QuantumScape Corporation (NYSE:QS) Q2 2023 Earnings Call Transcript

QuantumScape Corporation (NYSE:QS) Q2 2023 Earnings Call Transcript July 26, 2023

QuantumScape Corporation misses on earnings expectations. Reported EPS is $-0.22 EPS, expectations were $-0.2.

Operator: Good day and welcome to QuantumScape’s Second Quarter 2023 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 Second Quarter 2023 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 and 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 statements for the reasons that we cite in our shareholder letter Form 10-K and other SEC filings, including uncertainties posed by the difficulties in predicting future outcomes. Joining us today will be QuantumScape’s Co-Founder, CEO and Chairman, Jagdeep Singh; and our CFO, Kevin Hettrich. Jagdeep will provide a strategic update on the business and then Kevin will cover the financial results and our outlook in more detail. With that, I’d like to turn the call over to Jagdeep.

Jagdeep Singh: Thanks, John. At the beginning of 2023, we set out a few key goals to enable our transition from technology prototype to commercial product. With the first half of the year behind us, we’re pleased to share an update on our progress. The first of our 2023 goals was to increase the cathode loading of our cells, which increases cell energy by packing more cathode active material into the same area. Last quarter, we shared testing results of two-layer unit cells using higher loading cathodes, which our system enables thanks to our anode-free lithium-metal technology. This design eliminates the graphite host material used in conventional battery anodes, reducing the transport distance lithium ions have to traverse as the battery cycles and allowing for higher cathode loadings.

These new cathodes are capable of storing more energy, not only compared with the cathodes in cells we previously shipped to customers, but also relative to the cathodes used in commercial cells such as the 2170 battery, which powers some of today’s best-selling EVs. We’re happy to report that we have now shipped high cathode-loading unit cells to multiple automotive partners in line with our development roadmap. This is an important milestone because this level of cathode loading is close to our commercial intent cathode loading design for energy dense cells and represents a significant step towards delivering a commercial product. In our view, when combined with the 24-layer capability we’ve already shown in our A0 prototype cells and other planned improvements, this shipment represents a validation of our ability to achieve industry-leading energy and power performance for our first commercial product.

On that subject, as we announced last quarter, our first commercial product is planned to be a 5 Ah cell, which we believe will offer a compelling combination of energy density and power unmatched by the leading EV batteries available today. We are designating this first product QSE-5 and are already working closely with a prospective launch customer in the automotive sector for this cell, with the goal of bringing our next-generation technology to the electric vehicle market as rapidly as possible.

,: We believe this is a unique selling point with our technology enabling longer range, higher power and faster charging. We believe automotive OEMs gain the ability to better differentiate their EV offerings. Note that delivering on our product roadmap will undoubtedly require us to successfully address many technical and manufacturing challenges, including our key goals for 2023 and beyond. However, we believe QSE-5 raises the bar for EV performance and puts battery development on a fundamentally new trajectory. Now a word on our technical development. Last quarter, we shared data from high-power discharge of unit cells with high-loading cathodes. This showed that in our system, cathodes optimized for high energy density can also meet the demands of high performance vehicle applications.

Of course, in addition to high-rate discharge, improving the driving experience of electric vehicles also requires high-power fast charging. We’ve targeted the ability to charge from 10% to 80% in approximately 15 minutes for our first commercial product. Faster than conventional energy cells used in today’s best-selling EVs. Fast charge rates present a challenge for conventional cell architectures, which have to transport lithium ions from one side of the battery to the other and then drive them into the graphite or silicon host material, which imposes a kinetic penalty that limits power. Our system unlocks higher performance by plating lithium directly on the anode layer without the need for a host material. The lithium ions in our system have a shorter distance to traverse and don’t incur the diffusion penalty of intercalating into a graphite host material, as is the case in the conventional cell.

As a result, in our system, lithium can plate as fast as the cathode can deliver it. Thanks to this fundamental advantage, we’ve now demonstrated unit cells capable of meeting our 15 minute 10% to 80% fast charge target, even with a high loading cathode. As shown by data published in our shareholder letter. Our anode-free design enables not only higher energy density via higher cathode loading and a thinner anode, but also higher power density as a result of shortened ion transport paths. This fundamental advantage is why we believe our technology is capable of an unmatched combination of energy and power. Another key technical development milestone is safety testing. In Q2, we ran a suite of safety tests on our A0 prototype cells, including nail penetration, overcharge, external short circuit and thermal stability testing up to 300°C.

