SES - Earnings call transcript Q1 2024

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Operator

Thank you all for standing by for today's conference call with SES.

We are still awaiting one speaker to join before we start today's call. [Operator Instructions]. And I'd like to thank you all for your patience. Thank you all for your patience.

conference today's begin will call shortly. We again beginning in you for standing be will we and a by, Thank few time. moments all. morning Good I Financial you Quarter welcome would the like First SES all XXXX Call. Results to and Business to My moderator today's name call. your for is I be and Brika, will an end. All are with the questions and of the presentation on for portion answers mute call for opportunity at the Instructions]. [Operator Thank you. to host, to now like pass Kyle begin. Chief would over your the I to Officer, Pilkington, Executive conference

So Kyle, ahead. please go

Kyle Pilkington

covering call conference first our to welcome and everyone, results. XXXX our Hello, quarter

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

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

detailed statements it we and the those the started, This securities forward-looking within risks that SEC as business results our expressed may involve our the Before our meaning be information to those that, will could differ assumptions Such not results latest as implied current certain are predictions in and materially earnings statements we of to discussion quarter. and Qichao. cause to filings. can expectations these or in today. for I'll from which today These statements. With cause review in based to, materially is reminder well pass The limited from and applicable or that this release or uncertainties contain forward-looking our results morning, over include, and the future expectations our actual statements are but performance risks, get different of our as uncertainties, on our a may legislation.

Qichao Hu

Good thank for call. our you joining morning, on us and

lithium few battery talk has excited as visible the a a X it power we the electric past milestones in significant I to our SCS technology before. and milestones new batteries. the and center land for ever in going time got believe to commercialize UAN this about transportation weeks we no air to our what the to in these is today AI became manufacturers lot means and both metal reached of era more lithium as on that metal for we forward. new with lead That on metal morning want how lithium mission Our in applications. detail era reached achievements believe other EV this more reinforce our race point to we We're

X we pillars support in significant business the vision, in We about one our have and year. advancements that talked each have this made

about our core EV. focus, talk Let's first,

differentiated has as extremely such better been Hyundai, technology by JDA an high-density have Honda validated partners, platform GM. and We that

next is better the phase This represents their announcement underway. only development with time Our coverage validates lithium the scale how past capability automotive partnership building battery rapidly OEMs about to the And we It it B-sample scaling technology metal X JDA week within Hyundai X a for entering a and first that further OEM us the seen in manufacturer is all In are facility. months, company an have ambitions. JDAs line U.S. have makes few back the the EV first industry. AI increased is and to demand. agreement SES our global to lithium our metal manufacturing last meet

of the investment their the last new Honda to next significance batteries. lineup $XX Canada, AI's United manufacturer is of top States increase their ambitious Hyundai emphasize Hyundai, and enough and reinforcing in investment a commitment the contract on the and development the of in $XX-plus goals XXXX. plants XX for I technology models billion a has announced with confidence to EVs making They very Hyundai largest becoming into billion maker and our global are EV second in and placed moving EV However, SES next over EV phase they recently can't week announced a that the focusing already research to EV joint in decade. additional X by personnel development capabilities.

Hyundai development in lithium lines Besam Korea, in within and of this largest fund center of investing AI Ulan, electrification their facility. While research will dedicated operating South one world new the the in the the metal be building SES will facility capacity in

year of the fourth The this will our cycle. thereafter. expect our several ready will We the more on for infrastructure more addition to production in testing. AI be this training testing Avatar with AI performance The to Avatar quarter line in conducting months be increased early of ready allows be life

to ventures test good facility be the sample to -- believe startup that we especially us support practice can other is large needed extreme plan understand the do Ulan cells scale similar in will agreement. our the they for process This with joint we've Operating beyond, doing will to what under for mentioned speed with where line Hyundai we the we to fail. D-Sample C-Sample are in what past the We production. help and

UAM. Second,

passenger metric a UAM. agreements EVs. that where the focus, UAM. to that While equivalent or the Urban double improves miles. per mission. weight profitability. greatly very is UAM application Lithium we number second a primary an double revenue say committed energy the and fit And development passengers perfect D-sample twice doing carry cells pillar mile to a core cargo is have adjacent for for those are of is This density it the additional metal. exciting that UAM the an lithium amount can we on step little we mean means to Air our requires metal for learnings operators' concern. metals a I number UAM, of little it's B-sample per fleet EV X operates the growth of primary With are for aircraft or development, UAM change lithium model, are batteries. for is When we can going, apply nearly believe production is beyond additional delivered commercial to EV Mobility opportunity the already or It's what we our I

