QuantumScape Corporation (ticker: QS), a leader in the development of solid-state lithium-metal batteries for electric vehicles, has announced the commencement of low-volume production of its B Sample cells, the QSE-5, during its Third Quarter 2024 Earnings Call. This development signifies a key milestone for the company, as these cells are the first anode-free solid-state lithium metal cells for automotive applications. The company has also revised its financial guidance, lowering its full-year adjusted EBITDA loss and CapEx guidance for 2024, while maintaining a strong liquidity position.
Key Takeaways
- QuantumScape has begun low-volume production of B Sample QSE-5 cells with an energy density of 844 watt hours per liter.
- The QSE-5 cells can charge from 10% to 80% in just over 12 minutes.
- A new separator production process, Raptor, is expected to support QSE-5 production into 2025.
- QuantumScape is collaborating with VW PowerCo under a licensing agreement, which includes a $130 million prepayment.
- The company reported a GAAP net loss of $119.7 million and an adjusted EBITDA loss of $71.6 million for Q3.
- Adjusted EBITDA loss guidance for the full year has been tightened to between $280 million and $300 million.
- CapEx guidance for 2024 has been lowered to between $60 million and $75 million.
- QuantumScape ended Q3 with $841 million in liquidity, expecting a cash runway extending into 2028.
- The company is transitioning to a Cobra manufacturing process, with full implementation expected by 2025.
- Co-Founder and Chairman Jagdeep Singh is set to retire at the end of 2024.
Company Outlook
- Focus on reducing costs to industrialize technology platform.
- Licensing agreement with VW PowerCo expected to lower capital requirements by billions of dollars.
- Aim to leverage partnership with VW PowerCo to enhance manufacturing capabilities and accelerate high-volume production.
Bearish Highlights
- GAAP net loss of $119.7 million reported in Q3.
- Adjusted EBITDA loss of $71.6 million for the same period.
- Full-year adjusted EBITDA loss guidance tightened to $280 million to $300 million.
Bullish Highlights
- Commencement of B Sample QSE-5 cell production, a significant technological advancement.
- New Raptor production process to support current and future production needs.
- Strong liquidity position with an expected cash runway into 2028.
Misses
- Despite technological advancements, significant net losses and adjusted EBITDA losses were reported.
Q&A Highlights
- Management emphasized a systematic approach to product development, prioritizing quality and safety.
- QuantumScape retains 100% ownership of its separator technology, allowing potential knowledge transfer to other partners.
- The company is preparing for the ramp-up of production with multiple customers.
- Acknowledgement of Co-Founder Jagdeep Singh's upcoming retirement and his contributions to the company.
QuantumScape's Third Quarter Earnings Call has revealed both the progress in their product development and the financial challenges they face. The company's collaboration with VW PowerCo and their focus on a capital-light business model suggest a strategic approach to overcoming these challenges, as they aim to lead the transition to solid-state battery technology in the automotive industry. With the B Sample cells now in production and a strong liquidity position, QuantumScape appears to be on a path to scaling up its operations and delivering on its technological promises.
InvestingPro Insights
QuantumScape's recent developments in solid-state battery technology are promising, but the company's financial metrics reveal some challenges. According to InvestingPro data, QuantumScape's market capitalization stands at $2.62 billion, reflecting investor interest in its potential. However, the company's financial health warrants careful consideration.
InvestingPro Tips highlight that QuantumScape "holds more cash than debt on its balance sheet" and "liquid assets exceed short term obligations," which aligns with the company's reported strong liquidity position of $841 million at the end of Q3. This financial cushion supports QuantumScape's projected cash runway into 2028, providing time for the company to develop and commercialize its technology.
Despite these positive aspects, InvestingPro data shows a significant operating loss, with an adjusted operating income of -$511.87 million for the last twelve months as of Q2 2024. This is consistent with the company's reported GAAP net loss and adjusted EBITDA loss in the article. The InvestingPro Tip noting that QuantumScape "suffers from weak gross profit margins" further underscores the financial challenges faced by the company as it works towards commercialization.
The stock's performance has been volatile, with InvestingPro data indicating a 30.56% price decline over the past three months. This volatility is reflected in the InvestingPro Tip stating that "stock price movements are quite volatile," which investors should consider when evaluating QuantumScape's stock.
It's worth noting that InvestingPro offers 10 additional tips for QuantumScape, providing a more comprehensive analysis for investors interested in a deeper dive into the company's prospects.
