And as you point out, this test was run in our automotive OEM partner’s lab, right? So, it’s their test, using their equipment, using their test protocols. And we’re just really excited that this demonstrates — this is really the purpose, as you know, of the A sample, is to demonstrate the capability of the core technology. And then, of course, when you get to B sample, that’s when you have to get to things like implementing that sample — or that capability with production processes, and that’s when the reliability, and so on, become more important factors. So, the short answer to your question is, the capacity retention curve that we’re showing here is very similar to what we see across the board. We do have work to do on reliability to make sure every cell goes the distance.
But in terms of the overall behavior, we’re really excited by this result. It shows the inherent capability, in our view, of what a lithium-metal zero-anode design is capable of.
Chris Snyder: Yes, no, happy to hear that, and really appreciate all that color. Maybe for my second question, I wanted to ask on the consumer electronics. At QuantumScape, historically, you guys have been focused more on the auto market. This year you’ve talked more about consumer electronics opportunities, the letter talked about a technology evaluation agreement with a leading electronics player. So, I guess my question is, do you think the company’s first commercial product that generates revenue is more likely to be in auto or consumer electronics? Thank you.
Jagdeep Singh: Yes, no, thanks for the question and the opportunity to clarify this. First of all, I want to be crystal clear, right, our focus has been and continues to be and remains automotive. That is our, you know, primary focus. That is the space within which this initial launch customer that we’ve been talking about is in, and those are the partnerships that we are working very closely with. We talk about consumer, however, because we believe what we have is a technology platform. We’re getting a lot of interest from a lot of different sectors. And we believe it behoves us, we almost owe it to our investors to explore all those options, keep them, you know, in the running. But, you know, we don’t in any way intend to let that distract us from our primary focus, which is of course automotive.
There’s several reasons for this. One, of course, is the fact that, you know, if you get to defocused, then you can end up in a situation where you do nothing well. We’d rather do one thing and do it really well. But the other is that sector, we think, is by far the largest sector in terms of size and growth potential. So, the way I would summarize it is that our focus remains unchanged and the automotive space is our primary market. However, we’ve said before that we have a — I think we’ve called it a single-track dual purpose design. What we mean by that is the same product in this form factor, we think has relevance to not only automotive, but also consumer. And so, you know, we — by continuing down that single track, we can serve both purposes up to a point, at which point we’ll have to — you know, obviously, if we’re doing an actual consumer product, we’ll have to make some modifications.
But for the time being, we see no distraction and we continue to focus on automotive while working with some of the consumer partners as well.
Chris Snyder: Thank you, Jagdeep. Appreciate that.
Jagdeep Singh: Of course.
Operator: Your next question comes from the line of Gabe Daoud with TD Cowen. Your line is open.
Gabe Daoud: Hey, Jagdeep, Kevin, and team. Thanks for taking my questions. I was hoping we could maybe just go back to the first chart that Chris noted in the shareholder letter. I guess I’d just be curious as to why the prospective launch customer ran the test at a C/3, C/2 charge, discharge. Just kind of curious why they wouldn’t run like a 1C.
Jagdeep Singh: Yeah, no, so it’s a good question. Obviously, they ran it C/3, C/2 because that’s the test that they wanted to run. You know, we, as you know, many of our tests, we report 1C-1C. We do that for two reasons. One is 1C-1C is even more aggressive because it charges and discharges the entire battery in an hour. So, it’s going to be hard to discharge an actual battery in a car in an hour. You’d have to really run down 300 miles of charge or more in one hour, which is hard to do. And in terms of charging up the battery, one-hour charge is typically considered to be a supercharge level of charging, and most automotive OEMs, most EVs are not charged on a supercharger for every single charge. We do it that way because; A, we think our technology is capable of it; and B, it allows us to collect data much more quickly, so we can have a faster cycle time, which of course, as you know, is key to learning and improving and continuing to execute.
Having said that, from a customer standpoint, C/3 may in fact be more typical of what a typical OEM sees for a charge rate, so three-hour charge. So, if you’re plugging in your car into your garage overnight, you know, it might even be longer than that, but that’s kind of what they, you know — I can’t speak for the customer, but apparently that’s what they standardize on, along with the C/2 discharge. So our — what we’re doing here, again we’re simply reporting data that was provided to us by this automotive OEM customer. They get to decide the test conditions under which they run and that’s why we reported this. What we think is notable is just the, you know, the capacity retention that we see here with a 24-layer cell is really remarkable.
And we mention this because, you know, as you know, we went public a few years ago. And one of the questions some people had was, great, you guys have shown some fantastic data at a single-layer cell level, can you replicate this in multilayer cells? And what this data demonstrates to us is that not only can we do this in multilayer cells, in this case, 24-layer cells, but that 24-layer cell is of course the same layer count that we’re targeting for our first commercial product, QSE-5. And at that 24-layer cell level, we’re seeing what we believe is industry-leading performance in terms of capacity retention compared to any other lithium-metal cell that we’ve seen. So, we think it’s an important data point and we thought it was worth sharing with investors, especially because it was generated in a customer’s lab by the customer using their own test protocols and their own test conditions.
Gabe Daoud: Definitely makes sense. Thanks, Jagdeep, for all the — for the clarification and color. And I guess just a quick follow-up. You noted the layer count and obviously, a goal this year is the higher cathode loading. Just curious, I think last quarter, you guys showed a higher cathode-loading cell that was maybe a couple of layers, so I was curious if there was any update around that performance and cycle life and capacity retention. And I guess, when can we expect to see some data with the two combined, meaning higher layer count with the higher cathode loading. Thanks, guys.
Jagdeep Singh: Yes, that’s a great question. And that’s exactly the task that we’re currently focused on is to take this 24-layer cell that we showed that we shipped last year, the data from which we are showing in this letter, add to it the higher-loading cathode, add to it the more efficient packaging. As I mentioned, the, you know, thinner adhesive layers, narrow margins at the edges, thinner current connectors. Add to it some improvements we’re making to reliability. And then that becomes a QSE-5. So, the answer to the question when we expect to have that is next year sometime in 2024. And I can say that, you know, the — in general, the testing results from the higher-loading cathodes are similar to what we’ve seen before, which is basically we had work to do on reliability.
