Q3 2021 Quantumscape Corp Earnings Call
Welcome to the Clinton Scapes third quarter 2021 earnings conference call, John Seeger quantum Scapes head of Investor Relations you May begin your conference.
Thanks, operator, good afternoon, and thank you to everyone for joining quantum since third quarter of 2021 earnings conference call.
To supplement today's discussion. Please go to our IR website at IR Dot quantum escape dot 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 and as part of our quarterly update.
Forward looking statements generally relate to future events 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.
The safe Harbor provision identifies 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 Form 10-K, and other SEC filings, including uncertainties posed by the difficulty in predicting future outcomes.
Joining us today will be quantum Scapes co founder CEO, and chairman, Jack <unk>, and our CFO Kevin Patrik.
<unk> will provide a strategic update on the business and then Kevin will cover the financial results and our outlook in more detail.
With that I'd like to turn the call over to J D.
Thanks, Sean.
Welcome to our earnings call for the third quarter of 2021 earlier.
Earlier today, we published our shareholder letter summarizing the major developments in the last quarter.
I'd like to briefly describe a few of the highlights here.
On the Q2 2021 earnings call, we disclosed that we submitted our single lay ourselves for testing by an independent third party lab.
We can now report that the results from these tests replicate the impressive performance, we first disclosed in our battery showcase presentation in December last year.
So thats carried out what we believe is the most automotive relevant test.
Over 800 cycles at 25 degrees Celsius.
One C E one hour charge and discharge rates, 100% depth of this charge and $3 for atmospheric pressure.
This test is critical because in automotive battery cell with simultaneous to satisfy all of these requirements missing even one vendors to sell inadequate for automotive applications.
The other important news in September we announced an agreement with a second top 10 global automotive OEM by sales revenue.
This automotive OEM has already tested ourselves in their labs and the agreement calls for them to work with us to evaluate our batteries, where inclusion into pre series prototype vehicles and ultimately for series production vehicles.
So long held the belief that customer contracts are the ultimate external testing validation. So it's encouraging to have this agreement with a second automotive OEM as confirmation of the compelling value proposition offered by our technology.
This OEM has committed to purchase 10 megawatt hours of batteries from <unk>, our pre pilot production line.
Finjan upon achieving technical milestones that are in line with our pre existing technical development roadmap.
As we said in the shareholder letter, although the potential near term economic value of this agreement is in the high single digit millions. We believe this deal represents a major long term opportunity.
On the cell development front, we saw important developments during the past quarter.
In August we announced the completion of our third key milestone of the year, our foreign Aircell successfully demonstrating <unk> cycles to more than 80% capacity at one hour charge and discharge rates and 25 degree Celsius.
We report these cells have now achieved 1000 cycles well in excess of the commercially relevant target.
Construction and development of 10 million ourselves continues with encouraging results.
The first generation 10 million ourselves reported in the second quarter shareholder letter displayed energy retention behavior similar to our four and single there ourselves.
As well as cycling performance in excess of our expectations for such early cells, achieving over 300 cycles at a <unk> rate.
As we've said before achieving our targets requires continued improvement of the quality consistency and throughput of our processes.
Our testing at aggressive <unk> charge discharge rates allows us to quickly identify potential refinements and cell design and construction dramatically shorten the development cycle and deploy improvements rapidly.
Following the <unk> data, we shared last quarter, we continue to improve our high energy density <unk> T cells with refinements to the cathode material and manufacturing process.
We believe combining LSP cathodes with our lithium metal platform provides our OEM customers and opportunity to minimize active material costs and address those supply chain issues, while addressing the fundamental challenge conventional LLP cell space, which is low energy density.
For a deeper dive on LSP with lithium metal anodes I'd encourage you to go to our website and check out our September 9th Webinar on LSP batteries.
From a manufacturing perspective, we wanted to lay out our scale up plans, which call for a staged approach with several generations of manufacturing lines, which include an extended engineering line.
Pre pilot production line <unk> zero.
And our joint venture production lines with Volkswagen <unk>.
