Earnings call transcript Q1 2023

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Operator

Good afternoon. Thank you for attending today's SES AI Corporation First Quarter Earnings Call. My name is Cole, and I will be your moderator for today's call. [Operator Instructions].

I would now like to pass the conference over to our host, Eric Goldstein. ahead. go Please

Eric Goldstein

Hello, covering operator. guidance. welcome our to Thank first everyone, quarter call our financial XXXX conference you, and results and

Joining update Financial Hu, and me X:XX p.m. shareholder Qichao Chief provides after as today Officer; a our which Executive results. business letter Founder just Jing well We Officer. and Chief today, issued as our Nealis, are financial

our today's Investor with a link to of in press Relations letter the in release a at conference find webcast You'll shareholder call ses.ai. website section our

our Before started, discussion is statements reminder today applicable today. as and are a may Such meaning forward-looking materially from and to results statements statements different securities the we or of based be may this get predictions that performance and on expressed legislation. These these contain the expectations statements. forward-looking cause within in or our or actual implied of those risks, future certain information assumptions involve uncertainties, which

to cause quarter. release and results limited The to, business will earnings our in latest risks SEC not and our our results the those as are could uncertainties as review detailed our in for expectations differ but from well that This include, we afternoon, filings. current our materially

With pass over that, I'll to Qichao. it

Qichao Hu

mass foundations. was say be laid we I is XXXX and now, in turning starting battery think crucial great Eric. back from Thanks, SES. key we look XXXX out a production, few metal point for is several technology years to will A year when a lithium as our

an JDAs. to X like OEM you give our on I'd First, update

so GM, company to world's the and Hyundai As battery and enter metal we we Honda. we JDAs, have were previously, lithium discussed automotive with A-sample did first

rate lithium launch to become deep tweeted to data cells. after Starship capability, data in that become and the production metal them, the mPOWER With many intelligence. many test material ills. value Musk solves Even ability development large ability, this ideas high to XXX biggest our Our build and is addition Elon

X China since have than anywhere And X XX Shanghai, make cells. metal and Chungcheongbuk-do, in XXX a metal in X the It's been mPOWER lithium large most cell and technology. difference improvements and lines A-sample the now producing a lines are they year and and testing what large the more and They provide safe world. mPOWER Korea, battle-tested our running, have lithium to production been up new These reliable test us for in and ideas South made. advanced a to platform

say, we we close detailed safe we is to in been on didn't what It to manufacturing the simply started being solved or these now making have calls, as Many know have we until higher that didn't know we issues cells previous discussed of solved. volumes. are large

rounds lamination. X For material of we lithium rolling tearing and and A-sample anode on with example, have ultrathin and and this lines during improved After our large-format equipment in vendors, and issue. significantly collaboration iterations improvements wrinkling our

lamination issues We started will for designs. have processes these we testing eliminate completely anode and in even believe new future

solvent scale-up. novel electrolyzed Second,

has completed team While different solvents production. scale-up to for X molecules, R&D our continues of new team solvent types develop material our electrical

overhead. electrical Third, misalignment and stacking

their approach our issue of team of paid experience. Our metal process lithium-ion lithium-ion engineers cells quickly borrowing manufacturing addressed really off here experienced by lithium using from cell as stack this power lithium-ion

we after best fundamental understanding laser to is the Understanding to solution approaches in and working now choose unique metal powder die have This our we formation will metal punching. lithium on approaches. X fully electrical the both during and be Fourth, teams mechanism, anode, able parallel.

working equipment iteration after with a we across implement improvement Five, current metal designs. now solution and and X rounds we formation stability. is vendor, and that lithium pressure to voltage our unique our This have will And our of also and cells. future

image area cells do metal many really ways to and and cells. ways is store, companies developing important lithium test large-format a on to interesting and that This attention Six, top finding recycle don't handle, scanning efficient enough to. pay

imaging cutting-edge others monitoring our boxes tools mPOWER test cell large systems. us metal testing and developing large mPOWER Avatar such and innovate are sophisticated very smart and SCM, and large a lithium and as XXX to tools, x-ray, teardown also all for to cells. metal safe lithium stores We're ultrasound to CT, manufacturing We integrating XXX provide facilities, new environment on test ideas including robots, cell

