cell, and assortment of cell format. Our COBRA process is capable of those and as is the Eagle Line. And that exactly fits into that first of our two phases of our business model, working together with customers to customize our technology platform to their product solutions, earning the first line of cash flow and longer term setting up that much larger licensing opportunity.

Aman S. Gupta: Yeah. Thank you, gentlemen. I appreciate the color there. Just as a follow-up, maybe a bit of a finer point. And the reason why I asked about this surface area increase and maybe larger cells

Kevin Hettrich: is

Aman S. Gupta: what I thought I heard from the PowerCo arrangement is that the QuantumScape Corporation cells need to fit into the unified cell architecture. And I am wondering if that can be done with the current size, the QSE-5, or is that a larger cell that you need to develop?

Siva Sivaram: Yeah. As you just said, the QSE-5 cell is a certain aspect ratio, providing us with about 5.6 amp-hour

Kevin Hettrich: and about 21 watt-hour

Operator: cell.

Kevin Hettrich: The UFC is a largest form factor, and every customer has their specific need for what they need for their application.

Siva Sivaram: And fully knowing that, we use this as the adaptable baseline. The Eagle Line will show that the platform is from which we can adapt it to make it bigger, smaller, whatever we need to. And that is the whole point of establishing one stable baseline from which we can build for different customers.

Aman S. Gupta: Very helpful. Thank you.

Siva Sivaram: Thank you. Our next question comes from Winnie Dong with Deutsche Bank. Please proceed.

Winnie Dong: Hi. Thank you so much for taking my questions. In your prepared remarks, you alluded to various verticals, including data centers and robotics, aviation, as potential applications outside of automotive. And I think in the past, consumer electronics was also a potential application as well. I was wondering if you can help us understand, is there one vertical where your technology is more suitable than the other ones? For instance, I am just trying to understand, in, for example, stationary storage, a lot of companies that are seeking out that, they are still trying to use LFP. So just curious, why is lithium metal just as good or even better for some of these applications? Thank you. Yeah.

So, Winnie, I will start out, and then Kevin has some strong views on the subject.

Siva Sivaram: he will continue on. Clearly, the architecture that we have developed with the ceramic separator provides you what we call a no-compromise solution. Meaning, concurrently, at the same time, we can deliver high energy density, high power density in both charge and discharge, better safety capability, cycle life, and because we eliminate the anode, we have better—and because the formation is so short, we can deliver a better cost profile. Each of these markets that we just talked about have unique needs. For example, as you add, the consumer electronics product is very big on volumetric energy density.

We are trying to make sure that we size the opportunity, work with customers, move rapidly so that we can take our no-compromise cell and fit it into the appropriate platform, appropriate form factor, and quickly get to market. That is the idea behind it. As you would expect, the automotive market still is the larger market, and we remain focused, and logically, the automotive market also takes the longest time to develop, qualify, and deploy into larger fleets. These are just facts of the marketplace that we work with, but the cell itself is so useful across different markets that we do think it is logical for us to take that leap.

Kevin Hettrich: Yeah. As Siva mentioned, we are starting from a good place with that no-compromise battery advantages laid out. We see opportunities over the fullness of time across the broad set of energy storage applications. I believe you listed several potential applications. Consumer electronics tends to get excited about the volumetric energy density advantage. AI-dense data centers value safety. Drones, and anything that flies, love the gravimetric savings and the power, and the grid, at least for the major load shifting application, values cost per round-trip cycle.

So we believe we can offer compelling solutions to all these spaces, and as a management team, it is our job to decide how many of these do we do in parallel, and in what order do we sequence them, to both delight our customers and to optimize returns for our shareholders.

Siva Sivaram: And everything we just discussed about, we are intending in goal number three that we laid out

Kevin Hettrich: in our letter today, expand into high-value markets.

Siva Sivaram: And the whole thing is enabled by the Eagle Line. The Eagle Line allows us the flexibility of going and trying this out because we have the ability to make more samples for more customers. And that is what makes this whole thing possible. Got it. Thank you. My second question is on the year’s

Operator: EBITDA guidance. I was wondering if you can help us flesh it out in terms of the OpEx and also in the context of some of the billable help that you can get from your partner as a result of partnership. Thank you.

Kevin Hettrich: So, and then, Winnie, can you help me with the color around which aspect? And then you were asking about color on billings. Is that a correct rephrasing of your question?

