Q1 2023 QuantumScape Corporation Earnings Call
Speaker 1: approximately 60% higher than the previous cathode.
Speaker 1: We're therefore excited to report that we've already made and tested two layer unit cells with these higher loading cathodes, and in our show letter, we published data showing very good cycling capacity retention at high 1C or 1 hour average charge discharge rates. Consistent with the data we previously published, we have been able to
Speaker 1: from cells with more loading cathodes.
Speaker 1: In addition, we also showed data demonstrating sustained discharge rates of approximately 5C at 25 degrees Celsius and at high of 8C at 45 degrees Celsius, while still accessing approximately 50% of the battery's nominal capacity.
Speaker 1: When it comes to power performance, we believe an important benefit of our solid state lithium metal system is the ability to deliver high rates of power even in a high energy cell design, a combination that lends itself well to high performance applications.
Speaker 1: Now, let me discuss our progress in product development.
Speaker 1: First a bit of background on the product side.
Speaker 1: As a result of our customer engagement across all the motorbom consumer electronic sectors,
Speaker 1: We believe there's a significant opportunity for a cell that combines high energy density and high power.
Speaker 1: To enable a commercial product that can serve either consumer or automotive applications on the shortest timetable, we're targeting a single-track, dual-purpose design that we believe presents an attractive value proposition for both automotive and consumer electronics applications. For more information, visit www.fema.gov
Speaker 1: We now have a target for our first commercial product.
Speaker 1: a 24-and-air cell with a capacity of approximately 5 amp hours.
Speaker 1: This is in a similar capacity range as the 2170 battery used in several leading units.
Speaker 1: We believe this initial product design makes the most efficient use of our resources and represents the fastest path to market while delivering a product that presents a compelling combination of energy and power.
Speaker 1: Importantly, this design uses the same layer count and similar separator area as a 24-nare 80-0 prototype cells that we've already shipped to customers.
Speaker 1: De-lisking these aspects of the product development process.
Speaker 1: This allows us to focus on integrating the key remaining functionality, including the higher loading cathode and more efficient packaging, as well as include reliability. All key gold we set are for 2023.
Speaker 1: We also expect this first product to take advantage of a new fast,
Speaker 1: Now that we have line of sight to this first commercial product, we can begin finalizing equipment designs for upgraded higher volume production on our consolidated QS0 pre-pilot line.
Speaker 1: As a reminder, our current production plan for QA-0 is based on our new disruptively faster and afterorfotology produces. and afterorfotology produces.
Speaker 1: We currently plan for deployment of this fast process in two stages. The first stage targeted for later this year is designed to triple throughput using similar equipment to our existing line.
Speaker 1: The second stage targets even higher throughput to support higher volume QS-0 production and requires the equipment.
Speaker 1: We can now report that the installation of our first stage equipment is already underway and we aim to complete installation, qualify the equipment and deploy this first stage into initial production this year. We're also already operating prototype versions of our second stage equipment and are working towards final equipment specifications.
Speaker 1: Let it flow through the word about the big picture strategic outlook for the company.
Speaker 1: 2023 is about turning the corner from technology demonstration toward a commercial plot.
Speaker 1: This represents a phase transition, both in the history of our company and in the nature of our development work.
Speaker 1: As always, we emphasize that continuing to improve quality, consistency, and throughput of our manufacturing processes and increasing reliability of finished cells is not a trivial task.
Speaker 1: It requires an ongoing and systematic process of identifying and addressing issues, working with material and equipment suppliers, and iterating through new processes and cell designs.
Speaker 1: Yet, facing the challenges of scaling up is also a rare privilege.
Speaker 1: Historically, many emerging battery technologies fail well before this point, often because the basic electrochemical system does not have the intrinsic capabilities necessary to meet customer requirements.
Speaker 1: Therefore, it's always motivating to see results from customer testing that validate the core capabilities of our technology.
Speaker 1: Based on results like these, we believe it's possible to produce a commercial product using our solid state lithium metal platform that simultaneously achieves high energy density and high power capability, starting with a 24-layer, approximately 5-amp power cell.
Speaker 1: We believe this controlling combination is made possible by the intrinsic capability of our technology.
Speaker 1: So we have much more work to do as we progress through our roadmap. We believe the work we've done so far has established the Solid Foundation and that we're closer than ever to our first generation Solid State Battery Product.
Speaker 1: Thank you for your support and we look forward to reporting on our continued progress next quarter. With that, I'll have things go over to Kevin. Thank you, Jiggy. In the first quarter, our gap operating expenses were 110 million. Our gap net loss was 105 million.
