Very happy to have QuantumScape and Kevin Hettrich, the CFO here of QuantumScape. We're gonna do, he have some slides, and then we're gonna do a fireside chat. If you guys... We have a small enough room, if you have questions, you can raise your hand. You can also email session6 @rwbaird.com. Take it away, Kevin. Thank you. Good morning and thank you for being here. What I'll do, just in the interest of time, cause we have less time in the chat, is I'll present two slides and show a picture. So, QuantumScape is working to develop significantly better batteries for the automotive space. It's about every-- it isn't common that you get a new chemistry. The last time we got a new chemistry were lithium-ion batteries in the 1980s for consumer electronics devices. What we're working on is a new chemistry called lithium metal chemistry, specifically solid- state lithium metal chemistry, which has a number of advantages that we will talk through. So this is the first slide. So on the left, you have a single layer of a lithium-ion battery. You have the cathode on the bottom, the anode on the top. In between is a separator. The way a battery works is when you charge up a battery, lithium-ions in the cathode, when it's discharged, charge it up, you push it into the anode. It's like rolling a ball up a hill. When you want the energy back out, the ball rolls back down. So that's all a battery is. Lithium ions from the cathode to the anode to charge, discharge, comes right back down. So, that structure, the... When folks hear people talk about metals in the battery space, the ones that are more scarce or more expensive come from the cathode, things like nickel, manganese, cobalt, et cetera. The anode tends to be made of graphite or graphite blended with silicon. It's like a host structure, and it's just a place for lithium-ions to live when you charge it up. So that's lithium-ion on the left. So what we're doing on the right is it, as it turns out, you don't need that anode electrode at all. You don't need to store lithium-ions in a space. You can actually plate it out as pure metal. So, our structure, as made, you notice that there's not a graphite silicon anode. There's also not a liquid electrolyte, kind of, within that anode either. And then the lithium-ions on first charge are plated out as pure metal. In order to make that structure work, you have to replace the kind of porous separator on the left with a solid-state one. So that's why it's solid-state lithium metal. And then just visually, by not making one of the two electrodes in manufacturing, it's kind of apparent that you're taking weight and volume out of the cell, so it's more energy-dense. Why do you care about that? As a driver of an electric car, you can translate that into more range. Also, there's a significant improvement to power. Imagine you're a lithium-ion, you're leaving the cathode, you only have half the distance to travel now, and you crudely double the rate of charging, or you have the rate of charge time. So for as an automotive customer, those are two of the most important things: What is the range of the car? What is the charge time? We won't go into this, unless it's in the questions, but, by removing organic material, from the cell, that also tends to improve safety. That's the real value proposition to move to the chemistry, and it's not. And then this is the second slide I'll show. So, we're pushing both dimensions at the same time, which is unheard of in the current chemistry. So here we've laid out a number of kind of Porsches and Teslas and Rivians just to show automotive makers making trade-offs between power and energy density. By the way, these slides can be found on ir.quantumscape.com, just in our presentation deck. So the y-axis is charge time, how many minutes to go from 10% to 80% of charge? And then the x-axis is energy density. How many watt-hours do you have per unit of volume? And you see Rivian, in exchange for a 40-minute charge time, which is relatively slow in that range, has the best energy density. Porsche went the opposite direction. They take about a 20% hit on energy density in exchange for charge time. So our first product, the QSE-5, which we're... We'll talk about the status probably in the questions, is where that blue line is. That blue line may be better than whatever lithium-ion may ever achieve, and that's just the start of our roadmap. We'd make a larger area cell in the green, and then go on with the roadmap. So that's... And then I'll show you a picture, and then I'll hand it over to Ben for questions. So, two years, at the end of 2022, we started A-sample testing with a number of automotive players, including the Volkswagen Group, with whom we have a deep partnership. The Volkswagen Group in January talked about how impressed they were of our A-sample testing. The A-sample was that cell on top, and then we have a more efficient packaging with higher energy density cathodes that'll be the basis of our B-samples and our first commercial product, the QSE-5, on bottom. So with that as an intro, I'll pause and give it over to Ben for questions. Cool. Thank you. Again, just raise your hand or, or you can, email here. So maybe if, you know, you guys are very, milestone-driven, if you could talk about some of your recent milestones, and how they fit into your, your four strategic goals? Great question. So at the end of 2022, automotive testing has three stages: an A-sample, which is show off the technology, a B-sample, the final B-sample, the