Winnie Dong: Yeah. Essentially, you are guiding to—you have the year’s EBITDA guidance. I am just curious, in the context of existing partnership, I think in the past you have been getting operational help from some of these partners. Is it being considered within the outlook? And yeah.

Kevin Hettrich: Yeah. So, that is a great question. So to answer what you just mentioned first: Yes, our EBITDA guidance is inclusive of help, either from OEM partners or ecosystem partners. That is all baked in. And by the way, there is significant resource being put in by all of those three. In terms of just some color, the EBITDA guidance is relatively flat year over year, but I would point out that the team is seeking to take on a lot more with expanding and deepening the automotive partnerships, as well as expanding into new high-value markets. There are all sorts of activities behind that as well as pushing the frontier of battery development.

So our goal is to deliver much more with the same resource base, improving efficiency to shareholders. But we need just to be clear, for this year, Kevin just announced $19,500,000 of billings and cash received. And that, as he has pointed out, has gone directly into

Siva Sivaram: equity, and that is not part of

Aman S. Gupta: the

Siva Sivaram: EBITDA loss that we just announced.

Kevin Hettrich: Correct. And as I mentioned in the comments, please expect that to be lumpy quarter to quarter as we do this type of agreed development work with customers and ecosystem partners, as well as our desire to improve on that 2026 versus 2025.

Winnie Dong: Got it. That is very helpful. I will pass along. Thank you. Thank you so much. Our next question comes from the line of Joseph Spak with UBS. Please proceed.

Aman S. Gupta: Thank you. Good afternoon. First question is just, if I compare

Kevin Hettrich: the slides that you put out today versus prior, it looks like that

Aman S. Gupta: conditional cash inflows is now $150,000,000. Last time, it was $261,000,000. Can you detail what changed there?

Kevin Hettrich: If you—just to rephrase or maybe to clarify, when we expanded the VW development and collaboration and licensing agreement with Volkswagen last summer, there is an opportunity to earn up to $131,000,000 worth of those development

Siva Sivaram: payments.

Kevin Hettrich: Is that what you are referring to?

Aman S. Gupta: Joe: Yeah. Like, if I—you put on, like, on

Gabriel Alexander Gonzales: slide 16, you have on the slide detailing your relationship with

Joseph Spak: PowerCo. It says $150,000,000-plus of conditional cash inflows. If I look at the last quarter slide, that $150 was $261.

Siva Sivaram: Let me

Kevin Hettrich: let me pull that up and revert with you in a few minutes. I do not have

Aman S. Gupta: it in front of me. I will revert with you on that.

Kevin Hettrich: Okay.

Joseph Spak: The next question then, just, you know, obviously, PowerCo is a deep and important partner here. There had been some reports that Volkswagen sort of slashed the funding there. Just curious if that, sort of, you felt that at all, if that sort of impacted your business or your work with them. If it has even increased some of your urgency to diversify to other customers.

Kevin Hettrich: Yeah. So, Joe, our work with PowerCo is continuing on unchanged.

Siva Sivaram: Their commitment to us is very, very good. Our relationship with them and the focus with which we are working together is as good as ever. We are both working towards a set of agreed-upon scope of work that has not changed, and we are continuing to bill them the way we have agreed in that $131,000,000 deal that Kevin just talked about. So in July, we agreed on a scope of work, and our partnership is as strong as ever. And the work itself is lumpy, as in the way it is planned, up and down. But we are doing very well with respect to worksite. That does not mean we are not working with other customers.

As we announced in the letter, we have added two new large global auto OEMs to our portfolio, with whom we are working. And we have also announced additional technology development and technology evaluation agreements with them together. So this is in a good place. The customer interest has been very strong, and the Volkswagen and PowerCo relationship still remains very, very strong.

Joseph Spak: Okay. Last question for me. And you touched on some of this, and I just sort of want to better understand how you are thinking about it because you talked about new end-market opportunities, energy storage, robotics. Exciting stuff. But, you know, if I look at what you have done with the auto business, you have effectively, right, left the commercialization industrialization to PowerCo and other partners.

So as you move to these other end markets, like, how is it—you know, if you are not making a sort of a standard cell, and I understand the Eagle Line sort of helps you sort of do different form factors or different cells—but, like, are you not going to need to sort of reach out individually to help sort of scale these different form factors for these opportunities? It just seems maybe a little bit more difficult as you go to some of these other end markets where there might be some more bespoke use cases versus, you know, the old strategy, which was doing it yourself. But maybe I misunderstood that sort of stuff.

