What’s “Electric Glass” and why is The Wealth Advisory hinting that “One Tiny Company at the Center of it Could Hand Early Investors a Huge Windfall?”

Most of the pitches we’ve looked at from The Wealth Advisory over the past several years have been exaggerated income promises… like the “Prime Payouts” from Amazon or Pot Paydays that were supposed to generate $48,000 or $56,000 a year.

This one is a bit different, though, much more of a “get in early on new tech” idea about the next generation of batteries. The offer is their special report called “How to Get In On the Ground Floor of the Multitrillion Dollar Electric Glass Revolution” … and all you have to do, of course, is pony up your $99 for a subscription to The Wealth Advisory.

Or, if you prefer, read on and we’ll see if we the Thinkolator can identify this company for us and get you started on doing your own research. Ready?

There is all the false urgency that we see in just about every teaser pitch… this is from the order form:

“‘Electric Glass’ could be the opportunity of a lifetime for regular investors.

“A chance to get in on the ground floor of a truly WORLD-CHANGING technology…

“And ride that technological revolution to a life-changing fortune.

“Commercial production of ‘Electric Glass’ is set to begin very soon.

“Once that happens, the small company I’ve told you about today will be a household name…

“In the same vein as ExxonMobil, Tesla, Shell, or BP.

“But today — and maybe only today — you have a chance to get in before that happens.”

So what’s the story? What’s “Electric Glass?”

That’s really just a reference to solid-state batteries, which have certainly been teased before — we’ve heard these called Quantum Glass Batteries, Jesus Batteries, Forever Batteries, and I’m sure the superlatives will keep coming. Here’s a little more from the ad:

“According to CNET, ‘Electric Glass’ represents the “Holy Grail” of energy technology.

“Because as ‘Electric Glass’ is rolled out to every country, state, town, and home across the world…

“It will transform the entire $3.3 trillion energy industry.

“But despite this interest from the world’s richest and most powerful people…

“Very few members of the general public have any idea what’s going on.

“So retail investors who get in now could be part of an entirely new generation of millionaires.

“What’s about to unfold has only occurred a few times in human history.

“The invention of the steam engine…

“The discovery of oil…

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“The splitting of the atom….”

Subtle and understated, no?

The big promise of the ad is, of course, financial… the point of pitching an investment newsletter is to promise someone that these ideas will make you rich…

“… most remarkable of all is at the center of this $3.3 trillion tidal wave of wealth is just one tiny company that — get this — controls virtually all the patents for ‘Electric Glass.’

“Which means it may soon be the most valuable energy company in existence.

“And if you get lucky and place your stake into this small firm before ‘Electric Glass’ begins to be rolled out en masse…

“You could be looking at a massive windfall.”

As with many of these kinds of pitches, they often blur the lines between the industry and the company they’re promoting — the idea is to conjure up an image of a fantastical future and focus not on the hundreds of high-end labs who are working on developing battery breakthroughs in companies and universities around the world, but on the one company they imply will be the “winner takes all” victor in the end.

So I’m going to skip over some more of the broad hyperbole about solid state batteries in general (sorry, I mean “electric glass”), and move on to sniff out the specific hints about the company they’re teasing… this is what we get:

“The U.S. Department of Energy gave this company its initial seed funding back in 2010. It’s gearing up to deploy “Electric Glass” to 8,000 charging stations across America in one of the largest infrastructure overhauls in history. It believes it ‘can lead the next industrial revolution’ because of this effort.”

And then…

“‘Electric Glass’ will soon be a vital component of almost every single piece of technology in the world… part of the fabric of the future.

“And in the process, drive trillions of dollars in new wealth.

“And unlike the semiconductor revolution, I expect the lion’s share of all that money to flow to one place and one place only.

“Because:

“One Tiny Company Owns More Than 200 Critical Patents for This Groundbreaking Technology… And Has a Virtual Lock on the Entire Global Supply of ‘Electric Glass!'”

That’s a bold statement. Solid state batteries as the next generation to replace lithium ion batteries have been an area of major focus for battery researchers for more than a decade, and there are thousands of patents in this area (quite possibly hundreds of thousands)… and no real supply, since there is no commercialized large-scale production of these batteries, so having a “lock on the global supply” doesn’t really mean anything.

But anyway, we can look past the exaggeration… we’re looking for more clues. What else do we learn about this “one small company?” A few more hints about the founder, who is a serial entrepreneur who has built and sold several companies…

“The founder was a boy genius and immigrated to America at just 15 years old to study computer science at the University of Maryland.

“In 1987, still only 20 years old, he was recruited by Hewlett-Packard to modernize its telecommunications division.

“He parlayed his experience there to start his own company that developed software for wireless telecommunication networks in 1992….

“He then started a third telecommunications company in 2001 that he eventually scaled to a $1.2 billion market cap….

“‘Electric Glass’ Is This Entrepreneur’s Most Ambitious Project to Date…”

And we get a few hints dropped about the other folks on the team at this company, and about the investors:

“The co-founder and chief scientific adviser holds a Ph.D. in solid-state physics.

“And he’s one of the world’s leading experts on energy conversion and storage at the nanoscale level….

“On the board is not one, but two former Tesla execs who left Elon’s company to throw their chips in with this one.

“And some of the richest men in the world agree.

“For the first time in history, Amazon founder Jeff Bezos…

“Salesforce founder Marc Benioff…

“Alibaba founder Jack Ma…

“Microsoft founder Bill Gates…

“And even Richard Branson, the founder of Virgin Galactic…

“Have joined together and poured hundreds of millions into this company to help them make “Electric Glass” a reality.”

And that, really is now officially overdoing it on clues… we can easily punt this to the Thinkolator now and get our answer in the blink of an eye — Jason Williams is teasing Quantumscape (QS), the secretive battery startup which came public through a SPAC merger last year.

