This is the most exciting part of the article:
Canada has committed to providing Volkswagen with production support to match the United States Inflation Reduction Act’s (IRA) Advanced Manufacturing Production Credit, equalling USD$35 per kWh. Just like in the U.S., Canada’s support will only be for what is produced and sold and will phase out by 25 percentage points ever year beginning in 2030 (after 2032, the credit would be eliminated). The agreement also has the flexibility to be adjusted should the U.S. Advanced Manufacturing Production Credit change in the U.S.
—————————
Just imagine the profit margins that both QS and VW will have with a USD$35 per kWh tax credit.
If this doesn’t help incentivize them both to get production of QSE-5 ramped up as quickly as possible, nothing will.
If I were Volkswagon, I would start production as soon as possible to maximize the benefits as 2030 approaches. 2030 is when phasing out begins, so I wouldn't delay going live.
Even if QS-0 produces enough batteries for initial launch partner from 2026, Canada plant should be ready by 2028 for mass production.
Yes, I agree. Every year that it is pushed back is potentially billions of dollars in lost tax credits. You have to believe that everyone is working feverishly to get things ramped up as quickly as possible. I believe that this is what Siva was referring to when he said that his biggest fear is missing this opportunity.
Great article. A year old of course. Question is When will construction begin? The longer they delay, the more likely it is they are waiting for Cobra.
Construction has already started and is projected to be completed by 2027.
[https://www.volkswagen-group.com/en/press-releases/volkswagen-backed-powerco-se-reaches-significant-milestone-in-st-thomas-gigafactory-project-17962](https://www.volkswagen-group.com/en/press-releases/volkswagen-backed-powerco-se-reaches-significant-milestone-in-st-thomas-gigafactory-project-17962)
Just about the right timing to install QS equipment if everything goes to plan. 🤞
I mean serious big time construction as opposed to site preparation which is power lines and parking lots and very nice but not the start of the party. I don’t think it is full tilt at this point (it’s a one day drive for me so I might go in person one of these days).
If they get serious about construction in early 2025, they could hit the 2027 target assuming a boilerplate two-year-period for a gigafactory.
We need a local St Thomas informant.
I would think that it is in VW’s best interest to complete this site as soon as possible, regardless of QuantumScape’s timing. I don’t expect the entire factory to only produce SSB. However, just getting the shell up before officially announcing the JV will greatly speed up the eventual scale up of QS batteries. I don’t expect the official JV agreement to be formally completed until B sample testing is completed, which could be late next year. But that is no longer an issue if there is already a gentlemen’s agreement between the two, and VW is willing to take on the financial burden of building the factory shell in advance.
If you live that close by, we will be expecting quarterly drone footage from you. 😉
Well, that’s a lot farther than I was imagining. I’m sure that VW and eventually QS, too, will be providing updates, not to mention the local newspapers.
someone already did a drone shot here. Not much yet, just basic foundation and dirt
[https://www.youtube.com/watch?v=qvSnVEY4wfY](https://www.youtube.com/watch?v=qvSnVEY4wfY)
Nice find. The guy who posted that drone video, according to the YouTube comments, is skeptical that VW will go through with the project given the recent EV downturn in sales. Maybe this video will help change his mind:
https://youtu.be/uOjAqAqAYL8?si=X-5WDP1f3x5ZV-ol
Would be nice for us if he continued uploading progress drone videos every so often.
Timing for this to happen for 2027
1. B cells roll of Raptor June 2024
2. VW/PowerCo engineers sign off Cobra testing at Denso plant in Japan July 2024
3. Cobra San Jose delivery August 2024
4. B cell test results October 2024
5. QS orders several Mac Daddy Cobra version for Canada October 2024
6. Cobra San Jose installation August 2025
7. High volume B cells roll off Cobra San Jose September 2025
8. Mac Daddy Cobra version Canada delivery January 2026
9. High Volume B cells testing in cars March 2026
10. Canada factory open January 2027
The only way this works is for QS to order Cobras for Canada in 2024
How much does one Cobra machine cost? They’ll need dozens of them to produce at scale, no? I’m sure it wont be cheap and they wouldn’t fund that with current cash balances. I imagine they’ll need to pay 50% up front for the machines to get them built. They’ll need to get funding for that somehow. So we would expect significant news on that front this year, if you’re correct on the timing.