Siva Sivaram: Very perceptive question. I am glad you asked. The licensing and the capital-light business model is not a single flavor. There are a lot of different ways of doing the same thing: having manufacturing rights, having contract manufacturing, having our partners manufacture for others,

Kevin Hettrich: having

Siva Sivaram: customer-provided manufacturing abilities. There are many different ways of doing it. As long as we are not spending the capital to build it, we can do this very well. And these markets are fully amenable to these business models. So we are exploring those with our new customers. I am not saying that we rule anything out, but our preference has always been a license and capital-light business model. So I am glad you asked this question. Even in these markets, such different variations on the theme are very possible.

Aman S. Gupta: Thank you, sir. I appreciate it.

Siva Sivaram: We did—I did have a chance to look at the

Kevin Hettrich: the slide you referenced. The prior reference to 02/06 or February is when you sum both parts of the economics with Volkswagen together: the $130,000,000 prepay and the up to $131,000,000 of development payments. That is the former number you referenced. In this latest round, as footnoted, what we are doing is we are only—we are having more of a backwards-looking view where we are only counting the billings to date plus the $130. So it is a different cut at the same two numbers. There is nothing changed contractually.

Joseph Spak: Okay. So nothing changed with that other—with that delta—that is sort of more

Kevin Hettrich: Correct.

Joseph Spak: potentially to come.

Kevin Hettrich: Okay. Correct. It is more looking at the bird in the hand relative

Joseph Spak: to billings as opposed to the bird in the bush with the up to.

Kevin Hettrich: Thank you for that. I appreciate it.

Siva Sivaram: Yep.

Operator: Thank you.

Siva Sivaram: Our next question comes from Mark Delaney with Goldman Sachs.

Operator: Please proceed.

Kevin Hettrich: Hi, good evening. Thank you for taking the

Aman S. Gupta: questions. I have Aman on for Mark. Maybe kind of starting on your goal for the Eagle Line and scaling that. And congrats on getting that installed. Can you maybe help what key metrics for that line are today? Like, provide some context for where some of the yields and production time and things like that are, and how you see that scaling over the course of the year, and what is needed to then, you know, exiting the year, get to commercial transfer to your licensing partners.

Joseph Spak: Thank you.

Siva Sivaram: Yeah. Aman, thank you for the question. So last year, we had a manual line with which we were producing cells for applications such as the IAA Munich demonstration and the Ducati bike. We developed a very stable baseline, and we decided that was a good time to convert it to be a much more highly automated line so that we can match the output of the highly productive COBRA line to the cell-making line.

And so in the ten months since March, we have literally conceived the line, designed it, found the build partners for the equipment, built the equipment and brought them over here, installed them, qualified them, developed the process, transferred the process, and then integrated it into the baseline, and we are running it. And that is what we inaugurated last week this time.

Kevin Hettrich: Now

Siva Sivaram: this is a manufacturing prototype pilot line. So this is what we are using to convince and work with our partners who are going to be working with us hand in glove, watching how this is done. So all of the metrics that we normally use in a pilot production facility—such as uptime, mean time between failure, mean time to assist, mean time to repair, yields, reliability, quality, cycle time, cost—all of these kinds of metrics have to be made efficient so that our customers come and work with us and say, okay, I am ready to go take this line and convert it to all of my own factory for scalability.

So these are the things that you just asked and what we will be very, very closely monitoring as we ramp it up. We are in a good place, and we will continue to work with our customers, and we need to show this to our customers who are here with us watching this. And when we inaugurated the line here, the customers were actually here with us as we got the start.

Kevin Hettrich: And just some other dots to connect. The Eagle Line is certainly called out in our first corporate goal for 2026: demonstrate scalable production with Eagle Line. As Siva was mentioning, it is central to the other three. Without that type of prototype and sampling and demo volume, that is the currency with which we can advance automotive commercialization, new and existing, as well as gives us the currency to expand into new high-value markets. And it also gives us other parts for internal use to do development on, to support that beyond QSE-5 roadmap. So that Eagle Line demonstrated last week is really important to set up a successful 2026. Now, having said all that,

Siva Sivaram: Aman, this is the unsexy part of the work. This will be systematic, methodical, iterative improvement of every one of those so that the customers see and work with us to see the data progress on all of them. So this is not a new thing. I have done this many times in the past, and the employees know what it is that we need to do here at QuantumScape Corporation. We will get that done.