Full transcript - Quantumscape Corp (QS) Q3 2024:
Operator: Good day, and welcome to QuantumScape's Third Quarter 2024 Earnings Conference Call. John Saager, QuantumScape's Vice President of Capital Markets and FP&A, you may begin your conference.
John Saager: Thank you, operator. Good afternoon, and thank you to everyone for joining QuantumScape's Third Quarter 2024 Earnings Call. To supplement today's discussion, please go to our IR website at ir.quantumscape.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 as part of our quarterly update. Forward-looking statements generally relate to future events, future technology progress, or future financial, or operating performance. Our expectations and beliefs regarding these matters may not materialize. Actual results in financial periods are subject to risks and uncertainties that could cause actual results to differ materially from those projected. There are risk factors that may cause actual results to differ materially from the content of our forward-looking statement for the reasons that we cite in our shareholder letter, Form 10-K, and other SEC filings, including uncertainties posed by the difficulty in predicting future outcomes. Joining us today will be QuantumScape's CEO, Dr. Siva Sivaram; and our CFO, Kevin Hettrich. With that, I'd like to turn the call over to Siva.
Siva Sivaram: Thank you, John. I'd like to begin by discussing the most significant achievement in our Company's history. We are excited to report that we have begun producing low volumes of our first B Sample cells, accomplishing our most important goal for 2024 and we have begun shipping these cells for automotive customer testing. These are B Samples of QuantumScape's first product QSE-5, with measured energy density of 844 watt hours per liter, capable of fast charging from 10% to 80% in just over 12 minutes. QSE-5 represents an important milestone for our Company and the Battery Industry as a whole. These cells are, to the best of our knowledge, the first anode-free solid-state-lithium metal cell design ever produced for next-generation automotive applications. This cell is capable of simultaneously delivering exceptional performance with respect to energy density, discharge power, charging speed, low temperature performance, and safety. This milestone marks a new stage of rigorous development and production efforts. Now that the product design and performance profile is set and we have established a baseline process, we will continue to ship samples, get customer feedback, and refine our processes. During this B Sample phase, iterations of these samples will be subject to extensive product testing, which will take many months to complete. We have to substantially improve on metrics such as cell reliability, yield, and equipment productivity among others. Next, I'd like to share an update on our progress on separator production. The first implementation of our disruptively fast separator production process is named Raptor. And as of Q3, Raptor is now our baseline. We set this as a key annual goal, because Raptor is a major improvement from our last generation technology in film quality and performance, heat treatment time and energy consumption. We expect that Raptor will continue to support our QSE-5 sample output into 2025. Beyond enabling B Samples, Raptor serves as a learning platform and transitional step to our Cobra process, which we continue to see as our best pathway to gigawatt-hour scale separated production. We are preparing for Cobra production to enter our baseline in 2025. We expect Cobra heat treatment equipment will be in place by the end of 2024 and with addition of higher volume downstream automated equipment, this line will enable a significant increase in separator production. Next, I'd like to briefly update on our joint work with PowerCo, the battery manufacturer of the Volkswagen (ETR:VOWG_p) Group. As a reminder, we have signed a landmark agreement with PowerCo to bring our QSE-5 technology platform into mass production at the gigawatt-hour scale. The first phase of this agreement includes intensive collaboration with PowerCo contributing skilled personnel to aid the industrialization of the QSE-5 platform. Upon satisfactory technical progress in this phase, QuantumScape will grant PowerCo a license to mass produce battery cells in exchange for royalty payments including a $130 million prepayment. The collaboration phase kicked off in Q3, with joint development activities at our San Jose facilities. During this phase of the project, we combine our QSE-5 platform and deep knowledge of solid state battery technology with PowerCo's expertise in scaling up high volume manufacturing processes. PowerCo is well positioned to contribute in areas such as supply chain, production equipment and automation. Last, I want to put this quarter's achievements in context. This is a proud moment for the entire QuantumScape team. We have accomplished our most important goal. We have started producing B Samples of our QSE-5 product and begin shipping them for customer testing. We believe these cells represent a new high water mark for the battery industry. This is the moment we've been waiting for. The start of the climb towards industrialization. To make the kind of impact on electric transportation, we believe this technology is capable of. We will need enhanced manufacturing processes which can make millions of cells per year, with defectivity rates on the order of a few cells per million or lower. It will require a sustained effort and deep collaboration with partners including the Volkswagen Group and PowerCo to achieve such a massive scale. With those long-term goals in mind, shareholders should take a balanced view of the achievement we have announced today. It is no more than the first shipment of early low-volume QSE-5 B Samples, but at the same time, we believe it is no less than a true world first, an anode-free solid-state lithium metal battery capable of revolutionizing electric vehicle performance. A cell, with the potential to offer what drivers are demanding, much longer range, faster charging, powerful acceleration, and better safety all at the same time. Thank you for your continued support and we look forward to updating you on further progress in the months to come. With that, I'll hand things over to Kevin.