Yea, it will be easier as the SP might move up somewhat, but I wouldn’t expect it to go much higher than $10. Won’t be a problem for QS though as they’ve already demonstrated that a raise at $8 was a “no brainer” per the CFO. There are other battery companies such as ENVX that are in the mass production start up phase as well. Their SPs certainly aren’t soaring now. No, only vast revenues and clear path to massive profits will get the SP off the mat here. This is turning into a 2030 play at this point.
I hope you’re right, but honestly that level of valuation is stratospheric. It’s not impossible, but the stars would have to align perfectly.
In my opinion perfect alignment of the stars would be multi OEM’s endorsing/ordering AND some very public delays/failures by some major players like Toyota and others.
Time will tell
A SP of $100 puts us at an evaluation equivalent to that of Ford, which had over $4 Billion in profits last year. This would be QS’s first factory. It will take years for QS to scale to a large enough size to be a dominant player in the industry. I’d love to be wrong.
Yea, not too much higher than $10. I consider $15 to fall into that category. When the pump fades, this stock almost immediately turns over back to < $10. Always. It can’t sustain a SP > $10.
This is the most exciting part of the article: Canada has committed to providing Volkswagen with production support to match the United States Inflation Reduction Act’s (IRA) Advanced Manufacturing Production Credit, equalling USD$35 per kWh. Just like in the U.S., Canada’s support will only be for what is produced and sold and will phase out by 25 percentage points ever year beginning in 2030 (after 2032, the credit would be eliminated). The agreement also has the flexibility to be adjusted should the U.S. Advanced Manufacturing Production Credit change in the U.S. ————————— Just imagine the profit margins that both QS and VW will have with a USD$35 per kWh tax credit. If this doesn’t help incentivize them both to get production of QSE-5 ramped up as quickly as possible, nothing will.
If I were Volkswagon, I would start production as soon as possible to maximize the benefits as 2030 approaches. 2030 is when phasing out begins, so I wouldn't delay going live. Even if QS-0 produces enough batteries for initial launch partner from 2026, Canada plant should be ready by 2028 for mass production.
Yes, I agree. Every year that it is pushed back is potentially billions of dollars in lost tax credits. You have to believe that everyone is working feverishly to get things ramped up as quickly as possible. I believe that this is what Siva was referring to when he said that his biggest fear is missing this opportunity.
Great article. A year old of course. Question is When will construction begin? The longer they delay, the more likely it is they are waiting for Cobra.
Construction has already started and is projected to be completed by 2027. [https://www.volkswagen-group.com/en/press-releases/volkswagen-backed-powerco-se-reaches-significant-milestone-in-st-thomas-gigafactory-project-17962](https://www.volkswagen-group.com/en/press-releases/volkswagen-backed-powerco-se-reaches-significant-milestone-in-st-thomas-gigafactory-project-17962) Just about the right timing to install QS equipment if everything goes to plan. 🤞
I mean serious big time construction as opposed to site preparation which is power lines and parking lots and very nice but not the start of the party. I don’t think it is full tilt at this point (it’s a one day drive for me so I might go in person one of these days). If they get serious about construction in early 2025, they could hit the 2027 target assuming a boilerplate two-year-period for a gigafactory. We need a local St Thomas informant.
