Volkswagen deepens collaboration with QuantumScape, a company specializing in the development of solid-state batteries.
The strategic partnership between QuantumScape and PowerCo, the battery subsidiary of the Volkswagen Group, has taken a significant step forward. The expanded collaboration, announced in July 2025, builds upon an original agreement that was established in July 2024 [1][2].
The primary focus of this updated agreement is to accelerate the development and industrialization of QuantumScape's QSE-5 solid-state battery at their pilot production line in San Jose, California [1][2][3].
Key aspects of this expanded partnership include:
- PowerCo will provide up to $131 million (€112 million) in milestone-based payments over the next two years to support the QSE-5 development pilot line and scale-up efforts. The first technical milestones have been met, triggering initial payments expected in 2025 [1][2][3][4].
- PowerCo gains earlier involvement in QSE-5 production and automation processes, enabling a faster ramp-up of manufacturing capacity and facilitating smoother technology transfer for commercial-scale production [1][2][3][4].
- Under the updated agreement, PowerCo obtains the right to produce up to an additional 5 gigawatt-hours (GWh) annually of QSE-5-based cells, including sales to customers beyond the Volkswagen Group, expanding the potential global market footprint of the technology [1][3].
- The agreement also grants PowerCo the option to license certain future QuantumScape technologies, strengthening the strategic alliance and expanding collaborative opportunities [1][3].
This expansion represents a major step forward from development to industrialization and market introduction of QuantumScape's next-generation solid-state battery technology, signaling confidence in QSE-5's commercial potential and accelerating its path toward global deployment [1][5].
The partnership aims to revolutionize energy storage, offering higher energy density, faster charging, and better safety [6]. Additionally, QuantumScape has signed a joint development agreement with another major global automaker, as reported in the latest quarterly report [7].
It's worth noting that the payments are contingent on the achievement of certain milestones by the joint team [1][2][3][4]. The new agreement also allows PowerCo to enter production and automation of QSE-5 cells earlier [1][2].
[1] QuantumScape Press Release, July 2025. [2] PowerCo Press Release, July 2025. [3] Volkswagen Group Press Release, July 2025. [4] QuantumScape Q2 2025 Earnings Call Transcript. [5] QuantumScape Q2 2025 Investor Presentation. [6] QuantumScape Company Overview. [7] QuantumScape Q2 2025 Quarterly Report.
The expanded partnership between QuantumScape and PowerCo, a subsidiary of the Volkswagen Group, includes PowerCo providing up to $131 million for the development and industrialization of QuantumScape's QSE-5 solid-state battery. This technology collaboration aims to revolutionize energy storage, offering higher energy density, faster charging, and better safety.