large partners. And predicted abnormal XX%. And successfully working with XX pretty last XX significantly OEM prediction to quality year. Avatar cells. our to accuracy XX% seventh, of That's increased getting we from management improved through out experiment, a cell Avatar close our in our X% recent Furthermore, diligently

control our example, than points XXX to X,XXX more about plant points. control now control went For from

are X,XXX more control We targeting points. than

metal massive metal perform to this, is I and thousands just cells discussion. and metal error, to the doing detail through this. process, in our of They don't capable X have universe battery lithium XXX trial if extensive new mPOWER characterize company lithium is A-sample building Since not testing hundreds a you don't any and you entire of we issues think And or that's technology, lines been experiments. addressed want and little a of push required metal every fully could did, forward. what simulation do large can't to other these lithium lithium

X already we most the we A-sample is large all XXX lines for be there. A-sample line, X will we But X. want a to in production. and XXX have metal development, B-sample. basically phase Line of at the These lithium for that didn't X Line cell next of are least a automotive This learnings the is that mPOWER leapfrog, cell lithium built And X metal integrate ahead the brand-new large stop accumulated mPOWER our X advanced generation world lines. our

build-out The of A-sample Line in already rigorous design many Avatar facility concepts, lines, new built X current the exterior and will is X to including this control integration completed. Compared have plan quality from the phase.

enabler start be achieve equipment a entire the still to to We for summer X This this and track to transition fall key which expect arriving XXXX. rooms to dry us half first to the the status completed on year. in this we're will to ready-to-use achieve Line and this B-sample, be of

Lastly, stock our completed quickly had day. Recently, not the X-year future, plans since no procedural address filings. to I every price. was fundraise X NYSE, we want S-X, about we fundraise it's listing Frankly, our to although soon. we to anniversary have something anytime think the us I the and in One which allows on

sold in the taxes from other on XX as have there I, started vested where Another any single recently cover stock reported X, taxes purely including just the a myself, to share was made sale RSUs. years of SES, Form dollar never single or these shares management, pay since of to a clarify I the than misinterpretations. I been X issues ago. our to have the case wanted company founder

super was our that step to making. be and it's It are progress development road And a Line last again. X fun I'm about the major but change will we year Anyways, B-samples. painful part now transition in map a excited our new of

up get keep additional X We steps will to Line to you as we running. posted and take continue

call our financials. the hand review over to Jing I'll to that, With

Jing Nealis

and our Good Thank our year full Today, first and XXXX. capital you, I budget results cover Qichao. operating quarter will for afternoon, everyone. discuss financial

the reported compensation $X.X first from million and increase increase We expense last $X.X the an related expenses were the cell increased development period development, million of Stock-based development advanced to facility due in $X.X million costs costs AI This our increase management the in In supplies, of increase and material our $XX.X in and year. to cost. to same reflects last was quarter. support expenses software headcount operating an million, same quarter, $X.X million, of an battery year. research systems battery higher period and lab an consumables personnel increased increase from

Our partners, million spend offset which quarter R&D in $XX.X was are which our contra as gross the R&D expenses. billed treated $X.X million, OEM to was by first

Our to was public costs a G&A first which were by XXXX, the million, costs during year. in in expenses as increase offset as last a decrease fees support combination our and transaction business result from of of from incurred quarter million professional company. a a same reduction operations of partly $X decline personnel $XX.X the This resulted the an period

quarter, facilities. million. CapEx reflecting was for payments first and $XX.X the the $X was million, for operations equipment During quarter used in cash

Looking liquidity. at

equivalents remains balance sheet ended investments very in cash Our million. securities $XXX strong. and marketable We of cash, with quarter the combined first

to continue our believe to us to commercialization. We liquidity get is sufficient

XXXX, our guidance For financial is unchanged.

