Volkswagen Group is the world's second-largest automotive company by volume, and includes several other brands, like Porsche, Audi, Ducati, Bentley, and Lamborghini. It's a great partner (customer) and doesn't prevent QuantumScape from selling to other brands.

That said, it's becoming evident that investors will be waiting a long time for their reward, and it's unclear what the ultimate prize looks like. With the company planning its funding into 2028, this signals that there is likely no meaningful revenue coming anytime soon -- at least not nearly enough for the business to generate cash flow, let alone profits.

Plus, QuantumScape is only one of many pursuing solid-state technology. Many automotive companies have invested in next-generation batteries, directly or via partnerships similar to the QuantumScape-Volkswagen deal. Ultimately, QuantumScape has a wide range of eventual outcomes. How successful the company will be is still the great unknown until a finalized battery is ready for mass production.

A millionaire maker or a lottery ticket?

QuantumScape has a $3.3 billion market cap today. It may need to become a $30 billion to $100 billion stock to create life-changing returns for most individuals. Unfortunately, it's still too unclear what the company's eventual revenue and earnings will look like or how long it will take. In other words, nobody really knows. If it were such an obvious home run, Volkswagen, a company with $350 billion in annual sales, would probably buy QuantumScape outright.

So for most investors, this stock won't make sense to own. But if you do buy it, just keep your expectations grounded, and don't invest money you can't afford to lose if things don't work out.

Don’t miss this second chance at a potentially lucrative opportunity

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*Stock Advisor returns as of October 28, 2024

Justin Pope has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Volkswagen. The Motley Fool recommends Volkswagen Ag. The Motley Fool has a disclosure policy.

Is QuantumScape a Millionaire Maker? was originally published by The Motley Fool