QuantumScape Corporation

Good day and welcome to QuantumScape's fourth quarter and full year 2025 earnings conference call. Sam Kamara, QuantumScape's Senior Director, Investor Relations, you may begin the conference.

Thank you, operator. Good afternoon and thank you to everyone for joining QuantumScape's fourth quarter 2025 earnings call. To supplement today's discussion, please go to our IR website at ir.quantumscape.com to view our shoulder 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 quality 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 share of the letter, Form 10-K, and other SEC filings, including uncertainties posed by the difficulty in predicting future outcomes. Joining us today will be QuantumScape CEO, Dr. Sivar Sivaram, and our CFO, Kevin Hetrick. With that, I'd like to turn the call over to Sivar.

Thank you, Sam. I would like to begin by reviewing our progress over the course of 2025. It was an extraordinary year on all fronts for QS. At the beginning of the year, we set aggressive goals for ourselves to base in the COBRA process, ship COBRA-based QSC-5 cells, install equipment for our Eagle line, and expand our commercial engagement. We are proud to report that we succeeded on all four key goals. In June, we announced that our breakthrough COBRA process has been integrated into our cell production baseline. This groundbreaking process enables gigawatt-hour scale production and is a catalyst for our capitalized development and licensing business model. With respect to commercial engagements, in 2025, we expanded our collaboration and licensing agreement with Powerco, the battery manufacturer of the Volkswagen Group. We also added two major global automotive OEMs to our portfolio of customers, announcing new joint development and technology evaluation agreements. Additionally, in 2025, we issued our first customer billing. In 2025, we added two globally renowned ceramic production experts to our QS ecosystems, Murata Manufacturing and Corning. We capped the year with our second annual solid-state battery symposium in Kyoto, where we brought together ecosystem partners, automotive OEM customers, and government officials. 2025 also saw milestones in our technology commercialization roadmap, with Cobra-based QSC5 cells shipped to the Volkswagen Group. In September, we made headlines as the Ducati V21L race bike, powered by QSC5 cells, rode across the stage at IAA Mobility in Munich. This exciting event was the world debut of our solid-state lithium metal battery technology in a real-world electric vehicle. Finally, over the course of 2025, we installed our pilot cell production line, the Eagle line. On February 4th, 2026, we held an inauguration event for the Eagle Line with attendance from automotive OEM customers, technology partners, and local and state government officials. Incorporating the innovative COCA process, the Eagle Line is a suite of equipment materials and highly automated processes forming the blueprint for production of QSC5 technology. This leads me to our four key goals for 2026. Firstly, we will demonstrate scalable production of the Eagle Line. The purpose of the Eagle Line is threefold. First, it will produce QSC5 cells to support customer sampling and testing, technology demonstrations, and product integration efforts. Second, the Eagle Line will show scalable process steps for production of our battery technology to enable licensing partners to bring our technology to gigawatt-hour scales in their own facility. Third, the Eagle Line gives us a platform to develop and test further enhancements and refinements at meaningful scale, allowing us to accelerate our advanced development efforts. In 2026, we will demonstrate the scalability of the Eagle Line through increasingly efficient cell output. Secondly, we will advance automotive commercialization. The automotive market remains our core focus, and in 2026, we aim to advance our automotive customers through the stages of our technology development and licensing business model. Working with multiple global auto OEMs, we will use our technology platform to tailor product solutions for vehicle programs, undertake field testing, and implement customer-specific industrialization strategies. Thirdly, we will expand into new high-value markets. Our solid-state battery technology offers a step-change improvement over conventional lithium-ion technology. Batteries are becoming a disruptive force across the entire economy, and we see the opportunity set for advanced energy storage expanding across existing and new applications. In 2026, we aim to seize opportunities where our differentiated solid-state technology can capture significant value. And finally, we will go beyond QSC5. As a technology innovation company, we will continue to push the frontier of battery performance as we ramp production of our current QSC5 platform. In 2026, we are focused on further advancements to meet the ever-growing need for energy storage in existing and emerging applications. And this year, we will announce progress along our technology roadmap. To conclude, I'd like to say a word about our strategic outlook. 2025 was a remarkable year. and it would not have been possible without that tireless effort of our outstanding employees. Our ambitious goals for 2026 will require continued disciplined execution on the part of the team. Looking at the broader landscape, the world at large faces important challenges around technology and secure supply chains. We view this as a golden opportunity. our mission to revolutionize energy storage has positioned us to offer solutions to these exact challenges. For industry partners who need better batteries, we seek to offer a future-proof technology platform that delivers better performance across the board and continuously improves over time. For players across the automotive, data center, robotics, aviation and different spaces who are in need of next generation energy storage to power demanding applications. Our technology represents a compelling and unique solution. We believe we have a diverse group of customer and application opportunities, a robust and growing partner ecosystem and a differentiated technology platform that is both continuously improving and capturing the benefits of increasing scale. Even as we face the many challenges still ahead, we are establishing a strong foundation on which to build a future of energy storage. As a final note, we'd like to express our sincere gratitude to Professor Dr. Chris Prince, one of the co-founders of QuantumScape, who's retiring from our Board of Directors after more than 15 years of service. We thank Fritz for his leadership, guidance, and friendship through this remarkable period of QS history. With that, I'll turn things over to Kevin for a word on our financial outlook. Thank you, Steve.

