In the past month, QuantumScape (NYSE:QS) stock has gone basically nowhere. When I last wrote about QS stock on May 12, it closed at $27.30, but as of June 11, it was at $27.90. But when I began the previous article on May 11, it was at $29.48. In effect, it has actually fallen over 5%.

This is what I predicted in my article, and what I expect will continue to happen. According to its September 2020 investor presentation, the company won’t even start to generate revenue until 2024. That is over two years from now, at which point QuantumScape will only make $14 million.

Moreover, the revenue will not even begin to ramp up until 2026, when it is forecast to reach $275 million. The cash flow burn rate will be significant.

Here is what I previously wrote about QuantumScape’s financials:

“The page 28 slide shows that there is a $3.3 billion cash burn funding hole from 2022 through to 2027. This is seen on the second to last line item showing that free cash flow (FCF) losses, or cash burn, will be $184 million by the end of 2021.”

“…This works out to an expected $1.4 billion in cash burn losses over the next four-plus years to 2025.”

QuantumScape Needs To Change

My conclusion is that this solid-state battery company is nothing more than a research organization. Nothing about the company indicates that it intends to commercialize any of its technology over the next several years. This is despite the fact that the company probably has enough liquidity to cover its cash burn losses.

That means that QS stock does not deserve its present vaunted $11.33 billion market value. It needs to change its present business model and bring forward significant revenue generation.

I have been a strategy consultant for several companies, so let me put on my strategy analyst hat. Why can’t the company start selling solid-state battery power units right now? They don’t have to be engineered to be part of an electric vehicle (EV.) This is what the company is trying to do with Volkswagen (OTCMKTS:VWAGY).

Its technology must be advanced enough to have some practical application. For example, Tesla (NASDAQ:TSLA) sells its Powerwall units and also has a larger energy generation division. There is not much engineering involved here. It is mostly just selling batteries. So why can’t QuantumScape do something similar? At least that can start revenue generation before 2024.

And if that is not feasible now, how soon could it be? Alternatively, what about licensing technology on a limited basis? Whatever their method, QuantumScape needs to find some way to move revenue forward on a substantial basis.

And if none of these things make sense, just resort to the Wall Street favorite: mergers and acquisitions (M&A.) Buy an EV or battery company that has revenue and needs QuantumScape’s technology. At least that way the company can be valued on forward cash flow.

What To Do With QS Stock

My concern is that QS stock could end up treading water for several years. It could rise or fall plus or minus 20% over that period, but nothing significant would happen until the market changes its mind. Once it becomes clear that QuantumScape can generate significant amounts of revenue, QS stock might end up tracking higher.

The only other thing that could change QS stock’s price would be a potential takeover by Volkswagen or another major EV manufacturer.

Consider this: Volkswagen has a market value north of $180 billion. So even if it paid a 30% premium to buy QuantumScape, it would cost just $14.73 billion. That represents just 8.18% of its $180 billion market value.

This is nothing for Volkswagen if it pays for QuantumScape in stock. In that case, QS stock could be a winner. But don’t count on it. Hopefully, the company will come up with a change of plan in case M&A doesn’t work out.

On the date of publication, Mark R. Hake did not hold a position in any security mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.

Mark Hake writes about personal finance on mrhake.medium.com and runs the Total Yield Value Guide which you can review here.