How Lithium Can Supercharge QS Stock in a Long Run?

• QuantumScape has lost a majority of value in their share price.
• Recently an insider sold some shares for an average price of $7.51.
• QS stock was trading at the market value of $7.55 at the publication time.

QuantumScape Should Leverage Increasing Lithium Demand

The automotive industry has started to focus on electric vehicles steadily due to the increasing concerns towards global warming. This may significantly give a push to lithium battery producers. QuantumScape Co. (NYSE: QS) is one of the growing companies in the industry and can leverage the increasing demand in lithium. QS stock has lost over 80% from its value since its all-time high.

Recently, an insider sold 6,843 company shares at an average price of $7.51, totalling the transaction value to over $51,000. QuantumScape Co. started as a solid state lithium battery producer and includes investors like Bill Gates and Volkswagen. In 2018, Volkswagen invested $100 Million and became the biggest investor in the organization. In 2020, they even surpassed Ford Co. (NYSE: F) for a short timespan.

QS Stock Price Action

Source: QS Stock Price at TradingView

QS stock was trading at the market price of $7.55 at the time of writing, uptrending by 1.48% in the past 24 hours. The share was trading as high as $43 during November 2021. The chart shows a steep decline in the value where the company failed to recover to around $40 levels. The price started climbing in April 2022 to reach $22 but slashed its value by half in the following month.

Regression trend positions the price in a buying zone and creates a resistance around $10. The price history has lowered the buying zone since April 2022 but the value remains consolidated since October 2022. Now there are a couple of factors which can potentially help QS stock to gain in the future.

One of the major factors that may deliver a positive effect is Lithium. The company already deals in solid state lithium batteries and the increasing demand for EVs have directly affected demand for the element. Its production has increased from 28,100 Metric Tons in 2010 to 82,000 Metric Tons in 2020. The company needs to tighten the grip on lithium producing regions.

Currently, Bolivia holds the top spot in the identified lithium resources with 21 Million tons followed by Chile and Australia with 9.8 Million tons and 7.3 Million tons. Australia held the majority of global lithium production with 49% of total global production in 2020.

The EV industry too may prove fruitful to QuantumScape as lithium remains a vital element used in electric vehicles. With the rising global production and demand in EVs, the company can generate considerable revenue. EV cars production has increased by 297% from 750K in 2016 to 2.9 Million in 2020.

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