QuantumScape (NYSE:QS) said it is expanding its manufacturing plans after bringing its Eagle Line pilot facility into operation, announcing a planned 100-megawatt-hour mass-production line intended to serve data center, aerospace, defense and other advanced applications.
Chief Executive Officer Dr. Siva Sivaram said startup production from the new line is targeted for 2028. The company also announced an ecosystem partnership with Muehlbauer Group, which will provide cell-assembly equipment for the planned facility.
QuantumScape said the Eagle Line, inaugurated in February, has become central to its customer-sampling efforts and has enabled increased customer billings. Sivaram said the pilot line, along with the company’s Cobra production process, has demonstrated scalable production and provided the confidence to pursue a larger manufacturing step.
Production Strategy and Funding
The proposed 100-MWh line is expected to primarily support QuantumScape’s data-center and advanced-solutions businesses, rather than automotive production. Sivaram said the company intends to retain its capital-light licensing strategy for automotive customers with their own manufacturing capacity, including Volkswagen PowerCo and Honda.
“This line lets us serve high-value markets directly while keeping our CapEx-light licensing model for automotive,” Sivaram said.
QuantumScape is targeting equipment costs of less than $100 million for the production line, according to Sivaram. The company said it is pursuing non-dilutive funding from customers, government sources, ecosystem partners and licensing partners. It expects to provide a capital plan and 2027 financial guidance on its fourth-quarter earnings call.
The company has not selected a site for the facility and said it would disclose the location at an appropriate time. Sivaram described the equipment-design, construction and installation process as the project’s longest-lead-time component.
QuantumScape said partnerships with Murata, Corning and Muehlbauer now span the company’s production flow, from materials and separators through cell assembly. Management said the partnerships are intended to support an end-to-end manufacturing solution as the company works toward eventual gigawatt-hour-scale production.
Data Center and Advanced-Application Push
During the quarter, QuantumScape introduced its QS PowerBlock reference design for in-rack energy storage at AI data centers. The company launched the product alongside the Open Compute Project Global Summit on Oct. 8.
The company said testing of the QS PowerBlock showed four times the power density and five times the runtime of the relevant Open Compute Project reference specification. Sivaram said the product is designed around the QSE-5 cell and is intended for data-center architectures where racks are expected to require increasing amounts of power.
Management emphasized battery safety as a key part of its pitch to data-center customers. QuantumScape said conventional lithium-ion batteries, including lithium iron phosphate batteries, are not thermally stable above approximately 180 degrees Celsius, while its solid-state batteries have demonstrated thermal stability above 300 degrees Celsius in customer and third-party laboratory testing.
Sivaram said customers have expressed interest in obtaining QS PowerBlock products in volume, which helped support the decision to move forward with the 100-MWh line. He said the 2028 production target aligns with the data-center industry’s expected timeline.
QuantumScape’s QS Advanced Solutions, or QSAS, business is pursuing applications in defense, aerospace, medical devices, consumer electronics and telecommunications. The company said it shipped QSE-5 samples to customers in the defense, aviation and telecommunications sectors and recorded its first QSAS customer billing in the third quarter.
Management said QSAS could address a total market of up to $75 billion by 2030. Sivaram also cited the company’s U.S.-based manufacturing and supply-chain design, including the absence of graphite in its architecture, as differentiators for defense and aerospace applications.
Automotive Development Continues
QuantumScape said automotive cell-development engagement remained robust across global customers. In the third quarter, it recorded its first customer billings under the Honda agreement announced in June. That agreement covers joint development work to integrate QuantumScape’s solid-state battery platform into Honda’s technology roadmap.
The company also signed an agreement with an unnamed global mobility manufacturer whose applications and requirements are aligned with automotive customers. Sivaram said active customer engagements beyond Honda and Volkswagen PowerCo include two other top-10 original equipment manufacturers.
QuantumScape is updating its statement of work with Volkswagen PowerCo and said it amended its collaboration agreement to eliminate transition payments while working to add milestones tied to technology advances. Sivaram said the PowerCo relationship remains strong and is evolving toward milestone-based payments, with potential expansion to applications including data centers and robotics.
The company plans to provide further details on its next-generation technology platform and automotive collaboration model at its Solid-State Battery Symposium on Nov. 11 in Kyoto, Japan.
Third-Quarter Financial Results
Chief Accounting Officer Agnes Tan reported third-quarter GAAP operating expenses of $92.4 million and a GAAP net loss of $84.5 million. Adjusted EBITDA loss was $60.7 million, which Tan said was in line with expectations.
- Customer billings: $9.8 million
- Capital expenditures: $4.4 million
- Liquidity at quarter-end: $819.8 million
- Full-year 2026 adjusted EBITDA loss guidance: $250 million to $275 million
- Full-year 2026 capital-expenditure guidance: $27 million to $37 million
Tan said customer billings included automotive and non-automotive customers, development activity, ecosystem-partner payments and cell shipments. She cautioned that customer billings are an operational metric rather than a substitute for revenue reported under U.S. GAAP and may fluctuate between quarters.
About QuantumScape (NYSE:QS)
QuantumScape Corporation is a development-stage battery technology company focused on solid-state lithium-metal batteries. Its technology is designed to replace the liquid or gel electrolytes used in conventional lithium-ion batteries with a solid-state separator, with the goal of improving energy density, charging performance, safety and operating range for electric vehicles.
The company is developing prototype battery cells and related manufacturing processes for automotive applications.
