VW and Quantumscape ink new solid state battery co-operation

Powerco, the battery arm of German OEM VW Group and challenger US battery firm Quantumscape (QS) have struck a new agreement aiming to industrialise the latter’s solid-state battery technology.

VW, which invested $300mn into QS in the 2018-2021 period, will continue to remain its largest shareholder. According to the Wall Street Zen website, the investment arm of Volkswagen of America holds a 13.66pc stake in the company, while VW’s head of M&A Jens Wiese (10.61pc) and Powerco CEO Frank Blome (7.57pc) are the second and third largest shareholders.

Under the deal, upon what is deemed “satisfactory technical progress and certain royalty payments”, QS will grant Powerco a non-exclusive license to mass produce battery cells based on its technology platform.

Powerco will be allowed to manufacture up to 40GWh/yr using QS technology, with the option to expand up to 80 GWh/yr. The companies aim to develop a product that will be scaled-up for integration in a VW Group vehicle series.

The two firms hope to foster “a highly collaborative partnership that amplifies the companies’ core competencies — Quantumscape’s cutting-edge technology and Powerco’s global capabilities in industrialisation and manufacturing facilities”, aiming to “accelerate the industrialisation” of QS technology. It also promises a “large, dedicated scale-up team, composed of experts from both companies”.

“With this co-operation, we aim to bring the most sustainable and cutting-edge battery cells to our customers,” says Blome. “We have been collaborating and testing Quantumscape prototype cells for years now and we are looking forward to bringing this technology of the future into series production. Quantumscape’s technology is poised to enter a pivotal stage where Powerco’s specialised expertise, resources and global factories can help facilitate the transition to industrial-scale production.”

“This agreement with Quantumscape will ensure the Volkswagen Group’s global fleet has access to this groundbreaking battery technology for years to come,” adds Thomas Schmall, VW Group board member for technology.

“This agreement is a major step in our long-term global scale-up strategy to bring Quantumscape’s solid-state lithium-metal battery technology to market,” says QS CEO Siva Sivaram. “This deal establishes a blueprint for a capital-light business approach. Working closely with Powerco as our first customer will help us accelerate commercialisation and adoption of these game-changing batteries together.”

QS shipped its first prototype cells to prospective customers in the fourth quarter of 2022 and, in November last year, hailed “exceptional” results from initial customer testing. It then shipped a second version in March this year. In April, the firm suggested it would likely have to go to the capital markets again before commercial launch, or alternatively look to automotive OEM joint ventures as a source of funding.

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QS' technology platform is based on the firm’s proprietary solid-state ceramic separator, which enables the use of a pure lithium-metal anode — what it describes as “a transformative innovation that is designed for exceptional energy and power density, fast charging and a robust safety profile”. It anticipates full commercialisation and GWh scale production "sometime in that end of 2026, early 2027 period", according to Sivaram.

The new agreement supersedes an earlier joint venture between VW Group and QS to co-manufacture batteries.