Our engineering line is used for cell and process development as well as production of near term customer prototypes and expansion to this line will allow us to increase sell output, providing the test cells in media to further accelerate our development program.
We tend to use <unk> zero to both produce more sales for customer use and three series test vehicles.
And prove out the processes that will be used in a gigawatt scale.
<unk> production facility.
This quarter, we finalized orders for large scale heat treatment tooling with a cure zero pre pilot line in close collaboration with our vendors and partners. These.
These tools represent the core of our manufacturing capability.
Finally, I wanted to say a few words about our strategic vision.
As while our immediate focus remains on achieving our near term goals.
These near term goals should always be understood in the context of this broader vision.
Our board of directors recently laid out a series of ambitious targets for the company to be achieved over the course of the coming decade.
Including cumulative delivery of one terawatt hour of battery cells.
Equivalent to the annual production of over 20 factories, the size of the Giga factory outside Reno, Nevada.
Of course, we have a lot of work to do that we know of them, but our ambitions will not stop there.
We believe that the once in a generation shift to electric vehicles combined with our transformative lithium metal battery technology represents an extraordinary opportunity with de carbonization as well as shareholder value creation.
Extraordinary opportunity demand extraordinary ambition.
With that I'll hand, it over to our CFO, Kevin Hedrick to say a few words on our financial performance before we open up to Q&A Kevin.
Thank you Jackie.
In the third quarter, our operating expenses were $54 million.
Excluding stock based compensation operating expenses were $41 million.
This level of spend was in line with our expectations entering the quarter.
For the full year, we expect cash operating expenses opex less depreciation and stock based compensation to be in the range of 130 million to $160 million consistent with previous guidance.
Capex in the third quarter was approximately $39 million for.
For the full year, we now expect capex to be in the range of $135 million to $165 million.
On the Q2 earnings call, we discuss 2021, capex tracking higher than $130 million to $160 million, primarily due to the potential pull in of some <unk> zero equipment spend from 2022 into 2021.
In Q3, our team secured shorter lead times for a portion of this equipment. They are consequently, seeing less timing based shift of <unk> zero Capex spend from 2022 into 2021.
Capex actuals are determined by lead times order dates and payment terms near year end changes in these factors can move lumpy payments either into or outside of the forecast period.
We expect Capex in 2022 to be significantly higher than 2021, as we continue to increase our engineering line capacity to support internal development and broader customer sampling as well as to invest in our pre pilot <unk> zero line consistent with our 2023 target of providing sales from that line.
For Houston test cars.
We'll provide more specifics regarding 2022 on our Q4 earnings call.
With respect to cash we spent $68 million on operations and Capex in the third quarter.
We expect full year 2021 free cash flow burn to be in the range of 260 million to $300 million. We continue to reiterate year end liquidity guidance of greater than $1 3 billion.
This quarter, our company achieved progress on cell development manufacturing scale up and prospective customer engagement, while maintaining a strong balance sheet.
We ended the third quarter with more than $1 5 billion in liquidity.
We believe exiting 2021 with more than $1 $3 billion unexpected liquidity provides sufficient capital to achieve our key milestones, including fully funding quantum scape through initial <unk> production.
Our GAAP net income for the quarter was $15 million, including the impact of $69 million and noncash fair value adjustment of the assumed common stock warrants.
Excluding this noncash adjustment the net loss for the quarter was approximately $54 million in line with our expectations.
Lastly, this quarter, we completed the redemption of all assumed common stock warrants and important step that further simplifies and streamlines our capital structure.
Consequently, beginning in Q4 2021, we will no longer incur fair value adjustments related to these warrants.
We're excited about the progress this quarter and look forward to the opportunities ahead, we'd like to thank our investors for supporting our mission to commercialize our solid state lithium metal batteries and to help accelerate the mass market adoption of electric vehicles.
With that over to you John.
John.