$XXX expect million. in In We to usage million million the in total, continue from the $XX range of necessary equipment, and XXXX. facilities in materials. of for range usage from expect to to XXXX million be we million expenditures spending of B-samples capital compared million. the the continue expect our $XX $XXX to $XX to to higher headcount, cash growth year in $XXX manufacturing we to to operations to Significant is range support This of expansion, lab of be cash as A-samples for in XXXX spending areas to and level transition

anniversary SES file combination with the our Lastly, S-X first Acquisition statement of to registration Capital following became Corp. business eligible Ivanhoe an

was SEC aggregate to time which It and flexibility XX shelf the us an with effective million. will became time to capital S-X the filed registration, from up allow XXXX. raise universal a Our April includes on on $XXX XX, April to

capital. have type to While of be we clear, the these to filings plans to headlines raise can confusing, very related be near-term no

for to SES. shareholders, XXXX appreciate shaping be is exciting We OEM the employees growth support year and our of partners. up of an

hand With Eric. that, call to I'll the back

Eric Goldstein

open questions. you Jing. line the now can Thanks, for Cole,

Operator

Instructions]. [Operator

Shawn first with Research. Our Severson question is Water Tower from

Shawn Severson

Line little X. I to Qichao, on wanted a bit touch

curious you number You there you of just had a do difficult, the things just technologies, in being of particular the that yourself. changes right? me are was was of mentioned better those are assume some if little being types bringing and done you X out understand manufacturing in existing. Line and you stuff challenging could it line guys help I versus maybe calls in could -- in-house the implemented thought that about prior a If -- lay bit I

Qichao Hu

Yes, sure. Thanks, Shawn.

lines, just coating, data and additional from in aspects, It's it's And hard then systematic X,XXX. X still XXX, still incorporating all of for have Avatar, we to XXX. control way then control XXX then first the with points fragmented. anode also in-house. coating number don't started XXX collecting the a of cathode all Line starting X, essentially points. now number of we But started very to increase just out the We in sensors and add So the these the

every Line of coating, anode have anode it X, One cathode coating, is stacking. couple things. in So will a aspect, lamination

Line complete our points. control X,XXX of Line will ability aspect. then be to us, X, phase X also incorporated design line from terms make these And in of the every the already So first we

going and will points Line in And integrated X, X,XXX we in in incorporate the will added whereas in-house. beginning. Line every had the the the beginning, we these older all then it fragmented be from then aspect basically But So to And and the then we're to with way have X, XXX sensors Avatar. compatible all then control data from and the XXX.

the would just it's So a generation X really first least of I X say lines. -- ahead at

Shawn Severson

a further B that and, into of from great cost reductions are And is cost that standpoint, are that anything your and point target items there you manufacturability should still for we course, a to eventually big-ticket you'd to Is any through there standpoint as particular C? for sights opportunity in reductions cost a in monitor? go

Qichao Hu

Yes.

is consideration first for always test then as let's quite worry performance for the and A-sample, we let's -- and A-sample. the much. yield So a cells, A-sample wasn't was X yield low, in build not the yield Basically, about let's the lines really just the

not So we the is way meaningful have of rigorous a cost very the because controlling yield. don't obviously

first first we that that Line than the later the lines. then be then be and Line to yield. X will the track higher the the significantly But first will addition we all X built on this all X the basically, have actually And B-sample capabilities line based Line will in will that performance, yield A-sample, X line

to addition then phase we actually beginning a where very considerations actually performance So consideration -- a Line be the where move A-sample. -- into from actually X yield the meaningful we other becomes and the and in will

a lowering for is yield So big the cost. consideration

Operator

Our next Bank. with question Deutsche is Dong from Winnie

Winnie Dong

the still says that My on on it will use the that start arrive the half XXXX. be in is to it seems achieve for fall then ready B-sample. first to and would of this In the letter, question Line also year. But X. equipment And it line in entirely critical shareholder the -- also the will you're to be B-sample to then first like be track transition then

being fully sort the or is to dependent transition. of time I for Line that on B-sample line to also And on confirm the an ready. So transition just update is wanted latest if like X not maybe

Qichao Hu

Yes.

the XXXX, were process B-sample in back a -- entering of example, basically we definition is into entered developing A-sample, for into the so or of we A-sample when starting So B-sample.

