Good day, and welcome to QuantumScape’s Second Quarter 2022 Earnings Conference Call. John Saager, QuantumScape’s Head of Investor Relations, you may begin your conference..

Thank you, operator. Good afternoon and thank you to everyone for joining QuantumScape’s second quarter 2022 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 difficulty 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..

separator production and cell assembly. A key ongoing goal of our phase one engineering line is to improve the quality, consistency and throughput of our separator production. And the first goal of our phase two engineering line is to do the same for cell assembly.

We’re pleased to report that our phase two engineering line is now operational and cell assembly has been transitioned to this line.

Located at QS campus, the phase two line benefits from six times more floor space for cell assembly, increasing flexibility to area on our process, expand automation and inline metrology and add more cell assembly lines as we continue to scale our production. This quarter we achieved a peak of greater than 5,000 weekly separator film starts.

To improve the quality distribution of our cells, we’ve been using much of our separator production capacity to baseline the quality improvements I mentioned earlier. While we don’t expect the linear increases in starts each quarter, we retain our goal of achieving peak weekly starts of 8,000 before the end of the year.

On the customer front, we continue to collaborate closely with Volkswagen as we work to bring our technology to market. Our collaboration with Volkswagen’s engineering teams has intensified in recent months with regular technical and product development meetings.

Their expertise has proved especially valuable as we build competence in mass manufacturing. In addition to Volkswagen Group, our previously announced deals, we’re pleased to report two additional customer sampling agreements with automotive OEMs.

We’ve now announced agreements with six prospective automotive customers from global top 10 manufacturers by revenue to premium performance and luxury auto makers encompassing both pure EV and conventional OEMs. We’ve engaged with companies we believe provide us with a strategic mix across geographic footprint and vehicle segment.

This breadth of customer engagement gives us confidence that demand for next-generation solid-state lithium-metal batteries remains robust across the automotive industry. And if we can accomplish our goals, the scope of the opportunity ahead of us remains compelling. Before I pass things over to Kevin, a few concluding remarks.

This quarter has been both rewarding and challenging. Despite basing the hurdles I mentioned earlier, the teammates made significant strides in cell development, manufacturing, and customer engagement.

We are grateful for the exceptional focus and discipline the team has shown through the challenges of delivering on a never before realized technology and the commitment of our automotive partners to help us bring this technology to market.

We remained focused on our key goal of delivering a 24-layer A-sample to an automotive customer this year, and look forward to reporting our continued progress in the coming months.

Kevin?.

Thank you, Jagdeep. In the second quarter, our operating expenses were $96 million. Our GAAP net loss for the quarter was $95 million. This level of spend was in line with our expectations entering the quarter. Cash operating expenses, defined as operating expenses less stock-based compensation and depreciation were $60 million for the quarter.

For full year 2022, we continue to expect cash operating expenses to be in the range of $225 million to $275 million as we support additional hiring and increased production volumes on our engineering lines. In line with previous guidance, we forecast OpEx to grow steadily during 2022 and 2023 OpEx to grow modestly from 2022 levels.

As we slow our headcount growth rate, we allocate resources from development to manufacturing and realize gains for investments into automation CapEx in the second quarter was approximately $28 million.

Approximately 40% of our Q2 CapEx went towards our Phase 2 engineering line, 40% towards QS-0 and the QS Campus build out and 20% towards our Phase 1 engineering line.

This level of CapEx spend was below our guidance range of $35 million to $65 million, as we are actively working to prioritize investment into critical milestones while conserving cash to maintain flexibility through the current difficult macroeconomic environment.

Drivers of lower CapEx spend varied by project and included deliberate postponements to refine equipment specifications, delays imposed by supply chain factors or technical challenges as discussed in the shareholder letter, realized cost savings and improved visibility into order times.

An example of realized savings was the facility CapEx to support our Phase 2 engineering line. In this case, value engineering and insourcing construction activities helped the specific projects come in below budget. These drivers also impact full year CapEx projections.

And we now estimate our capital expenditures to be between $175 million and $225 million for full year 2022. We believe most of the reduction in our forecasted 2022 CapEx spend will now be pushed out into 2023.

Despite the lower CapEx spend in 2022, we remain focused on achieving our goals for the year, including delivery of A sample prototype cells to a customer, demonstration of a cell format designed to accommodate lithium plating and stripping, scale up of peak film starts to 8,000 per week, and taking delivery of the majority of QS-0 equipment toward a 2023 line start.

