Thank you, operator. Good afternoon, and thank you to everyone for joining QuantumScape's Third Quarter 2026 earnings call.

To supplement today's discussion, please go to our Investor Relations 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 CEO, Dr. Siva Sivaram, and our Chief Accounting Officer, Agnes Tan.

Our Chief Financial Officer, Kevin Hettrich, is recovering from a planned medical procedure, and Agnes will cover the financial portion of today's call. With that, I'd like to turn the call over to Siva.

Thank you, Sam. We look forward to having Kevin back soon, and we wish him a speedy recovery.

Let me start with a big news on cell manufacturing. In February of this year, we inaugurated the Eagle line, and it has already become the workhorse of our customer engagement, allowing an increased pace of customer sampling, which is flowing into customer billings.

Our progress on demonstrating scalable production has given us the confidence to take the next step for production scale-up beyond the design capacity of the Eagle line. Today, we announced a 100 megawatt-hour mass production line with output aimed at meeting the rapidly emerging opportunities for our QS-DC and QS-AS business verticals.

In addition, we announced a QS ecosystem partnership with Muehlbauer Group to provide cell assembly equipment for this planned line. Engineering work on higher-throughput processes and equipment is already underway, and start of production for this new line is targeted for 2028.

With Murata, Corning, and Muehlbauer, we have now announced partnerships with global players along the entire production flow, representing an end-to-end solution for mass production of our technology as we work towards gigawatt-hour scale production. Next, I will provide an update on our three business verticals, starting with QS-DC.

On October 8th, we launched the QS PowerBlock for AI data centers in conjunction with the Open Compute Project Global Summit. The QS PowerBlock is an in-rack energy storage reference design that enables AI data center architects to harness the improved energy density, high-power capability, and especially the improved safety profile of the QSE-5 cell.

In testing, the QS PowerBlock demonstrated four times the power density and five times longer run time than the reference specification from OCP. This is a clear demonstration of the step-change performance improvement provided by QS technology and the value we can offer AI data center customers.

Another important advantage of our ceramic solid-state separator is its safety profile, in particular its thermal stability. Conventional lithium-ion batteries, including LFP batteries, are not thermally stable above approximately 180°C, leading to the risk of catastrophic thermal runaway and making insurance and regulatory approval more onerous, which slows down deployment of critical AI infrastructure.

In contrast, QS solid-state batteries have been shown to be thermally stable well over 300°C, and we recently validated this result in customer testing, as well as with third-party lab testing. Next, an update on our automotive vertical, QS-EV.

Engagement on automotive cell development continues to be robust across our global automotive customers. In Q3, we recorded our first customer billings from Honda agreement announced in June.

This agreement encompasses joint development work to integrate our solid-state platform into Honda's technology roadmap. In addition, we have signed an agreement with a new customer to further advance automotive commercialization.

This agreement is with a leading global player in mobility manufacturing whose applications and requirements are aligned with our automotive customers. We are aligning our statements of work with Volkswagen PowerCo with a goal of bringing them on to our long-term technology platform that goes beyond QSE-5 and includes other applications.

Our aim is to bring all of our automotive customers on to a common technology platform. On November 11th, we will announce more details on our next-generation technology platform and collaboration model with automotive customers at our third annual solid-state battery symposium in Kyoto, Japan.

Next, an update on our QS-AS business vertical. QS-AS is engaged with customers across many advanced applications: defense, aerospace, medical devices, consumer electronics, and more.

We believe this diversity of applications offers an attractive opportunity set for our QSE-5 platform, with a total addressable market for QS-AS of up to $75 billion by 2030. We have shipped QSE-5 samples to customers in the defense, aviation, and telecommunications sectors, and we recorded our first customer billings from QS-AS this quarter.

One important point of feedback from customers in defense is that supply chain vulnerabilities are not just a theoretical concern. They are already seeing restrictions put in place by foreign governments, which limit their ability to procure cutting-edge batteries to power their advanced defense systems.