going is we to Line the second developing of half key will X part X B-sample year. into Line process enter part a of this of is B-sample. So of year, that. then And be this But

No, So B-sample part like start and it's getting ready. X X is B-sample is we work the not then we of after only of Line ready. start this Line B-sample

And there the X, Line likely for will be OEMs. X, right, Line X

in would enter but of into X half Line the this will So likely B-sample B-sample, we first line be year. second

Winnie Dong

that indicated Or far, And you is of to correct? changed the that one that regard? sort so it. confirm, anything with OEMs, Got B-sample there is of in

Qichao Hu

Yes.

come But and the X quite we've across and similar, built the OEMs. a transferable into enter that then from other we the are will later. and capability requirements by X, the X will increased having we capability that Line think all first the be that will I perspective, technical then X

Winnie Dong

up the if by if fast the get Would it. and that would plant that of do months to sort likely, stone. it can understanding with just taken of you ideal maybe Got XXXX, in what of plant going forward not end even more ideally everything most say, And a build-out to, of B-sample sneak I theoretical I'm XXXX, understand it's with of that map, trying takes in plan, have XX in guess in, idea Or and not, we with finish, finish JV if U.S.? of so the internal place it or like world this sort to one that running? of a an might B-sample road be set ideally is XXXX? to you more in start another sort just by a right, question. an your let's I

Qichao Hu

Yes, sure.

sit this to 'XX, And are and B down year manufacturer potentially, of second B-sample basically towards C, and sit of with X when next the location down half enter that's partners. and and also C partners. we battery end SOP. And So large-scale then and beginning resource OEM plan of year, they we then for

and to pilot plan for planning sort A you you So C and B the and then start plant. similar then considered C, together once for are get scale of also then and But SOP.

to towards B say so So we I -- B. would transitioning now end are of

when lithium XX we say, a to well site now, are to Next, manufacturing as months as North battery from -- for the we plan transitioning supply year when when metal C, American that's chain.

Operator

Our is from Timothy next question Johnson.

Unidentified Analyst

past concept. the the being us on with that? update you mentioned some done work you past, -- stand anode-free you please recent Can on In where

Qichao Hu

anode Sorry, what, can second recent the question the the the you The ask half? work again? on and

Unidentified Analyst

On all from take anode lithium the and you anode-free the comes lithium for the where out the foil upon charging. of cathode the

Qichao Hu

Yes, yes.

we So exploring. are it's next-gen one design, the of on that projects anode-free

the these the in be used all were that can and A-sample XXX X, as lines for X the then for well. on anode-free mPOWER all Line lines So used cell lines,

we are actively this testing anode-free version cells. so XXX metal of also mPOWER And and lithium building

mPOWER I lithium they So version when as version. say versions, in metal well different XXX cells, anode-free lithium as come

we this the data. year, perhaps So to we do more later disclose these. can have And test capability then

for are the the anode-free drones for air the of For applications, applications. cell, urban less mobility so now, and metal these we lithium primarily XXX considering mPOWER version eVTOL, EV

Operator

pass waiting, for Dennis not, over to question closing disconnected remarks. questions next the there so Our no management but conference Hugh. team I'm or Dennis any sure not from is are if the I'll additional has

Qichao Hu

Yes.

first lot And people a when was quarter we lithium coming quarter things metal XXXX, then -- just leap lithium together. this last and mPOWER that now we of XXX around. crazy I XXXX was was finally, really after cells. too, large And were turned it these a large build then it last we But felt this the cells. year. to these are And year, things difficult. have we year, metal crazy, things thought now, And learned quarter, think past then built first this and big

that all into and all then the into really ideas. from X ideas them first turned we data we learnings putting then the all all together, the intelligence. the -- and data, Line the have is JDA A-sample knowledge, new And the take capabilities, that time new and the

So X, share guys. to the line first really right, we're excited just news And on good and XXXX I excited just future about the mean Line Line C-sample. with from then for and imagine are on capability. X, you also just just you I we can't really year about wait more think progress now, -- I'm the a

Operator

That call. Thank concludes for your participation. you the conference

now disconnect your may line. You

SES AI (SES) 8 May 232023 Q1 Earnings call transcript