Speaker 1: Cash operating expenses, defined as operating expenses left stock-based compensation and depreciation for $63 million.
Speaker 1: to follow and spend with in line with our expectations and our reporter.
Speaker 1: For a full year, 2023, we reiterate our guidance for cash operating expenses to be between 225,000 and 275,000.
Speaker 1: That's in the first quarter with approximately 28 million.
Speaker 1: First quarter CAPEX was primarily directed towards facility spend for our consolidated QS0 pre-production line.
Speaker 1: We also procure equipment for our FAST, separator production process, and self-safety test lab.
Speaker 1: For the remainder of the year, our CAPEX will primarily go towards facility work and equipment for Q&A.
Speaker 1: We reiterate our guidance for 40-year 2023 CAPX to be between 100 million and 150 million. We added Q-1 with just over 1 billion in liquidity. We continue to make progress on ongoing cost-fading initiatives and resource optimization. We reiterate our cash runway as forecast to extend into the second half of 2020.
Speaker 1: with a few questions we've received from investors, or that I believe investors would be interested in.
Speaker 1: Shadee, there's a perception that some players in the industry are moving to larger self-formats.
Speaker 1: Why are these children 24 layers or 5 amp hours as the size of your first commercial top?
Speaker 1: Yes, so we've seen William and Tristan both large and small sounds, but what everyone has demonstrated in its energy density.
Speaker 1: Over time, we plan to make both small and large cells. But for our first product, we want to minimize time to market.
Speaker 1: We believe our 24-layer, 5-amp hour design has the potential to deliver energy densities and power capability higher than cells used in many DVVs today.
Speaker 1: So we think this design already offers a compelling value prep position.
Speaker 1: Using the same layer count and similar separator area of the A0 samples that we've already shipped, we believe we can minimize the amount of additional work required to get to market.
Speaker 1: And finally, this product also provides its flexibility to serve the consumer and electronic sector.
Speaker 1: Thanks for that helpful context. There have been a number of announcements in recent months regarding new battery technologies, including 500-wire-hour-per-still-dome announcements from some players as well as sodium-indicator.
Speaker 2: How those announcements affect your market outlook?
Speaker 1: So we're pleased to see industry players recognize the importance of higher energy density and the need for new chemistries to deliver this capability. Of the two recent announcements I'm familiar with, we have yet to see any data showing performance and high rate long cycle life room temperature tests.
Speaker 1: And of course, without this data, it's very hard to evaluate any claims. Regarding sodium ion, some of the figures we've seen in CZS, it has a very low energy density, so it's likely unsuitable for high value automotive applications.
Speaker 1: In addition, note that if you change the ion that's transporting charge through the cell, from lithium to something else, you can change the ion that's transporting charge through
Speaker 1: You're changing the entire stack, including the cathode, the anode, and the electrolyte, potentially introducing unknown or unexpected materials and interactions.
Speaker 1: in addition to requiring an entire D.U. supply chain.
Speaker 1: We don't know what the specific material supply chain is for this class of battery.
Speaker 1: Thanks, Eddie. Kevin, one question for you. Can you talk to how the company is navigating the continuing macro at the Honour of Dunk uncertainty and the banking system's trained that we witnessed in the corner?
Speaker 3: Yeah, happy to.
Speaker 1: Four points I'd like to make.
Speaker 1: First, I'd like to highlight and strengthen our balance sheet. Land of the quarter is just over 1 billion in liquidity. We reiterated guidance and our shareholder letters that we continue to see our cash runway extending into the second half of 2025. Additionally,
Speaker 1: Concurrently with the filing of our annual report at the end of February , we filed a $400 million dollar at the market perspective supplement. Any proceeds from this would further extend our cash runway.
Speaker 1: Second, we remain prudent on the use of funds. We continue to make progress against the number of internal cost-saving initiatives focusing on both off-act and capex.
Speaker 1: Third, our investment policy prioritizes the preservation of principle and liquidity. We invest our treasury funds in what we view as a conservative manner, both in terms of duration, less than 18 months weighted average maturity and credit quality. Greater than 75% of our portfolio is invested in the US government obligations and triple a rated money market funds.
Speaker 1: Finally, regarding institutional relationships, we use multiple banks for Treasury management and the following has to be used in quality have added additional operating relationships as well.
Speaker 1: Thanks, Kevin. Jiggy is turning back to you. Can you invest your sense of level of quality, on-state needs to make the system work with higher levels of reliability?
