QuantumScape (NASDAQ:QS) has had a difficult 2021. After topping out just below $133 per share in December, QS stock has lost more than 80% of its value. It’s been tripped up by a number of things recently, including insider stock sales, a devastating short-seller report and a washout within the special purpose acquisition company (SPAC) arena.

At the heart of the matter is a simple question: Does QuantumScape’s battery technology work and offer the benefits that it purports to?

The 188-page report from Scorpion Capital earlier this year made some compelling arguments against QuantumScape’s credibility. And the company hasn’t managed to rebut much of the negative perception Scorpion created.

Rather, management continues going along with their timeline. Perhaps as the company nears commercial battery production the market will start to give QuantumScape more credit. However, a recent development casts some doubt on that theory.

Dissecting QuantumScape’s Recent Partnership

QS stock popped from around $20 to close to $29 in late September on elevated trading volume. After a difficult summer, it looked like QuantumScape might finally be charging up. However, a closer investigation of the recent move showed it didn’t hold much merit.

It started on Sept. 21, when QuantumScape announced that it had signed a partnership. QuantumScape described it as “an agreement with a second top ten (by global revenues) automotive original equipment manufacturer (“OEM”) in which the OEM committed to collaborate with the Company to evaluate prototypes of the Company’s solid-state battery cells, and to purchase 10 MWh of capacity from the Company’s pre-pilot production line facility (“QS-0”) for inclusion in pre-series vehicles, subject to satisfactory validation of intermediate milestones.”

At first glance, this seems great. A top 10 OEM wants to use QuantumScape batteries. That should add a lot of revenue, right? Not so fast.

For one, we don’t know who the OEM is. Think back to QuantumScape’s first OEM partnership. Recall how Volkswagen (OTCMKTS:VWAGY) — according to the Scorpion report — was disappointed with QuantumScape’s work and transparency. It’s understandable why another OEM might not be in a rush to associate its name publicly with QuantumScape.

Furthermore, the 10 MWh purchase agreement, you’ll note, is subject to validation of intermediate milestones. These, according to the company, are expected to be satisfied sometime before it begins production in 2023. That’s potentially still quite a ways off.

A Long and Winding Road to Revenues

There are still a number of obstacles to QuantumScape reaching commercial success. It has to validate its battery technology works beyond a small scale. And then it actually has to get its production up and running and start deliveries. From there, the OEMs have to use the batteries and see if they work better than other options in their vehicles.

This process will take at least a few years to play out, if everything goes well. Meanwhile, short-sellers have raised meaningful concerns about the company’s technology and management team. These allegations have not been adequately refuted, as the sorry chart of QS stock demonstrates.

I agree with my InvestorPlace colleague, Thomas Niel, who writes that potential QuantumScape investors will be able to get a better entry point at a lower stock price in future months.

QS Stock Verdict

I’ve long argued that QuantumScape doesn’t belong on a publicly traded market yet. There simply isn’t enough information for most investors to have a highly informed outlook on the company. The battery technology is profoundly speculative. If it works, QS stock will probably be a multi-bagger. If it doesn’t work, the stock would likely be close to worthless.

This is the sort of binary outcome that venture capital (VC) is good at managing. VC firms can build a portfolio of many such moonshot companies, knowing that, while most will fail, a few will pay off tenfold.

For retail investors, however, this sort of approach is risky. There is little to go on that confirms QuantumScape’s potential. You have to simply trust management and hold through at least 2023 before there will be tangible signs of progress. For most traders, there are much more rewarding ways to invest in the electric vehicle (EV) revolution.

On the date of publication, Ian Bezek did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.

Ian Bezek has written more than 1,000 articles for InvestorPlace.com and Seeking Alpha. He also worked as a Junior Analyst for Kerrisdale Capital, a $300 million New York City-based hedge fund. You can reach him on Twitter at @irbezek.