GAAP operating expenses and GAAP net loss in Q4 were $110.5 million and $100.1 million, and for full year 2025 were $472.6 million and $435.1 million, respectively. Adjusted EBITDA loss was $63.3 million in Q4, in line with expectations, and for full year 2025 was $252.3 million within guidance. A table reconciling gap net loss and adjusted EBITDA is available in the financial statement at the end of this shareholder letter. For 2026, we expect full-year adjusted EBITDA loss to be between $250 million and $275 million as we work towards our goals while continuing to drive greater operational efficiency across the company. Capital expenditures in the fourth quarter were $12.3 million, and for full-year 2025 were $36.3 million within guidance. Q4 CapEx primarily supported facilities and equipment purchases for the Eagle line. For 2026, we expect full-year CapEx to be between $40 million and $60 million, the majority of which we plan to invest into the next generation of our technology. Customer billings for full-year 2025 were $19.5 million. As a reminder, customer billings may vary from quarter to quarter due to fluctuations in activity as we progress through various phases of an agreed scope of work. Customer billings is a key operational metric meant to give insight into customer activity and future cash flows. The metric is not a substitute for revenue under U.S. GAAP. During the quarter, we received $19.5 million in cash from 2025 customer billings. As noted on our Q3 call, due to the related party nature, U.S. GAAP required this amount to be recorded directly to shareholders' equity once certain requirements were met. We ended 2025 with $970.8 million in liquidity and will remain prudent with our strong balance sheet going forward. As always, we encourage investors to read more on our financial information, business outlook, and risk factors in our quarterly and annual SEC filings on our investor relations website.

Thanks, Kevin. We will begin today's Q&A portion with a few questions we have received from investors or that I believe investors would be interested in. Siva, can you expand further on why the inauguration of the Eagle Line was such a significant milestone and a notable event on QuantumScape's commercialization pathway? Also, how will you use this line to demonstrate scalable production?

Sam, the Eagle Line is an extremely important catalyst for our technology commercialization goals. At the beginning of 2025, we set out the goal of increasing our output of QSC5 cells. When we were ramping volumes for the Munich IAA show, we had a stable baseline to make cells for the Ducati bike. We decided that the processes were sufficiently mature, and it was time to significantly increase the automation of the line to better match the productivity of the Cobra process. In the subsequent 10 months, we designed the line, prototyped it, found partners for equipment, built the tools, installed the tools at QS, qualified the processes on the tools, and released the equipment to the baseline. This was an incredible effort on the part of the team to get it done in such a short time. As we said in the letter, the Eagle Line enables pilot production of cells for sampling and is a platform to develop technologies for future generations. But the most important outcome is to have a blueprint for production. This is what we intend to transfer to our customers so that they can ramp to gigawatt hour scale in their factories. Success on the Eagle line is to have a blueprint for scale, cost, quality, and cycle time that a customer can deploy into their manufacturing line. This is about demonstrating the technology to our licensing partners for them to take the next step up in scale.