Aman S. Gupta: Appreciate the color there. Thank you. And maybe tying that to my follow-up here, Kevin, you talked about $40,000,000 to $60,000,000 of CapEx. Can you maybe help dimension that across some of the spending you have kind of outlined in your goals, whether that is for the Eagle Line and scaling that versus expanding some of the QSE-5 technology and potential incremental spend related to expanding to some of these other end markets? And how should we think about that level then being sustained beyond 2026 in terms of further continuing to explore those opportunities? Thank you.

Kevin Hettrich: It is a good question, Aman. The bulk of the spend goes towards the fourth goal of going beyond the QSE-5, and the bulk of the CapEx spend from $40,000,000 to $60,000,000, as you referenced. There is CapEx in the other categories, but with the maturity of the QSE-5 platform, for example, in the case of expanding into new high-value markets or doing custom development for OEMs, it is more incremental on choice of cathode or dimensions or form factor. That is more of an incremental spend as opposed to core development spend. As a technology licensing company, it is our core job to develop and pilot and transfer high-performance battery technology to our customers and partners.

Capital is required to push that frontier, and this is the type of magnitude we think investors should expect going forward for that steady-state advanced runway development. And I would also like to draw a contrast with this type of spend under a technology licensing model versus that of a full-blown manufacturing company, which requires billions of dollars of investment for gigawatt-hour scale done years before that factory even comes online. So we think that our choice of business model is in the best interest of our shareholders.

Aman S. Gupta: Thank you. And maybe just on that point, too, quickly, can you kind of dimension what are the goals you are trying to hit for the QSE-5, like, beyond the QSE-5 platform that you are spending on? I apologize if you have discussed it before. I do not have it off the top of my head.

Siva Sivaram: No. Aman, last year, we put out our blueprint on how we move forward as a technology company. The QSE-5 is our first minimum viable product. Clearly, as we move up the S-curve rapidly, we need to make the performance metrics better on every aspect of it and keep moving this up. And every eighteen to twenty-four months, we will be coming up with new upgrades on this that we need to come and show you all, show our customers, and show our shareholders where we are spending the money and to move the technology frontier forward. That is where the business is headed from the QSE-5 moving

Aman S. Gupta: Thank you very much.

Siva Sivaram: Thank you.

Operator: Our next question comes from the line of Ben Kallo with Baird. Please proceed.

Ben Kallo: Hey,

Aman S. Gupta: good evening, guys. It was great to see you last week. One thing I noticed when I was visiting is your supply partners

Ben Kallo: there. I just want to get a sense of how they are thinking about your future or potential customers outside of Volkswagen. I know you guys have done a lot of work with supply chain, so if you could talk about that and just how that helps you with new potential customers.

Siva Sivaram: Ben, great to see you last week. Thank you for being here. You are 100% correct. The QuantumScape Corporation ecosystem is very important to us. This level of technology change cannot be done by a single company. It requires a whole ecosystem to move this forward. Whether it be in capital equipment, whether it be in advanced materials, whether it be in things like software and AI systems, there are places where we need help. Murata and Corning being able to take over and run the manufacturing for the ceramic separator is a big step forward for last year.

Ben Kallo: In our

Siva Sivaram: solid-state symposium that we hosted in Kyoto, we brought together, similarly, our tool vendors from across the world to be there. And you saw some of these suppliers here in the U.S. who helped us build the Eagle Line. These folks are very excited about the possibility of us expanding further into other form factors, into other markets, into new customers both in the automotive and non-automotive space. We are counting on their support, and we will be expanding the ecosystem continuously to make sure that we can bring this along.

Kevin Hettrich: And again, Kevin is very passionate about our secure supply chain, and let him

Siva Sivaram: talk about that. Yes. So

Kevin Hettrich: as Siva mentioned, in the ecosystem we are building where there are customers, there are cell manufacturers, certain suppliers of materials and equipment. As you add more activity to it, it makes the whole stronger. Certainly from the view of some manufacturer or supplier of equipment or materials, more additional end markets and expanding and deepening automotive relationships is a good place to sell their goods and services into. But then from the flip side, if you are a QSE-5 customer or manufacturer themselves, having a ready supply chain with the world’s leading examples in their respective spots only strengthens the value proposition as well.

So we are very excited with the progress that we made in 2025, and our goal is to continue that moving forward into 2026.

