VW-backed battery start-up to list on NYSE

QuantumScape, a battery start-up backed by Volkswagen and Bill Gates, is to go public on the New York Stock Exchange as it seeks to commercialise a technology it says could almost double the range of an electric car.

The company, which was spun out from Stanford University in 2010, said it would merge with Kensington Capital Acquisition Corp in a deal valuing it at $3.3bn. It will raise $700m through the transaction, including a $500m sale of shares to investors such as Fidelity and Janus Henderson.

It would be the highest-profile listing of a US battery company since A123 Systems, which went public in 2009 before filing for bankruptcy in late 2012.

QuantumScape’s backers include Silicon Valley investors Kleiner Perkins, Khosla Ventures and Mr Gates’ Breakthrough Energy Ventures.

Its biggest shareholder is VW, which has invested more than $300m in the company in a partnership the carmaker has said is aimed at “industrial-level production of solid-state batteries” as it seeks to build 22m electric vehicles within the next decade.

The company is led by Jagdeep Singh, a computer scientist and entrepreneur. It says its technology offers a significant improvement on the energy storage of a lithium-ion battery, while also having the potential to be safer and cheaper.

Its cells use a ceramic solid electrolyte rather than a liquid one, as in most conventional lithium-ion batteries. They also contain a lithium metal anode rather than a graphite one, which allows the battery to store more energy.

Solid-state batteries have been the focus of battery start-ups over the past decade but have never been used in electric cars.

Simon Moores, an analyst at Benchmark Minerals Intelligence, said he did not expect solid-state batteries to be in electric vehicles before 2030. “The EV is the harshest environment for a battery to go into,” he said. “That’s the challenge. Solid-state lithium metal is the future but they need to prove it.”

QuantumScape said it would have $1.15bn in cash after the merger and that it was looking to scale up its cell production and build a new factory. By 2028 it aims to make enough batteries for 910,000 vehicles a year, it said.

Originally published in Financial Times