QuantumScape Updates Battery Development Agreement with Volkswagen-Owned PowerCo, Secures $75.4 Million Milestone Payments

Revised Collaboration Structure with PowerCo

QuantumScape disclosed that its wholly owned subsidiary, QuantumScape Battery Inc., executed an amendment to its Amended and Restated Collaboration Agreement with PowerCo SE on July 16, 2026. PowerCo is a battery cell company wholly owned by the Volkswagen Group, which remains a major investor in QuantumScape. The amendment updates the program structure and milestones for the continued joint development, validation, demonstration, and initial commercialization of battery cells based on the company's QSE-5 Technology.

The original Collaboration Agreement was dated July 17, 2025, and was previously disclosed in a Form 8-K filing on July 23, 2025. Under the amendment, the two companies have repositioned their focus toward automotive cell development and larger format cells while advancing QuantumScape's future technology roadmap. The amendment replaces the prior statement of work and cost reimbursement structure with a new payments framework centered on achieving specific technical and commercialization milestones over the following two years.

Milestone-Based Payment Framework and Financial Terms

The disclosure indicates that the amended agreement establishes a milestone-based payment structure replacing the previous cost reimbursement model. Under this new framework, QuantumScape will receive payments from PowerCo tied to the achievement of specific milestones, including the delivery and validation of battery cells. The company disclosed that the maximum aggregate amount it will receive from PowerCo under the program is $75.4 million, inclusive of amounts the company has already been paid to date.

This shift to milestone-based compensation represents a change in how the collaboration is financially structured. Rather than reimbursing costs as they are incurred, PowerCo will now compensate QuantumScape based on tangible progress toward defined technical objectives. The two-year timeframe specified in the disclosure suggests the company and PowerCo have aligned on a development and validation schedule for the battery technology. Any outstanding obligations previously invoiced to PowerCo under the original collaboration agreement remain due and payable to QuantumScape, the filing states.

Technology Transfer and QSE-5 Development

The amendment focuses on the transfer of QuantumScape's QSE-5 Technology into a cell size to be determined by PowerCo. QSE-5 represents QuantumScape's solid-state battery technology platform, and the collaboration aims to advance it toward automotive-scale cell manufacturing and commercialization. The filing indicates the amended milestones emphasize automotive cell development and larger format cells, suggesting both companies are progressing toward production-relevant cell sizes and configurations.

The disclosure does not specify which cell sizes are currently being targeted or provide technical details regarding the QSE-5 Technology's performance characteristics. However, the focus on automotive cell development and larger format cells indicates the work is advancing beyond laboratory-scale demonstration toward formats relevant to vehicle integration. The filing notes that the amendment does not modify the terms of any intellectual property license agreement that may be entered into by QuantumScape and PowerCo, which was previously described in the July 23, 2025 Form 8-K filing.

Termination of Previous Statement of Work

Statement of Work No. 1, which was previously disclosed as part of the original Collaboration Agreement, was terminated effective July 16, 2026, according to the filing. This statement of work was replaced by the terms contained in the amendment, which includes Statement of Work No. 2. The transition from one statement of work to another reflects an evolution in the companies' development priorities and demonstrates a structured approach to managing the multi-year collaboration.

The termination of the prior statement of work effectively concludes one phase of the collaboration while establishing a new phase with revised milestones and deliverables. The company emphasized that any outstanding obligations invoiced to PowerCo under the original Collaboration Agreement to date remain due and payable to QuantumScape, clarifying that the termination of Statement of Work No. 1 does not eliminate prior financial obligations owed by PowerCo to the company.

Volkswagen Group's Strategic Position in QuantumScape

PowerCo SE is wholly owned by the Volkswagen Group, which the filing identifies as a major investor in QuantumScape Corporation. The Volkswagen Group's ownership stake in PowerCo and investment in QuantumScape underscores the automotive manufacturer's strategic commitment to solid-state battery development and commercialization. This structure positions Volkswagen to potentially integrate QuantumScape's battery technology into its vehicle platforms if development and validation efforts prove successful.