This is a point of differentiation for QS. In addition to advantages in performance and safety, our cells are built in America and use supply chains that were designed from the beginning to avoid critical dependencies on Chinese suppliers of equipment or materials, such as graphite.

Finally, with Q3 behind us, I'd like to take a look back at our execution so far on our four key goals for 2026. These four goals were all focused on one strategic objective: taking our solid-state battery technology and turning it into products across multiple verticals.

Our execution towards our goals has been strong. Our first key goal for 2026 is to demonstrate scalable production on the Eagle line.

Eagle line is fully operational and is producing increased volumes of QSE-5 cells for our customers. This has allowed us to move to the next stage of scale-up with the announcement today of our 100 megawatt-hour mass production line and ecosystem partnership with the Muehlbauer Group.

Our second key goal for 2026 is to advance automotive commercialization. Far this year, we have announced our second named automotive partnership with Honda.

We continue our engagement automotive development with Volkswagen PowerCo, and we have signed new agreements and expanding existing relationships with global players in automotive and mobility. Our third key goal for 2026 is to enter new high-value markets, and we are seeing strong interest in both our QS-DC and QS-AS verticals.

With the QS PowerBlock, QS-DC is addressing the need for high-performance, safer in-rack energy storage for advanced AI data center design. With QS-AS, we are seeing broad interest across advanced applications, including defense, aviation, and telecommunications, and we have already begun generating customer billings from QSE-5 sample shipments.

Finally, in 2026, we promised to go beyond QSE-5 with an update on our technology roadmap, and we are pleased to announce that this will take place in conjunction with our third annual solid-state battery symposium on November 11th in Kyoto, Japan. We are proud of the progress we have made so far in 2026, and while there is much work left to do, the whole team is focused on our mission to revolutionize energy storage.

We look forward to sharing more updates soon.

Thank you, Siva. GAAP operating expenses and GAAP net loss in Q3 were $92.4 million and $84.5 million, respectively.

Adjusted EBITDA loss was $60.7 million in Q3, in line with expectations. For full year 2026, we reiterate our adjusted EBITDA loss guidance of between $250 million and $275 million.

A table reconciling GAAP net loss and adjusted EBITDA is available in the financial statements at the end of the shareholder letter. Capital expenditures in the third quarter were $4.4 million.

Q3 CapEx was primarily composed of investment into our technology roadmap and associated facility spend. For full year 2026, we reiterate our guidance for CapEx to be between $27 million and $37 million.

Customer billings in Q3 were $9.8 million. Customer billings is a metric represents the total value of all invoices issued by QS to our customers and partners in the period, regardless of the accounting treatment.

As a reminder, customer billings may vary from quarter to quarter due to fluctuations in activity as we progress through various phases of engagement. This operational metric is not a substitute for revenue under US GAAP.

Customer billings in Q3 included both automotive and non-automotive customers and reflected the mix of development activities, payments from ecosystem partners, and cell shipments. We ended Q3 with $819.8 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, Agnes. We will begin today's Q&A portion with a few questions we have received from investors or that I believe would interest investors.

Siva, today we announced a 100 megawatt-hour production line, as well as a partnership with Muehlbauer to provide cell assembly equipment. Why take this step now, and why Muehlbauer?

Sam, we have announced the QS PowerBlock at the OCP conference, and we have shipped cells to a number of aerospace and defense customers. The response from both markets has been very strong.

These customers don't typically have their own cell manufacturing capacity, we need to provide a manufacturing solution. The Eagle line, our highly automated pilot line, along with our Cobra process, is demonstrating scalable production.

We are sampling to more customers, generating billings, and this pilot line is laying the groundwork for the next step-up in scale. For this step, it is crucial to bring in an ecosystem partner with deep experience in automation and cell manufacturing equipment development to partner with us, and that's where Muehlbauer comes in.

When we take our material supply partners, separator partners including Murata and Corning, and put that together with downstream cell assembly with Muehlbauer, that gives you an end-to-end process flow enabled by a set of world-class experts. This line lets us serve high-value markets directly while keeping our capital-light licensing model for automotive.

