Returns as of 10/13/2021
Returns as of 10/13/2021
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Most investors probably aren’t familiar with quantum glass batteries, but the technology could revolutionize electric vehicles (EVs) and the broader renewable energy industry.
If you’re wondering what a quantum glass battery is, here’s a brief explanation. Quantum glass batteries, also known as glass batteries, offer more advanced technology than the lithium-ion batteries common in today’s EVs.
In glass batteries, electrolytes have higher energy density and can deliver an equal amount of power to lithium-ion batteries in a smaller space. Quantum glass batteries also don’t catch on fire, which means they don’t need the components of the lithium-ion batteries that prevent them from starting a fire. Quantum glass batteries also charge faster, and their higher energy density means they can give electric cars greater range.
Glass batteries are still a nascent technology, but you can see why this market would be alluring to investors, especially given the explosion in demand for electric vehicles over the past couple of years.
Below we’ll explore some of the companies that hold critical patents in quantum glass batteries. Keep reading to learn more about three of the best quantum glass battery technology companies out there today.
Data source: Yahoo! Finance.
It’s hard to pick a leader in an industry that has no material revenues and whose technology is still experimental, but QuantumScape has received more investor attention than any other glass battery stock. The company went public through a special purpose acquisition company (SPAC) merger with Kensington Capital Acquisition in late 2020, and the stock has cooled off since its market cap jumped to more than $50 billion in December 2020.
QuantumScape has revealed tests showing that its single-layer battery cells are capable of charging to an 80% capacity in just 15 minutes. However, building an entire fuel cell would take 100 of those battery cells, and a complete battery would take hundreds. While the single-layer battery cell tests are a positive step, manufacturing a functioning glass battery will be much more complex.
Perhaps the best reason to believe in QuantumScape is its partnership with Volkswagen (OTC:VWAGY), one of the biggest carmakers in the world. The German automaker has invested more than $300 million in QuantumScape and hopes to begin using its cells by 2025. The two companies have also formed a joint venture to build a solid-state battery cell gigafactory.
Most major car manufacturers are looking to partner with battery tech start-ups working to build quantum glass batteries. Toyota is taking a different route by seeking to build its own. The company has been a laggard in the EV race, but Toyota recently announced that it would invest $13.6 billion in batteries over the next decade, including a significant portion in quantum glass batteries.
As an auto manufacturer, Toyota has a number of advantages over start-ups like QuantumScape. First, it’s well-capitalized with a thriving core business. There’s no reason to worry about the glass battery investments sinking the stock, and that means it will be less volatile than a pure-play battery stock. Toyota is also planning to initially use its solid-state battery cells in its hybrid vehicles.
The company acknowledged in September that it would take longer than expected to develop glass batteries for fully electric cars, but investors should expect such setbacks given that producing these batteries at scale is a monumental engineering challenge.
Decarbonization Plus Acquisition III is another SPAC that has agreed to merge with Solid Power, a quantum glass battery start-up. Solid Power is expected to have $599 million in cash once the deal closes and has been developing its technology since its 2012 founding. The company has an impressive list of high-profile investors, including carmakers such as Ford (NYSE:F), Hyundai (OTC:HYMTF), and BMW (OTC:BAMXF), as well as electronics giant Samsung (OTC: SSNLF).
Solid Power aims to begin producing automotive-scale batteries in early 2022, although the company’s market cap — less than $500 million — indicates that investors are less sold on Solid Power’s technology than they are with QuantumScape, which is valued at nearly $10 billion. Investors should learn more about Solid Power’s prospects once the merger closes.
Investing in quantum glass battery stocks at this point is not much different than buying development-stage biotech stocks. We are still several years away from this technology going mainstream, and the field is wide open with no viable products available yet. Additionally, technology promises haven’t always come through in the auto industry. Many industry insiders, including auto company CEOs, expected autonomous vehicles to be commonplace by now. That hasn’t happened.
Although that doesn’t mean quantum batteries won’t be successful, investors may want to wait until more conclusive data comes in and a clear leader emerges. At this point, glass battery stocks are only suitable for investors with a very high tolerance for risk.
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Stock Advisor launched in February of 2002. Returns as of 10/13/2021.
Average returns of all recommendations since inception. Cost basis and return based on previous market day close.
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