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Electric Vehicle Battery Makers Optimistic Despite Slowdown in Demand
The demand for electric vehicles (EVs) may be slowing down, but battery executives in the US are confident that it’s just a temporary blip. According to recent sales data, North American EV sales increased by 10% in the first six months of 2024 compared to last year.
QuantumScape’s Shares Surge Following $130mn Payment from Volkswagen
Battery maker QuantumScape’s shares surged 52% after disclosing a $130mn payment from Volkswagen for technology royalties. The announcement was a rare bright spot for US battery makers, whose valuations have crumbled amid slowing EV sales and increasing competition from Chinese suppliers such as BYD and CATL.
Siva Sivaram, QuantumScape’s CEO, Insists on the Company’s Strong Future
In an interview, Siva Sivaram, QuantumScape’s CEO, said that he’s not worried about the Chinese competitors. He believes that the company’s development of solid-state batteries will give EV cars longer range and faster charging times compared to lithium batteries made by Chinese or other competitors.
Uncertain Path to Commercialization
However, Wall Street analysts have raised concerns about the uncertain path to commercialization for solid-state batteries. The deal with Volkswagen gives QuantumScape about one to two months of free cash flow, according to Morgan Stanley. Volkswagen previously invested $300mn in QuantumScape and controls about 25% of the voting power at the company.
Sluggish EV Sales and Increased Competition
Tesla, the world’s largest EV company, reported a second consecutive decline in quarterly vehicle sales. However, other EV manufacturers, such as Ford, have seen an increase in sales. Ford’s EV sales were up 72% in the first half of the year, making it the second-largest EV seller after Tesla.
Battery Business Valuations Fall
Despite the challenges in the EV market, battery business valuations have fallen from the market’s 2021 heyday. Silicon-based battery developer Sila Nanotechnologies, which was valued at $3.3bn in a 2021 funding round, raised $375mn in a June fundraising that was considered a "down round".
Experts Believe in the Long-Term Potential of EVs
Experts, such as Joe Fath, a portfolio manager at TRowePrice, believe that the long-term potential of EVs is still strong. "The folks who are participating, there is conviction and belief that all ground transportation is going to go electric," said Gene Berdichevsky, co-founder and CEO of Sila.
Conclusion
While the demand for electric vehicles may be slowing down, battery executives in the US remain optimistic about the long-term potential of the industry. The development of solid-state batteries and the increasing competition from Chinese suppliers are expected to drive growth in the EV market.
FAQs
Q: What is the current state of the electric vehicle market?
A: The demand for electric vehicles is slowing down, but North American EV sales increased by 10% in the first six months of 2024 compared to last year.
Q: What is QuantumScape’s deal with Volkswagen?
A: QuantumScape disclosed a $130mn payment from Volkswagen for technology royalties, which surged its shares by 52%.
Q: What is the significance of solid-state batteries?
A: Solid-state batteries are expected to give EV cars longer range and faster charging times compared to lithium batteries.
Q: What is the current valuation of battery companies?
A: Battery business valuations have fallen from the market’s 2021 heyday, with companies like Sila Nanotechnologies experiencing a "down round" in a recent fundraising.
Q: What is the long-term potential of the EV market?
A: Experts believe that the long-term potential of EVs is still strong, with many companies and investors believing that all ground transportation will go electric in the future.
Author: www.ft.com
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