Skip to content
    QS
    Earnings call· Jun 2026(Q2 FY26)

    QuantumScape Corp QS

    Jul 22, 2026 Source

    Executive summary

    QuantumScape Q2 FY26 — Honda Partnership and New Verticals Drive Progress

    QuantumScape reported a pivotal quarter, securing a new partnership with Honda and restructuring into three verticals to capitalize on broad demand for its solid-state battery technology. The company is making operational strides with its Eagle Line, aiming to double cell output in the second half of the year, while managing significant R&D investments. The updated PowerCo agreement reflects evolving milestones, maintaining a neutral cash impact.

    Highlights

    5

    • Secured a multi-year partnership with Honda for solid-state battery technology, expanding into new high-value markets.

    • Updated Volkswagen PowerCo collaboration with milestones focused on automotive cell development and larger format cells, maintaining a strong relationship.

    • Established three new business verticals (QSEV, QSDC, QSAS) to address diverse customer needs in EVs, AI data centers, and aerospace/defense.

    • Eagle Line pilot production is ramping, with core tools showing >90% uptime and cell output planned to double in H2 2026.

    • Achieved 2026 customer billings goal of $21.8 million by Q2, exceeding FY25 billings of $19.5 million.

    Concerns

    3

    • Adjusted EBITDA loss was $64.2 million in Q2, with full-year guidance reiterated at $250 million to $275 million.

    • The total possible payments under the PowerCo agreement reduced from $131 million to $75 million, though offset by reduced expenses.

    • Demonstrating scalable production of unique technology on a first-of-a-kind automated line remains a significant challenge.

    Guidance & targets

    4
    CategoryTargetConfidence
    Adjusted EBITDA loss
    between $250 million and $275 million
    high materiality
    High
    Capital Expenditures
    between $27 million and $37 million
    medium materiality
    High
    Customer Billings
    exceed customer billings in 2025
    medium materiality
    High
    Eagle Line Cell Output
    further double cell output
    high materiality
    Medium

    Operational metrics

    8
    Adjusted EBITDA loss
    $64.2 millionin line with expectations
    Q2 FY26

    Adjusted EBITDA loss for the second quarter.

    Customer Billings
    $10.8 million
    Q2 FY26

    Total value of invoices issued to customers and partners in Q2.

    Customer Billings
    $21.8 millionexceeding fiscal year 2025 customer billings of $19.5 million
    YTD Q2 FY26

    Cumulative customer billings through Q2 2026, already surpassing the previous fiscal year's total.

    Volkswagen PowerCo Agreement Total Possible Payments
    $131 million
    Prior agreement

    Total possible payments under the previous 2025 collaboration agreement with Volkswagen PowerCo.

    Volkswagen PowerCo Agreement Total Possible Payments
    $75 millionreduced from $131 million
    Updated agreement

    Total possible payments under the updated collaboration agreement with Volkswagen PowerCo, with a net neutral financial impact due to reduced expenses.

    Volkswagen PowerCo Royalty Prepayment
    $130 millionunchanged
    Ongoing

    Prepayment amount from PowerCo that is released by technical milestones and form factor alignment.

    Eagle Line Core Tools Uptime
    >90%
    Q2 FY26

    Uptime for core tools on the highly automated pilot cell production line.

    Eagle Line Cell Output Growth
    double
    H2 2026

    Aim to further double cell output in the second half of 2026.

    Industry KPIs

    2
    MetricValueDetails
    Adjusted EBITDA ebita$64.2 million lossUSD
    Cash investments balance$859 millionUSD

    Product announcements

    2
    ProductTypeDetails
    Larger Area Separatorsmilestone
    QSE-5 Safety Profileupdate

    Deals & partnerships

    4
    HondaMulti-year agreement to advance solid-state lithium metal battery technology for automotive and other applications.multi-year

    Partnership results from a rigorous assessment of QuantumScape's technology, leveraging Honda's engineering excellence and investments in solid-state battery manufacturing.

    Volkswagen PowerCoUpdated collaboration and licensing arrangement with a set of milestones and payments.up to $75 million

    Milestones focused on automotive cell development, larger format cells, and future technology roadmap. Eliminated MotoE related milestones. The $130 million prepayment is unchanged.

    an additional automotive OEM customerShipped cells to an additional automotive OEM customer.

