How QS (QuantumScape) Makes Money in 2026: A Deep-Dive With Income Statement

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Understanding how a solid-state battery developer like QuantumScape (formerly QuantumScape) makes money is essential for investors and anyone interested in the business of next-generation energy storage. In this post, we break down QuantumScape's quarterly income statement (Q4 2025) using a Sankey chart to visualize the financial flows — what comes in, where it goes, and what's left as profit.

Quick QuantumScape Overview

QuantumScape operates as a developer of solid-state lithium-metal batteries for electric vehicles and other applications. Revenue comes primarily from other income sources, as the company remains in the pre-commercialization phase with no reported total revenue from product sales. Additional context includes heavy focus on R&D for battery technology advancement, partnerships with automakers, and strategic investments to scale production.

Revenue Breakdown

• Total Revenue (Q4 2025): $0 (+0% YoY)
  • No segment breakdowns available due to pre-revenue status.
  • Growth is powered by progress in battery prototyping and partnerships, though core revenue remains negligible.

Gross Profit and Margins

• Gross Profit: N/A (N/A gross margin)
  • Cost of Revenue: $0 (+0% YoY)
  • QuantumScape maintains limited margins due to its early-stage R&D-focused business model with no significant cost of revenue yet.
• Most costs come from operating expenses, particularly R&D.

Operating Income and Expenses

• Operating Income: N/A (-% YoY, N/A margin)
• Operating Expenses: $110.5M (-14.2% YoY)
  • R&D: $86.8M (-16.9% YoY, 0.0% of revenue) — focused on solid-state battery development, prototyping, and testing for EV applications
  • SG&A: $23.7M (-2.6% YoY, 0.0% of revenue) — covers general administrative functions, legal, and overhead for a development-stage company
  • QuantumScape continues to prioritize innovation while maintaining efficiency in a capital-intensive pre-revenue environment.

Net Income

• Pre-Tax Income: N/A (+% YoY, N/A margin)
• Income Tax: N/A (N/A effective tax rate)
• Net Income: $100.1M (-12.7% YoY, 0.0% net margin)
• QuantumScape converts other income into a significant reported net figure due to non-operating items like other income, despite high operating costs.

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What Drives QuantumScape's Money Machine?

• Other Income: 100% of reported net activity / Primarily from other items totaling $100.1M, likely including grants, partnerships, or investment gains
• R&D Investment: Heavy focus with $86.8M spent, representing the core driver of long-term value creation
• Battery Technology Development: Strategic investments in solid-state tech to enable higher energy density and faster charging
• Future growth areas: Commercial battery production and EV partnerships, though not yet profitable

Visualizing QuantumScape's Financial Flows

The Sankey chart below visualizes how each dollar flows from gross revenue, through costs and expenses, down to net income. This helps investors spot where value is created, what areas weigh on profits, and how efficiently the company operates.

• Most revenue flows are absent, with operating expenses (especially R&D) taking the largest chunk at $110.5M.
• Even after significant investments, other income of $100.1M results in net income, highlighting non-operating support.

Key Takeaways

• QuantumScape's money comes overwhelmingly from other income sources
• High operating expenses illustrate the demands of QuantumScape's R&D-heavy business model
• Heavy investment in R&D, balanced by efficiency in cost reductions YoY
• Ongoing growth is driven by battery technology milestones and partnerships

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FAQ About QuantumScape's Income Statement

1. What is the main source of QuantumScape's revenue in 2025?

QuantumScape generates over 100% of its reported net activity from other income $100.1M. No traditional revenue from product sales due to pre-commercial stage.

2. How profitable is QuantumScape in Q4 2025?

QuantumScape reported net income of $100.1M in Q4 2025, with a net margin of approximately 0.0%, reflecting moderate profitability driven by non-operating other income amid high R&D costs.

3. What are the largest expense categories for QuantumScape?

The biggest expenses on QuantumScape's income statement are operating expenses, particularly Research & Development (R&D) and Sales, General & Administrative (SG&A) costs. R&D investment reached $86.8M in Q4 2025, as QuantumScape prioritizes solid-state battery development.

4. Why does the core business operate at a loss?

The core battery development operations, despite generating no revenue, posted operating expenses of over $110.5M in Q4 2025. This is because QuantumScape aggressively invests in R&D and prototyping, believing these will drive long-term growth—even if unprofitable today.

5. How does QuantumScape's effective tax rate compare to previous years?

QuantumScape's effective tax rate in Q4 2025 was N/A, consistent with previous years. This low rate is primarily due to pre-profitability status and potential tax benefits from R&D credits and development-stage structuring.