QuantumScape Corporation

Good day and welcome to QuantumScape's second quarter 2021 earnings conference call. John Sager, QuantumScape's head of investor relations, you may begin.

Thank you, operator. Good afternoon and thank you to everyone for joining QuantumScape's second quarter 2021 earnings conference call. To supplement today's discussion, please go to our IR website at ir.quantumscape.com to view our shareholder letter. Before we begin, I want to call your attention to the Safe Harbor provision for forward-looking statements that is posted on our website and as part of our quarterly update. Forward-looking statements generally relate to future events or future financial or operating performance. Our expectations and beliefs regarding these matters may not materialize. Actual results and financial theories are subject to risks and uncertainties that could cause actual results to differ materially from those projected. The Safe Harbor provision identifies risk factors that may cause actual results to differ materially from the content of our forward-looking statement for the reasons that we cite in our Form 10-K and other SEC filings, including uncertainties posed by the difficulty in predicting future outcomes. Joining us today will be QuantumScape's co-founder, CEO, and chairman, Jagdeep Singh, and our CFO, Kevin Hetrick. Jagdeep will provide a strategic update on the business, and then Kevin will cover the financial results and our outlook in more detail. With that, I'd like to turn the call over to Jagdeep.

Thanks, John. Welcome to our earnings call for the second quarter of 2021. Earlier today, we published our shareholder letter summarizing the major developments from the last quarter. I'd like to briefly describe a few of the highlights here. First and most significantly, we are excited to report that we have now built and are currently testing our first 10 layer cells in our commercially relevant form factor. In the shareholder letter, we published preliminary data from our cycle life tests and early capacity retention and cycling performance remain similar to what we've shown for single and four-layer cells. Our goal was to have 10-layer cells by the end of 2021, so we are encouraged to have our first 10-layer cells this early. To be more specific, the development of 10-layer cells has been the result of a number of concrete improvements to our separator manufacturing process. Taken together, these improvements result in a step change increase in both separator quality and consistency. As we baseline these improvements, we expect positive knock-on effects to accrue to our development process as we progress through our manufacturing scale-up roadmap. As we've said since first going public, separator quality and consistency are key technical parameters, and this step-change improvement is an encouraging sign that our focus on this area is paying off. To put this achievement in context, It's helpful to think about how far we've come. In December 2020, we showed our first data on single-layer cells. Then in February, we showed our first four-layer cells. To now be able to share an early look at full-size 10-layer cells in July is very exciting to us, and we believe that the rapid rate of progress to this point goes well for our development plans going forward. In another important development, we made and tested our anode-free lithium metal cells with a low-cost iron phosphate, LFP cathode, and confirmed that our chemistry and cell design is compatible with LFP. We believe this demonstrates the commercial flexibility of our cathode-agnostic solid-state lithium metal platform, which allows us to extend our product offering to a broad spectrum of the automotive market. In addition to these exciting technical results, Much of our focus this past quarter has been on installing high volume manufacturing and automation tools on our engineering line as a precursor to the build out of our pre-pilot QS0 facility. Such high volume tools will allow us to further refine our manufacturing process, reduce variability, and feed our learn fast and iterate development process as we continue to work towards accomplishing our year end goals. For example, We expect our high volume continuous flow heat treatment equipment to improve separator production throughput by an order of magnitude over the current process, as well as to significantly improve the quality of our separators as a result of more uniform processing. Just as important as our tools is our team. We've grown our company headcount by 20% over the last 90 days with a particular focus on attracting experienced high tech manufacturing professionals. Among many others, we are pleased to welcome Celina Mikolajczak from Panasonic and Tesla as our VP of Manufacturing Engineering, and Clayton Patch from Micron Technology Inc. and IM Flash Technologies as VP of Manufacturing. Our focus for the rest of 2021 is to build many more 10-layer cells to collect performance data and comprehensively characterize and optimize the cell design. In addition, we will continue working closely with Volkswagen and other customers as we push towards next year's customer sampling targets. Lastly, I'd like to take a moment to look at the bigger picture. This last quarter has seen an incredible volume of electrification announcements from automakers all over the world, with a growing number committed to phasing out combustion engines entirely. This comes as governments across the world are tightening restrictions on combustion engine vehicles and accelerating the pace at which automakers are required to switch. The EV market is seeing enormous growth in major markets, and this growth looks set to continue over the short and long term. But it's also important to keep in mind that EV sales are still less than 5% of all new cars sold. And in some ways, the first 5% is the easiest to address with current technology. We believe that selling EVs to the remaining 95% of car buyers will require batteries that are not just marginally better than today's standard, but significantly better on key metrics such as range, charge time, cost, and safety. We believe the automotive market is starting to appreciate that incremental progress in battery technology will ultimately be insufficient to meet the requirements of drivers, necessitating step function improvements like those delivered through our anode-less lithium metal approach. Although there are challenges ahead of us, we are confident that we have the team, resources, and fundamental technology to overcome them, and every major hurdle we clear becomes a moat that strengthens our competitive position in the race to capture the next generation battery market. In short, we are encouraged by the results we've seen this quarter, and we are excited to continue our progress towards commercial deployment of our technology and share more developments with our shareholders in the months ahead. With that, I'll hand it over to our CFO, Kevin Hedrick, to say a few words on our financial performance before we open it up to Q&A. Kevin?