SES AI (US:SES)2023-03-14 15:33Financial Data and Key Metrics Changes - In Q4 2022, operating expenses were $20.7 million, an increase of $10.6 million from the same period last year [27] - R&D expenses were $8.3 million, up $3.1 million year-over-year, reflecting higher personnel costs and increased development costs [27] - Cash used in operations for full-year 2022 was $46.5 million, lower than the guidance of $55 million to $60 million [32] - The company ended 2022 with cash and short-term investments of $390 million, which is deemed sufficient for commercialization [34] Business Line Data and Key Metrics Changes - The company built and completed three A-sample lines in 2022, achieving ready-to-use status ahead of schedule [7][8] - The A-sample lines allowed the company to test and deliver approximately 1,000 large lithium-metal cells in 2022 [37] Market Data and Key Metrics Changes - Significant investments were made in Chungcheongbuk-do, South Korea, enhancing the region's battery production capacity [14] - The company received cash grants from the South Korean government to expand capabilities [15] Company Strategy and Development Direction - The company plans to transition from A-samples to B-samples in 2023, focusing on improving manufacturing feasibility and quality [26][23] - A key strategy involves doubling the material R&D team and tripling the quality team to enhance battery performance and safety prediction [21][43] - The company aims to leverage experiences from global lithium-ion players and new material innovations to establish a robust EV battery supply chain in North America [25][24] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in entering B-sample agreements with OEM partners, indicating a natural progression rather than a reaction to economic volatility [76] - The company anticipates that 2023 will be a year of growth and investment, with significant spending planned to support the transition to B-samples [35][42] Other Important Information - The company is preparing to expand its U.S. lab space to strengthen electrolyte and anode material development capabilities [44] - The company is also working on developing new anode processes and coating cathodes in-house to improve quality control [19] Q&A Session Summary Question: Feedback from JDA partners on A-sample cells and timeline for B-sample delivery - Management indicated that feedback from JDA partners has been positive, with confidence in both performance and manufacturing feasibility, and B-sample preparations are expected around mid-2023 [48] Question: Key milestones for 2023 - Key milestones include improving organizational capabilities for higher quality and manufacturing management, increasing production speed, and scaling up new materials [49] Question: Confidence in achieving B-samples this year and impact of economic environment - Management noted that quality improvements and organizational upgrades provide confidence in achieving B-samples, and the economic environment has not significantly impacted their plans [61][76] Question: Cash usage and spending conservatism in 2023 - Management acknowledged that lower spending in 2022 was due to conservatism and a focus on solving issues rather than just building cells, with a more aggressive spending plan for 2023 [40][62] Question: Supply chain readiness for large-scale production - Management confirmed that they are implementing capabilities for lithium-salt and electrolytes in North America, targeting readiness for commercial production by 2025 [77]