Thanks, Kevin will begin today's Q&A portion with a few questions. We've received from investors over the say app and in our IR Inbox. Our first question is actually a combination of questions that came in through the inbox. We've recently seen some new data from two of your competitors and it's hard to tell the difference between your results and errors why do you think quantum state.
The headwinds.
So the simple answer is we have not seen any other data from any other lithium metal or solid state player. It means the basic requirements of the automotive sector, which of course is to be able to cycle. The 800 cycles at <unk> E. One hour charge, a one hour discharge rate a room temperature I E 25 degree Celsius.
While retaining more than 80% of the sales capacity.
And if you Miss any one of these requirements.
Don't believe that the battery is viable for automotive applications.
Now neither of the players you mentioned has been able to demonstrate in these requirements. For example, both have shown cycling data at fee over five rates, that's a five hour charge in.
In one case, which uses a liquid electrolyte lithium metal anode. This is likely because like previous attempts along these lines. There are presentation slides showed theyre seeing dendrites and lowering the charge rate is one way to reduce the incidence of such dendrites to sell internal impedance is too high to support highway charge.
Furthermore.
Any approach that requires.
So lithium metal foil to start with will face severe challenges from a cost standpoint, given the cost of the lithium foil and the manufacturing complexities of handling reactive lithium metal in a manufacturing environment.
Does that.
That means what we believe are the basic requirements of automotive application.
Until the company shows data demonstrating their cells can meet these basic requirements.
The other applications that can address but we don't believe that approach is going to work for automotive applications.
Okay. Thanks, a second question also comes from the IR Inbox can you talk a little bit more about the significance of signing the second OEM. It seems like this is just an agreement for samples.
So the significance of this is that this represents a second top 10 by revenue automotive OEM that has tested ourselves in their labs and confirmed that they are interested in building pre series and eventually series production vehicles. If our technology continues to meet the milestones laid out in the agreement.
Milestones that are along our existing development timeline.
The agreement is a 10 megawatt hours of capacity from our <unk> pre production line representing on the order of 100000 cells, which is a really significant number that supports the idea of evaluating.
Evaluating the technology for <unk> and eventually series production vehicles.
We don't believe either side would have entered into this agreement use in production vehicles.
We successfully delivered the milestones we've got a disruption. This OEM has the volume to drive significant revenues mccloskey.
Okay on to questions from the Saf have you entered into any material agreements with manufacturers other than Volkswagen.
Yes, John So I think we directly answers discretion with our announcement of an agreement with a second top 10 OEM this quarter as we just discussed.
Okay. Great do you have an estimated date on your first usable product for Matthews and what are the steps between now and then.
So as we've said our target is to start production in the $2024 five timeframe for him in support of this we're targeting having sales from our pre production line <unk>.
<unk> zero in 2023.
Between now and then when you do a few key things continue increasing our layer counts improving the quality consistency and throughput of our separate air and some manufacturing processes.
Our evs the only use case for your batteries or are you planning on entering other markets.
John our focus remains on electrifying, the automotive powertrain, which we believe is the most significant market both in terms of the market opportunity and de Carbonization Convention.
But having said that.
We're seeing strong interest from a range of other applications and we believe our technology can add value in those sectors.
But we would expect to also address those markets in the fullness of time.
Hey, Thanks, do you have a sufficient amount of lithium supply secured to meet future demands.
So.
Interesting question, because even though we use of lithium metal anode.
Don't have a purchase and lithium metal.
This is because in our anode free zero lithium design, a 100% of the lithium in our NOI comes from the cathode.
Remember that conventional capital such as NMC of LLP ship previous created and this is the same lithium that becomes our anode once ourselves a charged up so there is no other excess lithium required.
Note that this is not the case for all lithium metal approaches as there are some that require a lithium foil to start and we believe those approaches will have a serious cost challenge to overcome.
Also in terms of lithium is an earth abandoned material in fact, our CTO <unk> calculated that theres enough lithium and the Earth plus the ship tended to nine long range bvs pretending to nine years. So two hour lithium obviously with some of our work required to extract that lithium but the fact is that it's there means that a demand does go up.