And we’re pleased to report that the A0 prototype cells successfully passed these safety tests. According to the specification set by a leading automotive prospective customer. We attribute these impressive results to our solid state architecture, which replaces the combustible polymer separator in conventional lithium-ion cells with a noncombustible solid-state ceramic separator and also eliminates the graphite fuel from the anode. However, it’s important to note that safety is a function of cell materials and design, and as we improve packaging efficiency and energy density for QSE-5, the cell itself will have different physical characteristics and potentially a different safety profile. Any new cell design must be retested to establish its behavior under abuse conditions.

We also made significant progress last quarter on our manufacturing scale-up process. We reported previously on an innovative fast separator heat-treatment process that offers the potential for dramatically better throughput. Initial deployment of this fast process is another key goal for 2023, and we plan to roll it out in two stages, which we’ve dubbed Raptor and Cobra. The underlying work on these processes has been ongoing for several years and as the data has come in, it’s clear that fast separator processes are the endgame for our separator production. Raptor introduces a step-change process innovation, which allows continuous-flow heat treatment equipment to process separator films more rapidly while applying less total heat energy per film, increasing the throughput of the equipment and bringing down the cost of producing an individual separator.

Raptor is intended to support production of initial B0 samples from QS-0 in 2024, and so our goal is to qualify Raptor for production by the end of 2023. We’re pleased to report that installation of Raptor equipment is complete and we continue to expect initial production to begin before the end of the year. Cobra is a further evolution of the fast separator process, which builds on the innovation of Raptor and adds even faster processing and better unit economics. We see Cobra as a groundbreaking innovation in ceramics processing and we believe it represents the best pathway to gigafactory-scale manufacturing. We’re currently operating prototypes of Cobra and intend to roll out our first production Cobra system to support higher volume B-sample production from QS-0.

Finally, I’d like to take a moment to look at the bigger picture and our strategic outlook. At the start of the year, we set our focus on moving from our first 24-layer A0 prototypes, which we shipped at the end of 2022, to a first commercial product design with initial lower-volume B0 sample production currently slated for next year. To achieve this transition from prototype to product, we set four key goals. Introduce high-loading cathodes, bring up our fast separator production process, optimize packaging efficiency and improve cell quality, consistency and reliability. Midway through 2023, we’re excited and encouraged by our progress against these goals. We’ve demonstrated 800 cycles with high-loading cathodes in unit cells and have begun sampling high-loading unit cells to prospective automotive OEM customers for validation in their own labs.

With Raptor equipment now fully installed and beginning qualification, we’re making good progress on implementing our faster separator production process. On packaging efficiency, our QSE-5 product is being developed for a slimmer version of our A0 packaging, which we believe will allow for an unmatched combination of energy density and power performance better than 800 watt-hours per liter, with the ability to charge from 10% to 80% in approximately 15 minutes. As our product roadmap shows, we also believe our solid-state lithium-metal technology unlocks significant design headroom and can put EV battery development on a fundamentally new trajectory. As a result of our ongoing quality improvement initiatives, we’ve integrated in-line improvements to our manufacturing processes and metrology systems, which are showing encouraging improvements to reliability.

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Ongoing improvements throughout the year have allowed us to ship high cathode-loading unit cells to customers in line with our development schedule. Hopefully it’s clear from these results that our team of more than 800 engineers, technicians and business personnel has been laser-focused on doing what it takes to bring our first commercial product to market. As we always emphasize, there is much work still to be done on our path from prototype to product and unforeseen challenges will almost certainly arise. However, at the close of Q2, we’re excited by the momentum we’ve built and energized to tackle the remaining challenges on the path to commercialization. We look forward to sharing more as we continue ahead. With that, I’ll hand it over to Kevin for a word on our financial outlook.

Kevin?

Kevin Hettrich: Thanks, Jagdeep. The second quarter 2023 capital expenditures were $25 million. GAAP operating expenses were $124 million. Cash operating expenses, defined as operating expenses less stock-based compensation and depreciation were $64 million. For the full year 2023, we maintain our guidance on capital expenditures of $100 million to $150 million and cash operating expenses of $225 million to $275 million. During Q2, our CapEx primarily went toward facility spend for our consolidated QS-0 pre-production line. Other notable CapEx spend was driven from progress payments made toward various equipment projects, including equipment for the Raptor process. For the remainder of the year, our CapEx will continue to be allocated toward facility work and equipment for our consolidated QS-0 pre-production line.

