Mark Shooter

Mark Shooter inquired about HONOR's receptiveness to adjusting the 0.7 C-rate cycle life test for smartphones, considering it an accelerated standard, and whether HONOR would accept a formulation with slightly lower energy density to meet this specific cycle life requirement.

Answer

Raj Talluri, President and CEO, explained that the 0.2 C discharge rate meets real-world smartphone usage, while 0.7 C is an accelerated test. He outlined three pathways for qualification: convincing HONOR to accept lower 0.7 C cycle life, developing a new accelerated test for silicon anodes, or modifying electrochemistry. He clarified that the discussion is about cycle life, not lower energy density. Mark Shooter then asked about the smart eyewear opportunity, specifically if initial production demand constitutes a purchase order and the potential revenue for 2026. Raj Talluri confirmed the initial demand is a purchase order, highlighting the disproportionate advantage of Enovix's technology in smaller batteries and the market's expected growth in 2027-2028. Ryan Benton, CFO, emphasized the importance of this order.

Mark Shooter inquired about Enovix's discussions with Honor regarding the 0.7 C-rate cycle life test for smartphones, questioning Honor's receptiveness to changing this incumbent standard and whether a trade-off for slightly lower energy density would be considered to meet the 0.7 C-rate spec. He also asked for clarification on the initial production demand for smart eyewear, specifically if it constitutes a purchase order, and sought revenue expectations for 2026 and 2027.

Answer

President and CEO Dr. Raj Talluri explained that most smartphone use cases are under 0.2 C discharge, which their battery exceeds 1,000 cycles for. He clarified that the 0.7 C is an accelerated test, and silicon anode batteries behave differently, leading to discussions with Honor on three pathways: accepting lower 0.7 C cycle life, adopting a new accelerated test for silicon anodes, or modifying electrochemistry. He confirmed the smart eyewear initial production demand is a purchase order, with manufacturing underway, expecting lower initial volumes in 2026 but significant growth in 2027-2028. CFO Ryan Benton emphasized the importance of the smart eyewear order.

Mark Shooter of William Blair asked about the outlook for Average Selling Prices (ASPs) in the smartphone market as battery capacities increase, and questioned why Enovix can command higher margins in the AR/VR glasses market.

Answer

CEO Raj Talluri explained that as higher-capacity batteries become standard even in mid-tier phones, overall ASPs are rising, and Enovix's technology leadership should command a premium. For AR/VR, he noted that true augmented reality requires immense power, making high energy density critical. Chairman Thurman John Rodgers added that Enovix's architecture is uniquely suited for the small, custom shapes in glasses and offers superior thermal management.

Mark Shooter asked about the Eagle Line's capability to increase the ceramic separator's surface area, potentially leading to larger cell sizes, and if this aligns with PowerCo's Unified Cell architecture requirements.

Answer

CEO Dr. Siva Sivaram and CFO Kevin Hettrich explained that the Eagle Line is designed to be adaptable for various customer needs, including different cell capacities and formats. They confirmed that the QSE-5 cell, while having a specific aspect ratio, can be adapted from the stable baseline provided by the Eagle Line to fit larger form factors like the Unified Cell architecture.

Mark Shooter inquired about the Eagle Line's new manufacturing technology, specifically if it allows for increasing the ceramic separator's surface area to enable larger cell sizes, and if this is part of QuantumScape's technology roadmap. He followed up by asking if the QSE-5 cell's current size fits the PowerCo Unified Cell architecture or if a larger cell needs to be developed.

Answer

CEO Siva Sivaram explained that the Eagle Line improves efficiency and is adaptable for specific customer needs, serving as a blueprint for industrialization. CFO Kevin Hettrich added that the Cobra process and Eagle Line are capable of adapting to different cathode choices, cell capacities, and cell formats, aligning with their business model. Siva further clarified that the QSE-5 is a specific aspect ratio, and the Eagle Line provides a stable baseline from which they can adapt to larger or smaller form factors, like the Unified Cell.

