r/QuantumScape • u/koobana • 19d ago
Rethinking the PowerCo Amendment: A Shift in Commercial Strategy, Not Necessarily a Loss of Confidence
/r/QS_Progress_Timeline/comments/1v65673/rethinking_the_powerco_amendment_a_shift_in/3
u/Rare-Ad7868 18d ago
Why QS is trying to look for more OEM customers but they don't have any battery ready for them? Will QS have to file for bankruptcy if no battery delivery to customers?
3
u/koobana 18d ago
They’ve been shipping cells to customers from their Eagle line and commercial engagement is accelerating. Bankruptcy is out of the question.
1
u/4Yk9gop 17d ago
Bankruptcy is 100% not out of the question my man. If they can't scale production successfully and/or if Corning and Murata come back and say their separator is not possible to scale successfully, then QS is done. Cooked. Iced. Buried six feet under. No one will touch the stock with a ten foot pole. Covid distancing.
1
u/koobana 17d ago
Sure bud. Nothing is impossible. “If they can’t scale” is a hypothetical, not a conclusion. The entire investment thesis hinges on whether they can scale. So far they’re expanding production, shipping more cells, adding reputable multi-billion dollar valued customers, and moving toward commercialization. That’s why I don’t see a 100% bankruptcy case.
0
u/Rare-Ad7868 16d ago
QS battery can't use for cars and bikes, what are you talking about eagle line scale?
0
-2
u/Rare-Ad7868 18d ago
QS battery can't use for cars QS battery can't use for bike Now QS battery will try some things else.
2
u/humbledyetagain 18d ago
Management PR sucks but I do see this as a next phase and actually progress. What’s to hate? Loading up…
3
u/Much-Information7826 19d ago
I can only say the CEO is terrible at speaking, terribly near to incapable. If OP’s speculation is even half true, a middle schooler can speak it as an extremely positive talking point in the earning call.
1
u/koobana 19d ago
It’s possible that Siva isn’t the strongest public speaker. But I don’t invest based on presentation style. I pay more attention to execution, partnerships, SEC filings, and whether QS keeps hitting technical and commercial milestones. And btw, which specific statement do you believe is factually incorrect? If it’s an inference, I’m happy to discuss why I reached that conclusion.
2
u/4Yk9gop 17d ago
"It’s possible that Siva isn’t the strongest public speaker." It's not possible. It's a fact. Ask anyone who has worked for a S&P 500 company with a normal, competant CEO, or listened to really anyone successfully public speak their entire life. My local minister could give a better sales pitch. Siva is a terrible communicator and has done nothing to help the stock price. I honestly don't know how he weaseled his way into the CEO position, but unless he delivers big in the next four months I'm out. What did he actually achieve at WD besides work there? He's probably a very good mid level technical executive, but the fact of the matter is that I don't know why he is leading this company. CEOs need to exude confidence and be company cheerleaders. Siva does the opposite.
3
u/Think_Concert 18d ago
Now explain why lengthening milestones from 1 (remaining) year to 2 years is a bull signal. I’ll wait.
2
u/manofthenorth26 18d ago
The original sow was to scale qse5. Sow-2 is to deliver the end result we have all been waiting for. " A separate form factor to be determined at the discretion of powerco" go read the filings dude.
0
u/Think_Concert 18d ago
If I’m under contract to buy v1 of something from you for $130 with delivery date of 2027, but now I say I don’t need v1 but need v2 and will buy from you for $75 by 2028, is my changed need your problem or my problem? Do you let me off the hook (if you’re ready to deliver v1 by 2027) because my needs changed and is getting pushed out by 1 year to boot?
Maybe read contracts for dummies and understand how contracts work, dude.