Speaker 1: Yeah, as we said before, we believe that the real function of DPEC entry and DPEC density is a function of quality and consistency, which are in turn functions of Cloning and S and Blastless Control.
Speaker 2: As we move to more automated tools, we tend to see improvements in all these runs.
Speaker 2: To give you some context, some industries such as semiconductor and the magnetic spinning disk storage industries require very high levels of cleanliness and process control. For example, the magnetic storage industry, a very high volume industry, which ships millions of hard disk drives every year, has heads that float nanometers above the surface of the the surface of the availability of energy. It is really expensive for your individually responsible customers and customers.
Speaker 2: which are spending 1000 to VPN.
Speaker 2: This requires clandiness on the order of nanometers. By contrast, we believe we require clandiness on the order of microns, a thousand times less clinging. As we continue moving the more automated tools and continue to identify and resolve sources of defects, we believe we will be able to further improve our reliability.
Speaker 1: Okay, thanks so much guys. We're now ready to begin the live portion of today's call. Operator, please open up the line for questions.
Speaker 4: If you would like to ask a question, please dial star followed by one on your telephone keypad. If there is any reason you would like to remove that question, please press star followed by two. Again, to ask a question, press star one. As a reminder, if you are using a speaker phone, please remember to pick up your hands that before asking your question. We will pause here briefly as questions are registered.
Speaker 4: The first question is from the line of Jordan Levy with Truist. Your line is now open.
Speaker 4: The first question is from the line of Jordan Levy with truest. The line is now open.
Speaker 4: of Jordan Levy with Truist. Your line is now open. Afternoon all and congrats on the.
Speaker 5: design decisions next step for you all. Maybe to start, I just wanted to see if you could help us benchmark the cell design you're targeting versus some of the cell available in the market today, maybe the 21-70 or 48-16 in terms of
Speaker 5: what EV battery performance metrics could theoretically look like down the line once you get things scaled up.
Speaker 2: So as we mentioned in our letter, the 2170 that we're familiar with has an energy density somewhere in the low 700s in terms of watt hours per liter. And we believe that even with our 24-layer design, we can actually make the most of the
Speaker 2: with the same area separators or similar area separators to what we've already shipped with our A0s, so we can exceed that number.
Speaker 2: I think the other thing that keeps in mind is that we believe not only can we exceed those energy densities, but we believe that we can do that while maintaining high levels of power. And that combination we think is relatively unique. And so we think there's a compelling value proposition with that 24-layer cell by VAMP hours.
Speaker 2: which really allows us to minimize the amount of additional work that would be required if we were to change the layer count or change the area dramatically or other things like that, which in turn then allows us to...
Speaker 5: Thanks, Jack Deep. Then maybe a separate question. If you could just give us a little more detail on the process and steps for scaling up the next production phase of QSVR. I think you said three times the capacity and what remains to be done before bringing that FASTA process line on line. So, that's our pregnancy.
Speaker 5: subsequently what the steps are to get to that next expansion following that.
Speaker 2: Absolutely, yeah. This is an important question and that's actually an area we're pretty excited about. So as you might recall, we are already using a continuous flow process for our separated production, for the films themselves. And what we've been able to do is come up with a new process that we think is disruptively better.
Speaker 2: That process can take tools that are essentially very similar to the equipment we already have that we're using today, and as we mentioned, triple the throughput. That particular – that's the first stage of this new process. That first stage, we are in the process of deploying right now.
Speaker 2: The tools are in-house, they're being configured, and we currently plan to have production off of that line starting this year. Now the exciting thing about this new process though is that there's a second stage where we can take the same general principle that we're using for this process.
Speaker 2: and scales up to even higher throughputs. And now to get those higher throughputs, there is new equipment that's required, and we're currently in the process of specifying the tool and process specs for that new equipment. That equipment, we expect will be operational, in-house and operational before the end of 2025.
Speaker 6: Thank you for your question.
Speaker 4: The next question is from the line of Winnie Dong with a Dwayce Bank headline is now open. Hi, thank you so much. My first question is with the 24 layer A zero prototype now complete with one auto custom rule. Could grab one that.
Speaker 7: What's sort of like the next step there in terms of completing testing with the other customers before you can transition to the next phase, which is the sample? And then how far are you from completing this testing with the rest of the audience? Yes. We are pleased, as we mentioned in the letter, with the results of the testing.
