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EV Face-Off: Tesla's Scale vs. QuantumScape's Battery Vision
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Key Takeaways
Tesla faces slowing sales, tighter margins and intensifying competition in key global markets.
QuantumScape's new Cobra process speeds up solid-state separator production by 25 times.
QS deepens ties with automakers as first customer billings mark early commercial traction.
Electric vehicle (EV) adoption may have been slower than expected, and the theme isn’t as hot as it once was — but the future of transportation is undoubtedly electric. And when we talk EVs, the first name that comes to mind is Tesla (TSLA - Free Report) . However, with intensifying competition — especially from Chinese automakers — Tesla’s once-unshakable dominance has started to show cracks. Still, Tesla has proven its ability to scale profitably and remains the industry’s benchmark for execution muscle.
QuantumScape Corp. (QS - Free Report) , on the other hand, is powering the EV revolution from the battery side.Since batteries determine much of a vehicle’s cost, performance and range, breakthroughs here could reshape the industry. QuantumScape is developing solid-state lithium batteries that promise greater energy density and faster charging. While still pre-revenue, the company has been making meaningful progress.
At this juncture, if you’re looking for exposure to the EV industry, should you stick with Tesla’s proven power or bet on QuantumScape’s battery dream?
Year to date, shares of QS have jumped more than 210%, handily outperforming Tesla’s gain of 10%.
Image Source: Zacks Investment Research
The Case for Tesla
After its first-ever annual delivery decline in 2024, 2025 hasn’t been smoother for Tesla. Sales dropped 13% year over year in the first quarter and another 13.4% in the second. While third-quarter deliveries hit record highs, the spike was largely driven by buyers rushing to claim the expiring $7,500 federal EV tax credit. With incentives now gone and competition heating up, fourth-quarter volumes are expected to weaken again.
Tesla’s sales performance in Europe is facing rising challenges. In Europe, October sales plunged sharply — down 89% in Sweden, 86% in Denmark and 50% in Norway from a year earlier. Sales were weighed down by a limited model lineup, rising competition and controversy around CEO Elon Musk. France was the only bright spot, with a modest uptick in sales. In China, Tesla sold just 26,006 vehicles in October — its lowest monthly total in three years — as demand softened in an increasingly crowded and price-sensitive market.
Although Tesla has introduced “affordable” versions of its Model 3 and Model Y, it hasn’t launched any truly new models to challenge Chinese rivals offering sub-$30,000 feature-rich EVs. Adding to the pressure, regulatory credit sales — once a key profit driver — have been declining, following U.S. policy changes that reduced automakers’ need to buy credits.
Margins remain under strain from ongoing price cuts, tariffs and higher costs. With its core EV business losing momentum, Tesla is now leaning more heavily on artificial intelligence, autonomous driving and robotics for growth.
Overall, Tesla’s EV challenges highlight the broader slowdown and competitive pressures facing the industry, where price wars, shrinking incentives and shifting consumer demand are reshaping the landscape.
The Case for QuantumScape
QuantumScape is gradually turning its solid-state battery vision into something tangible. In June 2025, the company announced a key breakthrough — the successful implementation of its new Cobra manufacturing process for solid-state separators. The Cobra process, which is 25 times faster and more compact than the previous Raptor system, marks a major step toward cost-effective mass production. During the second quarter, QuantumScape completed the final shipment of its Raptor-based B0 samples and began shipping B1 samples built using the Cobra process in the third quarter. Several automakers are now evaluating these new cells, signaling stronger engagement and confidence from industry partners.
At the IAA Mobility show in Munich, QuantumScape and Volkswagen’s PowerCo unveiled the world’s first real-world demonstration of anode-free solid-state lithium-metal batteries — powering Ducati’s V21L motorcycle. These QSE-5 cells, built with the Cobra process, delivered standout performance with 844 Wh/L energy density, ultra-fast charging from 10% to 80% in just over 12 minutes, and robust discharge capability.
QuantumScape continues to strengthen its industry partnerships. Beyond Volkswagen, it signed a new joint development agreement with another top global automaker and deepened collaborations with Corning and Murata Manufacturing to scale up ceramic separator production. The company is also advancing its Eagle Line pilot facility, with most high-volume production equipment now installed and the rest on track for completion this year.
It also recorded $12.8 million in customer billings for the first time in the third quarter— a small but significant milestone that reflects its first wave of commercial activity. With growing OEM interest and strong technical validation, QuantumScape is inching closer to making solid-state batteries a commercial reality.
What Do Estimates Say for QS & TSLA?
The Zacks Consensus for QS’ bottom line in 2025 and 2026 implies a year-over-year improvement of 21.3% and 12.6%, respectively. The consensus mark for loss has narrowed over the past 60 days.
Image Source: Zacks Investment Research
The Zacks Consensus Estimate for TSLA’s 2025 EPS implies a year-over-year decline of 32%, but calls for growth of around 50% from the 2025 projected levels in 2026. The consensus mark has moved south over the past 60 days.
Image Source: Zacks Investment Research
Conclusion
Tesla remains a dominant force in the EV space, but its leadership is no longer unchallenged. With sales slowing, margins tightening and competition intensifying, Tesla’s growth engine faces rising pressure.
QuantumScape, though still in the early stages, represents the other side of the EV equation—innovation at the cell level that could redefine performance and economics for the next generation of electric vehicles. Although QS is still pre-revenue, its solid-state battery progress, deepening partnerships and the first signs of commercial traction make its case stronger.
