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?

Thank you, Jagdeep. In the third quarter, our operating expenses were $54 million. Excluding stock-based compensation, operating expenses were $41 million. This level of spend was in line with our expectations entering the quarter. For the full year, we expect cash operating expenses, OpEx less depreciation, and stock-based compensation to be in the range of $130 million to $160 million, consistent with previous guidance. CapEx in the third quarter was approximately $39 million. For the full year, we now expect CapEx to be in the range of $135 million to $165 million. On the Q2 earnings call, we discussed 2021 CapEx tracking higher than $130 million to $160 million, primarily due to the potential pull-in of some QS0 equipment spend from 2022 into 2021. In Q3, our team secured shorter lead times for a portion of this equipment. We are consequently seeing less timing-based shift of QS0 CapEx spend from 2022 into 2021. CapEx actuals are determined by lead times, order dates, and payment terms. Near year-end, changes in these factors can move lumpy payments either into or outside of the forecast period. We expect CapEx in 2022 to be significantly higher than 2021 as we continue to increase our engineering line capacity to support internal development and broader customer sampling, as well as to invest in our pre-pilot QS0 line, consistent with our 2023 target of providing sales from that line for use in test cars. We'll provide more specifics regarding 2022 on our Q4 earnings call. With respect to cash, we spent 68 million on operations and CapEx in the third quarter. We expect full-year 2021 free cash flow burn to be in the range of 260 million to 300 million. We continue to reiterate year-end liquidity guidance of greater than 1.3 billion. This quarter, our company achieved progress on cell development, manufacturing scale-up, and prospective customer engagement while maintaining a strong balance sheet. We ended the third quarter with more than $1.5 billion in liquidity. We believe exiting 2021 with more than $1.3 billion in expected liquidity provides sufficient capital to achieve our key milestones, including fully funding QuantumScape through initial QS1 production. Our gap net income for the quarter was $15 million, including the impact of $69 million in non-cash fair value adjustment of the assumed common stock warrants. excluding this non-cash adjustment the net loss for the quarter was approximately 54 million in line with our expectations class t21 we will no longer incur fair value adjustments related to these warrants we're excited about the progress this quarter and look forward to the opportunities ahead We'd like to thank our investors for supporting our mission to commercialize our solid state lithium metal batteries of electric vehicles.

With that, over to you, John. John?

Thanks, Kevin. We'll begin today's from investors over the Say app and in our IR inbox. Our first question is actually a combination of questions that came in through the inbox. We've recently seen some new data from two of your competitors, and it's hard to tell the difference between your results and theirs.

Yeah, so the simple answer is we have not seen any other data, Claire, that meets the basic requirements of the automotive sector, which, of course, is to be able to cycle 800 cycles at a 1C1C, i.e., one-hour charge and one-hour discharge rate, at room temperature, i.e., 25 degrees Celsius, while retaining more than 80% of the cell's capacity.

And if you miss any one of these requirements, we don't believe that the battery is viable for automotive applications. Now, neither of the players you mentioned have been able to demonstrate they need these requirements. For example, both have shown cycling data at C over 5 rates. That's a five-hour charge. In one case, which uses a liquid electrolyte with a lithium metal anode, this is likely because, like previous attempts in all these lines, Their presentation slides show they're seeing dendrites, and lowering the charge rate is one way to reduce the incidence of such dendrites. The cell internal impedance is too high to support higher rate charge. Any approach that requires a lithium metal foil to start with will face severe challenges from a cost standpoint, given the cost of lithium foil and the manufacturing complexities of handling reactive lithium metal in a manufacturing environment. So to summarize, to our knowledge, QuantumScape is the only next-gen battery player to have shown data that meets what we believe are the basic requirements of the automotive application. Until a company shows data demonstrating their cells can meet these basic requirements, there might be other applications they can address, but we don't believe their approach is going to work for automotive applications.

Okay, thanks. Our second question also comes from the IR inbox. Can you talk a little bit more about the significance of

So the significance of this is that this represents a second top 10 by revenue automotive OEM that has tested ourselves in their labs and confirmed that they're interested in building pre-series and eventually series production vehicles if our technology continues to meet the milestones laid out. The agreement is to take 10 megawatt hours of capacity from our QS0 pre-production line, representing on the order of 100,000 cells. which is a really significant number that supports the idea of evaluating this technology for pre-series and eventually series production vehicles.