Mechanisms getting code suppliers to extract more something that wouldn't be possible if it weren't as ortho limits.
And finally, our strong relationships with some of the world's top automotive Oems.
Provide us an opportunity to leverage their scale and purchasing power to ensure our material supply.
Alright. Thanks, so much we're now ready to begin the Q&A portion of today's call. Operator, Please open the lines for questions.
Thank you John as a reminder to ask a question you will need to press Star and then the number one on your telephone keypad again, just press Star and then the number one on your telephone keypad and David Joe Your question press the pound key please standby, while we compile the Q&A roster.
Your first question comes from the line of Gabe Daoud from Cowen. Please proceed with your question.
Hey, good afternoon, everyone and thanks for the prepared remarks, thanks for taking my question.
Jack.
Maybe can we start with just manufacturing in any.
Comments, you could provide on improvements to uniformity on the separator since your last update and then <unk>.
Can you just remind us where do you have to get to.
Hey, Dave how are you. Thanks for the question. So let me answer the second part first on the fitness of the separate or so.
We've said publicly that are separate or is in the tens of microns in terms of fitness.
We've also said that the VW milestone that we had in Q1 that we reported on.
We required that ourselves be in a commercially relevant thickness with a separator and commercially relevant area and of course, we all know we've met that milestones that we feel like there is in fact.
<unk>.
Before being made in those dimensions relative.
Relative to manufacturing.
And the questions you asked about.
Due to the things that we're working on I.
I would say that.
One data point from single day ourselves last year too.
<unk> ourselves earlier this year to attend to ourselves that we are reporting on.
First in July and then again today.
That progress wouldn't have been possible, if we had not been making steady improvement on all three of those metrics that you need.
And better quality of the film correlates with them.
Our performance in terms of everything.
Everything from the current density you can handle the cycle life to the liability of the films uniformity.
And consistency.
It relates to how many useful films you get out of a given number of films that you start and of course throughput is the capability the capacity of the tools that you have and how do you feel that you can make and of course as we make a higher layer count films, we need to get a lot more capacity out so tender every single time there yourself.
Needs 10 times as many films as a singular so we need to have either tools that have 10 extra capacity or 10 times as many tools in the operators and so on so.
The fact that we announce.
For making singular ourselves afforded ourselves to telling ourselves.
As indicative of progress on all three of those key metrics.
Thanks, that's helpful and then maybe follow up on.
On the manufacturing side can you, maybe refine a little bit or just better describe the quote unquote dozens of lawyers that we need to get through next year. For example, as you are.
November again close to next year is there anything that you can say to try to help us understand what that number could really look like.
Yes, I mean, I think the actual layer count as we mentioned in the testing is going to vary by automotive Oems because the of the cell thickness. For example, and that is going to be a function of the Oems specific module and pack design.
We said dozens of layers because.
Retail in the in.
In the letter.
Our manufacturing.
Being a capability can be thought of as sort of three phases. Currently b, we're expanding our engineering line. That's the line, which we are doing all the R&D element.
The next phase of course will be <unk> zero, which is the proof outline that.
You know about already in the final phase will be.
The production line with Volkswagen, which we're calling <unk>.
And so we.
<unk>.
Our.
<unk>.
But at a number of tools for both <unk> and <unk> and particularly the long lead time tools and.
And as those tools continue to arrive and decommission and turned up our capacity continues to increase so the net of it is that.
<unk>.
Bob.
We remain committed to the goals that we had outlined.
In previous quarters, which is that in 2022.
We hope to have.
Samples.
For our customers.
Our.
And a few dozen layers and thickness in the commercial world and form factor that.
We call those customer prototype samples and then in 2023 sample to roll off the pre pilot production line and those who examples in enough quantity to basically ascend.
Assembled.
<unk> test vehicles.
<unk>, so those goals haven't changed.
Essentially they've just one one last one for me just on commercialization and our Super early with this second OEM, but could you maybe just talk a little bit about what Stu.
Structure that could potentially look like over time, assuming they do become.
Yes.
