QuantumScape Corporation

Good day, and welcome to QuantumScape's third quarter 2022 earnings conference call. John Sager, QuantumScape's head of investor relations, may begin your conference.

Thank you, operator. Good afternoon, and thank you to everyone for joining QuantumScape's third quarter 2022 earnings 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 as part of our quarterly update. Forward-looking statements generally relate to future events, future technology progress, 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. There are 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 shareholder letter, 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 Hedrick. 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.

Thank you, John. We're pleased to share an update on our progress since our last call. I'd like to start with progress towards our 24-layer A sample. This sample is our next major milestone and is intended to demonstrate our commercially relevant battery cell format and a meaningful increase in layer count relative to previous generations of customer samples. As we discussed on our Q2 earnings call, Earlier in the year, we encountered a contaminant in our material. Over the summer, our team focused on identifying the root cause, and as a result of these efforts, we're pleased to report we've dramatically reduced the level of this contaminant in our films. In addition, we've also rolled in a number of other process improvements that we believe will produce better performing films. This progress has allowed us to freeze the major design parameters of the film itself and turn our full attention to building 24-layer test cells. Before we deliver a new generation of battery cells to customers, we run what we refer to as a sample campaign involving several successive phases designed to build the necessary confidence and quality to ship cells to customers. We've kicked off our 24-layer sample campaign and frozen major design parameters and are now ramping field production to enable larger volumes of cells to test and collect data on performance and quality. It's important to note that while we have frozen the major design parameters, other parameters may still change as we learn more from our testing process and address any knock-on effects resulting from these improvements. So much work remains to be done. We will not begin shipping cells for customer sampling until we've gathered data that establishes confidence in the performance of finished cells. We'll report progress on this front on our next quarterly earnings call. One key aspect of the ASAMPLE design is the cell architecture. All lithium metal batteries experience uniaxial expansion and contraction during charge and discharge, and we believe existing cell formats are not well equipped to handle this expansion. To address the requirements for our ASAMPLE cells, we've been developing a new hybrid cell architecture. In our shareholder letter, we've shared the first public renderings of this architecture, which is in certain respects across between a prismatic cell and a pout cell. We've progressed through multiple iterations of the design with the goal of improving its manufacturability and long-term robustness and expect to continue iterating on this design. Next, I'd like to provide an update on our customer engagement. We continue to see strong interest in the automotive sector. In addition, on previous earnings calls, we've described potential markets for our technology beyond the automotive sector. including consumer electronics. We believe a key selling point for consumer electronics is the ability of our battery cells to run with zero externally applied pressure since volume constraints within the consumer device make it difficult to apply significant pressure. We're engaged with some of the leading global consumer electronics companies, and I'm pleased to report we've shipped dozens of zero externally applied pressure single layer pout cells for customer testing within this sector. Sister cells made with the same design and tested under the same test conditions in our own labs show the leading cells have achieved over 500 cycles. While we remain focused on the automotive sector to drive our long-term growth and demand from this sector remains robust, we believe the consumer electronics market represents an interesting opportunity that could potentially provide additional revenue and field validation of our technology. I'd like to end with a look at the big picture. While the world is currently facing macroeconomic headwinds and geopolitical disruptions, we believe the fundamentals driving the demand for energy storage remain unchanged. In fact, we believe the need for better batteries has never been more urgent. We've taken important steps forward over the past quarter, and our progress is thanks to the incredible work of our team to overcome challenges, solve new problems, and deliver results as we build momentum towards commercialization. On that note, I'll hand things over to our CFO, Kevin Hetrick.