We note that on the last goal, there is a distinction between equipment sufficient to allow us to make the first cells on the pre-pilot line and equipment required to make significantly higher volumes. We believe we remain on track with respect to the former, but expect some of the tools required for the latter to be received in 2023.

With respect to cash, we spent $79 million on operations and CapEx in the second quarter, we now expect to enter 2023 with over $950 million in liquidity, above previous guidance of over $800 million. With that, I’ll pass it over to you, John..

Thanks, Kevin. We’ll begin today’s Q&A portion with a few questions we’ve received from investors and analysts over the Say app and in our IR inbox. We received many questions around our timeline. In this quarter we spent some time discussing that in more depth in the shareholder letter.

So Jagdeep, can you give any more color on when our technology will be fully developed timeline more broadly?.

Yes, so John, our goal is to get this technology to market as quickly as possible. So on today’s call, we wanted to update our view of the timeline going forward. Our timeline is gated by a number of factors, some of which we control and some of which we don’t.

For example, like other companies, we’re always vulnerable to unexpected supply chain disruptions. There are also product and process development risks as well as the need to specify order and qualify production tooling.

And subject to these uncertainties, as we said in the letter, we’re currently targeting approximately 18 months between the A and B sample. I want to say the A-sample and prototype B-sample cells, which may use some low volume processes. And we anticipate a similar timeframe to go from B-sample to C-samples.

However, given the unequivocal demand we see from customers, the differentiated performance of our prototype cells and the strength of our balance sheet, we believe the opportunity ahead of us remains uniquely compelling..

Okay, great. Another topic we’ve spoken a lot about the competitive landscape. Someone on the Say app this quarter asked will lithium ion batteries be able to bridge the gap to solid state over the next five years..

Yes.

So relative to conventional lithium ion cells, we don’t believe it’s possible to achieve a dramatic increase in performance without a change in chemistry, but we believe our approach based on a solid-state ceramic separator and an institute formed and/or a pure metallic lithium can deliver between 900 and 1,000 watt hours per liter while simultaneously enabling 15-minute charge.

Those are targets we don’t believe are achievable with conventional chemistries.

Now, relative to next generation automotive chemistries such as lithium metal or solid-state, we haven’t seen anyone show data from comparable to what we published, which includes the ability to run 800 charges start cycles at a one-hour rate of charge, at room temperature and modest pressure and what we refer to as the gold standard test conditions.

And we’ve shown data in single four and 10 layer cells. But of course, we do need to do more work to scale up the high layer count and production throughput. We’re targeting 24 layers for our first A samples, which of course, we plan to ship later this year.

And while we’re pleased that we showed early progress on these cells today, I want to note that we’re not done with this development..

Okay, great.

We had another investor asked the question does QuantumScape need to make perfectly uniform totally defect for separators for yourself work?.

The short answer is no, we don’t.

In fact, the baseline process we show in the quality improvement section of our letter, which shows a number of non-uniformities has already produced separators that have delivered the industry-leading results we’ve shown so far, including cycling on those gold standard test conditions, as well as repeated 15-minute charge performance.

So the key is knowing which defects matter and which ones don’t and to focus on the former, not the letter. And based on the many years of experience, we’ve gained with this system and with solid-state in general, we believe we’ve gained a lot of learnings in this topic, and this is actually a key part of our IP, our intellectual property.

That said, if you think of the quality distribution as a bell curve for example, what we’re trying to do is shift the entire curve to the higher quality end of the spectrum, because we believe improving the quality distribution of our materials raises the performance, scalability and the reliability of ourself..

Okay, great. We’ll switch gears a little bit now and this next one’s for Kevin. We’ve said that we plan to be strategic around fundraising and careful with capital spending in general.

How should investors think about our funding and forecast the cash runway now?.

Thank you for the question, John. We ended Q2 2022 with approximately $1.28 billion in liquidity and forecast exiting 2022 with over $950 million in liquidity and forecasts our cash runway extending through the end of 2024.

This we believe provides sufficient CapEx to complete our second phase engineering and pre-pilot QS-0 lines, which we believe will be capable of producing our B samples and initial C samples.