The amendment and its focus on automotive cell development suggest that Volkswagen and QuantumScape view the collaboration as advancing toward potential production applications. However, the filing contains forward-looking statements cautioning that the company's success depends on numerous factors, including difficulties in successfully developing and commercializing solid-state battery technology and achieving technical milestones. The company also notes its dependence on its relationship with PowerCo and the Volkswagen Group as a potential risk factor.

Forward-Looking Statements and Development Risks

QuantumScape included forward-looking statements in the disclosure addressing the development, validation, demonstration, and initial commercialization of its battery technology, as well as the transfer of QSE-5 Technology into cell sizes to be determined by PowerCo and the achievement of technical milestones. The company cautioned that these forward-looking statements are based on management's current expectations and available information but are subject to substantial risks and uncertainties.

The filing identifies several risk factors that could prevent the company from achieving anticipated benefits from the amendment, including difficulties in successfully developing and commercializing solid-state battery technology, challenges in achieving quality, consistency, reliability, safety, and cost targets required for commercial production, and risks related to competition and regulatory changes. The company also noted risks associated with retaining key personnel, changes in economic and financial conditions, and market demand for electric vehicles. QuantumScape stated it disclaims any duty to update forward-looking statements except as required by applicable law.

Exhibit Disclosure and Amendment Details

The filing attached the full text of the amendment as Exhibit 10.1, though the company noted that portions of this exhibit have been omitted in accordance with Item 601 of Regulation S-K. This standard practice allows companies to redact certain commercially sensitive or proprietary information from public disclosures while preserving the substantive terms of significant agreements. The exhibit includes Statement of Work No. 2, which governs the specific technical and deliverable requirements under the amended collaboration.

The filing was signed by Michael McCarthy, Chief Legal Officer and Head of Corporate Development at QuantumScape Corporation, on July 22, 2026. The amendment itself was executed on July 16, 2026. The company confirmed that its Class A Common Stock trades under the ticker symbol QS on the Nasdaq Stock Market LLC and that it is not an emerging growth company as defined under Securities Act and Securities Exchange Act regulations.

Implications for Solid-State Battery Commercialization

The amendment represents a refinement of QuantumScape's collaboration with Volkswagen's battery subsidiary, potentially indicating progress in the development of solid-state battery technology. The shift toward milestone-based payments and the specific focus on automotive cell development suggests both companies believe the technology is advancing toward manufacturing relevance. The $75.4 million total payment amount, while substantial, reflects the significant resources required to develop and validate solid-state battery technology at automotive scales.

Investors may be watching for QuantumScape's ability to achieve the milestones outlined in the amended agreement, as success could validate the commercial viability of solid-state batteries and strengthen the company's relationship with Volkswagen. Conversely, delays or failures to meet milestones could trigger delays in milestone payments and raise questions about the technology's path to commercialization. The two-year timeframe for the amended agreement suggests material developments or validation results could become available within that period.

Capital and Strategic Context

The amended agreement provides QuantumScape with a defined source of milestone-based revenue over the next two years, which may support the company's cash position as it continues to develop its solid-state battery technology. The maximum of $75.4 million in total payments from PowerCo, inclusive of prior amounts, represents a concrete commitment from a major automaker's battery subsidiary to the QuantumScape technology platform. This financial commitment, combined with Volkswagen Group's equity investment in QuantumScape, demonstrates the automotive manufacturer's confidence in the company's technology development efforts.

However, the filing's forward-looking statements and risk disclosures indicate that achieving commercialization remains uncertain. The company faces challenges including achieving the required performance, cost, and manufacturing metrics for production-scale solid-state batteries, competing with alternative battery technologies, and adapting to changes in market demand and regulatory requirements. Investors should consider these risks in evaluating QuantumScape's prospects, particularly as the company works to meet the milestones defined in the amended collaboration with PowerCo.