Thanks, Siva. You've highlighted growing interest beyond automotive. How are you thinking about those opportunities while maintaining focus on automotive commercialization?

Sir, automotive customers remain our core focus. Still the biggest and most valuable market for batteries. Nothing has changed on that front. The long-term global trend towards electrification is going to continue, and if you think about the autonomous vehicles really starting to become mainstream, those tweaks make the economic logic for EVs even more compelling. We have a cell and a design that is unique. It is capable of being safer, performing better across a wide temperature range, combining high power and high energy density. these characteristics are highly valuable across other applications for example in a data center you have high ambient temperatures but you absolutely cannot have a fire in racks with a million dollar gpus in a drone you need better energy density but also extremely high discharge power in addition our architecture can work with different cathode chemistries which makes our technology even more versatile. We can offer a differentiated and no compromise solution to these emerging applications, and these markets are growing rapidly. It's a logical step for us to pursue these markets.

Thanks, Deva. Kevin, how would you assess QuantumScape performance in 2025, and how are you thinking about achieving the company's 2026 objective while maintaining operational and capital efficiency.

I characterize 2025 as a strong year for QuantumScape. We executed on our key objectives for the year, and just as importantly, we did so with a high degree of financial discipline. We delivered approximately a 10% year-over-year improvement in adjusted EBITDA loss, narrowing from $285 million to approximately $252 million. That improvement reflects a sustained company-wide focus on cost-effectiveness. We made deliberate choices and improved our cost structure, for example, advancing value engineering efforts across the Eagle Line, as well as optimizing our real estate footprint. These actions allowed us to make meaningful technical progress while improving capital efficiency. 2025 was also an important validation year for our development and licensing model. Under this structure, we said we could generate customer-related cash inflows ahead of earning licensing royalties. During the year, We demonstrated that capability by achieving our first customer billings, totaling $19.5 million. Finally, we exited 2025 with $970.8 million of liquidity, leaving us with a strong balance sheet for this next phase of execution. Looking ahead to 2026, we believe our plan is well aligned with the goals we've laid out, and importantly, it allows us to advance those objectives while we further improve efficiency and monetize the platform we've built. Regarding efficiency, our plan is to continue to systematically, methodically, and iteratively drive efficiency gains across the organization via the activities you'd expect. Ongoing value engineering, higher equipment uptime and throughput, and further improvements in yield and reliability. We're well along in deploying machine learning and AI tools to accelerate development cycles and improve engineering productivity. On monetization, we expect customer billings in 2026 to increase relative to 2025 levels as we deepen and expand customer engagement.

Okay. Thanks so much, Kevin. We're now ready to begin the live portion of today's call. Operator, please open up the line for questions.

Thank you so much. And as a reminder to our teleaudience, if you do have a question, press star 1-1 and wait for your name to be announced. To remove yourself, press star 1-1 again. One moment for our first question. It comes from Mark Shooter with William Blair. Please proceed.

Hi, team. Thanks for taking my question. And congrats on commissioning the Eagle Line. And my question here is with this new manufacturing technology, I know there's a lot of improvement in throughput and yield, but I'm wondering if there's an ability to increase the surface area of your ceramic separator and therefore maybe increase the cell size. Is this possible or is this on your technology roadmap?