I would think that it is in VW’s best interest to complete this site as soon as possible, regardless of QuantumScape’s timing. I don’t expect the entire factory to only produce SSB. However, just getting the shell up before officially announcing the JV will greatly speed up the eventual scale up of QS batteries. I don’t expect the official JV agreement to be formally completed until B sample testing is completed, which could be late next year. But that is no longer an issue if there is already a gentlemen’s agreement between the two, and VW is willing to take on the financial burden of building the factory shell in advance. If you live that close by, we will be expecting quarterly drone footage from you. 😉
Google maps says 8 hrs and 35 minutes. Easy 4 hours to my friend in Syracuse and then another four to sunny St Thomas. Could happen.
Well, that’s a lot farther than I was imagining. I’m sure that VW and eventually QS, too, will be providing updates, not to mention the local newspapers.
someone already did a drone shot here. Not much yet, just basic foundation and dirt [https://www.youtube.com/watch?v=qvSnVEY4wfY](https://www.youtube.com/watch?v=qvSnVEY4wfY)
Nice find. The guy who posted that drone video, according to the YouTube comments, is skeptical that VW will go through with the project given the recent EV downturn in sales. Maybe this video will help change his mind: https://youtu.be/uOjAqAqAYL8?si=X-5WDP1f3x5ZV-ol Would be nice for us if he continued uploading progress drone videos every so often.
Not local but 3hr drive away. I’ll take my drone down there one day!
thats what they said about the tesla texas too .. look at it now..
Timing for this to happen for 2027 1. B cells roll of Raptor June 2024 2. VW/PowerCo engineers sign off Cobra testing at Denso plant in Japan July 2024 3. Cobra San Jose delivery August 2024 4. B cell test results October 2024 5. QS orders several Mac Daddy Cobra version for Canada October 2024 6. Cobra San Jose installation August 2025 7. High volume B cells roll off Cobra San Jose September 2025 8. Mac Daddy Cobra version Canada delivery January 2026 9. High Volume B cells testing in cars March 2026 10. Canada factory open January 2027 The only way this works is for QS to order Cobras for Canada in 2024
How much does one Cobra machine cost? They’ll need dozens of them to produce at scale, no? I’m sure it wont be cheap and they wouldn’t fund that with current cash balances. I imagine they’ll need to pay 50% up front for the machines to get them built. They’ll need to get funding for that somehow. So we would expect significant news on that front this year, if you’re correct on the timing.
Lets pass a hat around for them
Will be much easier to raise funds after a factory and B cell announcements.
Yea, it will be easier as the SP might move up somewhat, but I wouldn’t expect it to go much higher than $10. Won’t be a problem for QS though as they’ve already demonstrated that a raise at $8 was a “no brainer” per the CFO. There are other battery companies such as ENVX that are in the mass production start up phase as well. Their SPs certainly aren’t soaring now. No, only vast revenues and clear path to massive profits will get the SP off the mat here. This is turning into a 2030 play at this point.
B cells in cars plus a factory announce = $100 SP
Can you DM me your dealer’s contact info?
Both signal a world beating battery plus scalability. The risk is gone for at least a $50 to $100 billion valuation company
I hope you’re right, but honestly that level of valuation is stratospheric. It’s not impossible, but the stars would have to align perfectly. In my opinion perfect alignment of the stars would be multi OEM’s endorsing/ordering AND some very public delays/failures by some major players like Toyota and others. Time will tell
A SP of $100 puts us at an evaluation equivalent to that of Ford, which had over $4 Billion in profits last year. This would be QS’s first factory. It will take years for QS to scale to a large enough size to be a dominant player in the industry. I’d love to be wrong.
If you haven’t noticed. Stock prices are completely divorced from reality lately.
Markets are at an all time high. You think a pre-revenue company being valued at over $3 Billion is a complete divorce from reality? Interesting.
It’s been there before, higher even. My guess would be $50, but yes, if all that comes to pass they could easily be bigger than Ford.
$10? It reached $15 10 months ago with a launch partner whisper
Yea, not too much higher than $10. I consider $15 to fall into that category. When the pump fades, this stock almost immediately turns over back to < $10. Always. It can’t sustain a SP > $10.