Siva, this quarter we recorded our first billing from Honda and added a new agreement with a mobility manufacturer. Where does automotive commercialization stand, and what should investors expect for the rest of the year?

Sam, automotive continues to be a large and important market for us. On commercialization, in June we announced our agreement with Honda, and this quarter we recorded our first billings from Honda.

In Q3, we also added an agreement with a global player in mobility manufacturing. Beyond Honda and Volkswagen PowerCo, our active customer engagements include two other top-10 OEMs.

As we have done on a regular basis, we are in the process of updating our statement of work with VW PowerCo. As part of that process, we have amended our collaboration agreement to eliminate transition payments and are working to add milestones tied to technology advancements.

We continue to make substantive progress in advancing our technology platform, and we are aligning our automotive customers to take advantage of this. Regarding our Kyoto event, I won't give too much away today, but keep in mind that our ceramic separator enables an anode-free lithium-metal architecture that is cathode-agnostic.

Getting the automotive industry aligned on this one platform positions us to become the de facto operating system for the solid-state battery industry, creating enormous potential for value creation and capture. That's what we're aiming for, and I'll save the rest for the symposium in Kyoto on November 11th.

Siva, we launched the QS PowerBlock at the OCP conference in San Jose. What's been the feedback from AI data center customers so far?

We're extremely excited about this market, and OCP was a great chance to get customer feedback. We heard three consistent themes.

First, for data center architects, the role of energy storage is changing rapidly. I'll use an automotive analogy.

In the past, batteries were basically like a spare tire in a car: you carry it along, but you hope you don't need it. As we enter the 800-volt DC transition, and as single rack power is headed towards 1 megawatt, the battery is becoming more like a suspension system.

It is working constantly to smooth things out, and without a suspension system, something will break pretty quickly. This is a totally new use case, and data center architects need fundamental innovation to make it work.

Second, for in-rack power, safety is the absolute priority. That means architects today are generally limited to using LFP batteries, and they're paying a big performance penalty to maximize safety.

That gives us a clear opportunity to deliver systems that not only have longer run time and better power density, but also a safety profile that beats even LFP on thermal stability. Last, this transition is already happening.

Customers want to see the QS PowerBlock in volume, and that's why we're announcing this 100 megawatt-hour line today. Start of production in 2028 aligns well with the data center industry timeline, and now is the time to take that next step-up.

Thanks so much, Siva. We are now ready to begin the live portion of today's call.

Operator, please open up the line for questions.

Hi, thanks so much for taking my questions. First one is on the 100 megawatt-hour line with Muehlbauer.

Just curious to see what the economic arrangements might be, in terms of who owns it, who pays, and then what does it do to the CapEx-light model?

Winnie, thanks for asking that question. Just to put the Muehlbauer announcement in context and the 100 megawatt-hour line in context, the longest lead time aspect of the project is designing, building, and installing the equipment.

Now that we've started on that, we are announcing the planned 100 megawatt-hour line today. Obviously the next question is, where is this going to be?

On site selection, the process is underway. We will keep it confidential as you would expect and announce it at the appropriate time.

We will provide a capital plan in the 2027 financial guidance on our Q4 earnings call. We are targeting equipment cost to QS of less than $100 million, but in terms of funding, we are pursuing non-dilutive funding sources, including customers, government, ecosystem, and licensing partners, and we'll keep you updated.

Got it. That's helpful.

Then you mentioned you've recorded your first Honda billings in the third quarter. Was wondering if you can help size that, and then what does that mean in terms of timeline to potentially signing a licensing agreement with them?

Winnie, let me, by the way, finish up on a point you asked earlier. What happens to our capital-light model with the 100 megawatt-hour?

This deals back with your Honda question. We still are keeping our capital-light licensing model to address markets such as automotive that have their own manufacturing capacity.