Mark, thank you. Thanks for the question. The Eagle Line clearly enables us to do all the things you just said, improving yield, improving uptime, improving operational efficiency, improving materials utilization, so that we can show our customers the efficiency with which we can make sales. Equally importantly, the Eagle line and the Cobra line are set up to be adaptable to making the line useful for every customer for their specific needs. Our aim is to use the Eagle line as the backbone So that when we industrialize for specific customer for specific needs, we can adapt the line to make that happen. That's exactly what we are using as this transfer platform. So the Eagle Line acts as the scalable blueprint for us to take a core technology platform and adapt it to every one of our customers' specific needs.

Yeah, Mark, as you mentioned, those are probably the three vectors we'd expect our automotive customers to work with, either it'd be choice of cathode, capacity to sell, and sell format. Our COVID process is capable of those, and as is the Eagle line, and that exactly fits into that first of our two phases of our business model, working together with customers to customize our technology platform to their product solutions, earning the first line of cash flow, and longer term, setting up that much larger Yeah, thank you, gentlemen.

I appreciate the color there. I just, as a follow-up, maybe put a finer point. And the reason why I asked about the surface area increasing larger cells is What I thought I heard from the PowerCo arrangement is that the QuantumScape cells need to fit into the unified cell architecture. And I'm wondering if that can be done with the current size, the QSC5, or is that a larger cell that needs to develop?

Yeah, as you just said, the QSC5 cell is a certain aspect ratio providing us with about 5.6 amp hour and about 21 watt hour cell. The UFC is a larger form factor and every customer has their specific need for what they need for their application. And fully knowing that we use this as the adaptable baseline, the Eagle line, will show what the platform is from which we can adapt it to make it bigger, smaller, whatever we need to. And that's the whole point of establishing one stable baseline from which we can build for different customers.

Very helpful. Thank you.

Thank you. Our next question comes from Winnie Dong with Deutsche Bank. Please proceed.

Hi, thank you so much for taking my question. In your prepared remark, you alluded to various verticals, including data centers and robotics, aviation as potential applications outside of automotive. And I think in the past, consumer electronics was also a potential application as well. I was wondering if you can help us understand, is there a you know, is there one vertical where your technology is more suitable than the other ones? For instance, I'm just trying to understand in things about stationary storage. A lot of companies that are sticking out to this are trying to use LFP. So just curious, like, why is lithium metal, you know, just as good or even better for some of these applications?

Thank you. So we need to start out, and Kevin has some strong views on the subject that he'll continue on. Clearly, the architecture that we have developed with the ceramic separator provides you what we call a no-compromise solution, meaning concurrently, at the same time, we can deliver high energy density, high power density in both charge and discharge, better safety capability, cycle life, and because we eliminate the anode, we have better, and because the formation is so short, we can deliver a better cost profile. Each of these markets that we just talked about have unique needs. For example, as you asked, the consumer electronics product is very big on volumetric energy density. We Trying to make sure that we size the opportunity work with customers move rapidly so that we can take our no compromise self and Fit it into the appropriate platform appropriate form factor and quickly get to market That's the idea behind and as you would expect the automotive market still is the larger market and we remain focused on it And logically, the automotive market also takes the longest time to develop, qualify, and deploy into largest leagues. These are just facts of the marketplace that we work with. But the sell itself is so useful across different markets that we do think it's logical for us to take that leap.

As Siva mentioned, we're starting from a good place with that no compromise. battery with the advantages SIV has laid out, we see opportunities over the fullness of time across the broad set of energy storage applications. I believe you listed several potential applications. Consumer electronics tends to really get excited about the volumetric energy density advantage. AI identifiers, data center safety, drones and anything that flies loves the gravimetric savings and the power and the grid, at least for the the major load shifting application, values cost per round-trip cycle. So we believe we can offer compelling solutions in all these spaces, and as a management team, it's our job, how many of these do we do in parallel, and in what order do we sequence them to both delight our customers and to optimize returns for our shareholders? And everything we just discussed about, we're intending in goal number three that we laid out in our letter today, expand into high-value markets.