product is done, and it's made off of manufacturing intent processes. And then a C-sample means that you're not only is your product done, but you're actually and your process locked in, but you're actually making it off the equipment you'll use to satisfy whatever vehicle that you're appointed to with your automotive partner. So we at the end of 2022, we shipped our first A-samples to demonstrate the technology. Great press release by VW earlier this year. That testing takes a fair amount of time. And then in 2023, at a kind of component form, there were a number of things we needed to do to up the performance in order for us to B-sample testing. Those were higher mass loading cathodes and more efficient packaging, which I showed you, to continue to improve the throughput and yields and reliability of the cells as you move between stages. And then on the bottom, that's not enough just to have a compelling product. You also have to be able to make it at automotive scale and at automotive price points. Our unique component is that solid-state ceramic separator, it's about the thickness of a human hair. In order to make that with the right throughputs and economics, we have a fast process, which we've called Raptor and Cobra, the two different stages of. So at the end of last year, we landed the equipment for the Raptor process, and we had some prototypes running for the subsequent kind of Cobra. So then, this year, as Ben was alluding to, we set out to do four things. At the end of the year is an important milestone, shipping the first B-samples. That's a massive product stage for us. As a stepping stone there, we did prototypes called Alpha -2 samples, which showed off the higher mass loading cathodes and the more efficient packaging. We met that goal on the last earnings call, so that one's done. The two other goals relate to how the product is made via Raptor and Cobra. Raptor is we have that core tool that does the heat treatment for our ceramic separator. We got it in and started process development last year. Now we wanna ramp it up to its full planned output. We made some progress in the last earnings call, where we talked about installing automation in front of it and behind it, so then we aren't bottlenecking the process elsewhere. And then the final thing is to keep Cobra tracking for next year. So if this year we're doing our first B-samples off of the Raptor line, next year we'll do a higher volume of B-samples off the Cobra line. It's that Cobra process that we would intend to take into a gigawatt hour scale. Just on that front, your commercialization effort so far in the roadmap, is that... I mean, you kind of alluded to it there, but it's really getting out the first B-sample- Yep. this year, and then kind of how, how does it flow from there? Yep. In last year, we announced the first product, which is that QSE-5. Let's see. Maybe two. Sorry, I'll go backwards. The QSE-5, which is that blue line, it's about a five amp hour cell. So that would be more akin to the size of cells that like Tesla and Rivian use today. It's in that range of automotive cell size. Longer term, we would do a larger amp hour cell, which is more like the cells that you're like CATL and LG, that's more their kind of bread and butter cell. So we would intend to have two offerings, a small and a large cell, to fit kind of automotive need. And we this year B-samples are a pretty massive milestone because you're both showing off the product performance as well as off of your manufacturing intent processes, and that's a very powerful thing to engage customers with. We also mentioned last year we're working with our first launch partner on that QSE-5 and working quite closely on how that gets integrated into things like modules and packs, and then all the different volumes that we would need to ship and demonstrate in order to end with our cells in a vehicle. You mentioned the, you know, the different benefits of your technology over, just call it, traditional lithium-ion. Yep. Is there one in particular, can you stack rank them, or just discuss about how customers approach, you know, the benefits? If I can cheat a touch, it's this combination of power and energy at the same time. Okay. So, in today's cells, you can move along that line, generally by just making the cathode thicker or thinner, which you can intuitively understand. If you have a nice, big, thick cathode, that means you have a big, thick anode, and then a very high percentage of the cell is storing energy. However, if you're the lithium-ion, in that case, you have to move really great distances, so your power is negatively impacted. Then the flip side, if you have teeny thin cathodes and teeny thin anodes and a bunch of separators and foils and things, your energy density is weak, but that distance shrinks, and you have excellent power performance. So, the fact that we pushed the frontier out so much and perform well on both, that's probably our number one selling card. Maybe taking a step back, you recently got a new CEO. Yep. Could you talk a little bit about the new CEO and some of the changes that he's brought? So, Dr. Siva Sivaram, he joined the company in the fall of last year, and this spring, Jagdeep, founder and CEO, moved into a chairman-only role, and then we promoted Siva into CEO. So Siva had most recently come from Western Digital, where he was the president of Western Digital. Give me a big (pair of bars) but I think does something like 70% of the world's data storage. So massive, so complex