SES AI (US:SES)2022-05-12 23:51Financial Data and Key Metrics Changes - The company reported a net loss of $27 million for Q1 2022, which includes a $7.7 million non-cash expense related to the mark-to-market of sponsor earn-out shares [31] - Operating expenses for the quarter were $19.2 million, including $3.2 million of stock-based compensation and $4.6 million of non-recurring transaction-related expenses [29] - The company ended Q1 2022 with cash and cash equivalents of $426 million, which is deemed sufficient to reach commercialization [36] Business Line Data and Key Metrics Changes - The company has made significant progress in its three technology platforms: Hermes for material development, Apollo for engineering large automotive cells, and Avatar for battery health monitoring [10][11][17] - The Shanghai Giga facility is capable of producing 0.2 gigawatt hours of large lithium metal cells and plans to reach one gigawatt hour in Phase 2 next year [13] Market Data and Key Metrics Changes - The automotive industry is rapidly shifting towards electrification, with major carmakers announcing plans to electrify their fleets [7] - The demand for lithium and other raw materials has surged, causing disruptions in the supply chain due to geopolitical factors [9] Company Strategy and Development Direction - The company aims to transition from A-samples to B-samples within the next 12 months and is focused on establishing independent regional supply chains to address geopolitical challenges [19][24] - The company is developing recycling capabilities for mossy lithium and exploring new business models such as battery-as-a-service [25] Management's Comments on Operating Environment and Future Outlook - Management highlighted the importance of a sustainable supply chain strategy and innovative business models in the face of rising raw material prices and supply chain disruptions [9][43] - The company expects to achieve commercialization by 2024, focusing on generating gross margin and positive free cash flow [44] Other Important Information - The company has established joint development agreements with major global carmakers, including General Motors, Hyundai, and Honda [8] - The company plans to invest between $70 million to $80 million in operations for 2022, primarily for A-sample development [33] Q&A Session Summary Question: Can you provide more background on the distinction between mossy lithium and dendrites? - Management explained that dendrites are sharp structures that can cause shorts, while mossy lithium is a flat structure that forms in batteries and is typically associated with battery failure [42] Question: How are we being impacted by raw material price inflation? - Management acknowledged that raw material price increases, particularly for lithium and nickel, are affecting the entire industry, but they have strategies in place to address these challenges [43] Question: Can you clarify what classifies as commercialization? - Management defined commercialization as a process starting with A-samples with OEMs, expecting to reach this stage in 2024 while focusing on sustainable business practices [44] Question: How is the company securing its supply chain? - Management mentioned that they are working with major shareholders who are mining companies to secure off-take agreements for lithium and other key materials [47] Question: How is LFP fitting in with rising commodity costs? - Management noted that the price of lithium carbonate has increased, making LFP more attractive to OEMs as it can achieve similar energy density to high-nickel lithium-ion batteries [49][50] Question: Are there major technology hurdles in transitioning from A to B to C samples? - Management confirmed that while there are challenges, they are not fundamental showstoppers, and they are focused on engineering solutions to optimize performance [51][52]