2 Reasons QuantumScape Is a Buy After Its 143% Run-Up

Key Points

• QuantumScape has jumped 143% higher year to date.

• Volkswagen and QuantumScape are expanding their strategic collaboration.

• QuantumScape's highly publicized motorcycle demonstration took its battery tech from the lab to the real world.

• 10 stocks we like better than QuantumScape ›

Finally! 2025 appears to be the year QuantumScape (NYSE: QS) investors have long waited for, the moment when the market appreciates what the company is doing and sends its valuation soaring.

QuantumScape's stock price has soared 160% higher year to date on enthusiasm about the company producing solid-state lithium-metal batteries that excel in five crucial metrics: energy density, charging speed, safety, lifespan, and cost-effectiveness. Essentially, QuantumScape is developing the battery of the future that could drastically change the electric vehicle (EV) industry.

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That's a lot of stock price appreciation already, though. Is QuantumScape still a buy after already managing such an impressive rise?

Image source: QuantumScape.

Reason No. 1: QuantumScape expands partnership with Volkswagen

Part of what fueled QuantumScape's rise to date was its strategic collaboration and licensing arrangement with PowerCo, the battery company of Volkswagen Group (OTC: VWAGY). Recently, news came out that there is now an expanding strategic collaboration and licensing agreement with PowerCo.

Under the new terms, PowerCo will provide up to $131 million in new payments over the next two years if the joint scale-up team achieves certain milestones. The first achievement has already been reached. QuantumScape will begin receiving payments this year, and these cash inflows are in addition to the previously announced $130 million that will be due to QuantumScape upon technical progress and execution of the licensing agreement.

This expanding partnership will enable PowerCo to engage earlier in its production of QSE-5 battery cells, accelerating the timeline of QuantumScape's pilot line development. "This expanded agreement is a clear signal of the growing strategic, technical and financial alignment between the two companies," said Dr. Siva Sivaram, CEO and president of QuantumScape, according to Morningstar. "It reflects our shared confidence in QSE-5 as a game-changing platform for the battery industry."

It can't be overstated just how important this partnership is to QuantumScape. It's the company's first step toward its endgame: commercial production of groundbreaking solid-state batteries. QuantumScape has locked in an incredibly valuable partner in global powerhouse Volkswagen, giving the young battery manufacturer the potential scale it needs.

Reason No. 2: QuantumScape demonstrates its battery technology works

On paper, QuantumScape's solid-state batteries are the holy grail for electric vehicles, and one day may have uses beyond the auto industry. Solid-state lithium metal batteries use materials and a chemical process that allow for greater energy storage (i.e., more range/power), better safety (far less likely to catch fire or explode), faster charging, and a significantly longer lifespan compared to conventional lithium-ion batteries.

Earlier this month, the company's battery technology jumped from dream to reality as it premiered a live demonstration of QS solid-state lithium-metal batteries powering an electric vehicle. At Volkswagen's press conference at IAA Mobility, the highly publicized demonstration showcased a Ducati motorcycle equipped with QSE-5 battery cells, which were made using QuantumScape's highly anticipated Cobra production process.

The demonstration was a significant advancement in battery technology, moving solid-state batteries from the laboratory to the real world. QuantumScape's battery technology currently includes 844 Wh/L energy density and roughly 12-minute fast charging from 10% to 80% charge state, with more advancements promised. The average energy density for current EV lithium-ion batteries is a wide range between 250 Wh/L to 700 Wh/L, depending on the many variations of chemistry out in the market.

"The EV revolution is the biggest transformation the automotive industry has ever seen," said Frank Blome, CEO of PowerCo, in a press release. "Solid-state batteries will redefine what's possible for high-performance, premium vehicles, and today's historic demonstration is just the beginning."

What it all means for QuantumScape investors

Investors have long waited for a run-up in QuantumScape's valuation, as the company has nearly unrivaled potential if it beats competitors to the market with its solid-state battery technology. It truly has the potential to be a game-changer.

Despite the 143% stock price run-up so far in 2025, the future potential is still sky-high for the company, especially as it finally begins generating some revenue, and even that's just barely scratching the surface of its partnership potential with PowerCo. The future appears bright for QuantumScape and its long-term investors, but be aware that risk remains, and high-risk companies such as QuantumScape should have only a small position in any portfolio.

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Daniel Miller has no position in any of the stocks mentioned. The Motley Fool recommends Volkswagen Ag. The Motley Fool has a disclosure policy.