A decrease in short interest typically suggests that investors are becoming more bullish on a stock, as fewer traders are betting on its price decline. For QuantumScape, this could mean a short-term positive impact on its stock price, especially if the market perceives this as a sign of improving fundamentals or sentiment. However, the fact that QuantumScape's short interest is still significantly higher than its peers' average suggests that caution is warranted, as the market might still have concerns about the company's prospects.