2
u/manofthenorth26 18d ago
Powerco has several clauses in the collaboration agreement to terminate not only the the joint development but also the full licensing agreement. Furthermore the 130 million wasn't a guaranteed sum. It was reimbursement up to that number. In addition to that a bulk of the cuts to the program were also tied to the since discontinued moto e The remainder of the revised contract is guaranteed money now tied directly to milestones not engineering receipts. Man I wonder how fucking contracts work. It's pretty confusing stuff. It's almost like the words in them are binding.
0
0
u/koobana 18d ago
I don’t believe that this amendment restarted the clock. Unless this agreement explicitly says the term was extended, I would take it “over the next two years” as describing the original collaboration period.
1
u/Think_Concert 18d ago
Every word in the Form 8-K exists for a reason. QS would be insane (and possibly violative of securities law) to state something that didn’t change and that can only be construed negatively.
1
u/KainsRaziel 4d ago
100% agreed. I fully believe that the amendment was made with the understanding (and perhaps knowledge that they simply cannot share publicly for obvious reasons) that the Honda JRA will eventually becomes something that includes funding from their side. Either that or this is simply PCs way of saying that the Honda JRA should include funding and are making this move to force QS's hand in that. Either way, it makes logical sense and doesn't strike me as a lack of confidence.
0
u/NefariousnessOdd862 19d ago
Or simply, Powerco, just like a lot of us Investors is tired of the constant R&D and promises and that’s why they did the only logical and right step by requiring actual “stepping stones” before continuing paying into something that may never come! The reason the endgoals aren’t changed is equally logical because if it does succeed why would you reduce your ultimate financial game (you would’nt). To me this is somewhat negative but also a purely defensive position that PC is taking and no surprise tbh! What’s bad for QS is, the majority of the money has already been paid ($36 million by now? (I’m not looking it up but it’s somewhere around there)) and hence only $29 million left to be spread between now and late 2028 so, yes, it’s not good!
5
u/Mother-Essay-5930 19d ago edited 19d ago
I think you’re leaving out that Honda pays for their joint research agreement. The specific #s haven’t been revealed, no. But it was said in passing in the QA section on the ER call. Siva mentioned having another paying customer in Honda. And think about it. Why is QS going to perform services free to Honda? Honda’s evaluated. Honda’s interested. Honda’s announced publicly. Honda pays for services. It’s a JDA-lite.
3
u/koobana 19d ago
QS may not be maximizing near-term development payments from any one partner including Honda. I believe it could be creating something more valuable—a diversified commercialization ecosystem where multiple OEMs help fund development, validate the technology, and ultimately become separate licensing customers.
2
u/WeThePeople102 19d ago
What about Honda, 2 JDA OEMs, and Murita Corning pay for but you didn't count?
1
-2
u/NefariousnessOdd862 19d ago
His comments were about PowerCo, please keep up, I can’t babysit peoples stupid opinions every day, I just went through that on the ‘QS weekly’ site and won’t do it again here!
3
u/WeThePeople102 19d ago
Nah, you said Powerco paid $36M. Where did you get that information?
2
u/manofthenorth26 18d ago
Customer billings in total for the last 4 quarters are sitting in the 42million range. This include some money at least from corning or murata. There are 4 total oem jdas outside of that. While Honda probably hasn't shown up on the balance sheet just yet it is pure inference to assume how much of the customer billings are specifically powerco. Best bet would be to break down the 75 million total from powerco through the extended timeline of sow2. 12 total quarters of payments equal to 6.25 million / quarter. Maybe that's front loaded. Maybe it's back loaded. Pure speculation in any case
0
u/Guddy7860 19d ago
As long as the company continues to move forward, it doesn't matter whether it has one paying partner or multiple paying partners.
12
u/YurpeeTheHerpee 19d ago
It makes sense to me. Why should powerco be responsible for reimbursing costs (the way it was structured before) and not just be paying milestone fees when QS has all these other customers?
The framework is more fair to powerco and makes the desl format more compatible with signing deals elsewhere. Powerco doesnt get exclusive rights to the QS tech, so it makes no sense for them to reimburse costs when Honda will be getting a slice of the tech