Our expectation is that whether it is with Volkswagen PowerCo or with Honda, we will be transferring technology to them so that they can ramp up their own production. Now, with respect to products and product lines, as we are prone to do, those announcements have to come from our customers.

The engagement with Honda has been very, very strong, and we're working very closely with them.

Got it. Thank you.

I'll turn it back to queue. Thanks.

Thanks, Winnie.

Hey, Siva. Congrats on the PowerBlock product launch.

Just a quick question on that. I'm just trying to get your thoughts on the application.

The BBU, the product spec, or application space, is defined by high power, high pulse. This is a very different vector space than what you have been optimizing for EVs, which is more long cycle life, right?

You need probably on the order of 1,000 cycles. More full-depth discharge, not just the high-pulse application.

I understand that theoretically lithium metal has far better power density, but in practice in the lab, I'm wondering what have you done to maybe retune the cell off of the EV design and optimize it for the BBU application?

Mark, you are perceptive. That's a very, very good question.

The application for automotive use case is very different than in the BBU use case, where we don't need to worry about low temperatures, the occasional brownouts where you do full-depth discharges probably a couple of times a month, if not a few times a year. Most of the time is used for high frequency ups and downs, and towards the middle of the depth of charge and discharge.

What we have done is shown a couple of specs that are remarkably good for our technology. First is power.

How much power can I produce out of this? We are 4x better than anything that the OCP spec calls for.

Then how much run time can I support? When you get to be a megawatt-hour rack, and you are taking care of ultra-high frequency changes with capacitors, but the rest of it is supported by the battery, how much can you support on your own?

We found that compared to the spec, we are 5x longer run time. The lithium-metal technology naturally is a better fit for this application, but most important than anything else is safety.

You are sitting adjacent to very high-value GPUs, and people are ultra-scared about putting an NMC battery or something that could cause a thermal runaway. Here, the better safety profile of the QSE-5 is a very, very good fit for them in the ability to withstand thermal runaway.

In all, this is a very good fit, and the QSE-5 seems to have found an interesting home.

Great. Thanks for that color, Siva.

I appreciate that. Just to pivot to the 100 megawatt-hour line announcement, congrats on that as well.

I heard you also say to Winnie the $100 million in CapEx, and that's where you're seeing the top end. What are you seeing behind the scenes that's changed or that would have you divert from the CapEx-light model that you were pursuing, and VW, I believe, has right of first refusal on the first 5 gigawatt-hours if they choose to take that.

I'm just wondering are they in play here for the ownership, or who ends up developing this line? Who ends up owning the asset?

You are correct in pointing out that in our contract with PowerCo, they have a capacity to add non-automotive applications. However, what has come out of this is how well the Eagle line has done.

Remember, Volkswagen PowerCo is here with us developing it. They are in our shop working hand in glove, so that relationship is going well.

This equipment design is built off of our advancements on the Eagle line, and Muehlbauer will develop a full back-end cell assembly line for us. That's the structure that we're going in, and we'll be looking at, as you said, capital-light model for any automotive applications that we do it either at PowerCo or at Honda.

This line will be directed primarily at the high-value applications such as aerospace, defense, and data center.

That's very helpful. Thanks.

Should we look at that as maybe a DOE stepping in for some non-dilutive funding, like we've seen in some of the private sector and maybe some other smaller battery players?

We have seen those, and we have seen other grants, loans, and many other instruments from the government being applied, and we will be looking at those as well.

Great. Thanks, Siva.

Hey, good evening. Congrats on everything.

Just in terms of automotive versus data center versus aerospace, could you just talk about how competitive the environment is in all three of those verticals? Thank you, guys.

Thank you. Thanks, Ben.

As you'd expect, these markets are substantively different in their customer base. Especially with respect to the QS-AS advanced solutions that covers defense, aerospace, communications, etc., there the supply chain is a big asset for us.

A, we are a US-based cell manufacturer. B, we constructed the supply chain to have no dependence on graphite.

We don't have, in our architecture, any graphite. We are partnering with, as the government calls it, non-FEOC, non-foreign entities of concern partners.

