QuantumScape Corp. (QS) stock rose in premarket trading Thursday after the solid-state battery developer reported a smaller-than-expected third-quarter loss and outlined plans to expand production to meet growing demand from AI data centers and other markets.

QuantumScape Beats Earnings Estimates, Plans Production Expansion

QuantumScape reported a third-quarter loss of 14 cents per share, narrower than analysts' expectations for a 17-cent loss, according to market data.

The company plans to launch a 100-megawatt-hour (MWh) production line in 2028, expanding capacity beyond its existing Eagle Line facility.

Muehlbauer Group will supply assembly equipment, while partnerships with Murata and Corning will support the company's manufacturing strategy.

QuantumScape said its fully operational Eagle Line is increasing production of QSC5 battery cells to support customer sampling and billings.

The new production line will serve its data center and advanced solutions businesses. The company will continue using a capital-light licensing model for automotive applications.

QuantumScape maintained its 2026 adjusted EBITDA loss forecast of $250 million to $275 million and capital expenditure outlook of $27 million to $37 million.

AI Data Center Demand Creates New Growth Opportunity

QuantumScape is expanding into AI data center energy storage through its QS Power Block, introduced Oct. 8.

The in-rack energy storage system delivered four times the power density and five times the runtime of the Open Compute Project reference specification in testing.

The company also said its solid-state batteries demonstrated thermal stability above 300 degrees Celsius in customer and third-party tests.

As data centers adopt 800-volt direct-current architectures and rack power requirements approach 1 megawatt, QuantumScape sees growing demand for advanced battery technology.

During Wednesday's earnings call, CEO Siva Sivaram said AI data center customers want to see the company's QS Power Block batteries produced "in volume," citing strong demand for high-performance energy storage.

Sivaram said the customer response helped drive QuantumScape's decision to develop a 100-megawatt-hour production line, with startup production targeted for 2028.

Automotive Partnerships Expand

QuantumScape recorded its first billings under its Honda agreement in the third quarter and signed a separate agreement with another global mobility manufacturer.

The company is also in discussions with two additional top-10 automakers, expanding its potential customer base beyond Honda and Volkswagen's PowerCo.

Meanwhile, an amended agreement with PowerCo eliminates transition payments as the companies work toward technology-based milestones.

QuantumScape plans to unveil its next-generation battery platform and automotive collaboration model at a symposium in Kyoto on Nov. 11.

QuantumScape Targets $75 Billion Market Beyond Automotive

QuantumScape estimates its advanced solutions business, known as QSAS, could address a market worth up to $75 billion by 2030 across defense, aerospace, medical devices and consumer electronics.

The company shipped QSC5 battery samples to defense, aviation and telecommunications customers during the third quarter and recorded its first QSAS billings.

QuantumScape is also developing a U.S.-based supply chain to reduce dependence on Chinese equipment and materials suppliers, an important consideration for defense customers.

Production Scaling Remains Key Challenge

QuantumScape's priorities for 2026 include increasing Eagle Line output, strengthening automotive partnerships, expanding into new markets and developing battery technology beyond QSC5.

Management sees opportunities across AI data centers, defense, aerospace, telecommunications and automotive applications.

However, increasing manufacturing capacity and converting customer interest into commercial orders remain key challenges as the company works toward larger-scale production.

QS Price Action: QuantumScape shares were up 8.78% at $4.32 during premarket trading on Thursday, according to market data.