We ended Q2 with over $900 million in liquidity. We continue to look for opportunities to optimize our spending and be prudent with our strong balance sheet. We maintain our guidance that our cash runway is forecast to extend into the second half of 2025. Any funds raised from capital markets activity, including under our ATM prospectus supplement, would further extend this cash runway. Longer term, our capital requirements will be a function of our industrialization business model, which we believe could reflect a mix of wholly owned production, joint venture and licensing relationships.

Operator:

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. Jagdeep, our first question is for you. Can you expand a bit more on the launch customer that you mentioned in the shareholder letter?

Jagdeep Singh: So we can’t say much more than we said in the shareholder letter, which is that we’re already working closely with the prospective launch customer in the automotive sector for a QSE-5 cell. The two points I would take away are one is with the QSE-5 cell. We’ve defined a specific set of functionality that we believe offers a compelling combination of energy and power that we can deliver in the near term. And two, customer interest that we’ve seen in the cell provides further evidence that the market is excited about this unique capability and that the value proposition is compelling. We look forward to sharing more when we can.

John Saager: Okay, thanks. Can you compare the QSE-5 product at launch relative to your expectations of where silicon dominant anode cells may be at the time, notably on energy density and charge times?

Jagdeep Singh: Sure. Let me start by pointing out that when it comes to anodes, a lithium-metal approach offers the highest theoretical gravimetric energy density. And within the category of lithium-metal anodes, an anode-free design offers higher energy density than approaches that require lithium foil. As shown in the Energy power frontier chart in our shareholder letter. For any given chemistry, batteries can generally be optimized either for power or for energy, but not both simultaneously. Doing this requires moving the energy power frontier up into the right, which typically requires a new chemistry. Now, silicon anodes do have the potential to move the energy power frontier incrementally. However, our understanding of silicon anodes today still generally consists of relatively low amounts of silicon, which in our view, limit their value as such, anodes are mostly carbon.

Future so-called silicon dominant anodes have their own challenges. For example, around low-cost production, if they use chemical vapor deposition or with cycle life and 3D extension, which tend to be worse with higher silicon content. What we believe is unique about our technology is the ability to offer a compelling combination of energy density and fast charge, simultaneously representing a step change in performance. Furthermore, with future enhancements such as larger format cells which improve packaging efficiency, we expect energy densities to improve from here. So we believe our technology represents a platform that we can build on over time. We expect our initial product QSE-5 to deliver a better power energy combination than what we believe the industry will be capable of delivering in the near term.

But over time we expect to expand on that lead as we believe we’re just at the beginning of the S curve of our technology. But probably the more important point to close on is that we believe the market is big enough for multiple entrants. If the planned EV transition targets announced by various automakers and governments are realized, we believe there will be more demand for batteries than any new entrant can satisfy.

John Saager: Okay, thanks. Our next question comes from our investor inbox. What are the major challenges you still face in scaling up production?

Jagdeep Singh: So in terms of the main challenges, the first step is to lock and load on the critical aspects of the product definition. We believe we’ve now done that with QSE-5. Once we have the product defined, we need to freeze the major steps of the production process, i.e. how it will be manufactured. Once we do that, we can specify and order manufacturing equipment and tools. And finally, once that equipment arrives, we can install, qualify, turn it up and begin production of QSE-5. This is what we’re doing between now and when we have higher volume B-samples at the end of 2025.

John Saager: Thanks, Jagdeep. Kevin, turning to you now. Investors have been asking about the long-term business model. And in the shareholder letter you mentioned your openness to wholly owned facilities, joint ventures and licensing relationships. Could you walk investors through the advantages and disadvantages and also comment on whether or not QuantumScape needs a wholly owned facility up and running to prove out manufacturability before a partner can build and license the technology?

Kevin Hettrich: Hi, John. Thanks for the question. First, regarding our openness to various business models, our prospective customers have communicated different preferences, ranging from a desire to purchase cells or participate in a joint venture to licensing our technology. And in the fullness of time, we anticipate a combination of wholly owned joint venture and licensing business models would enable us to address the breadth of customer opportunities we see. An advantage to the wholly owned business model is control. QuantumScape receives 100% of the revenue and proceeds generated by the factory, a joint venture adds in the strengths of the partner, for example, customer commitment, manufacturing capabilities and reduces capital requirements for QuantumScape.

