QuantumScape Corporation has expanded its strategic collaboration with PowerCo SE, the battery division of Volkswagen Group, in a deal that provides up to $131 million in new funding over two years and advances the development of solid-state lithium-metal battery technology.
The expanded agreement, building on an initial partnership announced in July 2024, is designed to accelerate development of QuantumScape’s QSE-5 battery at the company’s pilot production line in San Jose. PowerCo will provide the funding as joint scale-up teams achieve specific milestones, with the first milestones already completed and payments expected to begin in 2025.
This funding comes in addition to a previously announced $130 million that PowerCo will pay upon satisfactory technical progress and execution of the licensing agreement. Under the updated terms, PowerCo gains the right to produce an additional 5 gigawatt-hours of QSE-5-based cells annually, including for customers outside the Volkswagen Group.
The broader licensing agreement allows PowerCo to manufacture up to 40 gigawatt-hours per year using QuantumScape’s technology platform, with an option to expand to 80 gigawatt-hours annually. This production capacity could supply batteries for approximately one million vehicles per year.
QuantumScape’s technology centers on a proprietary solid-state ceramic separator that enables the use of a pure lithium-metal anode, designed to deliver high energy and power density with fast charging capabilities. The companies will combine their expertise through a dedicated scale-up team composed of specialists from both organizations.
“This expanded agreement is a clear signal of the growing strategic, technical and financial alignment between the two companies,” said Dr. Siva Sivaram, CEO and president of QuantumScape. “It reflects our shared confidence in QSE-5 as a game-changing platform for the battery industry.”
PowerCo CEO Frank Blome emphasized the collaboration’s potential: “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.”
As part of the partnership changes, Blome stepped down from QuantumScape’s board of directors, where he had served since 2020 as one of two Volkswagen Group-designated board members. Volkswagen Group remains QuantumScape’s largest shareholder, and Blome’s successor will be announced in coming months.
The agreement supersedes an earlier joint venture between Volkswagen Group and QuantumScape and represents the companies’ strategy to achieve large-scale production of solid-state battery technology to meet growing demand for electric vehicle batteries.
