QuantumScape Corp. (QS) saw its stock soar 5.13% on September 26th, 2024, as investors reacted positively to the company's strategic pivot to a capital-light licensing model through a partnership with Volkswagen's battery subsidiary, PowerCo.
The agreement with PowerCo extends QuantumScape's cash runway to 2028, mitigating balance sheet stress and concerns about its financial situation. Under the deal, QuantumScape will receive $130 million in royalties from PowerCo for a non-exclusive license to produce between 40 and 80 gigawatt-hours of batteries per year.
This licensing strategy allows QuantumScape to materialize revenues while reducing the need for substantial capital expenditure on its own manufacturing facilities. PowerCo will be responsible for the CapEx for production scaling, freeing up $134 million for QuantumScape, according to the company's estimates.
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