And finally, licensing is the most capital efficient model and allows penetration of the market beyond the scale up bandwidth of the QuantumScape manufacturing team. Under a licensing model, we’d look for economics that reflect our product differentiation and look to see both contractual IP protections and alignment of incentives with our partner. As to the final part of your question. Our free pilot production line QS-0 is a wholly owned facility. A core purpose of QS-0 is to serve as a blueprint for subsequent factory scale up irrespective of the business model.

John Saager: Okay. Thanks so much, Kevin. We’re now ready to begin the live portion of today’s call. Operator, please open up the line for questions.

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Q&A Session

Operator: [Operator Instructions] We’ll take our first question from Winnie Dong with Deutsche Bank.

Winnie Dong: Hi. Thank you so much for taking my questions. First question is, you mentioned that you’re already working with a prospective launch customer. Can you maybe elaborate on the process and the calculus behind it? How is this different from or the same from the A0 shipments that you’re sending to multiple customers? What more are you working with this particular launch customer on that you’re not necessarily doing with the rest of the other ones yet?

Jagdeep Singh: Yeah. Thanks for the question, Winnie. This is Jagdeep. I’ll go ahead and take that. So the A0 prototypes were just that. They were prototypes that were meant to demonstrate that the core functionality is feasible. What we’re talking about now, of course, is the QSE-5cell, which we believe will be the actual cell that we deliver as our first product. So what we’re doing with this prospective launch customer is working closely to integrate that cell into their design. So we can’t say much more about this, as I mentioned, in the answer to Jon’s question, but I think our takeaway is that we now have a product definition, which is QSE-5. That’s a very specific cell. It’s a 5 amp hour cell that we’ve spoken about before.

And based on the customer interest that we’re seeing, we think the combination of energy and power density of this cell provides is in fact something that the customer base is excited about. So those are the key points that I would emphasize about that product.

Winnie Dong: Okay. Thank you so much. And then the second question is, you know, it seems like you’re making good progress on the equipment installation front. Would you perhaps be able to attach some numbers to either the Raptor and Cobra process? For instance, in the past you’ve provided, you know, X thousand of separate production per week. You know, what would that look like for Raptor and what would that look like for Cobra? Thanks.

Jagdeep Singh: Yeah, absolutely. So you’re right to focus on Raptor and Cobra because that really is what we think. We think the future lies for, for high scale production of our separators. As we’ve said before, the steady state production of our current capability is on the order of 5000 films per week. Film is just another word for separator, and we’ve indicated that we believe the Raptor line is capable of roughly three times that capacity. Now it won’t be there day one. And there are also other bottlenecks that have to get resolved besides the tool itself. So things like the automation to load and unload the tool and so on. But at a fundamental level, the ability of that tool to process films is, is a lot faster than our current process.

And then of course with Cobra, it’s a further improvement in terms of both throughput as well as unit economics on the separator. And there too, we’re really excited about the progress because as we mentioned in our letter, we have four prototype COBRA tools running at this point as well. So we feel good about both those processes. And in fact, I’ll just say in closing, if you look at the cover of our shareholder letter, that’s actually a photo of the Raptor equipment. In fact, that’s specifically those are the load and unload robots that are used to load and unload the Raptor process.

Operator: We’ll take our next question from Chris Snyder with UBS.

Chris Snyder: Thank you. I wanted to ask on the timeline between A sample, B sample, and C sample. In the past, the company has kind of talked about 18 month gaps between each. I believe the shareholder letter from today said a B-sample next year. So I guess my question is, does the prioritization of the QSE-5 cell rather than the larger format, does that change the timeline? Just that, hey, this product seems a lot more commercially ready? Thank you.

Jagdeep Singh: Yeah, that’s a good question. I think the way that we would interpret the QSE-5 is rather than any kind of a schedule acceleration, which is of course constrained by the time it takes to get automation equipment in, to turn up that equipment and so on. And there’s not a lot we can do to compress those times. Those are really our suppliers schedules. Rather than that I would think about this as risk reduction. So if we had to design a different form factor that would say, you know, dramatically different than what we’ve been working in so far, there’s the risk that that could take longer because then we need to modify things like the robot and detectors that are used to pick up and load, unload the film’s laser cutting that we use to do various steps in the process and so on.