And the whole thing is enabled by the Eagle Line. The Eagle Line allows us the flexibility of going and trying these out because we have the ability to make more samples for more customers. And that is what makes this whole thing possible.

Got it. Thank you. My second question is on the year's epidemic guidance. I was wondering if you can help us flush it out in terms of the objects and also in the context of some of the billable help that you can get from your partner as a result of the partnership. Thank you.

So, and then, Winnie, if you help me with the color around which aspect, and then you were asking about color on billings. Is that a correct rephrasing of your question?

Yeah. Essentially, you're guiding to – you have the year's EBITDA guidance. I'm just curious, in the context of existing partnership, I think in the past you've mentioned, you know, getting operational help from some of these partners. Is it being considered within the outlook? And, yeah, thank you.

Yeah, so that's a great question. So to answer what you just mentioned first, so, yes, our EBITDA guidance is inclusive of help. either from OEM partners or ecosystem partners. That's all baked in. And by the way, there is significant resource being put in by all of those three. In terms of just some color, the EBITDA guidance is relatively flat year over year, but I would point out that the team is seeking to take on a lot more with expanding and deepening the automotive partnerships, as well as expanding into new high-value markets. There's all sorts of activities behind that, as well as pushing the frontier of battery development. So our goal is to deliver much more with the same resource base, improving efficiency to shareholders.

Just to be clear, for this year, Kevin just announced $19.5 million of billings and cash received. And that, as he has pointed out, has gone directly into equity, and that is not part of the EBITDA loss that we just announced.

Correct. And as I mentioned in the comments, please expect that to be lumpy to quarter to quarter as we do this type of agreed development work with customers and ecosystem partners, as well as our desire to improve on it, 2026 versus 2025.

Got it. That's very helpful.

I'll pass along. Thank you. Thank you so much. Our next question comes from the line of Joseph Spak with UBS. Please proceed.

Thank you. Good afternoon. First question is just if I compare the slide like you put out today versus prior, it looks like that conditional cash inflows is now $150 million. Last time it was $261 million. Can you detail what changed there?

If you just to rephrase or maybe to clarify, when we expanded the VW, the development and collaboration and licensing agreement with Volkswagen last summer, there's an opportunity to earn up to $131 million worth of those development type payments. Is that what you're referring to, Joe?

Yeah, like if you put on slide 16, you have on the slide detailing your relationship with Power code says 150 million plus of conditional cash inflows. If I look at the last quarter slide, that 150 was 261.

Let me pull that up and revert with you in a few minutes. I don't have that in front of me. I will revert it with you on that.

Okay. The next question, then, just... You know, obviously, Powerco is a deep and important partner here. There had been some reports that Volkswagen sort of slashed the funding there. Just curious if you felt that at all, if that sort of impacted your business or your work with them, or if it's even increased some of your urgency to diversify to other customers.

Yeah, so Joe, our work with Powerco is continuing on unchanged. Their commitment to us is very, very good. Our relationship with them and the focus with which we are working together is as good as ever. We are both working towards a set of agreed upon scope of work that has not changed. And we are continuing to build them the way we have agreed in that $131 million deal that Kevin just talked about. So in July of last year, we agreed on a scope of work. And our partnership is as strong as ever. And the work itself is lumpy as in the way it is planned and up and down. But we are doing very well with respect to Volkswagen. That does not mean we are not working with other customers. As we announced in the letter, we have added two new large global auto OEMs to our portfolio with whom we are working with. And we have also announced additional technology development and technology evaluation agreements with them together. So this is in a good place. The customer interest has been very strong and the Volkswagen and power correlation still remains very, very strong.

Okay. Last question for me. And you touched on some of this and I just sort of want to better understand how you're thinking about it. Cause you talked about new end markets, opportunities, energy storage, robotics, you know, exciting stuff. But you know, if I, if I look at what you've done with the auto business, you've you've, you've effectively right left the commercialization industrialization to power co and other partners. So as you move to these other end markets, like, like how is it, you know, if you're not making a sort of a standard cell, like, and I understand the Eagle line sort of helps you sort of do different form factors or, or, or different cells, but like, aren't you going to need to sort of reach out individually to help sort of scale these different form factors for these opportunities? It just, It just seems maybe a little bit more difficult as you go to some of these other end markets where there might be some more bespoke use cases versus, you know, the old strategy, which was doing yourself. But maybe I misunderstand.