As the it space, an we to opportunity have make mover this first also this in market. means

seeing OEMs from has are top supply agreements growing OEMs. would very demand aggressive of and and has been our strong a sampling with a also have X We Honda I number sales demonstrated UAM. already that partner, and commitment to note

dedicated We to EV on we started have Korea line sample expect our work UAM already complete which in a to September. in line, converting

AI across health and for have of we To AI. monitor predict safety prepare all Third, our and practical significantly to commercial battery lines, incidents. C-sample deployment, the as use Avatar we ensure especially product expanded

avatar accuracy large-cell just year. metal lithium increased Our last to XX% XX% AI prediction from in XXXX

near is super development. AI, XX% pioneer are XXX% we transportation. guarantee building and map target With aim a out UAM and we we intelligent more achieve are safety for to AI battery Ultimately, year-end. foundation Our for a for electric Avatar than company, the road for just electrolyte using EV accuracy by a future AI laying

Our foundry by can both new we is electric faster. and AI fully operational, now humans much new test and ideas generated

molecule believe screening AI both leading science for and and is molecular map classical We relevant goal excited power universe. on feature several are small is We're learning. research physics a with learning machine them curating domain both collaborate and facility. at unprecedented using the to very to world's chemical The groups large computing tools. simulation the systematically sell and and in databases several machine and gives is integrates AI leading This experts machine improve SES we scientists, ability and learning discovery, advanced material EV pace us to that sustainability. synthesis our a products UAM of industry. an Fourth, for battery the innovate testing and

integrating at that a an date, reduction metal innovation supply To Worcester research for Lastly, to the Recycling metal. we state-of-the-art timelines and recycling will recycling We yet stage, the lithium of can has fund early in into batteries technology environmental to new batteries batteries be shortage recycling technology are initiative raw lithium critical we lithium-ion to developed. operations at of but announced materials our production sustainability Institute, for for been and lithium accelerate chain problems. recently not metal costs. reduce Polytechnic and WPI, enable develop efficiencies exist

Another evaporation. chemical initiative we is reduce pursuing solvent can on are dry that electrodes working

this We we of announced the initiative partner into business, recently integrating in efforts environmental expect our on real-time a future. This In Cares. to announce example SES a effort not-too-distant collaboration with with monitor forest that lithium collect and organizations metal drones and cells and sample partners Avatar our A fires B to advanced AI. protect train animals to data power marine field

our very our the last the quarter annual far will and more goals. batteries, commercialization the and that on this year will sustainability on May. sustainability much key of a We post first XXXX be at report end broader we're execution so with will XXXX noted goals. details be in metal We pleased initiative of strategy lithium our have

we We to B-sample facility. lithium have AI, manufacturer expect the to With have OEM build we first become an to battery first and the become produce X online Avatar world's metal to than highest Avatar improve within the number accuracy. with increase quality this before. number of year checks a help ever to calls associated data higher in AI's of will expect This underway,

look these brief Foundry. to we're also our future models As and accelerate a financials. models training of and to we electrolyte in over generated developing discoveries, Jing I ideas it now Electrolyte turn by will new our testing discussion new AI for

Jing Nealis

The XXXX Qichao was of million and in discuss first Good capital Capital for $XXX million Hu. used quarter $XX.X payment we expense. received million, afternoon, and quarter OEM will ended year $X.X stock-based from operations financial $X.X XXXX. first We were $X everyone. budget the Cash our operating GAAP million. -- compensation our in in partners. the quarter, $XX as liquidity. operating expenditures were our I you, included which million with million full first Today, Thank cover our results expenses

company the our milestones. Our strong as will on sheet stay achieve commercialization balance to we support track

is the our year guidance financial XXXX, unchanged. For full

of of million We to in from expenditures and $XXX cash to $XX continue capital expect be $XX the million. the million range range to usage to $XX in million operations

the We in expect year cash for usage the to $XXX $XXX range million total million. of

the long-standing out, focused As are our to discovery, milestones capital partners partnership our efficiency. with on and of deepen OEM very we accelerate future speed electrolyte laid we achieve we continue the

at metal for and advance build are strategic to stay as UAN open the hand laid science partners for call EV of deliver we innovation. discovery to the prediction as Qichao top our With and lean material I XXXX the operator forefront up to performance battery for Our as will the priorities earlier, to cells use that, goals attract Material talent AI back questions. capacity the Fabry of production to electrolyte support out to well

Operator

[Operator Instructions].