And it has been a lightning rod for attention, even before it came public. Yes, Jeff Bezos and Bill Gates and Jack Ma all participated in early fundraising for Quantumscape, as they were trying to discover the next great solid state battery chemistry and embraced co-founder Jagdeep Singh’s vision (yes, he’s the serial entrepreneur teased), and it was wild enough and well-connected enough to get all those big fellas investing in one startup (and to get that early seed money from the government before that, though that was really early R&D and didn’t go anywhere), but it was also their investment from Volkswagen, as that company tried to “catch up” on electric vehicle technology, which made the rest of the industry sit up and take notice four or five years ago, when there were a half-dozen or so fairly high-profile and well-funded solid state battery companies pushing to develop their R&D (some of which have since given up or had their funding pulled). And they stayed very secretive about what they were doing over the past decade, trying to keep any discoveries they had made under wraps, which meant, of course, that people wanted even more to know what was going on.

Now that it’s a public company, of course, operating in the same general industry that has made Elon Musk a household name, the attention has risen dramatically — and they have gradually become a little bit less secretive, releasing some information to shareholders to keep them apprised of their progress and their plans to invest hundreds of millions of dollars into a new battery factory to commercialize their new battery chemistry.

The challenge, though, is that they really are still keeping a lot of secrets, it’s quite likely that their “trade secrets” about materials used are more valuable to the company than their filed patents, and the technology is not yet ready for demonstration and pilot production or commercialization… which means that investors, to some degree, have to base their investment on faith. Yes, they say they have made the breakthrough they need in developing a lithium metal-based battery, and that Volkswagen has validated the cycling of the battery at “automotive rates”, which remains a major endorsement (though we should be mindful of the scale of Volkswagen’s investment — their $300 million total investment in QS over the years totals up to roughly one month worth of profit for this gigantic company, and Volkswagen clearly believes in this technology… but they are also partnering with other battery companies for both current production (Northvolt) and future possibilities)… but they also say clearly that they’re in the process of developing and validating an end product, including scaling up to multi-layer cells and developing the potential for high-volume manufacturing. It’s still quite early.

So along with that faith, investors need some patience. QuantumsScape is still at least a couple years from building a pilot plant, and at least three or four years from building a large scale factory with Volkswagen, and nobody really knows for sure, outside of QuantumScape’s labs, whether this battery really works as well as hoped… or, at least, if it will work by the time they build that factory. The first Quantumscape-powered Volkswagens have probably not been designed yet, and the goal is for them to be on the road in maybe five years. There will, of course, be updates and bits of good news and bad news along the way — I would assume that there will also be delays, as there always seem to be with new factories and new projects.

It’s a function of the massive size of the opportunity that they’ve raised such vast amounts of money,(they’re now sitting on about $1.5 billion), but from my very inexpert perspective there’s still a really meaningful risk of failure. It’s also really hard to invest in something that will not generate any revenue for at least five years.

And there’s going to be a lot of fighting between investors about what’s happening as we wait — most recently, there was a well-publicized short attack on QuantumsCape in mid-April, one of the longest “short” presentations I’ve ever seen (including, in a dig that probably gave heart palpitations to a lot of VC folks, a comparison to Theranos), and a quick response from the company, including an appearance by CEO Jagdeep Singh on CBNC. The most interesting piece I’ve read about QuantumScape recently, though, was a Bloomberg piece for which the author was granted a rare visit to their secretive labs, so if you want to avoid the long/short back and forth that’s probably the best place to start (and the article came out at almost exactly the same time as the short attack, coincidentally enough).

And the financials? They won’t really matter for a very long time. If they really have the best solid state (or semi-solid-state) battery design, and can achieve commercial production in several years, and nobody else has something markedly better, and QuantumScape’s chemistry ends up becoming the new standard in electric vehicle batteries, getting licensed to other battery makers around the world as they build out dozens of factories in the 2030s… then sure, it could easily be worth hundreds of billions of dollars in the end, more than justifying the current $13 billion valuation for QS and making the difference between a $5 billion valuation and $25 billion look pretty meaningless in 2025 or 2030.

But we don’t have any details beyond the (almost certainly wildly optimistic) “summary financials” touted in their original SPAC go-public presentation, so really that “If” sticks with me. It’s essentially impossible to do any kind of 2026 economic modeling based on this many unknowables (materials costs, production cost, selling price, competitive pressure), but the beauty of SPACS is that they can be pitched based on five and ten year projections, something the SEC won’t let you get away with in a “regular” IPO. Back when they made the merger agreement, the point at which the project made sense — based on factories that have not yet been designed, we should be clear, let alone built — was 2028, when they planned to be producing enough battery packs for 910,000 cars a year, with expansion to a second large factory and revenue of $6.4 billion (with free cash flow of $563 million).

I can’t get my head around betting on a massive industrial project that won’t bear fruit for five or ten years, but maybe that’s because it’s not helmed by an exciting attention-getter like Elon Musk. It’s certainly a cool story, I’ve found QuantumScape fascinating for years and I wish Jagdeep Singh and his team great success, but I’ll continue to watch the stock from the sidelines for now. Maybe I’m missing the next big thing, maybe not — you’ve got your own money to work with, so you get to make the call… and feel free to let us know what that call is, just chime in with a comment below.

Disclosure: Of the companies mentioned above, I own shares of Amazon. I will not trade in any covered stock for at least three days after publication, per Stock Gumshoe’s trading rules.


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bcarrot
Irregular
May 4, 2021 4:03 pm

There is another pitch by Matt Mc call for ilika
Much smaller than quantum scape. Also new material technology in the IK
Taking positions on both

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