product, massive scale, dominant market position. Prior to that, he had time with solar, semiconductors so is used to sophisticated technology, bringing it to market, and then taking it from that first market position to mass manufacturing multiple times across multiple products with a lot of success. So really perfect and stage appropriate for us. So in terms of change, we were actually walking in talking about this a bit with Ben. So Jagdeep, kind of founder and CEO, you could put him in a room, give him all different pieces of information across different customer and product choices, and manufacturing constraints and development, and put it in his head, and out would pop a pretty great answer, just with Jagdeep being who he is. Siva style is very different. So Siva has a PhD in chemistry, has written books on very sophisticated manufacturing, so has the technical depth. Nonetheless, one of the first things that he did is we have decisions and accountability are made by individuals, not groups. Instead of the focus of the meeting being on, like, what's new and what's interesting and what changed, we start some of these big operational meetings just by everybody, take your piece of paper, well, metaphorically, it's a PowerPoint now, and start with, how are you doing against the goals that you owe us? Jump right to the ones that are yellow or red and then talk about what you're doing to restore them to their status, and then talk about the impact on other people, and let's discuss that. So instead of what's like new and exciting, what's the change, it's very much an execution focus, which is, I think, a great fit for the stage. He's also has a nice kind of cadence to things in terms of, here is the platform for the first product. It either gets in there, or if it doesn't, if it. Like, the train is leaving the station, so let's just figure out what's the functionality on it, because behind it is that other train. So, like, just establishing the processes and systems of execution and that kind of cadence of a product company, I think, are some things I would highlight. Now, has he brought in other former members of his team, or are you guys still building out your team, or where do you stand? We, he's talked about this on the earnings call, that he loves the team and the people and the depth of bench. It's any CEO's prerogative to fill out some of the talent. If that happened, it would probably be more towards our future selves as we become a larger organization focused on kind of scale. You can imagine us opening seats there, and that would be opportunities to bring in some folks. So there aren't there, there's no major executive position he's filled from his past to date, but there's. That very well could happen in the future. You mentioned the QSE-5 a couple times. Could you talk to us about that in more depth? Yep. Just what it means for commercialization? Yeah. So, it's a benefit of. So for us, as a product company, getting a product out the door that's compelling is a big deal, and, if you ask, if you take the different competitive landscapes of what folks are working on, we assume that the major change in the industry over the next couple of years is that on the anode side, folks will be blending in increasing amounts of silicon. There are some challenges to that, either in terms of cost or in terms of life, but if you give people full credit, you'd see some of those kinds of target spots between where the curve is today and where our blue line is. That our first product is might be better than what lithium-ion could ever achieve and is only a start is pretty exciting. It's such a big market. If you think of, like, $5,000 of cells per vehicle on the premium, maybe more, 80+ million vehicles. So, it's like hundreds of billions of dollars worth of TAM, and what we're seeking to do is have a dramatically better product than anything else that's out there or anything that's close. Here, this is just a plot of others working on this same chemistry. It isn't a secret that this is a dominant chemistry. Thirty-four years ago, when the inventors of lithium-ion made the lithium-ion battery, they tried to make lithium-metal work first because the obvious benefits, not having an anode, and use the carbon anode, just as a practical solution to get the system working. But this is all of the data that we're aware of in the world of folks working on lithium-metal anode, and their performance. On the y-axis is charge rate. So, here it's how many times can you charge in an hour, between 10% and 80%. On the x-axis is cycle life. The size of the circle is correlated with energy density, meaning are you—if you're working on lithium metal and you have to put in excess lithium, either in terms of a foil or evaporated or something, we ding you with circle size. And then the color is just the difficulty of the conditions. If it's a red circle, we don't think it's a product, maybe for anything, because it has too much temperature or pressure. Blue is probably automotive; green is probably automotive or consumer electronics. And we're so far ahead of everyone, it's on multiple dimensions that we don't see. While there's space in the market for another competitor, we don't see anyone, yet who has a viable shot. Yeah. Yes, Dr. Weiss. So you guys are essentially a industrial biotech. You're developing a product, you've got a cash burn rate, it's gonna come out in a few years. Yep. How do you think about, you know, making sure that you have enough cash to get to