We don't believe either side would have entered into this agreement if the intent wasn't to qualify this technology for use in production vehicles.

If we successfully deliver the milestones and get into series production, this OEM has the volume to drive significant revenues for QuantumScape.

Okay, on to questions from the SEAC. Have you entered into any material agreements with manufacturers other than Volkswagen?

Yeah, John, so I think we directly answered this question with our announcement of an agreement with the second top 10 OEM this quarter, as we just discussed.

Okay, great. Do you have an estimated date on your first usable product for mass use, and what are the steps between now and then?

Yes, as we've said, our target is to start production in the 2024-2025 timeframe. and in support of this we're targeting having cells from our pre-production line qs0 in 2023 between now and then we need to do a few key things continue increasing our layer counts improving the quality consistency and throughput of our separator and cell manufacturing processes are evs the only use case for your batteries or are you planning on entering other markets John, our focus remains on electrifying the automotive power crane, which we believe is the most significant market, both in terms of market opportunity and decarbonization potential. But having said that, given we're seeing strong interest from a range of other applications, and we believe our technology could add value in those sectors, we would expect to also address those markets in the fullness of time.

Thanks. Do you have a sufficient amount of lithium supply secured to meet future demands?

So this is an interesting question because even though we use a lithium metal anode, we don't ever purchase any lithium metal. And this is because in our anode-free, zero-lithium design, 100% of the lithium in our anode comes from the cathode.

Remember that conventional cathodes, such as NMC or LFP, ship pre-lithiated.

And this is the same lithium that becomes our anode once our cells are charged up. so there's no other excess lithium required. Note that this is not the case for all lithium metal approaches, as there are some that require a lithium foil to start, and we believe those approaches will have a serious cost challenge to overcome. Also, it turns out lithium is an Earth-abundant material. In fact, our CTO once calculated that there's enough lithium in the Earth's crust to ship 10 to the 9 long-range BEVs for 10 to the 9 years, so that's a lot of lithium. Obviously, there's still a lot of work required to extract that lithium, But the fact that it's there means that if demand does go up, market mechanisms can encourage suppliers to extract more, something that wouldn't be possible if it weren't as earth abundant. And finally, our strong relationships with some of the world's top automotive OEMs provide us an opportunity to leverage their scale and purchasing power to ensure our material supply.

All right. Thanks so much. We're now ready to begin the Q&A portion of today's call. Operator, please open the lines for questions.

Thank you, John. As a reminder, to ask a question, you will need to press star and then the number one on your telephone keypad. Again, just press star and then the number one on your telephone keypad. And to withdraw your question, just press the pound key. Please stand by while we compile the Q&A roster. Your first question comes from the line of Gabe Dowd from Cohen. Please proceed with your question.

Jackie, maybe could we start with just manufacturing and any comments you could provide on improvements to uniformity on the separator since your last update? And then maybe just remind us where do you have to get to?

Hey, Gabe, how are you? Thanks for the question.

So on the separator, so We've said publicly that our separator is in the tens of microns in terms of thickness. We've also said that the VW milestone that we had in Q1 that we reported on actually required that our cells be in a commercially relevant thickness with the separator. and commercially relevant area. And of course, we all know we met that milestone, so we feel like the separator is, in fact, being made in those dimensions. Relative to manufacturing and the questions you asked about uniformity and consistency and throughput, those are exactly the things that we're working on.

Data point on those from single layer cells last year to four-layer cells earlier this year to the 10-layer cells that we reported on first in July and then again today.

That progress wouldn't have been possible if we had not been making steady improvement on all three of those metrics that you need. Better quality of the film correlates with better performance in terms of everything from the current density you can handle to the cycle life to the reliability of the films. And consistency relates to how many useful films you get out of a given number of films that you start. And of course, throughput is the capability, the capacity of the tools that you have and how many films you can make. And of course, as we make higher layer count films, we need to get a lot more capacity out. So every single 10-layer cell needs 10 times as many films as a single layer cell. You know, we need to have either tools that have 10x the capacity or 10 times as many tools and operators and so on. So the fact that we are now, you know, we've moved from making single layer cells to four layer cells to 10 layer cells is indicative of progress on all three of those key metrics.