Kevin Hettrich: Thank you, Siva. Capital expenditures in the third quarter were $17.9 million, in line with expectations. Q3 CapEx primarily supported equipment purchases for low volume QSE-5 prototype production as well as the Cobra process and other equipment as we prepare for higher volume QSE-5 prototype production in 2025. GAAP operating expenses and GAAP net loss were $130.2 million and $119.7 million, respectively. Adjusted EBITDA loss was $71.6 million in Q3 and in line with expectations. We continue to track to full year guidance for adjusted EBITDA loss. This quarter, we tightened our full year guidance for adjusted EBITDA loss to be between $280 million and $300 million within original guidance, but at the higher end of the original range, primarily due to higher legal fees and settlement accruals in 2024, that we do not expect to reoccur in 2025. We are lowering our guidance for capital expenditures to be between $60 million and $75 million. This lowered guidance in 2024 is driven by realized PowerCo deal-related efficiencies, non-deal-related savings, and a shift in certain payments originally planned for late 2024 into 2025. We ended Q3 with $841 million in liquidity. As we've mentioned previously, our long-term capital requirements are a function of our commercialization pathway. We believe our deal with VW PowerCo offers a capital-efficient path to market and continue to project our cash runway to extend into 2028. Any additional funds raised, including under our ATM prospectus supplement, would further extend this cash runway.
A - John Saager: Thanks, Kevin. We'll begin today's Q&A portion with a few questions we've received from investors, or that I believe investors would be interested in. Siva, can you elaborate on the significance of QuantumScape entering the B Sample phase of the automotive qualification cycle?
Siva Sivaram: Thanks, John. We hear announcements every day from different battery manufacturers touting isolated improvements, or specific performance features. Today we are discussing extensive measurements of our first planned product that we have worked so hard to develop. We believe that the QSE-5 cell is concurrently better in the major performance specifications at the consumers' demand, range, faster charging, ability to operate at lower temperatures, ability to provide high power, and a better safety profile than today's lithium Li-ion cells. For the first time, you're seeing a battery that can meet all of the above requirements and we are providing actual measurement data for all of these features. When OEM customers deploy our batteries into their vehicles at scale, we believe this combination of characteristics will transform the electric vehicle's marketplace by offering a no-compromise alternative to internal combustion vehicles.
John Saager: So beginning low-volume QSE-5 prototype production is a major milestone on QuantumScape's journey towards industrialization. But what key challenges remain ahead?
Siva Sivaram: John, first, I'm just so pleased that we have reached this stage. We got here through a set of thoughtful, deliberate milestones, starting with our single-layer results in 2020 and progressing towards our first A Samples in 2022 and six layer Alpha 2 prototypes earlier this year. We have communicated to you every step of the way. Now that we have a design that's frozen and a baseline that's running for our first product, this industrialization process follows a well-developed playbook that many industries have used before. In fact, I am excited to be in a familiar place that I have been in several times during my career. We know what we need to do. We need to do systematically, methodically, iteratively, take a product that we have developed at our headquarters in San Jose, and bring that into production of millions of cells that are ultimately deployed in vehicles. This long-term goal will require constant focus on quality, processes, customer feedback, and very close collaboration with our broader ecosystem, to achieve gigawatt-hour scale production.
John Saager: Thanks, Siva. Kevin, turning to you. What is required to achieve the 2028 runway extension? Can you elaborate further on the details behind that?