This also includes OpEx to run the lines, generate samples to engage in customer qualification and continue process development, working towards broader commercialization. To support subsequent expansion in the business, we’d anticipate raising funding between now and the end of 2024 and plan to be strategic on the form, timing and amount..

Okay, great. Jagdeep, some investors have asked how Volkswagen’s creation of PowerCo affects QuantumScape and our relationship with Volkswagen..

Yes. So our relationship with Volkswagen dates back to 2012 spans multiple CEOs and we’ve worked with Frank Blome who’s the CEO of PowerCo for many years, including as a member of our Board of Directors.

We have a tremendous amount of respect for Frank’s battery knowledge and operational experience and more important – more importantly, a high degree of trust with Frank. Given that the core of PowerCo is the former battery center of excellence within VW, which is a group we’ve been working with since its inception.

We expect this transition to be quite natural..

Okay, great. And then we had two questions come in from José Asumendi of J.P. Morgan.

His first question, which technical milestones are you looking to achieve in the next six months? And what has been the largest technical challenge you had to overcome to develop the 24 layer cell?.

Yes. So the most important milestone we’re looking to achieve in the next six months is of course, delivery of the A sample. This kicks off the automotive qualification process and in our view represents a substantial risk reduction to our path forward.

Relative to the largest technical challenge we faced last quarter, I would say it was a discovery of the contaminant in our material that we referenced in the letter. And of course, through some great work on the part of the QS metrology team, we were able to identify the composition of this contaminant and this allows us to work to resolve it..

Okay, great.

José’s second question was with regards to Volkswagen and the recently launched new battery company structure, has this changed in any form your collaboration with the firm? Is there any additional color you can provide on the collaboration?.

So relative to the collaboration, we’ve been collaborating more closely with VW in recent months with more frequent technical and program management meetings, but relative to the nature of the collaboration itself, we haven’t announced any changes..

Okay. Thanks so much, guys. We’re now ready to begin the Q&A portion of today’s call. Operator, please open the lines for questions..

Absolutely. [Operator Instructions] Our first question is from the line of Wendy Dong with Deutsche Bank. Wendy, your line is open..

Provide a bit more detail on possibly the items or task that you’re pushing out, which is leading to the lower CapEx spending for the year. Specifically, what kind of supply chain factors, I know you mentioned the technical challenges that you guys facing. But what kind of supply chain factors are you considering that’s pushing that up. Thanks..

Wendy, thank you for the question. If you compare the annual guidance from last quarter of $325 million to $375 million, take the midpoint of $350 million and compare it to the current $175 million to $225 million midpoint of $200 million.

We are seeing pushing approximately the bulk of that $150 million into 2023, which is, I think what you’re asking about. The primary drivers were the deliberate postponement to refine specification. We had execution buffers in our goals in 2022, and while we still target achieving those 2022 goals in 2022, we have used up much of that buffer.

And that has delayed the ordering of equipment gated by technical development. And an example of that would be some aspects of the cell assembly, which would be gated by high confidence in the proprietary cell design.

Another example would be we made changes in some of our separator processes in the quarter to improve quality and reliability and we wanted to incorporate those process changes into some of our tooling that automates one of our separator processes.

And when you combine those postponements and ordering with supply chain headwinds facing the industry, that’s what’s resulted in our updated capital forecast..

Okay. Got it. Separately, I was wondering if you can remind us, again, what’s required to go from A-sample to B-sample. You mentioned the 18-month timeframe that you’re sort of targeting and similar timeframe from B to C as well. Could you remind us sort of like the steps that awarded a task that need to sort of accomplish to go from A to B? Thank you..

Yes. So this is Jagdeep, I’ll take that one. So generally speaking, the A-sample is whatever the automotive OEM things they need to see in order to convince them that the product basically is capable of delivering the functionality they want. So that obviously will vary by OEM, that the OEM will have a different definition of that.

The B-sample typically represents the functionality in A-sample maybe a little bit more some small tweaks are typically okay. But it’s typically made using processes that are closer to production processes.

Now they can be on smaller versions of the production tooling, but they’re more production like than the A-sample, which can be completely handmade. And the C-sample then is – has all the functionality, has those production processes and is actually implemented on the production tooling on which you’re going to produce the production cells.

So if you think about that definition of a C-sample, then clearly the C-sample line depends on the volume of the vehicle that you’re trying to serve.

