QuantumScape and PowerCo Extend Partnership in Solid-State Battery Development
The partnership between QuantumScape and PowerCo, a subsidiary of the Volkswagen Group, has taken a significant step forward since its inception in July 2024. The collaboration, which initially focused on the development of QuantumScape's solid-state battery technology, has now expanded with a new agreement announced in July 2025.
This updated deal is centred around accelerating the development of the QSE-5 solid-state battery pilot line in San Jose, California. This is a crucial step towards industrializing QuantumScape's groundbreaking solid-state lithium-metal battery technology.
Under the new terms, PowerCo will provide up to $131 million in additional funding over the next two years, subject to the joint achievement of scale-up milestones. This funding comes on top of a previously agreed $130 million, which is linked to technical progress and licensing execution. PowerCo's earlier and deeper involvement in production and automation efforts is designed to support ramping up QuantumScape's pilot line, preparing for broader manufacturing and technology transfer to global markets.
As part of the agreement, PowerCo gains the right to produce up to an additional 5 GWh of QSE-5-based cells annually. This includes sales beyond Volkswagen Group customers, and rights to license certain future QuantumScape technologies.
This collaboration is set to enhance solid-state battery production capacity, enabling higher-volume prototype deliveries and facilitating scaling manufacturing capabilities. It positions PowerCo to be a key producer of QuantumScape's promising technology, which has demonstrated breakthroughs such as 15-minute fast charging and strong cycle life in multi-layer cells. PowerCo aims to reach an eventual production capacity of up to 40 GWh annually of QuantumScape cells, signalling a substantial scale-up aimed at integrating solid-state batteries into electric vehicles in the mid-2020s.
Beyond production scale, the partnership implies accelerated commercialization of these next-generation batteries, with potential applications in high-end Volkswagen Group vehicles first, followed by broader adoption. The technology features a ceramic solid electrolyte and lithium-metal anode, aiming to deliver higher energy density, faster charging, and improved safety compared to current lithium-ion batteries.
In summary, the QuantumScape-PowerCo partnership has moved from an initial collaboration into a deeper, milestone-driven alliance focused on piloting and scaling solid-state battery manufacturing. This progression enhances production capacity, strengthens technology transfer, and positions these companies as front-runners in the race to bring solid-state EV batteries to market, which could significantly impact future electric vehicle technology and industry standards.
- The additional funding provided by PowerCo, totaling $131 million over the next two years, will be used to finance the scaling up of QuantumScape's pilot line in San Jose, California, as part of the broader effort to industrialize their groundbreaking solid-state lithium-metal battery technology within the finance and energy industries.
- The expanded agreement between QuantumScape and PowerCo includes rights for PowerCo to produce up to 5 GWh of QSE-5-based cells annually, and to license certain future QuantumScape technologies, signifying a significant increase in technological capabilities in the technology sector, with the aim of integrating solid-state batteries into electric vehicles in the mid-2020s, potentially shaping future industry standards.