Kevin Hettrich: The 2028 runaway extension is the equivalent of more than $0.5 billion of non-dilutive improvement to capital availability in our forecast. There are four primary drivers. First, under the licensing agreement, PowerCo will invest CapEx required for gigawatt-hour scale production facilities. The deal replaces our prior JV structure, which frees up $134 million we had previously earmarked for required capital investments. Second, PowerCo will contribute resources and skilled personnel as part of the collaboration, which helps reduce costs to industrialize our technology platform. Third, the licensing agreement features an inflow to QuantumScape of $130 million royalty prepay contingent upon satisfactory technical progress. Fourth, and separate from the PowerCo deal, we continue to make improvements to the efficiency of our operations, which, as mentioned in our Shareholder Letter, we've already begun to realize. Longer term, the shift to a license with VW PowerCo for up to 80 gigawatt hours, four times the size of the JV agreement, the PowerCo deal replaced, reduces forecast capital requirements to QuantumScape by billions of dollars.
John Saager: Okay. Thanks so much. We're now ready to begin the live portion of today's call. Operator, please open up the line for questions.
Operator: [Operator Instructions] Our first question comes from the line of Joseph Spak with UBS. Your line is open.
Gabriel Gonzales: Hi, this is Gabriel on for Joe. Thanks for taking my questions. Firstly, congratulations on beginning B Sample shipments and fully implementing Raptor. I know you previously mentioned that you were targeting something like 800-watt hours per liter and that 10% to 80% charge time under 15 minutes. So good to see those metrics there. Siva, we've seen some announcements from some of your competitors intending to launch with their solid-state tech and lower volume fleets around that 2026, 2027 timeframe. But we've also heard expectations for full introduction of solid state as a later decade event. I know earlier you spoke about how QSE-5 stacks up, within the competitive landscape. So without setting specific expectations, do you see that timeframe as reasonable for the EV space in general to begin implementing this kind of technology, even if lower volume?
Siva Sivaram: Gab, thanks for asking the question. I will talk for ourselves first. As I said, there are a lot of announcements all the time from everywhere. We believe in systematic, methodical, iterative development of a product from a B Sample into high-volume production. This requires that we take no shortcuts. We make sure we focus on quality, we make sure we focus on the supply chain, our ecosystem, and do this right. And with a partner who knows how to build in volume. All of this does require time, effort, and focus. I can only tell you that we are on the fastest path to production as possible. Our partner and us are both highly motivated to get this path-breaking technology into production in the fastest possible manner. And that's where we are headed. And the first part of getting that started is establishing a baseline that actually delivers all of these, which is what we have established today. We have established that concurrently, we can give you the safety, we can give you better than expected energy density, very, very good power, very good safety, and ability to operate at very low temperatures. Put them all together you have the baseline and we work methodically, systematically, and iteratively, with our customers. That's about all I can tell you. Our customers working very closely with us on this.
Gabriel Gonzales: Great. That's good to hear. And Kevin, you lowered the CapEx guide about $25 million at the midpoint. So the full-year guide implies about $16.5 million of CapEx in 4Q. Is this sort of the quarterly run rate we should be expecting going forward, or are there some costs you expect to incur, such as Cobra spend that won't repeat going forward?
Kevin Hettrich: Thank you, Gabe. That's a good -- that's a great question. Specifically, here to the question on CapEx, we lowered guidance to $60 million to $75 million for three reasons. The first was deal-related efficiencies regarding the VW PowerCo deal. The second was non-deal-related savings and the third was a shift in certain payment timing targeted at the end of 2024 into 2025. That range of CapEx we would expect going forward. When you compare 2025 levels to 2024 to be flat to slightly down and actually for the same set of reasons, you should expect the same thing of 2025 OpEx as well. Flat to slightly down when compared to 2024 levels.
Gabriel Gonzales: Thanks, everyone. Congrats on the quarter.
Operator: And your next question comes from the line of Jordan Levy with Truist Securities. Your line is open.
Henry Roberts: Hi guys, it's Henry on for Jordan here. Congrats on the B Sample milestones. Just to start with, with those Samples now being produced and Raptor are continuously running, I'm just curious, are there any key learnings you guys have found from the continuous running that are being incorporated into the higher volume line, starting next year? Thanks.
Siva Sivaram: Henry, absolutely. What you are asking is exactly what we are doing. The Raptor line not only produces enough samples to run the baseline, but is also the platform on which we learn how to structure, improve, and continuously make the Cobra process better. Even on the rest of the line, it is what you would expect. Running a stable baseline allows you to systematically improve on the performance and you can see the effect. I mean, to come and tell you that we can do 844 watt-hours per liter, 301 watt-hours per kilogram. 12, just over 12 minutes of charge time. Operating up to minus 30 degrees with 10C capability and with safety, that is even at a 300-degree thermal stability that is good. This kind of an improvement comes from running a stable baseline.
