Shares of QuantumScape Corp. (QS) tumbled 10.76% in after-hours trading on Wednesday, despite the company reporting better-than-expected second-quarter earnings and announcing an expanded collaboration with Volkswagen's battery maker, PowerCo. The sharp decline comes amid a recent surge in the stock price, which had more than doubled over the past month.

QuantumScape, a developer of solid-state lithium-metal batteries for electric vehicles, reported a Q2 loss of $0.20 per share, narrower than the $0.25 loss per share in the same quarter last year and slightly better than the FactSet consensus estimate of a $0.21 loss. The company's adjusted EBITDA loss of $63.0 million was in line with expectations. However, QuantumScape narrowed its full-year guidance for adjusted EBITDA loss to a range of $250 million to $270 million, which may have disappointed some investors hoping for more significant improvements.

In a positive development, QuantumScape announced an expanded collaboration with PowerCo SE, a company wholly owned by the Volkswagen Group. Under the new agreement, PowerCo will contribute up to $130.7 million over two years to support the development, validation, and commercialization of QuantumScape's QSE-5 solid-state lithium-metal battery technology. Despite this news, it appears that investors may be taking profits after the stock's recent meme-driven rally, which saw QuantumScape shares rise over 200% in the past month without clear fundamental catalysts.