fruition? And I'm gonna guess that you're gonna need money to build the facilities once you have proven concept. Yep, fantastic question. So, we've been conservative on the balance sheet, have always been, just because of the size of the market opportunity and because of that cash burn profile. So we ended last quarter with about $1 billion on the balance sheet. We talked about that cash going into the second half of 2026. The exact amount of capital is, business model, dependent. QS-0, which is our set of facilities in San Jose, that's wholly owned, that'll make the first QSE-5 for a very, very small automotive vehicle program. High profile, but small because of where we're making it. We have a commercialization agreement with Volkswagen. It's a joint venture that helps make things more capital light. There's stepping stones between one and then an expansion of a further 20 GWh. We also mentioned on recent earnings calls, interest in our technology in terms of a licensing agreement, which is, of course, the most capital light of those models. So for us, and the way we look at it, is that that cash burn gets us all the way through all those different milestones, where you have finished B-samples coming off of your final processes, working closely with a launch customer. We have an ATM in place, which through the end of the last earnings call, we hadn't used. Our assumption is that doing all those things successfully is a massive value creation. If you think about it, I'm not an expert in the biotech space, but we would've hit some pretty massive phase trials by walking out with, "Hey, it's done. It's off of the final equipment. It's performing as it's supposed to, and we're feeding it into our launch customer, who's saying really nice things." And that should be—that should enable us to do whatever capital raising we would need for whichever business model or combination of business models we'd choose. But it isn't lost on us that to be prudent and scrappy and disciplined with that use of the money that we have. But that's actually a fine kind of risk-reward comparison that we think about, too. Hi. Obviously, the passenger EV market is established- Yep. To go straight into that, that's 400-volt, 800-volt systems. Is this scalable to the, like, 1,200-volt for long-haul trucking or eVTOLs? Yeah, you just, you put enough. It's a pack design question. If you think of the voltage of each cell being something like 3 volts, 3.2 volts, 3.3 volts, again, CFO, give you some ballpark figures. You just put those in sequentially until you get to the voltage that you want. So, you just put additional cells in series until you hit that ultimate voltage. And then you do kind of. To make the math easy, say it's 400 cells in series to get to 1,200 volts. And then you would just have parallel strands of 1,200 cells until you get to the final capacity that the manufacturer wants. So yes, and absolutely. Thank you. Yeah. You mentioned the relationship with Volkswagen. Could you just talk about your, you know, number of commercial relationships? Yeah. And then you mentioned you're delivering a B-sample cell to a customer. Yep. Maybe just, Sure. kind of give us more detail on all of that. VW has been a fantastic partner. We've met them within a few years of the company being founded. We've been at this for a while. New chemistries are hard. So we've been working basically for a decade. They've invested $hundreds of millions across multiple rounds. Our relationship now has spanned many CEOs, and each CEO has tended to take the same relationship and even expand the depth across it. They have two members on our board. They've mentioned that they're investors. We have a commercialization agreement in place where if we hit our milestones, we do a joint venture for manufacturing the cells, and then they turn around and buy out all the output. They, GM, and Toyota kind of battle it out for who's kind of number one in the world in terms of total kind of vehicles produced. But, regardless of if they're one, two, or three, they're one of the world's largest manufacturers of vehicles, and they have many of the world's kind of iconic brands. So they've been great. When we became a public company and had access to more capital, that enabled us to broaden our commercial partnerships as well. So we signed five other agreements in terms of sampling and development with other OEMs. So that brings the total to six. There's a great mixture of traditional players, pure EV. You have larger volume-type brands, performance, and niche, luxury, et cetera. So geographically, it gives us a nice variety, too. And then outside of automotive, we work with Fluence on the grid. We signed a leading consumer player as well, are probably the most notable non non-EV. The photo that I showed before. It's kinda cool. So that QSE-5 is about the size of this. It's about the size of a kind of a deck of cards, and it's fairly thin. So it's in the Venn diagram overlap between automotive and consumer, which is nice to have a single product direction, and you can give samples of that into leaders in both spaces, which is the fastest path to market. It's also very it's like a free option value on consumer along the way. You, the slide with the competitive landscape. You know, some companies, OEMs, have projects going on in-house, versus, you know, smaller companies versus, you know- Yep. -mega-cap companies. Yep. How do you see it, you know, where you'll have OEMs buying from multiple sources? Yep. Okay. Yeah, so, absolutely. I