Henry Roberts: Thanks for that. And then maybe just one quick follow-up. Kevin, on the readjusted CapEx forecast, are you guys able to talk to what kind of drove the shift in certain payments that you mentioned from this year to next? What was behind that?
Kevin Hettrich: Yes, just to put a magnitude to that, that shift was in the single-digit millions. It doesn't change any of the publicly stated kind of milestones for progress and we're very much aligned with both our prospective launch customer and VW PowerCo on the industrialization and tech transfer work. So I would put it in just the normal course of operation.
Operator: And your next question comes from the line of Winnie Dong with Deutsche Bank. Your line is open.
Winnie Dong: Thank you so much, and congrats on the quarter and the news of starting B Sample delivery. Now that you have a few months of collaboration with PowerCo, I was wondering if you can talk about maybe some of the specific issues that they're solving for versus what QuantumScape might be solving for internally for B Sample deliveries and testings with customers. And then secondly, could you guys maybe share any details around the economics beyond the loyalty payment? I understand that there is some sort of share economics beyond the $130 million prepayment that you guys discussed, is there any details that you can potentially offer at this point? Thank you.
Siva Sivaram: Winnie, why don't we take the second question first? Kevin, you want to talk about the economics?
Kevin Hettrich: No, unfortunately not anything beyond the redacted contracts we put in place. As you correctly noted, there is a royalty prepay, which gets unlocked with sufficient technical progress of $130 million inflow to QuantumScape. And then once up and going, there are two parts. There's both a royalty rate and then there is an outperformance share. And as is common in the industry, those details between two companies aren't shared so as not to disadvantage either one in future negotiations.
Siva Sivaram: So, Winnie, on to your first question. Clearly, on the second question, look, as much as we can disclose, we have, for many reasons, both for confidentiality between the parties and because we want to retain the ability to negotiate with other customers when we start. So we don't want to put these numbers out. On to your first question as to what Volkswagen's or PowerCo's role in this development is. We come in with a very deep knowledge of the solid-state battery technology itself. The electrochemistry is involved, the materials involved, the processing sequences and parameters. What PowerCo is very, very good at is in scaling up in industrialization of the manufacturing capabilities, making sure that the ecosystem, the supply chain, is properly negotiated, put in place, factory ramp up, making sure that the tools and their uptimes and large scale volume production capabilities in place. Those things they are very good at. And we are both working together as one team one goal, to take these B Samples into the gigawatt hour scale factories that we both want to get out as soon as possible.
Operator: And your next question comes from the line of Ben Kallo with Baird. Your line is open.
Ben Kallo: Hi, good evening. And congrats, guys and to echo everyone's congrats to you. Just could you talk a little bit more about moving to Cobra or adding Cobra and how that gets started just on the timing of it and then how we should expect the ramp up there to meet the more high volume of production? Thank you.
Siva Sivaram: Thanks, Ben. As you rightly point out, that is a very important step for us to ramp the volume of production from Cobra -- from Raptor into Cobra. The Cobra equipment, the main pieces of tools are already started arriving. By end of this year, all the individual pieces that we need just for the Cobra process will be in place, early part of next year certain high-volume production-capable downstream tools will get added and this will be a continuous process as we are developing and slowly cutting over from Raptor to Cobra. Raptor, we expect will be the main part of the sample production earlier in the year. And as Cobra comes in, it will cut over into majority into Cobra in 2025.
Ben Kallo: And then I think you might have touched on this a little bit. But just if I ask again, just, I know it's early in sending Sample -- B Samples out. But any feedback from customers, or potential customers, or too early to tell so far. And just how that could -- how you expect the customer deal pattern to change with actually having samples in their hand, if it does change at all. Thank you.
Siva Sivaram: Clearly, having samples in our hand is a great thing for all of us, us and our customers. And as you'd expect, the customer data is going to be very proprietary to the customer and they are not going to allow us to share any of that outside unless they choose to. However, we do measure sister cells and that's where the data that we presented today are all from the sister cells and you can see how thoroughly we have characterized it and given you the data so that we are not just showing bits and pieces of data, just one parameter at a time. We are actually showing you comprehensive data, exactly how it is measured, what the dimensions are, how do we measure energy, power, all of those are. So this is the reason we are able to share the data in that much detail. Customers will, of course, will measure it their own way, with their own specifications, and will give us specific feedback that will help us in refining and making the process better.