This is a very receptive question. I'm glad you asked. The licensing and capitalized business model is not a single flavor. There are a lot of different ways of doing the same thing. Have made rights, having contract manufacturing, having our partners manufacture for others, having customer-provided manufacturing abilities. There are many different ways of doing it. As long as we are not spending the capital to build it, we can do this very well. And these markets are fully amenable to these business models. So we are exploring those with our new customers. I'm not saying that we rule anything out, but our preference has always been to a license and capital-like business model. I'm glad you asked this question. Even in these markets, such different variations on this theme are very possible.

Thank you for that.

I appreciate it. I did have a chance to look at the slide you referenced. The prior reference to 260 or 261 is when you sum both parts of the economics with Volkswagen together. million prepay and the up to $131 million of development payments. That's the former number you referenced. In this latest round, as footnoted, what we're doing is we're only – we're having more of a backwards-looking view where we're only counting the billings to date plus the 130. So it's a different cut at the same two numbers. There's nothing changed contractually.

Okay, so nothing changed with that other, with that delta that's sort of more potentially to come. Correct.

It's more looking at the bird in the hand relative to Billings as opposed to the bird in the bush with the up to.

Thank you for that. I appreciate it. Yep.

Thank you. Our next question comes from Mark Delaney with Goldman Sachs. Please proceed.

Hi, good evening. Thank you for taking the question. Do you have a mon on for Mark? Maybe kind of starting on your goal for the Eagle line and scaling that, and congrats on getting that installed. Can you maybe help provide some context for where some of the key metrics for that line are today, like yields and production time and things like that, and how you see that scaling over the course of the year and what's needed to then, you know, exiting the year, get to commercial transfer to your licensing partners. Thank you.

Yeah. Aman, thank you for the question. So last year, we had a manual line with which we were producing sales for applications such as the IAA Munich demonstration on the Ducati bike. we developed a very stable baseline and we decided that was a good time to convert it to be a much more highly automated line so that we can match the output of the highly productive cobra line to the cell making line and so in the 10 months since since march of last year we have literally conceived the line designed it find the build partners for the equipment brought the build the equipment and brought them over here install them, qualify them, develop the process, transfer the process, and then convert it into the baseline and we are running it. And that's what we inaugurated last week this time. Now, this is a manufacturing prototype pilot line. And so this is what we are using to convince and work with our partners who are going to be working with us hand in glove, watching how this is done. So all of the metrics that we normally use in a pilot production facility, such as uptime, mean time between failure, mean time to assist, mean time to repair, yields, reliability, quality, cycle time, cost, all of these kinds of metrics have to be made efficient so that our customers come and work with us and say, okay, now I'm ready to go take this line and convert it to our need in my own factory to scalability. So these are the things that you, what you just asked is what we will be very, very, very closely monitoring as we ramp it up. We are in a good place and we'll continue to work with our customers and we need to show this to our customers who are here with us watching this. And when we inaugurated the line here, the customers were actually here with us as we got this started.

And just one other, some other dots to connect. The Eagle Line is certainly called out in our first corporate goal for 2026, demonstrate scale of production with Eagle Line. As Simba was mentioning, it's central to the other three. Without that type of prototype and sampling and demo volume, that is the currency with which we can advance automotive commercialization, new and existing, as well as gives us the currency to expand into new high-value markets. And it also gives us other parts for internal use, to do development on to support that beyond QSE 5 roadmap. So that ego line we demonstrated last week is really important to set up a successful 2026.

