Battery developer QuantumScape (QS) announced a breakthrough in its process for manufacturing solid-state lithium-metal batteries, sending the stock more than 32% higher in early afternoon trading on Wednesday.

QuantumScape is one of several companies racing to commercialize next-generation batteries for electric vehicles and other uses. On Tuesday, the US-based startup said it had successfully made its Cobra ceramic separator process the standard in its battery cell production, demonstrating that the improved manufacturing process could work on its assembly lines.

The company touted the efficiency gains of Cobra, saying the process treats battery cell components 25 times faster than earlier processes at a fraction of the equipment footprint. The production upgrade lays the foundation for scaling solid-state battery production — potentially to the gigafactory level — while delivering improvements in battery life, charging speed, and cost.

“By significantly improving throughput and shrinking the equipment footprint, Cobra gives us a powerful path forward for commercializing our next-generation battery technology,” QuantumScape CEO Siva Sivaram said in the release.

Solid-state batteries are considered the “holy grail” for EVs, with the technology linked to lighter-weight modules that can hold more energy, discharge more power, and charge faster. In addition to energy efficiency, the promise of lower costs compared to traditional cell-based batteries is one that sent QuantumScape stock surging back in 2020, but it has dropped 42% over the past five years, even including Wednesday’s move.

The development also has some implications for automakers, notably Volkswagen (VWAGY), looking to commercialize cheaper and more efficient batteries in their EVs.

Volkswagen, an investor in QuantumScape since 2012, struck a deal with the startup last year to license QuantumScape’s manufacturing technology for the mass production of solid-state batteries.

Over the past decade, Volkswagen has invested $380 million in the company and has a 24% stake in the startup, according to its annual report.

QuantumScape stated that it has also signed sampling agreements with other OEMs (original equipment manufacturers), from major manufacturers to luxury automakers.

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