So if you’re trying to serve a car that makes a million units a year, that will be a very different type of C-sample line than a car that makes just a – like a 1,000 units a year, right? Because in one case, the tools required are much bigger than the other case.

So the C-sample line, the real definition is that it’s the line off of which your production cells are coming. And how big that line is a function of how much – how big a volume you’re trying to serve with that line. The only point I’ll make is that typically all these different sample stages have multiple generations.

So there might be multiple As and Bs and Cs. And what we said on the call here was the very first B-samples that we make, which are the prototype B-sample cells. So they’re like B-samples, but they’re prototypes. Those could come off a line where some of the process steps are lower volume than others. So that’s really a summary of our timeline..

Okay. Thanks. Thanks so much for taking my question..

Absolutely..

Thank you, Wendy. Our next question is from the line of Gabe Daoud with Cowen. Gabe, your line is open..

Thanks, and afternoon, everybody. Thanks for all the prepared remarks. Jagdeep, maybe if we could just try to hone in a little bit more on the timeline. So if it’s 18 months between A, B and C, and if we think about A this year is being call it December delivery.

So does that put your C-sample delivery to late 2025 and then maybe QS-1 has then stood up in like late 2026, early 2027.

Could you maybe just help us frame that timeline and then progression to QS-1, I guess?.

Yes. So, we didn’t say anything about – Gabe, thanks for the question. We didn’t say anything about QS-1 in the letter. What we did say though on the timeline for A, B and C is exactly what you laid out.

So assuming that, A-sample happens as we are targeting at the end of this year, and assuming that the gap between A and B, and B and C on what we’re anticipating, which is, as we said, roughly 18 months then you’re absolutely right. That would put us into the end of 2025 for the C-sample.

Remember the C-sample, of course, is defined as cells coming off of A production line using production tooling. So that should be able to be a revenue generating capability at that point. And all we’ve said about QS-1, of course, is it would be sometimes after that, because, you need to have the blueprints for the line, which is really the function.

One of the key functions of QS-0 is to be able to get all the details around the processes, the tools, the specifications, and so on. So, we can order larger versions of those tools and more of them to be able to turn up bigger lines.

So the thing you don’t want to do is, start trying to turn up, a higher volume production line before you have all the details worked out on the tooling, because that just puts capital at risk. And obviously you don’t want to do that..

Okay. Got it. Thanks, Jagdeep. That’s helpful. And then maybe just as the follow up. I know we’re kind of focused here on the 24-layer, but I guess there’s just curious if the 16-layer did that hit 800 cycles, and then and I guess as we are, maybe, so that’s the first part of the question.

And then I guess, sorry, back to the 24-layer, since that is closer to representing an A-sample is there like anything you can say on what that looks like on an energy density standpoint? Thanks guys..

Yes, sure. So the 16-layer, wasn’t an explicit milestone that we had. And we felt like we made enough progress on the 16-layer to where we could move to making 24-layer cells. As you pointed out, what we already reported over 500 cycles in that 16-layer cells.

So, we didn’t really see need to continue to work more on that, and switched over to 24-layer cells.

And we’re actually, as you point out, quite pleased to have those first 24-layer cells on test already today in July, and that gives us a number of months to refine the design, incorporate any improvements and still be able to make the A-sample target for the end of the year.

The energy density we haven’t commented on Gabe, the A-sample really isn’t going to be the cell with energy densities that are close to the production levels, because it doesn’t have the right number of layers and the packaging isn’t really optimized. All those things are things that we think will happen in connection with the B-sample..

Got it. Thanks, Jagdeep..

Absolutely. Gabe,.

Thank you, Gabe. The next question is from the line of Chris Snyder with UBS. Chris, your line is open..

Hey, thank you. And thanks for taking my question. I wanted to follow up on Gabe’s question on the timeline.

But with a specific focus on progressing towards QS-1, is it fair to assume that the delivery of a C-sample is required for QS-1 to be commissioned and move forward? Or could that checkpoint be met with a B-sample, any color there would be really helpful?.

Yes, this is a great question. I think one of the things that we are thinking at this point is that one of the goals that we think we can meet from the QS-0 line itself is to make C-sample. And by doing that, we think, we can gain a lot of the learnings that might otherwise need that 1GWh QS-1 line.

So basically we think that essentially QS, the C-sample coming out of QS-0 can deliver to us some of the same learnings that we might otherwise need to do the 1GWh or Phase 1 QS-1 line, which we think opens a possibility to scaling up subsequent production lines more quickly.