Speaker 2: of the commercial shipping part, but overall, we're quite pleased with the results. From here, what we are working on is taking the key items we mentioned as our goals in our last drill over. So the higher loading cathode, the more efficient packaging of the sample.
Speaker 2: the new films coming off our higher throughput film production line, integrating all that functionality into our samples, and then obviously working on the liability. So that new functionality will be the basis of subsequent deliveries to our customers.
Speaker 2: and we expect to be working on that through when we have the D sample. We expect to have the, as we said before, lower-boiled D samples off of the lower throughput production lines sometime next year in 24 and then the first D sample off of the higher throughput.
Speaker 7: production lines before they are 25. Got it. That's very helpful. And then second question for Kevin. Sometimes we can sort of provide additional color on the internal cost initiative that you were doing too in terms of cap-ex and all that. Thank you. Thank you, Winnie. Yeah, I would.
Speaker 1: strong doubt sheet that we have and that isn't lost on any of the leaders on the team.
Speaker 7: Thank you so much.
Speaker 8: Thank you.
Speaker 6: Thank you for your question.
Speaker 4: The next question is from the line of Chris Snyder with UBS. Your line is not open.
Speaker 2: Thank you and appreciate all the updates this afternoon.
Speaker 1: So, again, the 24-layer, 5-amp hour cell, you know, you guys said it could be used for both auto and consumer. So understand that there's, you know, better synergies with that and it would be maybe the fastest path to market. Does this suggest that the company is no longer pursuing the plan of…
Speaker 1: scaling the cell up to kind of several dozen layers or is that still you know in the plans of just being kind of pushed right?
Speaker 2: No, as we've mentioned, we over time plan to make both large and small cells. And there's nothing inherent about our technology that causes us to not be able to do that. We just think that there's a lot of value to us, to our investors, to our customers.
of getting a product to market as quickly as possible. And so our goal here has been to say, what can we do to take what we've already shipped, which of course is the A0 sample, with 24 layers in a certain area, and commercialize that. And so what this first shipment does for us is allows us to leverage the 24 layer count that we've already done.
leverage the, leverage area that's similar to what we've already shipped and focus just on the things that I mentioned earlier that are part of our 23 goals. So add to that, to that cell, the higher loading capital, which increases the energy density, add to that cell more efficient packaging, which also increases the energy density, add to that cell, the new films coming off of the more scalable.
given the capacity that it has and the energy density that it has appeals to both the automotive sector and the consumer sector is in some ways a bonus because we can now take that same product and have a single track dual purpose design. So recall that the 2170s that are used in obviously many of the best selling EVs today.
are about, have about approximately four to five amp hours of capacity. And what we're talking about is about five amp hours of capacity. So it's in the same capacity range.
as today's 2170s, which obviously are high-volume cells, and the energy density that we think we can get out of these 24 and 25 amp ourselves, we think is higher than today's 2170s.
And then that's not even taking the count of the fact that we think we need a power density. So we need to come all the things together. Our conclusion is that you have a really compelling first product that can serve multiple markets, that can be better than what is the alternatives that are available.
and that can really optimize time to market without requiring additional development. We for sure plan to do larger sales over time. This is simply a question of how we can get the market as quickly as possible.
Thank you for all that, Carl. I really appreciate it. Does the kind of the focus on the 24-layer 5-amp hour cells, does that have any impact on your existing commercial agreements with auto OEMs or maybe, you know, kind of
I don't know if there's an expectation that these would be, you know, kind of larger cells at that window's agreements or signs. Thank you. Yeah, so I think, you know, the working with all of the players that we have already got in this with, we're discussing with them the best bit of this design with the other native speakers.
demand for this kind of cell that offers the combination of energy density and power density in this capacity range. And then in the fullness of time, we offer a broader portfolio including both larger and small cells in order to address the particular...
design approach that he show you as a choosing.
The next question is from the line of Ben Callow with Baird. Your line is now open.
Hey, John D. Hey, Kevin. Thank you. Happy. I just really Kevin. Have you done anything with ATM? I'm sorry, I missed this before.
I've been if I correct your question was regarding use of the ATM in the quarter.
Ben, if I'm correct, your question was regarding use of the ATM in the quarter. Right.
No, we did not use the HM facility in the square.
And then, so I'll keep this calm. Did I know?
this is all complicated to me at least but you know the the different form factors I think this question was asked before but like how do you think about you know going from sell to going into a product
and the timeline that we can see developments there. I just mean, it's a super electronic versus automotive.
Going from your cell to a pack
a cell to a pack. How should we think of milestones?
