The Battery Maker Set to Soar 10X-Plus by 2030
[Editor’s note: “The Battery Maker Set to Soar 10X-Plus by 2030” was previously published in October 2022. It has since been updated to include the most relevant information available.]
When it comes to stocks with enormous long-term upside potential, few look more compelling than QuantumScape (QS).
As the leading solid-state battery maker, the company is developing a new generation of batteries. These next-gen batteries will enable electric vehicles to drive thousands of miles on a single charge. What’s more, QuantumScape’s breakthrough could allow for fast charging (in mere minutes). Most exciting of all? It’s a “forever battery.”
That’s a big deal.
Electric vehicles are the future of transportation. That’s a foregone conclusion. But today, the average electric car only gets about 250 miles of driving range. And for that, it takes upward of an hour to fully charge. These truths impede EVs’ ability to replace gas-powered cars.
To solve these issues, we need a new type of battery. Current lithium-ion batteries are maxed out. With present battery tech, we simply can’t create EVs that drive thousands of miles or recharge in minutes.
We need a new solution.
QuantumScape is leading the charge. And that also means QS stock has some serious potential.
Introducing the Future of Batteries
While everyone is so hyped up about the EV Revolution, the plain truth is that it won’t go mainstream until we make better batteries.
To understand why, we need to take a quick trip back to chemistry class.
Batteries comprise three things: a cathode, an anode, and an electrolyte. They work by promoting the flow of ions between the cathode and anode through the electrolyte.
Conventional lithium-ion batteries are built on liquid battery chemistry. That is, they comprise a solid cathode and anode. Connecting the two is a liquid electrolyte solution.
And these batteries have worked wonders for years. But due to the constraints of liquid electrolytes, they’ve reached their energy cell density limit. So if we want our phones, watches, and electric cars to last longer and charge faster, we need a battery unlike any we’ve seen before.
Insert the solid-state battery.
With solid-state batteries, the name pretty much says it all. Take the liquid electrolyte solution in conventional batteries. Compress it into a solid. Create a small, hyper-compact battery. And since it has zero wasted space, it lasts far longer and charges far faster.
Of course, the implications of solid-state battery chemistry are huge.
Solid-state batteries could be the key to making our phones sustain power for days. They could enable our smartwatches to fully charge in seconds! And, yes, SSBs can allow electric cars to drive for thousands of miles without a recharge.
That’s why they’re dubbed as “forever batteries” by insiders. It’s the critical technology that can propel the EV Revolution into its next phase: supercharged growth.
QuantumScape Has Figured Out the Impossible
Until recently, making solid-state batteries was the stuff of science fiction. The science was just too prohibitively complex.
Then, a team of genius Stanford professors, scientists, and a few tech execs came together to simplify it. And 12 years later, QuantumScape has basically solved the solid-state battery problem.
The biggest issue with solid-state batteries is something called “dendrites.” These are small cracks that form in the solid electrolyte during charging and recharging. Eventually, they get so big that they short-circuit the battery.
Thus, the big breakthrough in solid-state batteries lies in developing a solid electrolyte material that is dendrite-resistant. And QuantumScape has cracked this code.
In late 2021, the company illustrated that its forever battery performed in 4-layer formats up to 800 charging cycles. A quarter later, it scaled successful results to 10-layer batteries up to 800 cycles. And earlier this year, QuantumScape successfully demonstrated its 16-layer battery’s successful results at over 500 cycles.
In other words, QuantumScape’s solid-state battery breakthrough is proving to work even as the company scales up the battery size.
If this trend continues, then QuantumScape will soon be commercializing effective solid-state batteries that are big enough to be used in cars. And this has big implications for QS stock.
Enormous Upside Potential in QS Stock
The battery of the future will arrive – and QuantumScape will be the company making and selling that battery.
And that means the potential upside in QS stock is enormous.
By 2030, we estimate that around 75 million new passenger cars will be sold globally. We believe about half of those cars will be EVs. Of those, we think around 10% will be outfitted with solid-state batteries. Assuming QuantumScape nabs about half of the solid-state battery market in EVs – and sells those batteries for around $7,000 a pop – the company could be looking at over $13 billion in revenues by 2030.
Assuming target 25% operating margins and a 20% tax rate, that implies potential 2030 profits of about $2.6 billion. A 20X price-to-earnings multiple on that implies a potential future valuation for QuantumScape of $55 billion – which is up 17X from the current market cap.
That’s impressive. So, if you’re looking to buy and hold a growth stock that could make you really rich, QS stock should be at the top of your list.
Buy this stock. Hold it. Wait for it to change the world.
The Final Word on QS Stock
Solid-state batteries are the future, and they represent one of the most promising technological breakthroughs of the 2020s.
Over the next few years, this emerging technology will forever change the EV industry. And, indeed, it’ll forever change the entire electronics world.
Some of the stock market’s biggest winners in the 2020s will be solid-state battery makers.
QS stock projects as one of those mega-winners. But it won’t be alone. And in fact, it won’t be the biggest winner in this space.
Indeed, we see this as the beginning of a massive Energy Transition.
Even the world’s largest company, Apple (AAPL), is getting onboard with its own autonomous EV.
Yes, the creator of the iPhone, the iPad, the Mac and the Apple Watch is making a move into the Energy Transition via the launch of its very own EV.
Considering how Apple’s previous innovations have shifted paradigms, the Apple Car will be a gamechanger for EVs.
We’re even more convinced that the companies that supply critical components for Apple Car will make fortunes for their investors.
We’ve identified one such critical parts supplier. And its stock is only trading for $3.
To prime you, I just put together a presentation about the Energy Transition. In it, I talk all about Apple’s next big product launch and the tiny supplier stock that could soar 40X as the Apple Car takes over the world.
The energy revolution is here. It’s time to plug in.
On the date of publication, Luke Lango did not have (either directly or indirectly) any positions in the securities mentioned in this article.
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