QuantumScape Stock Is Down 63%. Is It Finally Time to Buy?

Last year was a notable one for QuantumScape (NASDAQ: QS), as the company accomplished crucial milestones with its groundbreaking battery technology. One key was upgrading its production process, resulting in efficiencies that should bring the battery technology company one step closer to mass production.

However, it still faces a long road to commercial success, and the stock is down 63% from its 52-week high. With shares trading around $7 per share, is now the time to buy QuantumScape?

QuantumScape has upgraded its production process

In June, QuantumScape announced that its Cobra process had been integrated into its baseline cell production, delivering a significant improvement in heat-treatment speed while requiring significantly less floor space. These solid-state lithium-metal batteries feature an energy density of over 800 Wh/L and fast charging in under 15 minutes. The company shipped its Cobra-based QSE-5 cells to Volkswagen, which featured them on a Ducati V21L race bike in September.

In addition, it installed its highly automated pilot cell production line, known as the Eagle Line, in San Jose, California. Incorporating its new Cobra process, the Eagle Line is a scalable production blueprint that QuantumScape intends to transfer to its licensing partners. The Eagle Line production process debuted last month and is another step toward producing high-quality ceramic separators at scale, which will be crucial for the next step in mass production.

The battery company looks to expand beyond the automotive market

QuantumScape doesn't see itself limited to the automotive sector; the company believes expanding into new high-value markets presents numerous growth opportunities. While the automotive market will remain a primary focus, it views battery technology as a disruptive force and sees a "rapidly expanding landscape of opportunities" across markets such as data centers, robotics, aviation, and defense.

The high energy density of solid-state batteries could be ideal for powering demanding autonomous and robotic applications. It is also targeting the aviation sector, where lightweight, high-capacity energy storage is critical. As the company approaches commercial production, investors will want to monitor QuantumScape's progress in expanding into these alternative industries.

QuantumScape's cash burn remains a concern

QuatumScape is actively pursuing a capital-light business model, but the timeline for realizing revenue depends on the commercialization of its battery technology. It hasn't generated revenue from its primary business, and in 2025, it reported a net loss of $435 million and an operating loss of $473 million.

The battery technology company doesn't expect to begin commercial production in the near future. It ended last year with $971 million in liquidity and believes it has sufficient cash on hand to fund its working capital and capital expenditures for at least the next 12 months.

QuantumScape's battery technology could represent an important leap forward in energy storage, but it is still in development and requires significant capital. I think its future could be bright, but for now, most investors are better off keeping it on a watch list and monitoring ongoing developments before investing.

Courtney Carlsen has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.