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Volkswagen Group's battery firm PowerCo plans to pay solid state battery developer QuantumScape another $130.7 million to expand a collaboration and potential licensing deal, the companies tell Axios Pro.

Why it matters: The expanded partnership is a vote of confidence in QuantumScape's battery tech, which has been in development for 15 years but isn't yet commercial. 

Driving the news: QuantumScape announced the deal as part of its second quarter earnings on Wednesday afternoon.

QuantumScape also told shareholders that it signed a second joint development deal with a large auto OEM, which the company declined to name.

Catch up quick: Last year PowerCo and QuantumScape entered into a collaboration agreement, which included a potential $130 million royalty payment.

QuantumScape went public via a SPAC in 2020, and before that was backed by the Volkswagen Group, Breakthrough Energy Ventures, Khosla Ventures, Kleiner Perkins, Prelude Ventures, and Lightspeed Venture Partners. 

Tesla's former CTO, JB Straubel, sits on the company's board.

How it works: QuantumScape's secret sauce is a solid ceramic separator that enables charging and discharging of its solid-state, lithium-metal batteries. 

The company says its batteries can deliver EVs with a longer range, safer and faster charging, longer life and lower costs at scale. 

Zoom in: This new deal doubles the cash that QuantumScape can get from PowerCo and enables QuantumScape to bring in cash flow earlier than if it had to wait until after manufacturing had been ramped up.

Getting money upfront is "an extremely important thing for the company," says QuantumScape CEO Siva Sivaram because it conveys "the technology is advanced enough that somebody is willing to pay money to go begin the transfer process."

PowerCo will pay the cash over the next two years upon achieving certain milestones. The deal also includes the right for PowerCo to produce another 5 GWh of QuantumScape's battery cells annually, as well as the right to license certain future tech. 

Zoom out: QuantumScape had been trying to commercialize its batteries by 2024, but last year pivoted to a licensing model for its tech.

The company announced a net loss of $114.42 million for the first quarter of 2025 and booked no revenue. 

The big picture: Scaling up commercial manufacturing of a new battery technology has proved daunting and has led to the downfall of many upstart battery makers — like Northvolt. 

Startups that have partnered with big battery conglomerates have fared better, like Tesla working with Panasonic.

The chip industry, which commonly works with large foundries to produce next-gen chips, could be a better model for novel battery manufacturing. 

What's next: QuantumScape still needs to deliver on its milestones to PowerCo to draw down on the cash infusions. 

Editor's note: The story was corrected to reflect that QuantumScape and PowerCo have agreed to enter a collaboration and licensing deal (but PowerCo has not yet licensed QuantumScape's tech). The photo was also updated.

Exclusive: QuantumScape boosts PowerCo deal and signs new auto OEM

The 15-year-old battery firm is getting closer to having PowerCo commercialize its tech

Two people in white protective suits and blue gloves stand inside a cleanroom, facing machinery behind glass doors with warning labels and control buttons.

QuantumScape employees work on the battery tech company's pilot line in San Jose, Calif. Photo: QuantumScape

Volkswagen Group&#x27;s battery firm PowerCo plans to pay solid state battery developer QuantumScape another $130.7 million to expand a collaboration and potential licensing deal, the companies tell Axios Pro.Why it matters: The expanded partnership is a vote of confidence in QuantumScape&#x27;s battery tech, which has been in development for 15 years but isn&#x27;t yet commercial.

Exclusive: QuantumScape boosts PowerCo deal and signs new auto OEM

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