QuantumScape Corporation

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

Thanks, operator. Good afternoon and thank you to everyone for joining QuantumScape's third 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 periods 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 statements 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 third quarter of 2021. Earlier today, we published our shareholding letter summarizing the major developments in the last quarter. I'd like to briefly describe a few of the highlights here. On the Q2 2021 earnings call, we disclosed that we submitted our single-layer cells for testing by an independent third-party lab. We can now report that the results from these tests replicate the impressive performance we first disclosed in our battery showcase presentation in December last year. The lab carried out what we believe is the most automotive-relevant test. Over 800 cycles at 25 degrees Celsius 1C, i.e., one-hour charge and discharge rates, 100% depth of discharge, and 3.4 atmospheres of pressure. This test is critical because an automotive battery cell must simultaneously satisfy all these requirements. Missing even one renders the cell inadequate for automotive applications. In other important news, in September, we announced an agreement with the second top 10 global automotive OEM by SalesRevenues. This automotive OEM has already tested ourselves in their labs and the agreement calls for them to work with us to evaluate our batteries for inclusion into pre-series prototype vehicles and ultimately for series production vehicles. Long held the belief that customer contracts are the ultimate external testing validation. So it's encouraging to have this agreement with the second automotive OEM as confirmation of the compelling value proposition offered by our technology. This OEM has committed to purchase 10 megawatt hours of batteries from QS0, our pre-pilot production line, contingent upon achieving technical milestones that are in line with our pre-existing technical development roadmap. As we said in the shareholder letter, although the potential near-term economic value of this agreement is in the high single-digit millions, we believe this deal represents a major long-term opportunity. On the cell development front, we saw important developments during the past quarter. In August, we announced the completion of our third key milestone of the year, our four-layer cells successfully demonstrating 800 cycles to more than 80% capacity at one-hour charge and discharge rates at 25 degrees Celsius. Today, we report these cells have now achieved 1,000 cycles, well in excess of the commercially relevant target. Construction and development of 10-layer cells continues with encouraging results. first generation 10 layer cells reported in the second quarter shareholder letter displayed energy retention behavior similar to our four and single layer cells as well as cycling performance in excess of our expectations for such early cells achieving over 300 cycles at a 1c rate as we've said before achieving our targets requires continued improvement of the quality consistency and throughput of our processes our testing at aggressive 1c charge discharge rates allows us to quickly identify potential refinements in cell design and construction, dramatically shorten the development cycle, and deploy improvements rapidly. Following the LFP data we shared last quarter, we continue to improve our high-energy density LFP cells with refinements to the cathode material and manufacturing process. We believe combining LFP cathodes with our lithium metal platform provides our OEM customers an opportunity to minimize active material costs and address their supply chain issues while addressing the fundamental challenge conventional LFP cells face, which is low energy density. For a deeper dive on LFP with lithium metal anodes, I'd encourage you to go to our website and check out our September 9th webinar on LFP batteries. From a manufacturing perspective, we wanted to lay out our scale-up plans, which call for a staged approach with several generations of manufacturing lines, which include an expanded engineering line, a pre-pilot production line, QS0, and our joint venture production line with Volkswagen, QS1. Our engineering line is used for cell and process development, as well as production of near-term customer prototypes. An expansion to this line will allow us to increase cell output, providing the test cells needed to further accelerate our development program. We intend to use QS0 to both produce more cells for customer use in pre-series test vehicles, and prove out the processes that will be used in our gigawatt-scale QS1 production facility. This quarter, we finalized orders for large-scale heat treatment tooling for the QS0 pre-pilot line in close collaboration with our vendors and partners. These tools represent the core of our manufacturing capability. Finally, I wanted to say a few words about our strategic vision, as while our immediate focus remains on achieving our near-term goals, These near-term goals should always be understood in the context of this broader vision. Our board of directors recently laid out a series of ambitious targets for the company to be achieved over the course of the coming decade, including cumulative delivery of one terawatt hour of battery cells, equivalent to the annual production of over 20 factories the size of the Gigafactory outside Reno, Nevada. Of course, we have a lot of work to do now and then, but our ambitions will not stop there. We believe that the once-in-a-generation shift in electric vehicles, combined with our transformative lithium metal battery technology, represents an extraordinary opportunity for decarbonization as well as shareholder value creation. Extraordinary opportunity demands extraordinary ambition. With that, I'll hand it over to our CFO, Kevin Hetrick, to say a few words on our financial performance before we open up the Q&A. Kevin?