Yes, so I think on the automotive side, there's a relatively well-made out methodology that they use, which is you go from an A sample to a B sample and so on to higher levels of maturity in addition to maturity level.
You'll be able to typically have higher volumes, and they use those higher volumes to make packs, to then use those packs to make, you know, actually test cars and finally to qualify those vehicles, and then you have a series production release. So those are all activities that we were working on with our various oil and partners. On the consumer side, it's a simpler process.
because there is no pack, so to speak. The cell that you are building is going to go into a device by itself. The nice thing about this five-amp hour design is that corresponds to roughly 20 watt-hours. Twenty watt-hours is on the higher end of what you would see even in a relatively large,... Seems like too much feedback. But certainly not enough information. And out of the beet,
It definitely gets simpler and easier. So I think that those are the differences in terms of the process flows for how the process to market works. The advantage of consumer affordances that not only is it a simpler process, but it is mentioned to you, there's no pact designing worry about.
But the requirements of this level are also in some ways a lower bar. So you don't need the same rates of power. So the C8s are lower. You know, you don't need, you know.
super high power to run a phone versus a car. You also don't need the same temperature performance. Cars need to be rated down to between negative 20 and negative 30 degrees, whereas phones typically don't need to run that, operating at that lower temperature.
And the cycle lights are very different. Cars typically will need to run for hundreds of thousands of miles or 10 plus years, where no phone designs for 10 years. I wish they were, but typically the phones are designed to be obsolete within a few years. So all that makes it easier for the consumer.
application if you will. So which is why we refer to this as a single track dual-purpose design. We're doing one design for this 24-year cell 5 amp hours, but we think it applies quite well to both consumer and automotive in the sense that there are application, there are examples of leading
products in both sectors that you sell with capacities in that range.
Thank you. But in the past, you know, you talked about compatibility with current manufacturing, but you know, we continue to see more and more, you know, capacity and announcement, at least, like most every day in the United States.
So do you think that that scale diminishes what you can offer to the automotive industry? I mean sell and pack.
I will, you know, remember, you want to pick, you know, over the next four or five years as you get the cursesation or can you just remind us why you know, you'll simply ahead the curb.
Thank you.
Yeah, this is a question that are you asking whether the new button pac has too many shells from invadient evidence, skincare.
Whomever, I mean like 35 gigawatt hours here and there and here and there. I'm wondering, when we get out to 20, 25, 6, 7, what your advantage is.
Oh yeah, yeah, yeah, absolutely. You're absolutely right that there has been a lot of announcements relative to new battery production capacity coming online, for sure. And that actually is a testament to the expected demand that the automakers see for EVs in their portfolio. As much as we thought that EVs have been growing at a breakneck pace, it seems like there's no end in sight. This is just kind of, you know, appears to be continuing. I hope that we get to the end.
And so to satisfy that need, there's a need for a lot of batteries, hundreds of gigawatt hours of capacity. So we don't see that demand going away. I think relative to why our product is needed, the answer is that all of that capacity, substantially all the capacity that you mentioned, is coming in the form of traditional lithium ion capacity.
which means the energy densities, the power densities, the overall characteristics of those cells are very similar to what's available today. And we think that having a better cell, which is a cell that delivers better energy density, better power performance.
that kind of sell will always have demand. And so, what we're focused on doing really is getting this new technology to market in order to enable our customers to take advantage of those capabilities. We heard very clearly from effectively all the people we spoke with, all the customers that we have partnerships with right now.
that the value publishing we offer is very compelling. Our main challenge is you know, is simply to get this to market. So we're focusing very heavily on trying to do everything we can to
minimize time to market. And that's where locking in on this 24 layer, five amp design, we think is really a big step forward. Because it allows us to then have line of sight to a product, which allows us to order the tools that we need to mass produce the product, which allows us to get it to market. And of course, there will always be.
subsequent versions and subsequent factories that have more capacity. But all that additional capacity, all those follow-on products, all run through the first product in the first factory. So if we don't do that, none of the follow-ons are going to happen, which is why we're laser focused on just getting this 24.5 amp hour cell to market out of that first factory.
subsequent batteries that have more capacity. But all those, all those additional capacity, all those follow-on products, all run through the first product in the first factory. So if we don't do that, none of the follow-on is going to happen, which is why we're lazy focused. I'm just getting this 24-year-five amp hour cell to market out of that first factory. Thank you.