    Strengthening relationships with automakers in North America, Europe, and Japan.

    a major American defense primeShipped QSE-5 cells to a major American defense prime.

    Part of the QSAS (Advanced Solutions) vertical, engaged with global players across aerospace and defense industries.

    Risks & headwinds

    3
    Demonstrating scalable production of a unique technology on a first-of-a-kind automated line.ongoing

    significant challenge

    Mitigation: Applying systematic, methodical, and iterative approach; Eagle Line core tools showing >90% uptime; aiming to double cell output in H2 2026.

    Uncertainties posed by the difficulty in predicting future outcomes.future

    could cause actual results to differ materially

    Mitigation: Referenced in Safe Harbor statement, inherent risk in technology development.

    Reduction in total possible payments under the Volkswagen PowerCo agreement.through Q2 2028

    reduced from approximately $131 million to approximately $75 million

    Mitigation: Projected significantly reduced expenses for the project, resulting in a net neutral financial impact in terms of cash.

    What to watch in Q3 FY26

    5

    Eagle Line Cell Output

    H2 2026
    Currentcurrently ramping sample volumes
    Targetdouble cell output

    Why it matters

    Increased output is crucial for meeting customer demand, accelerating process development, and enabling technology transfer for higher volume production.

    As we continue to improve process stability and control, we aim to further double cell output in the second half of 2026 and anticipate customer sample shipments accelerating across all three verticals.

    Q&A highlights

    7

    Why did the updated PowerCo agreement shift away from execution-oriented targets (like cell delivery/validation) to development/technology objectives, and does this change expectations for timing/achievability of earlier milestones?

    Siva explained that the agreements are updated annually based on progress, and the objectives remain unchanged. The new milestones align with their technology roadmap, including larger format cells and future technology. There is no philosophical difference in the program's objectives.

    “The Volkswagen PowerCo agreements, we update them every year. We have done that 3 years in a row. As the relationship progresses, we update it based on the milestones yet to come. We have done that consistently. The relationship is very strong. Our objectives remain the same.”

    asked by Gabriel Gonzales · answered by Siva Sivaram

    2 min read5 chapters

    Detailed Narrative

    01

    Strategic Partnerships and Commercialization

    QuantumScape announced a multi-year partnership with Honda, a top 10 automotive OEM, to advance solid-state lithium metal battery technology for automotive and other applications. This collaboration follows a rigorous assessment and expands QuantumScape's reach into new high-value markets. The company also updated its agreement with Volkswagen PowerCo, focusing on automotive cell development and larger format cells, while continuing joint development with two other top 10 OEMs and shipping cells to an additional OEM.

    02

    New Business Verticals

    To serve its diverse and growing customer base, QuantumScape established three business verticals: QSEV for electric vehicles, QSDC for AI data centers, and QSAS for advanced solutions including aerospace and defense. QSDC is engaged with ODMs for AI data center solutions, and QSAS has shipped QSE-5 cells to a major American defense prime, indicating broad applicability of the core technology.

    03

    Eagle Line Production Progress

    The highly automated Eagle Line pilot cell production facility in San Jose is making significant operational progress, with core tools showing over 90% uptime. This line is crucial for meeting customer sample demand, accelerating process development, and proving scalable production. The company aims to double cell output in the second half of 2026, accelerating customer sample shipments across all three verticals.

    04

    Technology Advancements and Safety

    QuantumScape highlighted the safety profile of its QSE-5 technology, noting its non-flammable ceramic separator and non-combustible nature, which offers improved safety compared to conventional lithium-ion cells. Larger scale safety testing, including nail penetration, external short circuit, and thermal stability up to 300 degrees Celsius, continues to show superior safety. The company also demonstrated the ability of its Cobra process to produce larger area separators for higher capacity cell designs, addressing customer interest.

    05

    Financial Performance and Capital Discipline

    The company reported an Adjusted EBITDA loss of $64.2 million in Q2, reiterating its full-year 2026 guidance of $250 million to $275 million. Capital expenditures for Q2 were $4.6 million, and full-year CapEx guidance was lowered to $27 million to $37 million, reflecting capital discipline. Customer billings reached $21.8 million through Q2, already exceeding the full-year 2025 total of $19.5 million, demonstrating progress in commercialization.

    AI-generated summary of the company’s earnings call. Not investment advice.