QuantumScape (NYSE: QS) is working to revolutionize electric-vehicle (EV) battery technology. If its solid-state solution can be proven successful and able to be produced at scale, it could lead to a surge of interest in consumer EV demand.

One Wall Street firm is acknowledging the company’s progress and has raised its view of the stock. That led QuantumScape shares to surge today by as much as nearly 6%. As of 11:45 a.m. ET, the stock was still trading higher by 3.9%.

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According to reports, financial services firm HSBC has upgraded QuantumScape from the equivalent of a sell to a hold recommendation. It also raised its price target on the stock by nearly 13% to $5.30. QuantumScape shares closed Monday’s trading at $4.73 per share.

The company has made meaningful progress with its battery technology this year. It also announced an agreement with PowerCo earlier this year, the battery division of global automaker Volkswagen.

That agreement will help to industrialize QuantumScape’s technology, giving PowerCo a non-exclusive license to manufacture batteries using the technology to build as many as 1 million EVs per year. It was also a large reason for HSBC’s upgrade. The agreement could lead to other deals at production levels beyond QuantumScape’s internal capabilities.

Investors still need to view QuantumScape as a high-risk investment. If successful, the batteries are intended to provide charging capability in under 15 minutes while allowing for higher range and lower overheating risks.

However, the company just recently shipped its first prototypes for automotive testing. The collaboration with PowerCo will lower QuantumScape’s capital needs and thus extend its cash runway into 2028. But it will likely take that much time for its technology to be fully evaluated and validated by potential customers.

An investment here could pay off down the road. However, it will likely take several years before the business itself can be sustainable.

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