So that’s certainly our current thinking and if things go as planned and that would be the way we’d like to see them unfold..

Thank you. And the company is obviously just continues to announce a number of commercial agreements. I mean, I think it’s been the general kind of consensus view from the analyst community that QS-1 or just the first kind of substantial production facility would be with Volkswagen as the JV and the counterpart.

Is there opportunity that the counterparty on the first commercial – commercially sized facility could be an OEM other than Volkswagen?.

So, we haven’t said anything about specifically who else we’re going to do JVs with outside of Volkswagen. There obviously is the joint venture with Volkswagen, which is designed to serve the needs of Volkswagen, for the other non-Volkswagen customers, I think there’s a couple different ways to serve them.

One of course, is through this expanded QS-0 line where we produce C-samples off of QS-0 that will allow us to serve a certain volume of vehicles. So, we wouldn’t be able to do like super, super high volume type vehicle programs out of that line. But for smaller, perhaps premium high performance type of vehicles that would be one option.

There’s an option of course, is to do joint ventures, like the ones we have with – like the one we have with VW with other OEMs. In fact, one of the, I think one of the agreements that we announced specifically had a section in there discussing the possibility of a joint venture with that other Top 10 automotive OEMs. So that’s another possibility.

And there are also other opportunities that we’re looking at beyond those that might involve other more creative ways to get there. But I think that our main goal is to get the technology into the market as quickly as we can. And we’ve said in the past, there were basically three sort of general ways to do that.

One is to build on factories, I guess, QS-0 is an example of that, it’s a small factory, but it’s a factory. The second is to partner with OEMs to do JDs. The VW deal is an example of that.

The third one we referenced in the past occasionally although we haven’t provided any more details on that, at some point it might make sense to license the core IP. We only do that if there’s someone that we trust as a partner and where the economics make sense.

But those are the three general options and we don’t have any religion around any one of them. We want to basically pursue what makes the most business sense for us, for our investors, for our customers..

Appreciate that. If I could just squeeze one last one in. Over the past couple of years, the company has produced a very high number of data and test metrics that they’ve provided to the market.

I would just be interested, Jagdeep, amongst all these test metrics data that you guys produce, which – what to you is the most significant kind of indicator of what you’re tracking, whether it just be the company’s progression, the technology, just be interested to hear on your view amongst all the data and test metrics what do you think is most important?.

Yes. Great question.

I think probably, I would say the most significant aspect of data we published is this notion of what we call the gold-standard test conditions, right? So the idea is that this is data showing that these lithium-metal cells which obviously are designed for high energy density, because the lithium-metal anode is more energy dense than carbon or carbon-silicon highly anode.

So that opens up the possibility of getting to these 900 to 1000 one hour per liter type numbers. But the important point is with that kind of a design we’ve demonstrated that you can operate that that chemistry with high rates of charge.

So we do all of our testing that we published in recent times at 1C, 1C meaning one-hour charge rate at room temperature. Recent tests have been at 25 degrees Celsius for 800 cycles as Gabe alluded to in his question earlier and then a modest pressure.

We use no more than approximately 2.4 atmospheres of pressure and in recent times where you would dropping pressure below that. So that’s the first key point I focused on is, is test results that, that show that they’re done under this, these gold-standard conditions without compromising pressure or temperature or rate or cycle life.

The second key thing I’d say on the data front is that we’ve shown data showing both the ability to run at even higher rate. So we earlier this year published some data on 15 minute charge, 400 times in a row.

So that’s also really a really remarkable result, really we haven’t seen any data from any other lithium-metal player that that can do that or for that matter even lithium-ion type players for energy cells. But we have cells that are designed for the highest possible energy, not power cells, which are designed for power.

And then I think the third thing that I would point to in terms of data as we keep showing data on increasing layer counts. I think we’ve steadily – we’ve kind of tried to keep our nose to the grindstone and just stay focused on the mission, which is to keep increasing layer counts while trying to maintain that level of functionality.

So we run from one-layer to four-layers to 10 to 16, and now 24 layers, well, at least the very early data on 24. We’re not done with that yet. I want to be careful about that.

But those three things combined, I think what gives us a lot of comfort that run to something here, right? The fundamental data, the gold-standard data is very compelling at one-hour charge rate for the cycles. The high rate charge data for single-layer cells would now be very compelling.