Now, having said all that, Aman, this is the unsexy part of the work. This will be systematic, methodical, iterative improvement of every one of those so that the customers see and work with us to see the rate of progress on all of them. So this is not new thing. I have done this many times in the past and the employees know what it is that we need to do here at QS. So we'll get that going.

Appreciate the color there. Thank you. And maybe tying that to my follow-up here, Kevin, you talked about 40 to 60 million of CapEx. Can you maybe help to mention that across some of the spending you've kind of outlined in your goals, whether that's for the Eagle line and scaling that versus expanding some of the QSE5 technology and you know, potential incremental spend related to expanding to some of these other end markets, and how should we think about that level then being sustained beyond 26 in terms of, you know, further continuing to explore those opportunities? Thank you.

That's a good question, Aman. The bulk of the spend goes towards the fourth goal of going beyond the QSC-5 and the bulk of the CapEx spend from $40 to $60 million, as you referenced. There is CapEx in the other categories, but with the maturity of the QSC5 platform, for example, in the case of the expanding into new high-value markets or doing custom development for OEMs, it's more incremental on choice of cathode or dimensions or form factor. That's more of an incremental spend as opposed to a core development spend. As a technology licensing company, it is our core job to develop and pilot and transfer high-performance battery technology to our customers and partners. Capital is required to push that frontier. And this is the type of magnitude we think investors should expect going forward for that steady-state advanced runway development. And I would also like to draw a contrast with this type of spend under a technology licensing model with that of a full-blown manufacturing company, which requires billions of dollars of investment for gigawatt hour scale done years before that factory even comes online. So we think that our choice of business model is in the best interest of shareholders.

Thank you. And maybe just on that point quickly, can you kind of dimension what are the goals you're trying to hit for the QSC5, like beyond the QSC5 platform that you're spending on? Apologies if you've discussed it before. I don't have it off the top of my head.

Now, Aman, last year we put out our blueprint on how we move forward as a technology company. The QC5 is our first minimum viable product. Clearly, as we move up the S-curve rapidly, we need to make the performance metrics better on every aspect of it and keep moving this up. And every 18 to 24 months, we will be coming up with new upgrades on this that we need to come and show you all, show our customers and show our shareholders where we are spending the money to move the technology frontier forward. That's where this is headed from the QSC5 moving on.

Thank you very much.

Thank you. Our next question comes from the line of Ben Calo with Baird. Please proceed.

Hey, good evening, guys. It was great to see you last week. One thing I noticed when I was visiting is your supply partners there. I just want to get a sense of how they're thinking about your future or potential customers outside of Volkswagen and I know you guys have done a lot of work with the supply chain, so if you could talk about that and just how that helps you with new potential customers.

Ben, great to see you last week. Thank you for being here. You're 100% correct. The QS ecosystem is very important to us. This level of technology change cannot be done by a single company. It requires a whole ecosystem to move this forward, whether it be in capital equipment, whether it be in advanced materials, whether it be in things like software and AI systems. There are places where we need help. Murata and Corning being able to take over and run the manufacturing for the ceramic separator is a big step forward for last year. In our solid state symposium that we hosted in Kyoto, we brought together similarly our tool vendors from across the world to be there. And you saw some of these suppliers here in the US who helped us build the Eagle line. These folks are very excited about the possibility of us expanding further into other form factors, into other markets, into new customers, both in the automotive and non-automotive spaces. We are counting on their support and we will be expanding the ecosystem continuously to make sure that we can bring this along. And again, Kevin is very passionate about our secure supply chain and let him talk about that.

As Siva mentioned, in the ecosystem we're building where there's customers, there's cell manufacturers and suppliers of materials and equipment, as you add more activity to it, it makes the whole stronger, certainly from the view of a cell manufacturer or a supplier of equipment or materials. More additional end markets and expanding and deepening automotive relationships is a good place to sell their goods and services into, but then from the flip side, if you're a QSC5 customer or manufacturer, the cells having a ready supply chain with the world's leading examples in their respective spots only strengthens the value proposition. as well. So we're very excited with the progress that we made in 2025, and our goal is to continue that moving forward into 2026.

