QuantumScape: Buy the Next Dip Amid Q2 2025 Earnings Volatility

QuantumScape Corporation (QS) is making steady progress toward commercialising its solid-state battery technology. The company continues to invest in pilot production, R&D, and strategic partnerships. In Q2 2025, it expanded its collaboration with PowerCo and strengthened its cash position. Despite short-term losses, QuantumScape is focused on scaling up and meeting long-term milestones. This article presents the fundamental and technical developments of QuantumScape to help understand the stock’s next move.

QuantumScape Q2 2025 Financial Overview

QuantumScape spent $8.3 million on capital expenditures in Q2 2025. Most of this spending supported equipment and facility upgrades for QSE-5B pilot production using the Cobra separator process. The company narrowed its full-year capex guidance to between $45 million and $65 million. This reflects tighter cost management as it progresses toward commercial readiness.

Capital Expenditure Trends Reflect Tighter Cost Control and Growth

The chart below shows that the net change in capital expenditures have dropped from 2021 to late 2022, reaching a low point of around -$160 million. However, the spending steadily recovered through 2023 and into mid-2025, improving to -$43.23 million.

This trend signals stronger cost discipline and optimised spending. The rising capital expenditure is a positive sign that supports production scaling and long-term growth. As a result, improved capital allocation could lift confidence and potentially support upward movement in QuantumScape stock price.

Moreover, the total operating expenses for Q2 were $123.59 million, with a net loss of $114.7 million. The chart below shows that QuantumScape’s total operating costs have steadily risen since 2020 and remain high. At the same time, net income has consistently stayed negative. This trend reflects the company’s continued investment in R&D and scaling operations without yet achieving profitability.

High Operating and R&D Expenses Signal Long-Term Commitment

The continued investment in R&D is also seen in the R&D expenses in the chart below. The chart shows a steady rise in quarterly R&D expenses, reaching $101.18 million by Q2 2025. This upward trend highlights the company’s aggressive investment in solid-state battery development and technological innovation. The consistent increase reflects its focus on advancing from prototype to commercial scale.

While high R&D spending signals a strong commitment to innovation, it also adds pressure on profitability and cash flow. The reason for the short-term price drop is the company’s consistent expenses, but these expenses will likely return profits in the long term. Therefore, it is a good time for investors to invest in the company’s future.

Moreover, the adjusted EBITDA stood at a loss of $63.0 million, as per expectations. QuantumScape lowered its full-year guidance for adjusted EBITDA loss to a range of $250 million to $270 million. This reduction highlights cost-saving efforts and improved process efficiency from the Cobra process.

QuantumScape closed the second quarter with a strong cash position of $797.5 million. The company extended its projected cash runway through 2029, marking a six-month improvement over earlier estimates. Executives noted that further inflows from partnerships and financing activities could boost liquidity. This financial cushion enables the firm to maintain momentum in its R&D and production scale-up efforts.

PowerCo Partnership and Battery Market Growth Fuel Long-Term Potential

QuantumScape gained a significant growth catalyst through its expanded partnership with PowerCo, a Volkswagen subsidiary. The deal adds up to $131 million in new milestone payments over the next two years. These payments will support QSE-5 pilot line production and automation efforts. The agreement enables PowerCo to scale early production and receive higher-volume prototype cells. It also grants PowerCo rights to license future QS technologies and deliver up to 5 GWh of QSE-5 cells annually. This expansion signals strong technical and financial confidence. It validates QuantumScape’s battery platform and strengthens its path to commercialisation.

On the other hand, the projected growth in the global battery technology market offers a massive tailwind for QuantumScape. The chart below shows that the market may expand from $121.23 billion in 2024 to over $256 billion by 2034. This surge may increase the demand for advanced battery solutions. QuantumScape is well-positioned to capitalise on this trend. The company’s focus on commercialisation and strategic licensing can help it secure a meaningful share of this growing market. This macro growth backdrop strengthens the long-term bullish case for the stock.

QuantumScape has made steady progress since its founding in 2010. It began its partnership with Volkswagen in 2012. In 2016, the company demonstrated the world’s first solid-state separator meeting automotive needs. By 2018, it formed a joint venture with VW and validated lithium-metal cell cycling. The company showcased a commercial-size single-layer prototype in 2020. In 2022, it started shipping A0 prototypes to automakers. Then, these prototypes achieved 1,000 cycles with over 95% capacity retention in 2023. In 2024, PowerCo began low-volume shipments of QSE-5 samples. Now in 2025, the Cobra separator has entered baseline production.

Roadmap Highlights Milestones from Prototype to Scale-Up

As per the QuantumScape investor presentation, the company shows a clear path toward commercialisation. In 2024, the company shipped Alpha-2 samples and began low-volume QSE-5 B0 production. It also ramped up the Raptor process and prepared for Cobra production.