Overall, Tesla’s dominance is being tested, while QuantumScape’s steady technical milestones and growing industry validation make it a compelling long-term play for investors. QS stock currently carries a Zacks Rank #2 (Buy) and Tesla has a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here
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EV Face-Off: Tesla's Scale vs. QuantumScape's Battery Vision
Key Takeaways
Electric vehicle (EV) adoption may have been slower than expected, and the theme isn’t as hot as it once was — but the future of transportation is undoubtedly electric. And when we talk EVs, the first name that comes to mind is Tesla (TSLA - Free Report) . However, with intensifying competition — especially from Chinese automakers — Tesla’s once-unshakable dominance has started to show cracks. Still, Tesla has proven its ability to scale profitably and remains the industry’s benchmark for execution muscle.
QuantumScape Corp. (QS - Free Report) , on the other hand, is powering the EV revolution from the battery side.Since batteries determine much of a vehicle’s cost, performance and range, breakthroughs here could reshape the industry. QuantumScape is developing solid-state lithium batteries that promise greater energy density and faster charging. While still pre-revenue, the company has been making meaningful progress.
At this juncture, if you’re looking for exposure to the EV industry, should you stick with Tesla’s proven power or bet on QuantumScape’s battery dream?
Year to date, shares of QS have jumped more than 210%, handily outperforming Tesla’s gain of 10%.
The Case for Tesla
After its first-ever annual delivery decline in 2024, 2025 hasn’t been smoother for Tesla. Sales dropped 13% year over year in the first quarter and another 13.4% in the second. While third-quarter deliveries hit record highs, the spike was largely driven by buyers rushing to claim the expiring $7,500 federal EV tax credit. With incentives now gone and competition heating up, fourth-quarter volumes are expected to weaken again.
Tesla’s sales performance in Europe is facing rising challenges. In Europe, October sales plunged sharply — down 89% in Sweden, 86% in Denmark and 50% in Norway from a year earlier. Sales were weighed down by a limited model lineup, rising competition and controversy around CEO Elon Musk. France was the only bright spot, with a modest uptick in sales. In China, Tesla sold just 26,006 vehicles in October — its lowest monthly total in three years — as demand softened in an increasingly crowded and price-sensitive market.
Although Tesla has introduced “affordable” versions of its Model 3 and Model Y, it hasn’t launched any truly new models to challenge Chinese rivals offering sub-$30,000 feature-rich EVs. Adding to the pressure, regulatory credit sales — once a key profit driver — have been declining, following U.S. policy changes that reduced automakers’ need to buy credits.
Margins remain under strain from ongoing price cuts, tariffs and higher costs. With its core EV business losing momentum, Tesla is now leaning more heavily on artificial intelligence, autonomous driving and robotics for growth.
Overall, Tesla’s EV challenges highlight the broader slowdown and competitive pressures facing the industry, where price wars, shrinking incentives and shifting consumer demand are reshaping the landscape.
The Case for QuantumScape
QuantumScape is gradually turning its solid-state battery vision into something tangible. In June 2025, the company announced a key breakthrough — the successful implementation of its new Cobra manufacturing process for solid-state separators. The Cobra process, which is 25 times faster and more compact than the previous Raptor system, marks a major step toward cost-effective mass production. During the second quarter, QuantumScape completed the final shipment of its Raptor-based B0 samples and began shipping B1 samples built using the Cobra process in the third quarter. Several automakers are now evaluating these new cells, signaling stronger engagement and confidence from industry partners.
At the IAA Mobility show in Munich, QuantumScape and Volkswagen’s PowerCo unveiled the world’s first real-world demonstration of anode-free solid-state lithium-metal batteries — powering Ducati’s V21L motorcycle. These QSE-5 cells, built with the Cobra process, delivered standout performance with 844 Wh/L energy density, ultra-fast charging from 10% to 80% in just over 12 minutes, and robust discharge capability.
QuantumScape continues to strengthen its industry partnerships. Beyond Volkswagen, it signed a new joint development agreement with another top global automaker and deepened collaborations with Corning and Murata Manufacturing to scale up ceramic separator production. The company is also advancing its Eagle Line pilot facility, with most high-volume production equipment now installed and the rest on track for completion this year.
It also recorded $12.8 million in customer billings for the first time in the third quarter— a small but significant milestone that reflects its first wave of commercial activity. With growing OEM interest and strong technical validation, QuantumScape is inching closer to making solid-state batteries a commercial reality.
What Do Estimates Say for QS & TSLA?
The Zacks Consensus for QS’ bottom line in 2025 and 2026 implies a year-over-year improvement of 21.3% and 12.6%, respectively. The consensus mark for loss has narrowed over the past 60 days.
The Zacks Consensus Estimate for TSLA’s 2025 EPS implies a year-over-year decline of 32%, but calls for growth of around 50% from the 2025 projected levels in 2026. The consensus mark has moved south over the past 60 days.
Conclusion
Tesla remains a dominant force in the EV space, but its leadership is no longer unchallenged. With sales slowing, margins tightening and competition intensifying, Tesla’s growth engine faces rising pressure.
QuantumScape, though still in the early stages, represents the other side of the EV equation—innovation at the cell level that could redefine performance and economics for the next generation of electric vehicles. Although QS is still pre-revenue, its solid-state battery progress, deepening partnerships and the first signs of commercial traction make its case stronger.
Overall, Tesla’s dominance is being tested, while QuantumScape’s steady technical milestones and growing industry validation make it a compelling long-term play for investors. QS stock currently carries a Zacks Rank #2 (Buy) and Tesla has a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here