Thanks, Shagdeep. That's helpful. And then maybe in follow-up on the manufacturing side, can you Maybe refine a little bit or just better describe the quote-unquote dozens of layers that we need to get to next year for your A sample as we're now in November getting close to next year. Is there anything that you can say to try to help us understand what that number could really look like?

Yeah, I mean, I think the actual layer count, as we've mentioned in the past, Dave, is going to vary by automotive OEM because the cell thickness, for example, and that is going to be a function of the OEM-specific module and pack design.

We've said dozens of layers because they're all going to be in that general range. And I can also say, as I mentioned briefly on the call and in more detail in the letter, our manufacturing capability can be thought of as sort of three phases.

Currently, we're expanding our engineering line. That's the line in which we are doing all of the R&D development. The next phase, of course, will be QS0, which is the pre-pilot line that we are – ordered a number of tools for both engineering line and QS0, particularly the long lead time tools. And as those tools continue to arrive and be commissioned and turned up, our capacity continues to increase. So the net of it is that, you know, we remain committed to the goals that we had outlined, you know, in previous quarters, which is that in 2022, we hope to have samples to our customers that are, you know, a few dozen layers in thickness in the commercially relevant form factor that we call those customer prototype samples. And then in 2023, samples that roll off the pre-pilot production line, and those will be samples in enough quantities to basically assemble pre-series test vehicles to run test tracks. So those goals haven't changed.

Thanks, Adib. Just one last one for me just on commercialization. I know super early with this second OEM, but could you maybe just talk a little bit about what structure this could potentially look like over time, assuming they do become a customer upon commercialization? Would it be a JV similar to you're doing with Volkswagen? And then finally, is this second – would Chronoscape represent the only solid-state provider that this second OEM is working with? Thank you.

Yes, so relative to supply this second OEM, it's a good question. And the answer is that there are two possibilities. We haven't yet decided which one. And those two are either fully QuantumScape-owned facilities to this OEM. And the other option, of course, is more of a VW-style joint venture where they're actually part owner in the manufacturing facility. We haven't yet made the final decision on what the parties are going to prefer, but those are both viable options.

At the end of the day, what I think they really care about is getting a sufficient quantity of high-performance sales to meet their needs. relative to whether we're the only other solid state player.

I want to avoid, you know, addressing that directly, Gabe, because we haven't disclosed the identity of the OEM. And I think that if we comment on the other partnerships, then I think that starts to... uh, you know, to narrow down the players. But more importantly, I think, um, what we can say is that, um, uh, you know, as you know, we don't believe we've seen any other solid state or lithium metal effort, uh, that meets even, uh, what we consider to be the basic requirements, right? Can you cycle for 800 cycles at 25 degrees at a one hour feel comfortable that, uh, you know, uh, uh, that there's, uh, uh, not a lot of, uh, you know, uh,

viable competitive activity. Thank you again.

Thank you. And your next question comes from the line of George Gianaricas from Baird. Please proceed with your question.

Hey, good afternoon, guys. Thanks for taking my questions. Maybe to start on the manufacturing side, you started to order parts Can you talk about any additional learnings that you've had in that process, positive or negative?

Yeah, I mean, tons of learnings.

I'm not sure how much we can share, you know, but the tools themselves, you know, I mean, a key part of what we're doing right now is, of course, you know, sort of tuning and tweaking various process conditions to find the ones that produce the best results.

So we're doing a lot of that work. We are working closely with our tool suppliers to specify the tools in a way that we think meets our needs. uh and you know in that process there's a lot of earnings we've tried a lot of things that uh candidly we found you know didn't work as well as we thought and other things that we found uh work you know uh better than we expected uh you know i think at the end of the day straight line you know the real world you know is never a straight line anywhere uh but the um the key is that you make steady progress over time towards your goals and I believe we're doing that, so we're happy with that progress right now. Thank you. One quick thing to add to that, of course, is that part of the outcome of all this process development is we enhance our portfolio of trade secrets.

Trade secrets are those innovations that we don't by our competitors. Examine it. You can Take apart and examine it and determine things like the chemical composition of the materials and the the physical architecture of the layout and so on.