Customer upon commercialization, whether that be a JV similar to.
Youre doing with Volkswagen and then.
Finally, as the second.
Wood products that represent the only solid state provider that this second OEM is working with thank you.
Yes.
Relative to supply this second OEM.
Good question.
The answer is it there are two possibilities, we havent, yet decided which one and those two are either to have it be.
Fully quantitative for this OEM.
And the other option of course is more of a VW style joint venture where they are actually a part owner in the manufacturing facility.
We haven't yet made the final decision on what the parties are going to prefer.
Those are both valuable options at the end of the day.
What I think.
They really care about is.
Getting a sufficient quantity of.
Our high performance sales to meet their needs.
Relative to.
Whether we're the only other solid-state player.
I want to.
I want to avoid.
Addressing our directly get because we.
We haven't disclosed the identity of.
The OEM and I think that if we comment on.
The other partnerships that I think that.
It starts to.
To narrow down the players, but more importantly, I think what.
We can say is it.
As you know we don't believe we've seen any other solid state for lithium metal effort.
That meets even while we continue to be the basic requirement. So I can any cycle.
For 100 cycles at 25 degrees at a one hour to a comfortable debt.
Okay.
Not a lot of.
Sure.
Viable competitive activity.
As you get.
Thank you and your next question comes from the line of George <unk>.
<unk> from Baird. Please proceed with your question.
Hey, good afternoon, guys. Thanks for taking my questions.
Maybe to start on the manufacturing side can you you started too.
Quarter four parts.
Can you talk about any additional learnings that you've had and look in that process positive or negative.
Yes.
The learnings.
I'm not sure how much we can share.
But the tools themselves.
A key part of what we're doing right now.
Is of course.
Yes.
Sort of tuning and tweaking various.
Such as commissions to too.
Find the ones that.
Produce the best results.
So we're doing a lot of that work.
We are working closely with our suppliers to.
Specified tools in a way that we think meets our needs.
And in that process, there's a lot of learnings we've tried a lot of things that.
Kennedy, we found didn't work as well as we thought and other things that we found.
Yes.
Hello, better than we expected.
That process will continue.
Think of Dateline.
Real World.
Is never a straight line anywhere, but the key is that you will make steady progress over time towards your goals.
I believe we're doing that for years.
Happy with that progress right now.
Thank you the other thing I would add more with them.
One quick thing to add to that of course is it.
Part of the outcome of all this process development as we enhance our portfolio of trade secrets right. So trade secrets.
Remember those innovations that we don't pattern, because theyre not discoverable by examining.
Take apart some examine it and determined.
Sales and it is a physical architecture of the layout and so on although as you can tell what recipe.
With user which gases would solve into this temperatures and for how long.
To get those outcomes. So those are the kind of things that we keep the spaces within all of this work we're doing on equivalent evaluation continues to.
To increase the paycheck of portfolio, which we think.
Good thing for our investors.
Thanks, and then one more just on the second OEM agreement that you've signed can.
Can you share.
Was it a bake off where there other.
Solid state updates and the mix as far as you can tell anything with regards to other.
Testing that Youre doing are you aware of other companies in the Oems that are also.
So Dana tested any anything you can share on the competitive side.
Got it.
So if you're talking to.
Top 10, automotive OEM, you can pretty much assume that these guys.
All of these guys are exploring every possible value option that they that they can because.
I would say.
Effectively all of them are committed in one form or another to electrifying the powertrain.
And if you look at the.
The volume.
That ends up driving in terms of battery supply of current conventional lithium ion batteries, which I'm sure you all know.
Well because of all the current supply constraints in that space, but also next generation batteries that can help them meet their product.
Academic goals, if you will our view has always been as you know that.
So while it's great to see governments actively trying to encourage.
<unk> industry.
Fluids de carbonization potential during the day the product has to be attractive to the consumer and I believe has been that.
<unk> batteries get to be more competitive with the combustion engine the product is going to be lagging.
Combustion engine vehicles and so.