Mark Shooter, on behalf of Jed Dorsheimer from William Blair, asked about Volkswagen Group's target of having QuantumScape cells in EVs by the 'end of the decade,' questioning if this aligns with QuantumScape's development timeline and what technical hurdles remain. He also explored opportunities to accelerate this timeline with Volkswagen Group or other automotive OEMs. Shooter further inquired about the Volkswagen Group contract, specifically if it allows for non-Volkswagen Group applications or adjacent markets beyond the Ducati program.

Answer

QuantumScape CEO, Siva Sivaram, clarified 'end of the decade' as 2029 and stated that productization timelines are ultimately the customer's decision, with QuantumScape working closely with Volkswagen and PowerCo to facilitate rapid ramp-up. He emphasized that engagements with new and existing customers follow independent paths, with QuantumScape adapting its technical roadmap to each OEM's product roadmap for swift market entry. Sivaram confirmed that the Volkswagen Group contract does indeed include provisions for non-Volkswagen Group applications, in addition to internal projects like Ducati, and anticipates partnerships both independent of Volkswagen Group and collaboratively with PowerCo.

Mark Shooter asked about Volkswagen Group's mention of cells in EVs by the end of the decade, inquiring if this aligns with QuantumScape's development timeline, what technical boxes remain, and if there's an opportunity to accelerate this with Volkswagen Group or other customer engagements. He also questioned the Volkswagen Group relationship regarding space for other potential applications or adjacent markets beyond the VW Group.

Answer

Siva Sivaram (CEO, QuantumScape) clarified that 'end of the decade' refers to 2029 and stated that productization timelines are the customer's announcement. He emphasized QuantumScape's commitment to working closely with Volkswagen and PowerCo to enable rapid ramp-up, adapting their technical roadmap to the customer's product roadmap. He also noted that engagements with new and existing customers follow independent paths, with customers paying for joint development activities. He confirmed that the contract with Volkswagen Group includes non-Volkswagen Group applications, with Ducati being part of the Volkswagen Group, and expects partnerships with other new customers independent of Volkswagen Group, as well as collaborations with PowerCo.

Mark Shooter, on for Jed Dorsheimer, asked for details on the manufacturing areas receiving investment to increase pilot capacity, what Volkswagen needs to see before committing to a large-scale facility, and whether there has been increased engagement from US defense or drone manufacturers.

Answer

CEO Siva Sivaram and CFO Kevin Hettrich stated that downstream cell assembly capacity is being increased to match the higher separator output from the new Cobra process, which aligns with their annual goals. Sivaram declined to speak for Volkswagen but noted the expanded deal shows aligned interests. He also highlighted the strategic advantage of their US-based, graphite-free technology for non-automotive applications like defense, noting the QS ecosystem provides optionality.

Mark Shooter, on for Jed Dorsheimer, asked about future cell manufacturing collaborations and whether PowerCo might produce for non-VW customers. He also inquired about customer conversations around the anode-free design in light of supply chain concerns and recent industry comments, and asked about potential applications beyond electric vehicles.

Answer

CEO Dr. Siva Sivaram stated that the company is systematically looking at all opportunities with large OEMs and other manufacturers, without ruling out any options. He and CFO Kevin Hettrich reiterated that the anode-free design is a core strength, eliminating graphite supply chain risks and improving performance. Regarding other applications, Dr. Sivaram confirmed that while the primary focus is automotive, the company is keeping its eyes open for opportunities in data centers, aviation, and consumer electronics.

Mark Shooter from William Blair inquired about the potential location for PowerCo's large-scale manufacturing given geopolitical factors and asked for color on the scale required for the prospective launch customer's program.

Answer

CEO Siva Sivaram deferred to PowerCo on location specifics, noting their announced plants are in Germany, Spain, and Canada. Regarding the launch customer, he described it as a high-profile, relatively smaller volume project using the B1 samples from the San Jose facility, and emphasized that the customer would be the one to make any public announcements.

Mark Shooter of William Blair, on for Jed Dorsheimer, asked if the new licensing structure with PowerCo creates a shared responsibility for scaling the Cobra process, thereby de-risking the project. He also sought clarification on IP ownership, specifically if QuantumScape owns process improvements made by PowerCo and can transfer them to other partners.