Every one of them is done with a friendly partner to go make this happen. This is particularly relevant for our defense and aerospace applications, and more and more we see that even with the data center partners, that they are looking for a supply chain from a friendly source.

Add on top of it the better safety profile, that makes us have some additional advantages over any competition. Then of course, intrinsically, the cell is better in energy and power and all of the conventional applications that you'd look for.

Thank you.

Hi, you've got Ayush Ghosh on for Mark Delaney, thanks for taking the questions. Congrats on the new production line, and sort of with that, how are you thinking about the relative timing of commercialization across the three verticals, and how, if at all, has that timing changed over the last year?

The 100 megawatt-hour line, the start of production is targeted for 2028. We are looking at both QS-DC and QS-AS as maybe a faster time to market than the more rigorous QS-EV applications, but that does not mean our targets for QS-EV has changed.

We are continuing to work with our partners with that same original target of getting it into revenue and commercialization. What we have done here is with an end-to-end solution for mass production with very trusted ecosystem partners, like Murata, Corning, or Muehlbauer, is make sure we have a high confidence in us being able to address these high-value markets very, very quickly.

Thanks for the color there. Helpful.

Then separately, wanted to ask about VW given the restructuring efforts going on there. Can you speak to what, if any, implications that may have for the PowerCo relationship?

Then separately, how do you see the relationship of PowerCo evolving here? You noted aligning the statement of work beyond QSE-5.

Thanks.

Yeah. Ayush, the relationship with PowerCo remains very strong, and the overall goal of the collaboration remains unchanged.

As this partnership is constantly evolving. As we said last quarter, we are moving the PowerCo engagement towards milestone-based payments.

As part of this, we are also be expanding to cover other applications, such as the data center and robotics. Overall, we are continuing to evolve this relationship towards these applications as well.

Thank you for that. I'll pass it on.

Thank you.

Hey team, thanks for taking my questions. I guess, Siva, the decision to move forward with the 100 megawatt-hour line, it kind of suggests growing confidence in the demand across QS-DC and QS-AS.

I guess what sort of level of customer interest supports that decision? How many customers are currently testing samples, and over the next 12 months, what commercial commitments would you like to see?

Gabe, you are asking the right kind of questions. We have increasing confidence coming from three mutually orthogonal directions.

First, when we introduced the PowerBlock, and when we started sampling to multiple QS-AS customers across multiple verticals, the feedback has been very, very strong, and everyone has been asking for volume as soon as possible. Independently, we have obviously ramped up the Eagle line, and we are seeing the capability of the Eagle line to form as a foundation for the next higher-level step-up.

The third is a partner such as Muehlbauer coming in and validating the Eagle line and proposing a structure to ramp up from on top of it and taking ownership in this partnership to get that going. All three of them put together give us the confidence: the markets, the demand from our customers, the confidence in the technology based on the Eagle line, and the support of our ecosystem partners, all give us the confidence to take this 100 megawatt-hour step right now.

I guess just in the timeline between an award win to start of production, in the Western markets in automotive, it's typically a 2- to 3-year timeline. Obviously the data center is a completely different end market, but could we see some awards being announced within that 2027 timeframe before 2028 start of production?

You see how fast both of these markets are moving: the defense marketplace, drones, and other applications, similarly on the data center marketplace. This BBU concept, for instance, was a novelty barely 9 months ago, and already we are seeing racks being displayed in conferences.

This is moving very, very rapidly, and we want to be there in the middle of it to take advantage of it. That's why we want to have start of production in 2028, and we want to have multiple customers signed up before that to make sure that the uptake is there.

Great, thank you. Wishing Kevin a speedy recovery.

Thank you. We, too.

Thank you, operator. I would like to recognize the entire QS team for their execution this quarter, from the Eagle line to the launch of the QS PowerBlock to the 100 megawatt-hour line we announced today.

Thank you to our shareholders for their continued support, and we look forward to updating you on our progress in the months ahead. Thank you.