think, the classic automotive purchasing playbook is to, have multiple vendors, for example, like a big vendor and a minor vendor, and then just make them ruthlessly compete every purchasing cycle. And then for the OEMs, the batteries, determines all performance of electric vehicle effectively, range, charge time, safety. It's a big, heavy, high volume thing that you have to design the whole car around. So it's not lost on them, on how. And then you also, I don't know, just take some of the, the Germans, like the Audis and Porsches and Mercedes and BMWs, they all have very beautiful cars, and they're used to competing on the vehicle level. It's not common where you'll get, maybe it's unheard of, that you'll have a significant powertrain advantage from one of those brands over the other, that they can then, like, really hold over their competitor and take massive share. That's the type of advantage that we're targeting, and they're very excited about it. I know it's probably early to discuss cost and pricing- Yep. But, you know, any kind of framework you think about, you know, it's having a premium- Yeah product in the kind of a commodity-type market? Yep, yep. So that performance in terms of energy and power, we talked about safety. The other thing you notice, like in the VW press release, is that we have about half the rate of fade that they're used to seeing in lithium-ion. We think that's because you don't have an anode, you don't have a liquid there. So that's also life and the power, energy density, life, safety, those are all the things that people care about, and we hope to be better at all of them at the same time. So that should command a pretty healthy premium. And then the cool thing is, you get there by not making one of your two electrodes. So all that savings in the bill of materials, that's of the graphite silicon. Any of the liquid ion conductor that would be contained within it is savings. Then we need to make our solid-state separator. We need to substitute it in for the porous one. At lower scales, with less manufacturing maturity, we don't expect to have a cost of goods sold advantage. When we get to larger scale factories, saying the tens of gigawatt-hours, at maturity, we are targeting a cost of goods sold advantage relative to that same lithium-ion stack, because we eliminate one of the two electrodes as manufactured. And, you know- Is there a difference in quality because of the material composition? Meaning that the lithium-ion process has problems with defects and yield. Is that in how to get a factory ramped up, you know, those differences can be made. Is that an advantage with your composition? We would. I'm not an expert on some of like, if you're comparing with, like, how a porous separator or something is made, I'm not an expert in terms of, I think that's literally made by, like, taking whatever polyolefin film, and it kind of stretches it to give it the right spacing and things. So that's a mature product that's made at scale, well, and it works. We would, when we replace into it, we have different things that we look for in the manufacturing process, and one when our cells are made well, they work well, as you kind of saw with the press release. So one of our jobs is to tighten the conditions over time as we mature it and get more experience making it, so that the output is increasingly higher yielding and has the reliability that we expect, and that's just part of kind of coming down the curve. Maybe last one, just because we have so much, so many headlines that seem like, you know, OEMs are retrenching and not gonna make- Yep EVs, and no one's buying EVs. And, you know, what are you guys seeing just as far as, you know, you know, inbounds or customer discussions, as it relates to that? They continue to say what you all work, are working on, blows our mind in terms of performance. Put it in a box and ship it to us, so we can then test it and put it in a vehicle. Like, if, if the end market is, I don't know, when we're kind of commercializing, is like 15% of the market versus 20%, versus 12%, versus 23%, doesn't really matter to us. There's, like, such excitement over this differentiation that we don't have to worry. We, we won't bump into the addressable market for some, for some time. And in fact, our, hopefully, our product actually expands what's, what's addressable. So they're as, as enthusiastic as ever. You also, just in terms of a competitive advantage, just be sitting on $1 billion with a technology lead in this environment where no one else is getting funding, is also. We think longer term is actually gonna benefit us. Great. Just on that, so range anxiety is the number one issue. You've solved for that. So tell me, if you had the same size physical battery of what you're getting now- Yep. What is the difference in range? It would, it would be correlated with that chart. So call it, zip code of, like, 20%, depending on where you're comparing it to. And then we actually get range both ways. If, if they, they pack the vehicle with cells, you get 20% more range, and then we're also charging in half the time. So, you get it both ways. Your, your car will go farther, and then it'll charge faster, so you get both, both benefits at the vehicle level. Great. I mean, could you make a cell that has 500 mile range? And I think that's- Well, that is just a pack size thing. So if the OEM will dedicate more cells to the pack, absolutely. We're gonna have to leave it there. Thank you so much. Yeah. Thank you.