And Ben, equally important is the people you did not see in that group. You did not see a graphite supplier. You did not see an anode supplier. So securing the supply chain is as much for us about making sure that the suppliers that we need are there as much as making sure that we are not unduly dependent on any one material from any one place. So that also helps us in securing our supply chain.

Thank you. You know, we see, you know, OEMs retrenching or retreating or however you want to characterize it. And, you know, there's excess cell capacity with new potential customers. Yeah, I'll leave it there. Thank you, guys.

Ben, thank you. Yes, so clearly there is turbulence in the marketplace, at least in the U.S. However, the folks, especially at the senior levels in these companies as we talked to, consistently are more optimistic about the long term. we see the fact that electrification as a longer-term trajectory is still the right way to do it. The more we see about, for example, self-driving vehicles, navigation systems, you start to see there are other vectors that are forcing the EV conversion. So every customer we talk to is upbeat about two things, electrification, but in particular, solid-state batteries. Both are things that they come to talk to us, and we sense that excitement with our partners.

And we hope you can see that. Some of these themes were certainly playing out in 2025, and against that backdrop, we expanded the DW PowerCook collaboration agreement. We signed two new joint development agreements. We added a new technology evaluation agreement. We think that is consistent with the excitement that Siva mentioned, and While you use the word retrenchment, the automotive industry still is growing. It still is very much a growth sector. So the short, medium, and long-term prospects we think are still of growth. Great. Thank you, guys. Appreciate it.

Thank you. Our last question comes from Laisha Sack with HSBC. Please proceed.

Hi, Diva. Hi, Kevin. How are you? Thanks for having us last week. I just have one question because my questions are already answered. But I wanted to know if you have any KPIs that you can share with us on how you will measure the goals that you set for 2026.

It was great to see you last week. Thank you. Thank you for being here. Clearly the four goals that we have outlined are all very quantitative for us inside the company. whether it is about the Eagle Line demonstrating the efficiency and scaling of the Eagle Line for the purposes we just talked about, whether it is about making sure that we expand or advance our partnerships with the automotive markets, whether it is to go beyond the QSC5 and expand into high-value markets. Each of those is an extremely important vector for the company to continue to progress on. We will continue to update you as we progress on each of those, and you will see this progress as we give you updates. And our job is to make sure that, just like we did in last year, tell you what we are going to do, and then do, as we say, and on time and give you the updates.

Okay, that makes a lot of sense. And just one last thing. I know you mentioned that your focus is still automotive, but when you eventually start looking at other applications, does the Eagle line require major adjustments depending on the segment that you cater to? And will these imply a higher capex also for the customers? You said that the blueprint is easily adjustable to each customer's needs, but does this imply that they need to invest more to adjust to whatever they want to create, depending on the market or segment that the customer is in?

Yeah, it's an interesting dilemma. This is the reason we chose the licensing business model. In the battery business, Every customer wants their unique form factor. If we try to set up a line for every one of them, it becomes untenable. What we have done is a foundational technology, a scalable blueprint that we can do it. But any change that we do for any specific customer, clearly we expect that as part of the earlier payment, we would be working with them on financial arrangements to make sure it is done so that we stay capital-lighted. And when we take our technology roadmap and show it to our customers, we clearly set the expectation that we intend to be a capital light licensing company.

Okay. Well, thank you so much, Siva. And congrats again on the inauguration.

Thank you, Leisha. Thank you, ladies and gentlemen. And this concludes our Q&A session for today. And I will pass it back to Siva Sivaram for closing comments.

Thank you, operator. Finally, today, I want to recognize the entire QuantumScape team for their execution in Q4 and throughout 2025, and I want to thank our shareholders for their continuous support. We look forward to updating you on our progress in the months ahead. Thank you.

Concludes our conference. Thank you all for participating, and you may now disconnect.