We're seeing a lot of interest from a lot of these.
A couple of them.
One getting better batteries that.
They can help narrow that gap with combustion engines.
Allow them to be competitive with.
Traditional powertrain.
Powertrains, So I think you can assume that.
These guys have either looked at or evaluated.
The technology, where they could get their hands on and so.
Okay.
There.
Turning to the agreement.
To us reflects.
A signal that.
But the quantity of approach is in fact them.
The most compelling and viable of the options data they look at.
Thanks Fellas.
Thanks for the question.
Thank you. Your next question comes from the line of Evan Silverberg from Morgan Stanley. Please proceed with your question.
Hi, Evan So we're very Tim question for you guys.
No.
<unk> zero is obviously more imminent in the future, but curious if you guys can give any coloration started construction.
Initially you guys had targeted.
Quarter of gigawatt hour in 2004, so curious if you guys.
Still think thats on time.
Yes, hi, Evan so.
Well, we Havent said anything.
Additional other than the <unk>.
Press release, and 8-K that we issued earlier in the year.
<unk>.
Site selection process, but I think the point you made is starting to key point, which is that.
Thanks.
We will.
Wired the learning.
Things that we think are necessary.
And we don't currently believe.
Leave that site selection is a gating item and turning up <unk>, we think it's really around making sure we get the.
Well for <unk>.
No.
For a scalable.
Pilot production line, which we can then replicate.
One more.
You've shown the single layer. The for later in the 10 layers now in the 70 by 85 millimeter size.
For the sales that you plan to deliver to Oems in 2022 will that will they also be in that size or will you need to scale up to a larger size for that.
Yeah, that's a good question to Robin.
If you have noticed we use the word <unk>.
<unk> irrelevant in many of our communications with investors.
Investors in <unk>.
<unk>.
The public in general and the reason for that is because the precise dimensions again.
Somewhat different because.
Every OEM is going to need our cell to be essentially an integral tool in Tac dimensions.
So another vehicle has a vaccine.
Dimensions, and so <unk> seen general ZIP code if you will.
On dimension so.
It might be slightly smaller in some dimensions, and let me say the bigger, but it's not going to be you know.
Multi.
Multiples of times smaller or bigger that's why.
All in all the data we've been reporting.
This year, starting with the battery showcase last year has been in the 70 to 85, a form factor because we believe that is.
The commodity.
It's going to depend on the specific OEM.
But it'll be in that general range.
Great. Thank you very much.
Thank you.
Next question comes from the line of David <unk> from Wolfe Research. Please proceed with your question.
Hi, David Bell on for Rod Lash, Thanks for that.
I wanted to.
Go back.
A question from manufacturing.
Yeah.
I'm here with.
Can you describe to us what sort of library yields and improve the thickness.
Yeah. So.
The three main.
Areas that we.
We continue to work on them.
So quality.
Okay.
Well I mean.
Yes.
The uniformity across a given film so the film has.
Compositional various.
Political variance or any other variation across a given film that would be.
Uh huh.
Okay.
Lower quality than film that's more uniform it's high quality.
So and by that we mean.
Hitting that high quality.
Repeatedly.
Yes.
Every single time as you run.
The material to our process.
So.
What consistency.
Travelers to is really what you call it yield if.
If we can consistently make films of a given quality and the year will be higher.
And then the final thing is too which is again, how many films you can run through the process in a given given the amount of time.
Those three things are actually not uncorrelated it turns out that as we move to more scalable tools. For example, you've spoken about the fact that we are using these continuous flow tools to make our our separate of the films.
But those continuous flow tools as we get into ally does more highly automated.
Larger continuous flow tools.
Now, let me give you more throughput, but they also give you better.
Tighter control over the process better metrology in terms of.
What's happening in the films as they're going through the process and so we expect to see continued improvement.
All three things.
Because they are not really completely oncology.
On the 10 layers, how can you describe to us.
But you have how many cells that you're making on a weekly or monthly basis.
And what is the I guess automated processes that you're able to you in a day and now advanced in terms of output.