In 2025, it plans to expand commercial engagements and install high-volume equipment with PowerCo. QuantumScape will ship QSE-5 B1 samples and begin Cobra baseline production. By 2026, it targets its first customer launch and broader commercial expansion. This roadmap signals strong execution and forward momentum.

Examining the Key Technical Levels for QuantumScape

The weekly chart for QuantumScape shows that the stock has been trading within a long-term consolidation zone since the sharp decline in 2022. In June 2025, the stock initiated a strong rally, reaching a high of $15 ahead of the Q2 2025 earnings release.

However, the $13.50 level acted as a strong resistance zone, causing the stock to pull back, similar to previous declines seen in July 2023 and late 2022. Despite the correction, the drop remains within a broader bullish structure. The stock may form a new support base at lower levels before attempting another rebound.

Notably, the steep decline from the 2021 high of $132.73 continues to define the longer-term trend. A breakout above $13.50 could open the path toward $20. Moreover, a successful move above $20 may trigger a rally toward $39. A decisive break above $39 would confirm a long-term bottom and signal a sustained bullish reversal for QuantumScape.

Growing demand for solid-state batteries, the rise of electric vehicles, and increasing focus on renewable energy and energy storage continue to fuel volatility in the battery sector. These macro trends could support QuantumScape’s long-term bullish outlook despite near-term resistance levels.

Short-Term Volatility Suggests Bullish Momentum

The short-term outlook for QuantumScape reflects high volatility, with the stock struggling to break out from lower levels into bullish territory. A strong rally from the $4 region to nearly $15 occurred ahead of the Q2 2025 earnings release. However, the reported net loss triggered a sharp correction, pulling the stock back toward previous levels.

Notably, the 50-day SMA is crossing above the 200-day SMA, marking a potentially bullish signal. Unlike previous attempts, this crossover indicates strengthening momentum in the stock.

The immediate support lies at $8.30. A break below this level could push the stock down to the $7 region, which aligns with support near the 50-day SMA. While short-term volatility may cause deeper corrections, the stock presents a potential buying opportunity at lower levels.

Given the strong long-term demand for battery technology and QuantumScape’s strategic developments, investors may consider accumulating the stock during dips, especially for a long-term position.

Investment Risks Facing QuantumScape

QuantumScape faces several key risks that could impact its long-term success. The company is still in the pre-revenue stage. It remains heavily reliant on successful commercialisation and licensing agreements for future cash flow. Any delays in achieving technical milestones could threaten these agreements and slow revenue growth.

In Q2 2025, the company reported a high net loss and operating expenses. These enormous expenditures highlight the pressure on QuantumScape to manage its burn rate and deliver measurable progress carefully. Moreover, accounting uncertainty over the $10 million invoiced to PowerCo could raise concerns about revenue recognition and financial transparency.

As the company moves toward scaling production, it must juggle multiple customer engagements without overstretching its internal resources. This adds complexity and potential execution risk. While the partnership with PowerCo offers funding support and validation, it also introduces dependency on a single major partner. Any change in PowerCo’s commitment or timelines could disrupt QuantumScape’s commercialisation path.

Additionally, the broader battery sector is highly competitive and subject to rapid technological change. If competitors achieve faster breakthroughs or commercial adoption, QuantumScape’s market share could suffer. Investors should stay cautious of these operational and market risks despite the company’s promising long-term potential.

Compared to its competitors, QuantumScape remains deep in the red with a quarterly loss of -$114.70 million, while peers like Lear Corporation (LEA), Gentex Corp (GNTX), and Modine Manufacturing Co. (MOD) are all generating positive and stable net income. Despite its steep losses, QuantumScape’s heavy investments in next-gen solid-state battery technology position it for significant long-term upside as the market shifts toward advanced energy storage solutions.

Final Thoughts

QuantumScape continues to show strong long-term potential despite short-term losses and volatility. The company is investing heavily in R&D and pilot production, positioning itself as a leader in solid-state battery innovation. Its expanded partnership with PowerCo and upcoming product milestones show clear momentum. The roadmap toward commercialisation remains on track, supported by strong liquidity and strategic execution.

Meanwhile, macro trends offer powerful tailwinds. The global battery market is growing rapidly, and demand for EV and energy storage solutions is rising. QuantumScape’s advanced technology and licensing model can benefit from this growth. While risks remain, the current weakness in stock price offers a buying opportunity for long-term investors.

Investors can consider buying the stock at current levels and accumulating more positions if the price drops to the $3–$4 range. A breakout above $20 would strengthen the bullish outlook, while a move above $39 could trigger the next major surge in QuantumScape.