Ben Kallo: Thank you very much.
Siva Sivaram: Thanks, Ben.
Operator: [Operator Instructions] And our next question comes from the line of Jed Dorsheimer with William Blair. Your line is open.
Mark Shooter: You got Mark Shooter on for Jed. Echoing everybody else congrats on the B Sample stage gate. That's a big accomplishment. Not to undermine that achievement, but obviously, we're going to look forward a bit. So talking about C Samples, that's where the rubber meets the road as a lot of CapEx is needed to build the new manufacturing equipment for the Cobra process. Am I thinking about this correctly, that the new licensing structure will help create a shared responsibility for developing and also scaling that Cobra process? And does this de-risk the type of maybe wait and see type of approach that PowerCo would have taken, because now they have this shared responsibility? Do you see any advantage in that?
Siva Sivaram: Mark, this is a very important consideration on why and how we went with this model. In the relationship that we have developed with PowerCo and in the general capital-light model that we are going after. The designation of B Sample is actually done by the customer. And whether it is B Sample, or when the B Samples are fully qualified from them with the same functionality, they will call the same B Sample, C Samples depending on where they are in their qualification. But the most important thing with respect to your question is this PowerCo Volkswagen commits to spending all the capital to build, ramp, and run the factories. We participate in enabling them to be able to use that equipment very well and produce the cells. We make our money when they run the volumes and we get a royalty prepay when certain progress has been made. On a continuing basis, we'll get royalties and an outperformance as we were talking about it earlier. We are not committing to spend a lot of capital in building and running factories. That's what our partner will be doing. And so going from B Samples to C Samples et cetera, will be their designation based on their ability to ramp in high volumes.
Kevin Hettrich: And if you take a step back from the shareholder perspective, we're amplifying each partner's core competency for QuantumScape, as Siva mentioned that all the knowledge in the chemistry and the process and the cell design, development, but from the VW PowerCo, just the expertise in industrialization, automation, automotive scale. We mentioned before over the summer this is a non-exclusive deal and we think it serves as a template for others in the future. The IP is co-owned around industrialization for the separator is always owned by QuantumScape regardless of who creates it. And then, as I discussed in the comments in the letter, it's a major driver to extend our runway. And Mark to your question, once you get to Gigascale factory, it has tremendous benefits to the QuantumScape shareholder in terms of the capital to penetrate our technology into the marketplace.
Siva Sivaram: So we are watching for the shareholder returns and this is the optimum model for us to maximize shareholder returns.
Mark Shooter: That's great. Thank you both for the color. Just a quick follow up on that. If PowerCo is responsible for the scale up pass C Sample, am I thinking about this correctly that even if they create trade secrets or processes around the Cobra process, QuantumScape is still has 100% ownership of that and then can -- I know you're working with other OEMs. So can you immediately transfer that to up that learning to potential competitors to PowerCo? How does that relationship work?
Kevin Hettrich: So on the ownership question is, yes, QuantumScape retains ownership of the separator technology regardless of who creates it in this collaboration phase, regarding the exact details of how it works for use with others, I don't want to get into the weeds of the contract itself. There are limitations, but we think on balance, they're quite favorable to QuantumScape and use with other partners.
Siva Sivaram: But clearly, Mark, our expectation is that we will have multiple customers with whom we'll be ramping as rapidly as possible. And so the contract allows certain features for us to be able to do that. Clearly, there will be some restrictions, but this is a much faster way to do it.
Mark Shooter: Understood. Thank you again.
Operator: And there are no further questions at this time. QuantumScape management, I'll turn the call back over to you.
Siva Sivaram: Thank you, operator. As a final note today I would like to acknowledge our Co-Founder and Chairman, Jagdeep Singh, who will be retiring from the Board at the end of 2024 after almost 15 years of service. Jagdeep is the visionary behind the growth of QuantumScape leading up to the critical achievement of shipping B Samples of our first commercial product. We are deeply grateful for his inspired guidance and will continue striving towards the ambitious goals he has set for the company. On a personal level, I'd like to express my gratitude to Jagdeep, for continuing to be a great friend and confidant and for his invaluable help as I take on the task of leading this extraordinary company into its next stage. With that, thank you for listening and we look forward to updating you on further progress in the months to come.
Operator: This concludes today's conference call. You may now disconnect.
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