But what we would see.
More hygiene, calling from <unk>.
For the 10 layers.
The challenge of using the capital Electric Secondly magazine.
We want to do it with many layers as it is with one.
Yes.
Your first question has to do with them with that.
10 years, if we haven't we never disclose the actual.
Number of.
Films are cells that we make.
Their time, but.
We are shifting our focus to making.
Those tend to ourselves next year.
As you know we've talked about shipping multi dozens of layers.
In ourselves and so.
No we.
Okay.
Okay.
Ways to do that the key is to make it up.
That happened really are one as we got into throughput up so we get to have more films to work with two.
As soon as we got to be able to.
Sure.
Turning to <unk>.
Yet.
Good quality consistency so as we stack these films up.
They continue to work all together if you have it.
Ken <unk> and our sell in was one bad layer.
When you have a bad cell so consistency becomes important to produce more and more time to ourselves and we're looking at that and then relative to the electrolyte.
The fact that we can make.
These tend ourselves and as you see from that.
I think charter.
Effectively.
<unk>.
<unk>.
And the Multiday ourself.
Compared to what you see in our simulators.
Okay. Thank you Jackie and last one from me here.
I just wanted to touch on this one terawatt hour target, which sounds really great.
And a super ambitious I would just like to hear from you.
And how do you expect cost we achieved this one terawatt hours.
But so anyway.
I think it is an ambitious goal.
I mean, as we said, it's the equivalent of <unk>.
What 20 Giga factories to produce in one year.
But I think where that growth comes from as is.
Believe it.
But if we truly believe that we have a technology that is capable of delivering higher energy density and conventional cells, maybe by 50% or more that's capable of supporting faster charge times that is safer in many ways because of the nonflammable separator.
These are really critical selling point and if we can get this into mass production.
We.
Demand constraint and so if we have the demand for it then we should be able to build in our factories to really.
Earn meaningful share of the overall market for battery now we won't be in mass production to until mid decade. So the 25 timeframe yourself, so that doesn't give us a lot of time to ramp up to accumulative Terawatt hour.
But.
It's not impossible.
It requires that we turned up do.
The factories that are.
Of the <unk>.
Size and scale of what.
What's currently being planned by many of the leading battery manufacturer.
The original Panasonic Giga factories.
On the order of 30 to 40 gigawatt hours.
Many of the currently being planned value facilities on the order of 100 gigawatt hours per year over five years each.
Each of those factories cable producing half of Terawatt hours. So we don't think it's by any means impossible. It does require that we execute on.
But.
We believe the demand.
Fundamental technology has the capability to deliver on this.
And if we can.
Our execution as we have been doing we think we have a real shot of points. So I think with that Golar representatives is fundamentally a way to quantify.
What we've been talking about which is we really.
Wanted to make an impact in two ways. One of course, we want to create value for our shareholders and the second thing is we want to play a role in the.
The de carbonization of the transportation sector, and we think both those goals are served well by having aggressive right.
Ambitious target.
Of the type that we just talked about.
Thank you guys. Thanks for taking my questions.
Smooth.
Thank you there are no further questions at this time I will now turn the call back to Jackie. Please go ahead.
I want to thank.
Thank everyone for taking the time to join the call today.
Obviously, we're excited about the results that we shared independent third party testing.
With one of the things we've been hearing from some of our holding in pending about from our investors and we're delighted that the independent data.
Is extremely similar to the data we've shown in the past and of course. The test was also run under what we consider to be aggressive.
Driving conditions in one hour charge and discharge 25 degree Celsius, 100% depth of discharge.
800 cycles to north of 80%. We're also pleased with our multilayer results developments on the on the customer front remain positive as well.
We're going to stay focused on these goals and tasks.
Quarters coming in.
And we look forward to reporting on further progress on our next earnings call.
You all.
Thank you today's conference.
Has it been concluded. Thank you for participating you may now disconnect.
Okay.
Okay.
Yes.
Yes.
Yes.
Okay.
Okay.
Sure.
[music].