So the way to think about this QSE-5format is because it leverages the same form factor, the same dimensions we’ve been working in. It really represents, in our view, the fastest path to market for our technology because trying to change that form factor would just potentially extend things out. So that’s the way to think about QSE-5 as a way to reduce risk rather than an acceleration.

Chris Snyder: Thank you. I appreciate that. I want to follow up on the cathode in the high cathode loading unit cells. So I guess maybe part A, can you just talk a little bit about why that is so important for the company? Obviously, kind of historically, the focus has really been on the anode. It does feel like the company has a lot on its plate already. So kind of why add this to the mix and then kind of question B, when we see when we look at the shareholder letter on page three and we see the performance of the QSE-5 versus kind of competing alternatives in the market, is that using the higher cathode loading cell? Thank you.

Jagdeep Singh: Yeah, that’s a great question and I’m glad you asked it. So that dark blue curve on page three on the Power energy performance frontier chart, that is the range of energy and power combinations that can be achieved in a QSE-5 like cell. And the difference between being on one end of that curve versus the other is exactly that cathode loading. So the reason why capital loading is important is because it allows you to be on the right hand side of that curve where you have more energy. But if you wanted to have a lower loading cathode, then you could get more power. So it’s a really important parameter. In the past, what we’ve shown data on is our roughly three milliamp hour for semi squared cells and this is north of five milliamp hour for semi squared, which allows us to be a higher loading cathode than say conventional 2170 cells that we’ve mentioned in the letter that are used in some of the best-selling EVs today.

So the short answer to your question is, you know, squeezing more cathode material into the cell is how you get more energy into the cell. Now, you can’t do that with conventional cathodes as easily because you have you’re constrained by the transport distance inside the cell from one end of the cathode to the other end of the anode. In our design, of course, because there is no conventional hosted anode, there’s no carbon or silicon in our anode. It’s just a layer of metallic lithium that plates as you cycle that transport path is shortened. And so because we have a shorter path through the anode, we can use that extra distance to make the cathode more, more energy dense in effect. So that’s the reason why the loading is so important.

Chris Snyder: Thank you, Jagdeep.

Jagdeep Singh: Absolutely.

Operator: [Operator Instructions] We’ll take our next question from Ben Kallo with Baird.

Ben Kallo: Hey, Jagdeep. Hey, guys. Could you guys just — because a lot of things I think changed a little bit. But could you just update us on the capacity when we expect that and how that translates to the number of cars and how we should think about that, just timing capacity?

Kevin Hettrich: Then on the capacity question is regarding output. Maybe if I could start there. The intention of QS-0 is to do two things. One is, first, commercialization of our technology and that would be through the QSE-5 as we’ve discussed about in this letter. And we’re excited to talk about that prospective first launch customer. We haven’t given an exact size to that, but you should think of that as a small program. Is that does that help answer your question?

Ben Kallo: I guess, you know, before it was like we had QS-0 and like pre-production and then production and you guys gave a timetable. Then something shifted around and I was just wondering what the timeline is now.

Jagdeep Singh: Yeah. So we haven’t I don’t think we ever provided a gigawatt hour number or a kilowatt hour number for QS-0. I think as Kevin points out, here’s what we said about QS-0. We believe we’ll be making, you know, B-samples off the QS-0 line. There are multiple iterations of the QS-0 line where we’re going to be adding more higher levels of automation to get higher and higher capacity over time. So I would expect that line to be to start out as a lower volume line and become a higher volume line. We mentioned that there — the first — our target remains to have the first B-samples, initial samples come out next year in ’24. Those will be on a lower volume version of that line. Subsequent higher volume versus the B-sample.

We’ve said in the past will come out towards the end of 2025. So if there’s a there’s a built-in scale of the line itself, that’s contemplated. But the important point for QS-0 is the one that Kevin made, which is that it is the factory, the production facility that we plan to use to define the blueprint for how to make ourselves in an industrialized fashion. And then once we have that, we can go from there as far as bigger factories or joint ventures with other folks or even licensing our technology out, but all roads lead to QS-0. So it’s a really important factory for us.

Kevin Hettrich: And just at the point, the third time, that is the same guidance as was given last quarter. Low-volume B-samples in ’24, high-volume B-samples at the end of ’25. In fact, we’ve made progress against that execution road map, installing the Raptor system on time, including the equipment and the site acceptance test. So if anything, we have less work to do over the remaining part of the year and we were actually pretty pleased with the results that we shared in this letter.

