Investors looking to bet on next-generation batteries need to look beyond Quantumscape , according to Morgan Stanley. Analyst Adam Jonas downgraded Quantumscape to neutral from buy, saying in a note to clients on Monday evening that its leadership in the fast-developing battery industry is becoming less clear. "By the time we forecast QS to achieve commercial production at scale (FY25), our team believes the industry will have achieved significant improvement in battery efficiency and cost that could diminish the value of the technological 'leap' to solid state," the note said. The increased investment in battery tech and development "points to risks that could lead to battery commoditization and deflation to levels far below current economic models," the note said. Quantumscape entered the public markets through a SPAC merger last year and surged in its early weeks. However, the stock has dropped 52% year to date. Morgan Stanley cut its price target on the stock to $40 per share from $70. The stock closed at $40.58 per share on Monday. Shares were down 5% in premarket trading. -CNBC's Michael Bloom contributed to this report.
A solid-state battery development lab for QuantumScape.
Investors looking to bet on next-generation batteries need to look beyond Quantumscape, according to Morgan Stanley.