Answer

CEO Siva Sivaram affirmed that the model is designed for PowerCo to commit the capital for factories while QuantumScape provides the core technology, maximizing shareholder returns. CFO Kevin Hettrich added that QuantumScape retains full ownership of the core separator technology IP, regardless of who creates it during the collaboration. While there are some contractual limitations, the terms are favorable for QuantumScape to work with other partners in the future.

Mark Shooter, on for Jed Dorsheimer at William Blair, requested a metric to quantify the growing engagement in nuclear energy and asked for more detail on the expected TRISO fuel contracts.

Answer

President, CEO & Director Rex Geveden found it difficult to provide a single metric but confirmed that market activity is strong across all segments, calling it an unprecedented time. Regarding TRISO fuel, he characterized the expected contracts as strategically important for signaling commercial demand but noted they would be 'smallish' and not economically significant yet.

Mark Shooter from William Blair & Company asked about the expected trend for international revenue given the tariff situation and inquired about Amprius's competitive advantages over large Chinese battery manufacturers like CATL or BYD.

Answer

Executive Kang Sun explained that tariffs are not a primary concern due to the company's competitive cost base and significant global customer reach, which accounts for 83% of revenue. He differentiated Amprius from competitors by highlighting its focus on different market segments (aviation vs. EV/consumer electronics) and its comprehensive portfolio of proprietary silicon anode technologies, including silicon monoxide, silicon carbon, and silicon nanowire, which he believes gives Amprius a current leadership position.

Mark Shooter, on for Jed Dorsheimer, asked about the strategy of targeting a high number of customers versus focusing on a few large ones and whether any aerospace and defense clients have hesitated due to the company's manufacturing presence in China.

Answer

CEO Kang Sun clarified that Amprius only engages with customers demonstrating high-volume potential and leverages its scalable capacity to manage a broad pipeline. He noted that while no customers have walked away due to the China supply chain, some have requested a future transition to manufacturing in other countries within 6-9 months or by 2026.

Mark Shooter, on for Jed Dorsheimer, sought clarification on the $20 million in contracts, asking if all revenue would be recognized by May 2025. He also asked about the company's customer strategy regarding servicing many small customers versus securing fewer, larger ones, and inquired about long-term gross margin targets.

Answer

CEO Kang Sun confirmed the plan is to recognize the full $20 million in revenue from these contracts by May 2025. He also clarified that the company's strategy is to focus on large customers with substantial volume. CFO Sandra Wallach stated that while no specific guidance is being given, they see no reason SiCore product margins can't achieve parity with traditional graphite battery margins.

Mark Shooter, on for Jed Dorsheimer, inquired about the specifications of SES AI's South Korea facility, the performance benefits of its 2170 cells, and the target customer profile for the new Molecular Universe platform.

Answer

Founder and CEO Qichao Hu detailed that the Chungju, South Korea facility has two adaptable pouch cell lines and can be equipped for cylindrical and prismatic cells. He explained that SES's electrolyte enables high-performance 2170 cells (over 6.5 amp-hours) by stabilizing high-silicon content without gassing issues. For the Molecular Universe platform, he noted that over a dozen early users already include Tier 1 and Tier 2 battery makers, automotive OEMs, and chemical companies.

Asked for a breakdown of the 2025 revenue guidance, clarification on the BESS offering, the difficulty of entering the BESS market, and details about the location of contract manufacturers for drone applications and any related supply chain sensitivities.

Answer

The bulk of 2025 revenue is expected to come from BESS. The company is providing a full-stack BESS solution and is entering the fragmented parts of the market to gather data and train its Avatar AI. Contract manufacturers are currently in Asia, but there are plans to move to U.S.-based manufacturing to address customer supply chain sensitivities.

Mark Shooter, on for Jed Dorschmeier, asked for color on the capacity digestion in China's power market and inquired about how much of the company's backlog is tied to China's silicon carbide sector.

Answer

CEO Russell Low explained that the 'digestion' in China's SiC market is less about overcapacity and more about customers taking time to mature their processes and improve yields on their initial production lines. CFO James Coogan did not provide a specific backlog breakdown but confirmed that softness in China's power and mature markets drove lower Q3 bookings and the weaker outlook for the first half of 2025.