Siva Sivaram: And, Ben, equally important is the people you did not see in that group. You did not see a graphite supplier. You did not see an anode supplier. So securing the supply chain is as much for us about making sure that the suppliers that we need are there as much as making sure that we are not unduly dependent on any one material from any one place. So that also helps us in securing our supply chain.

Ben Kallo: Thank you. You know, we see OEMs retrenching or retreating, however you want to characterize it, and, you know, there is excess cell capacity out there. And I just wonder how that impacts your discussions with new potential customers. Yeah. I will leave it there, and thank you, guys.

Siva Sivaram: Ben, thank you. Yes. So, clearly, there is turbulence in the marketplace, at least in the U.S. However, the folks, especially at the senior levels in these companies as we talk to,

Operator: consistently are

Siva Sivaram: more optimistic about the long term. We see the fact that electrification as a longer term is still the right way to do it. The more we see about, for example, self-driving vehicles, navigation systems, you start to see there are other vectors that are forcing the EV conversion. So every customer we talk to is upbeat about two things: application, but in particular, solid-state batteries. Both are things that they come to talk to us about, and we sense that excitement with our partners.

Kevin Hettrich: And we hope you can see that some of these themes were certainly playing out in 2025. And against that backdrop, we expanded the VW/PowerCo collaboration agreement. We signed two new joint development agreements. We added a new technology evaluation agreement. We think that is consistent with the excitement that Siva mentioned. And while you used the word retrenchment, the automotive industry still is growing. It still is very much a growth sector. So the short, medium, and long-term prospects we think are still of growth.

Ben Kallo: Great. Thank you, guys. Appreciate it.

Siva Sivaram: Thank you.

Operator: Our last question comes from Leisha Satt with HSBC. Hi, Siva. Hi, Kevin. How are you? Thanks for having us last week. I just have one question because my brief answer was already answered. But I wanted to know if you have any KPIs that you can share with us on how you will measure the goals that you set for 2026?

Siva Sivaram: Leisha, it was great to see you last week. Thank you. Thank you for being here. Clearly, the four goals that we have outlined are all very quantitative for us inside the company.

Kevin Hettrich: Whether it is

Siva Sivaram: about the Eagle Line demonstrating the efficiency and scaling of the Eagle Line for the purpose that we just talked about, whether it is about making sure that we expand,

Kevin Hettrich: advance our partnerships with the automotive

Siva Sivaram: markets, whether it is to go beyond the QSE-5 and expand into high-value markets. Each of those is an extremely important vector for the company to continue to progress on.

Kevin Hettrich: We will

Siva Sivaram: continue to update you as we progress on each of those, and you will see this progress as we give you updates. And our job is to make sure that, just like we did last year, tell you what we are going to do, and then do as we say and on time, and give you the updates.

Operator: Okay. That makes a lot of sense. And just one last thing. I know you mentioned that your focus is still automotive, but when you eventually start looking at other applications, does the Eagle Line require major adjustments depending on the segment that you cater to? And will this imply a higher CapEx also, like, you know, for the customers? You said that the blueprint is easily adjustable to each customer’s needs, but does this imply that they need to invest more to adjust to whatever they want to create because it is depending on the market or segment that the customer is in?

Siva Sivaram: Yeah. This is the dilemma. This is the reason we chose the licensing business model. In the battery business, every customer wants their unique form factor. If we try to set up a line for everyone else, it becomes untenable. What we have done is a foundational technology, a scalable blueprint that we can do it. But any change that we do for any specific customer, clearly, we expect that as part of the earlier payment we would be working with them on financial arrangements to make sure it is done, that we stay capital light.

And when we take our technology roadmap and show it to our customers, we clearly set the expectation that we intend to be a capital-light licensing company. Okay.

Operator: Well, thank you so much, Siva. And congrats again on the inauguration.

Siva Sivaram: Thank you, Leisha.

Operator: Thank you, ladies and gentlemen. This concludes our Q&A session for today, and I will pass it back to Siva Sivaram for closing comments.

Kevin Hettrich: Thank you, Operator. Finally, today, I want to recognize the entire

Siva Sivaram: QuantumScape Corporation team for their execution in Q4 and throughout 2025.

Aman S. Gupta: And I want to thank our shareholders for their continuous support.

Siva Sivaram: We look forward to updating you on our progress in the months ahead. Thank you.

Operator: This concludes our conference. Thank you all for participating, and you may now disconnect.

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