And then we try to take that capability and increase the layer count with that. And I think that all of those things are things that we really haven’t seen with other approaches to high energy density automotive lithium-metal cells..

Thank you for all that. Appreciate it..

Absolutely. Thanks for the question..

Thank you, Chris. The next question is from the line of Ben Kallo with Baird. Ben, your line is open..

Hey, good afternoon guys. Thanks for taking my question. Congrats on adding two new customer relationships.

Maybe could you just talk us through kind of how those relationships span from like maybe have just provided them with a sample cell, like two-layer cell or how do all the different relationships differ, I guess is the question?.

Yes. So these relationships are generally quite similar. What they basically are is that they represent a effectively reservation agreement on the part of the OEM to get a certain amount of capacity out of our pre-pilot production – out of the QS-0 line.

And then in addition to that there, this involves our providing that, those OEMs with a set of intermediate samples. So, we’ll provide them samples before the A-sample, A-sample and subsequent samples leading up to that pre-pilot line.

And I think the thing that we’re excited about is, not only that there’s now six such OEMs but they really represent a broad cross section of the automotive sector, right. So I mentioned in the letter they represent, top 10 players on one hand, as well as non-top 10 but well-established premium, luxury type brands.

They represent pure EV type players and conventional OEMs. So we have both ends of the spectrum on multiple axes of represented. I think we’ve tried to be, as we said before, strategic about, who we work with; we are in the position for better or worse of being supply constrained right now.

There’s more demand than we have the ability to provide sales today. Frankly, we think we’ll be that position for some time into the future. But the benefit of that is allows us to be a little more thoughtful about, who we choose to work with.

And we’ve tried to choose players that we think, encompass the full spectrum of automotive, of the automotive sector in order to make sure that we have exposure to the whole sector.

So I think we feel pretty, pretty good about the OEM momentum and our focus now is really just trying to deliver these cells, so we can realize the potential of the opportunity ahead of us..

Thank you for that. I guess, what I’m I was asking is, has everyone received something physically to test or they are, is everyone at different stages in their testing or so, maybe have just received data, you started relationship there versus others, have tested an actual cell..

Yes, so I think and I don’t quote me on this, but I think, because I haven’t made the full list and look at it just for this question, but I think every one of these guys, to my knowledge I would say most of these players have in fact received cells at some stage and have already tested them.

And well I should say yes, most of them have, I think not everyone has but most of them received cells and have tested them. And there are different stages of their process. So obviously someone like VW is, further along we’ve had that partnership in place for a lot longer.

Some of the newer players, we’ve been announcing players every at regular intervals in time. So, some of them are going to be, at different points in their process. But most of these guys have already received and tested cells and some of them, that haven’t will get cell shortly and will test them.

So that the process is moving forward with all these players but there’s just a different points in their journeys..

Cool. Thank you. And then the last question, you call out and you highlight the cell manufacturing step being completed. Could you just maybe delve into that a bit more on, what that means and what, how it’s changed from how you previously did it? Thank you..

Oh yes. I think that particular reference was to the Phase 2 line. So as we have this Phase 1 engineering line, which was in our older building and we were turning up a Phase 2 version of line for additional capacity and capability in our new QS Campus facility.

And we’ve now turned off that Phase 2 engineering line and transferred production, cell assembly to that line.

So that’s an important point because it means that we’re actually now making cells in this new facility which means, we put in place the building, the appropriate dry rooms and the appropriate clean rooms and the power, supply and people, and all those things have to go into place to be able to make cells.

Also, in this building then is where – we’re planning on deploying the rest of QS-0, which is a pre-pilot line.

Kevin, you’d anything to add?.

And I think that’s a good summary, Jagdeep..

Thank you, guys. Have a good night..

Absolutely. Thank you, Ben..

Thank you, Ben..

Yes, let me just go ahead and close out the call. I want to thank everyone for joining the call. I’d also like to thank our investors for their ongoing support of our mission. I’d like to thank our forward thinking customers for their commitment to helping us get this technology to market.

And of course, our amazing team for their incredibly dedicated efforts to overcome all the hard problems associated with bringing a groundbreaking new technology to market. We look forward to reporting on further progress in the coming quarters.

That concludes the QuantumScape Q2 2022 earnings call. Thank you all for your participation. You may now disconnect your lines..