But you can't tell what recipe was used, which gases, which solvents, at which temperatures, for how long to get those outcomes. So those are the kind of things that we keep as faith secrets. And all this work we're doing on equipment evaluation continues to increase the faith secret portfolio, which we think is a good thing for our investors.

Thanks. And then one more, just on the second OEM agreement that you've signed, can you at least share, was it a bake-off? Were there other solid-state companies in the mix, as far as you can tell? And with regards to other testing that you're doing, are you also being tested? Anything you can share on the competitive environment would be appreciated.

Yeah. So, you know, if you're talking to a

top 10 automotive OEM, you can pretty much assume that all these guys are exploring every possible battery option that they can. Because I would say effectively all of them are committed in one form or another to electrifying the powertrain. And if you look at the volume that that ends up driving in terms of battery needs, it's just enormous. And so as a result of that, they are constantly looking not only to bolster their supply of current conventional lithium ion batteries, which I'm sure you all know about well in terms of all the current supply constraints in that space, but also next generation batteries that can help them meet their product activeness goals, if you will. Our view has always been, as you know, that while it's great to see governments actively trying to encourage an EV industry for its decarbonization potential, that at the end of the day, the product has to be attractive to the consumer. And our belief has been that until batteries get to be more competitive with the combustion engine, the product is going to be lagging combustion engine vehicles. And so we're seeing a lot of interest from a lot of these top OEMs around getting better batteries that can help narrow that gap with combustion engines. and allow them to be competitive with traditional powertrains. So I think you can assume that these guys have either looked at or evaluated every technology that they could get their hands on. And so their training agency agreement to us reflects a signal that the quantum scale approach is, in fact, the most compelling and viable of the options they've looked at.

Thanks, fellas.

Thanks for the question.

Thank you. Your next question comes from the line of Evan Silverberg from Morgan Stanley. Please proceed with your question.

Hi, Evan Silverberg here on behalf of Adam Jonas. First question for you guys, do you have any color on QS1 regarding site selection, location?

Yeah, hi, Evan. So we haven't said anything additional other than the press release in 8K that we issued earlier in the year on the site selection process. But I think the point you made is really the key point, which is that that our focus in the near term is, of course, on QS0.

And we feel like if we can execute on QS0, then we will . And we don't currently believe that site selection is the gating item in turning up QS1. We think it's really around making sure we get the for a for a scalable pre-powered production line, which we can then replicate.

Thanks. And one more. You've shown the single layer, the four layer, and the 10 layers now in the 70 by 85 millimeter size. For the cells that you plan to deliver to OEMs in 2022, will they also be in that size, or will you need to scale up to a larger size for that?

Yeah, that's a good question, too. If you've noticed, we use the word commercially relevant in many of our communications with investors and the public in general.

And the reason for that is because the precise dimensions, again, are somewhat different because every OEM is going to need our cell to be essentially an integral fraction of their module and pack capacity. So not every cell is going to be exactly the same. That same general zip code, if you will, of dimensions. So it might be slightly smaller in some dimensions. It might be slightly bigger. But it's not going to be multiple. multiples of times smaller or bigger.

That's why all the data we've been reporting this year, starting with the battery showcase last year, has been in the 70 by 85 form factor, because we believe that is the commercially relevant size range for these cells, roughly the size of a deck of cards. Whether it's slightly bigger or slightly smaller is going to depend on the specificity.

Thank you. Your next question comes from the line of David Bell from Wolf Research. Please proceed with your question.

Hi, everyone. David Bell on for Rod Lash. Thanks for the presentation, Jagdeep.

I just wanted to...

go back to the earlier questions on manufacturing, with yield being such a critical parameter, yield and improve the thickness?

Yeah, so the three main areas that we continue to work on are quality,

you can, you know, what I mean when I say quality is that's the logical variance or any other variation across a given film, you know, lower quality than the film that's more, so, you know, that's one key. And by that we mean, you know, hitting that high quality every single time as we run the material through our process.