Ben Kallo: And when I think about that frontier curve and it’s a good chart. There’s a lot going on there. How do I think about going to 2025 and how all those little dots, whether it’s 4680 or whatever kind of sell moving in all direction. At the same time that you’re kind of going through that direction for commercialization. And all I’m asking is, how do you think about like commercializing versus the incremental changes that are happening in the market right now with scale?

Jagdeep Singh: Yes, it’s a great question. So, yes, this is a really cool chart, frankly, because it really shows two of the most important metrics that batteries are measured on. If you look at the actual data points we have there on current batteries, you can see that, in fact, the 4680 is a little bit lower than the other cells on that chart, the 2170 and the reason for that might be that they’re optimizing for cost or some other metrics other than energy density and power density. But this data comes from a third-party database has what we’re talking about is pushing the frontier out. Now as I mentioned in answer to John’s question, one of the things that conventional lithium-ion is hoping to do is introduce silicon dominant anodes into those cells over time.

And that will — if they are successful, incrementally move out the energy power frontier curve up and to the right. But we believe that lithium ion is a pretty mature technology, and there’s — not a lot of juice left there to squeeze out, so to speak, whereas what the solid-state lithium metal approach represents is a new approach with a new chemistry where we’re just starting out. So our QSE-5, that dark blue curve on that power energy frontier chart. That’s the beginning of our S-curve. So we believe that as we, for example, increase the sell side, the larger areas, as we add other optimizations, we just go up from there and further expand the gap.

Ben Kallo: Thank you.

Jagdeep Singh: Of course.

Operator: We’ll take our next question from Jordan Levy with Truist Securities.

Jordan Levy: Afternoon, all, and appreciate you taking my questions. I apologize if you already covered this, but I just wanted to see if you could give a little color on the process of first getting Raptor online and what goes into that. But then more importantly, kind of the hurdles and complexities of the process once you move from Raptor to Cobra, is, is that more or less of a complexity from a process perspective than getting wrapped or going? Or is it kind of just a matter of scale and volume?

Jagdeep Singh: Yes, it’s a great question. So with Raptor, as we’ve mentioned, we now already have installed the main tool that we use for Raptor. So that part of it, we believe, is in good shape. We’re making films now, and we’re pleased with the — with what we’re seeing from that process. And it’s very exciting because it’s a step change in the process that allows us to process films more quickly with higher throughput and we believe better economics. What Cobra does is take the same basic framework of Raptor in terms of how we’re doing the films, but adds to it the ability to run at even higher throughputs — and so we think that Cobra is an extension. The Raptor would kind of build on Raptor. And in addition to that, we’ve already built the first Cobra prototypes in-house, and they too are showing very promising results.

So we think that at the end of the day, these two processes, which are really the same family of process, actually simplify the complexity of what we’re doing today. And that’s why they allow us to run faster and 1 more efficiently with better longer-term economics.

Jordan Levy: Thanks for that. And just as a follow-up, should we think about from the consumer electronics side? I know you’ve mentioned you’re working with a few partners there that you ship sells to. I’m just curious if we should think of Cobra as a time when you can start selling into that space or how you’re thinking about that?

Jagdeep Singh: Yes. So I think what we’ve said is that we expect to use COBRA were the low-volume B samples that come out next year. I apologize. I apologize. Maybe we said we expect to use Raptor. Thanks, Kevin, for correcting me. Expect to use Raptor, which is the first generation for the low-volume B samples that come out next year and COBRA for the higher volume versions of the B-samples that come out again in 2025. Relative to consumer versus automotive. I think the main point we’re making there is that the same functionality that we offer in our battery, which is higher energy density and higher power density and so on are of interest in multiple sectors and that basically creates optionality for us that we think is a good thing for us to have.

Jordan Levy: Thanks for taking my question.

Jagdeep Singh: Absolutely.

Operator: [Operator Instructions] All right. And there are no further questions at this time. I would like to turn the call back over to Jagdeep Singh for closing remarks.

Jagdeep Singh: Yes. So I’d like to thank you all for joining us. I’d also like to thank our team for their excellent work this quarter and thank our shareholders for their continuing support of our mission and we look forward to doing more as we continue ahead.

Operator: Thank you. That does conclude today’s presentation. Thank you for your participation and you may now disconnect.