And then the final thing about this customer is that the level of maturity they’re expecting is consistent with what we believe we’ll have with our higher-volume B samples. So, on all three of those metrics, volume levels, maturity levels and product functionality, this is a very good match for what we have. And that’s why we’re excited — that’s why both sides, in fact, are excited about the capability, and we look forward to continuing to work with them closely.
Winnie Dong: Thank you so much.
Jagdeep Singh: Absolutely.
Operator: Sorry. Your next question comes from the line of Ben Kallo with Baird. Your line is open.
Ben Kallo: Hey, guys. Thanks for taking my questions. Siva, congrats on your new role. Just maybe, Siva, with your new role, we heard about what’s similar to your previous roles. What do you think the difficulties are compared to your previous roles? And then I have a follow-up.
Siva Sivaram: Thanks, Ben. My prior role has always been taking advanced technologies into very high volumes. How do we integrate the technology into materials, processes and equipment and scale it up. And I have done this several times in the past. When I came into QuantumScape, that’s exactly what I am hoping to accomplish very soon. The technology is in a great place, the customer demand is there, the market is very large. It’s up to us to now scale what we have into a product that we can deliver to customers, and I’m looking forward to that challenge.
Q – Ben Kallo: Jagdeep and Kevin, congrats on the [indiscernible] parts. Just as you deploy capital and you have partners come in, how has it changed as we move forward and you test out stuff? Like, are partners more willing to invest capital so you can save some money, or how do we think about this going forward with your capital deployment?
Kevin Hettrich: Yes, Ben, thank you for the question. First on the $300 million gross proceed raise, we felt the timing was right based on all the momentum that we had during the year, on the product with the announcement of QSE-5, the manufacturing process with the Raptor equipment and having passed site acceptance, and then all the customer transact — all the customer traction that Jagdeep mentioned, where we’re working with a prospective launch customer in the automotive space for that initial high-visibility, small-volume launch. Moving forward, I would also highlight that in prior calls we are open to multiple different business models in the fullness of time. We see options with wholly owned capacity as is the case with the QS-0 joint venture relationships, which you’re well familiar with, as well as licensing relationships.
And separately, as we’ve also discussed on prior calls, there’s a lot of momentum behind investments in clean energy, specifically closed-loop, domestic supply chains here in the United States. Those are also things which we track those opportunities to be as capital-light and efficient with the capital that we do have as possible.
Ben Kallo: Maybe the last one I’ll sneak in. Just with everything going on around [UAW] (ph), everything in the world, have you seen any of your partners like pull back from relationships and timelines or partnerships with you guys?
Kevin Hettrich: I would almost say the opposite. I think with turmoil in the world and the growing realization for the importance for the penetration of electric vehicles, both the direct and indirect jobs they can bring, the importance to the environment, that we actually see more excitement around the space. And then within that what differential battery technology like we’re working with has the promise to completely shift out the power and energy frontier as our QSE-5, while eliminating as manufacturer one of the two components. It’s a pretty amazing thing, and we remain excited. And as we’ve talked about, that’s just the start of what our technology platform promises.
Ben Kallo: Thank you, guys.
Operator: [Operator Instructions] Your next question comes from the line of Jordan Levy with Truist Securities. Your line is open.
Unidentified Analyst: Hi, team. This is Henry on for Jordan. I just want to, firstly, touch on the CapEx savings you all have realized so far and expect to realize by the end of the year. Just want to touch on, I guess, any color you can add around some of the different puts and takes there. Was that material costs kind of coming down, more efficient installation to processes, and are there any learnings you guys are going to take or can take into 2024 and beyond?
Kevin Hettrich: It’s a good question. Philosophically, we think about this in terms of big projects and small projects. We regularly get together as a team and think through things that we can do differently or smarter to save CapEx, the same is true with OpEx. And then also, I think the whole company has rallied around the idea of spending more smartly and more effectively, and we also encourage and then publicly celebrate ideas that folks bring forward that we then put into actions. So that’s — and then when you break it down, it’s really that one-third of savings that I referenced in my script is actually broken down into a lot of smaller projects. That’s definitely credit to the broader company for realizing. I think it’s also important as we transition from a product development company to one of manufacturing, that has to be in our very DNA.
Unidentified Analyst: Awesome. That’s great to hear. And then just a quick follow-up on some of the recent graphite export news out of China. I’m just wondering if you guys are seeing at all any boost in interest in your technology with some of these geopolitical risks around battery materials kind of starting to play out a little bit. And do you think this will have a pretty large effect or pretty minimal in the long-term kind of demand for solid-state versus some of the other factors like higher energy density and the performance enhancements?
Kevin Hettrich: Henry, terrific question. From an industry point of view, our design eliminates the graphite anode materials from the cell, which this has two advantages. As you point out, it eliminates a supply chain bottleneck and associated risks of securing supply in a crowded market. And second, as you also alluded to, in eliminating the anode host material, we realize benefits in terms of energy density and charge time. Of course to do this, you will need a highly stable solid-state separator, which is our core IP.
Unidentified Analyst: Thank you, guys.
Operator: Your next question comes from the line of Chris Snyder with UBS. Your line is open.
Chris Snyder: Thank you. I wanted to ask on the A0 24-layer prototype cell. And specifically, that first chart in the shareholder letter, which shows the test results from a customer battery lab. Clearly really strong results there. But the letter does note that this was the best performing cell. So maybe could you just frame this a little bit more for us, whether it’s kind of was this one cell out of how many, anything around just the delta between this particular cell [indiscernible]. Was it a big outlier? Are they all generally similar? Any way to just kind of frame that more. Thank you.
Jagdeep Singh: Sure. Happy to do that. First of all, as we’ve said many times in our earnings calls this year, we have work to do on reliability. So that’s a key area that we’re focused on to make the cells more and more reliable, so every cell works as well as the best cell. Having said that though, with the caveat about reliability, the capacity retention curve that you are seeing here is actually very similar to what we see for most of the cells that we’ve shipped. In other words, the slope of this curve is really very similar across the cells. And what this cell shows is that, when we make the cells with a sufficiently low level of defectivity, we end up with a really, as you point out, remarkable level of performance. Because 95% capacity retention at 1,000 cycles, to our knowledge, is unheard of for a lithium-metal cell with a solid or a liquid.