Consistency is really what you call a yield. If we can consistently make films of a given quality, the yield will be higher. And then the final thing is throughput, which is, again, how many films we can run through the process in a given amount of time. Now, those three things are actually not uncorrelated. It turns out that as we move to more scalable tools, for example, we've spoken about the fact that we're using these continuous flow tools to make our separate films. But those continuous flow tools, as we get into larger tools, they require more automation because you have to be able to load and unload those films efficiently. you better and quality tighter control over the process, better metrology in terms of seeing what's happening with films as they're going through the process. And so we expect to see continued improvement on all three things because they're not really completely uncorrelated.

On the 10-layer cells, Could you describe to us the sort of throughput you have, how many cells are you making on a weekly or monthly basis, and what is the, I guess, automated processes that you're able to use? Are they analogous in terms of output to what we would see more as you've gone from one to four to ten layers? Has the challenge of using the capital electrolyte become more difficult, or has it been just as easy to do it with many layers as it is with one.

Yes, so your first question had to do with the 10 layers. So we never disclose the actual, you know, a number of, you know, films or cells that we make in a very varied time. But, you know, we are shifting our focus to making those 10-layer cells. Next year, as you know, we've talked about shipping multi-dozens of layers in our cells. And so, you know, we... work on ways to do that. The keys to making that happen really are, one is we've got to get throughput up so we get to have more films to work with. Two is we've got to be able to pack these films up. They continue to work well together. If you have 10 layers in a cell and there's one bad layer, then you have a bad cell. So consistency becomes important to produce more and more 10-layer cells.

The electrolyte in the cathode, the The fact that we can make these 10-day cells, and as you see from the acting charts in our letter, the fact that the performance is so similar, the acting behavior is so similar to what we've shown before, is an indication that there's no fundamental change in the multi-day cell compared to what you see in a single-day cell.

Thank you, Jeff.

And last one from me here. What your impression is of the market? And how do you expect to actually achieve this one terawatt hours? Terawatt hours. I think it is an ambitious goal. I mean, as you said, it's the equivalent of, you know, what, 20 gigafactors to produce in one year. But I think where that goal comes from is the belief that if we truly believe that we have a technology that is capable of delivering

higher energy density than conventional cells, maybe by 50% or more. That's capable of supporting faster charge times. That is safer in many ways because of the non-flammable separator. These are really critical selling points. And if we can get this into mass production, we demand constraint. And so if we have the demand for it, then we should be able to build enough factories to really earn a meaningful share of the overall market for batteries. Now, you know, we won't be in mass production until mid-decade, so the 25 timeframe or so. So that doesn't give us a lot of time to wrap up to a cumulative 10-watt hour. But, you know, it's not impossible. You know, it requires that we, you know, we turn up gigafactories that are... of the size and scale of what's currently being planned by many of the leading battery manufacturers. The original Panasonic Gigafactory is probably on the order of 30 to 40 gigawatt hours. Many of the currently being planned battery facilities are on the order of 100 gigawatt hours per year. So over five years, each of those factories is already producing half a terawatt hour. So we don't think it's by any means impossible. It does require that we execute on But we believe the demand is there.

We believe the fundamental technology has the capability to deliver on this.

And if we can continue our execution as we have been doing, we think we have a real shot at pulling it off. So I think what that goal really represents is it's fundamentally a way to quantify what we've been talking about, which is we really... want to make an impact in two ways. One, of course, we want to create value for our shareholders. And the second thing is we want to play a role in the decarbonization of the transportation sector. And we think both those goals are served well by having an aggressive, ambitious target of the type that we just talked about.

Thank you, guys. Thanks for taking my questions. Absolutely.

Thank you. There are no further questions at this time. I will now turn the call back to Jackie. Please go ahead.

I want to thank everyone for taking the time to join the call today. Obviously, we're excited about the results that we shared. Independent third-party testing was one of the things we've been hearing about from our investors, and we're delighted that the independent test data is extremely similar to the data we've shown today. in the past. And of course, the test was also run under what we consider to be aggressive driving conditions in one hour charge and discharge, 25 degrees Celsius, 100% depth of discharge to 800 cycles to north of 80%. We're also pleased with our multi-layer results. Developments on the customer front remain positive as well. We're going to stay focused on these goals and tasks in the quarters coming, and we look forward to reporting on further progress on our next earnings call. Thank you all.

Thank you. Today's conference has been concluded. Thank you for participating. You may now disconnect.