Absolutely. Thank you for your question. The next question is from the line of Mark Delaney with Goldman Sachs. Your line is now open. Yeah, good afternoon. Thank you very much for taking the questions. First, I was hoping to better understand the commercialization timeline, which has been a point of emphasis in the letter and your remarks today. If I heard correctly, lower volume B samples of this 24-layer, 5-amp, hour cell.
especially in the future. So I think in the near term, we have the milestones that we've laid out for this year in our.
better from last quarter. Those include, again, as a reminder, the higher loading cap loads, the more efficient packaging, the films coming off the new, more scalable production process, and then better reliability. Those are all things that are key requirements for any.
commercial product and those will also go into these initial low volume B samples that come off the lower throughput line in 24. Having said that, we do have higher throughput tools that we...
will be ordering that will arrive and be installed by the end of 25. So we believe we can be making the first B samples off that higher throughput line before the end of 25. These samples are things that we directly control.
To go from B to C, of course, now you have to get the automotive OEM involved, and the timing of the T-sample is really governed by the specific vehicle program and the customer that you're working with. So that becomes a little bit less precise.
But our target is to be able to ramp up that facility at the end of 25 and then be able to ship past that point.
That's very helpful. Thanks for clarifying. You also emphasized the value proposition and you think there's some good balance with this product that you've selected to commercialize initially. Could you double click a bit on that? Maybe one on the cost side. How would you think the cost of the product would compare versus established cells that are in high volume initially but then...
We've shown the fact that lithium-ion can be higher in density because we don't have the anode. So we don't have – in our system, as you recall, we don't – not only do we not have an anode, but there's really zero lithium.
in our annual as manufactured. So the only manufacturer are cathode and a separator and bring them together as part of the assembly process. The annual forms in situ on the first charge. That both gives us higher.
potential energy density, but it also gives us an opportunity to have some cost advantages because we don't need the annual material, whether it's carbon or silicon or lithium oil, and we also don't need the annual manufacturing line. Now obviously you can't compare a small scale line with a super high volume line in terms of the economy of scale and cost and so on.
But I think at this stage, when we have a production line, that will allow us to have all the details we need to then design larger lines and have more throughput. I think at the end of the day, what we believe is a
Our system has some key advantages in terms of economics, and that's I'm referring to the not needing an anode and not having an anode manufacturing line. And we believe this industry has volumes that are so high that economies of scale can absolutely be achieved. So a couple of those two things.
We do believe that we can offer compelling economic value proposition. The timing of the R&D stands on the timing of the ramp.
One other thing I could add just to connect the dots with the share of the letter is to maintain that, to capture savings there on the components that we eliminate. We of course have to manufacture our separator at scale and golding throughput that would fit with those targets. And that's why this disrupted – this first stage of this disrupted – susceptible to JavaScript weld-soads for Ker regulating plaintiffs for internalized campaigns
separated process is so exciting that that equipment's being installed now. And as we work towards specing out equipment for the second stage, so that's a development that we think is positive towards that product gross margin direction.
That's all very helpful. I was going to ask one last one. You spoke about amp hours of the cells, but as we think about overall storage capacity at the pack level, I think we need to think about how big the cells are versus 2170 and how densely they can be packaged. Maybe it's too soon to have visibility into pack level density.
energy density at the cell level, we will be higher with the Qwav's gig cell state and the team mental technology than conventional 2170 cells. But secondly, at the path level, because the cells will be the prismatic format, prismatic cells pack better. With the F's clinical cells,
Imagine taking a bunch of water bottles and trying to pack them densely. You will have dead space in the bottles that you cannot get rid of, no matter how densely you try to pack. There will be loss of space. I think the geometric calculations are on the order of 9% of the space is guaranteed to be lost to void space. Whereas with the prismatic cells, in a bunch of rectangular blocks that you're packing, you can pack them up with zero wasted space into a pack. So the combination of…
Higher energy density at the cell level and more efficient packing because of the prismatic nature of the cell at the pack level actually give you, we think, a compelling value proposition on energy density.
at the cell level and more efficient packing because of the pragmatic nature of the cell at the pack level, actually give you, we think, a compelling value proposition on energy density. Thank you.
Absolutely. Thank you for your question. There are currently no further questions registered, so as a reminder, it is star one on your telephone keypad. There are no additional questions waiting at this time, so I'll pass the conference back to the management team for any closing remarks.
I'd like to thank you all for joining today's call. In particular, I'd like to thank our investors for their continued support, our customers for their ongoing commitment to bringing our technology to market, and of course the entire quantum scape team with endless passion and dedication that drives our progress.