Dorsheimer the from Blair. William have question Jed from first We

Mark Shooter

Hi, everyone.

with. any with going you're Hyundai different partnership to the have Mark working was with You on that's Hyundai. other Shooter see in to because that be for I if facility, with see wanted OEMs between differences Jed there the you you're their

give compare little the you them? X relationships you differences and a could color see us contrast So any on might those between and

Qichao Hu

Yes, Mark.

So the different and terms the final is X and capacity also following ways. facility. are -- production in the then are of One similar is in their Hyundai in specs there the

to So comes especially AI. when installing it Avatar

contracture. that complexity infrastructure So you that does their install some have create to IT on

still this of is the So to data trying do basically quality, all with one AI out. every step this assembly. sort equipment, in has issue Avatar we're the And entire with to with process, every

this this to interested probably UAM. for also on do also -- Avatar we is EV, but plan have, just biggest primarily So IT sales build difference is infrastructure. one, else's in And for someone the that then AI Hyundai the and we

UAM these is of for also on other power versions we're EV the some So lithium metal focused whereas applications. one cells testing higher all applications, than the

Mark Shooter

Got it.

for Jing. one maybe And Okay.

a else's we're the Honda that I is that, of going in that CapEx spending? amount pitching facility, that. to Now for right, decent believe know in be you with do someone any helps

So than does and give And more the how you affect were expecting? that any does runway this previously business? financials you

Jing Nealis

out that into CapEx we -- that consideration. given Thanks, Mark. guidance The we the and taken have OpEx already

outputting in everything the and fully helps facility built definitely facility year cost there as will Hyundai into and is on this model. be So our

Operator

[Operator of Shawn Tower Research. Instructions].Your Severson Water next you. from question comes Thank

Shawn Severson

metal. adoption the wondering here, step back and you of question was lithium a if picture and Qichao, it's I take curve regarding could bigger

you growth So to actual of how the in adoption well, as of on about EV talking industry, commercialize overall the metal in we look the slowing, let's of market. start going if hybrids are large example. are understand, EV versus sales, this unit and relevancy ion lithium curve at I'm for What but trying in what's doing important kind say, the in lithium to

thinking growth about guess looking to curve are for EVs, growth I for an I at curve summarize, you of, a flattening out it Am that adoption let's curve So a you curve the regardless way? provides say, really the of great right

Qichao Hu

Yes.

example, think in bit lithium it's And today, it's little has some if EV because XX%. saturated you then Europe, lot at ion than countries more China, for fighting markets, lithium-ion for I some in a probably a in look XX%. it's out almost in also

So really technologies also fast. then for lithium ion actually a because lot. it's And way growing UAM, and then saturated still lithium will it's AI. Avatar for we with huge of think much UAM market see metal has adoption the a But right lithium metal, enhanced and safety the sooner then

no, don't or adoption and we flattening terms demand new So technologies. any in anything see for of

Shawn Severson

Right.

be not market, because get So pretty lithium seeing growth XX%, 'XX, still overall good say, on would the you but even you platforms a more more I a in pathway, importantly, EV through, adoption, XX% more and EV necessarily of still unit metal of see that flattening of commercialization, unit assume market. would lot as you'd let's course,

Qichao Hu

Yes, the at are market in yes. overall XX%, EV mean countries some XX%. I

down it then be slowing like are than for but incredibly X-point-something still lithium when So bit, a might you X%, little fast. less it's metal,

Shawn Severson

Understood. And is cash management. question your my about next

look do and you I cash and be? cash for into if flexible are mean if into that XXXX? in spend is a spend XXXX we understanding an get on possible you at what see optimal that what are to look you I'm it management you trying of more how the Or to optional would sense year could and think as you that XXXX capital need As beyond, reduce spend? budget conservation you have versus what in

Qichao Hu

I'll that answer Yes. first.

I the right, those B-sample commitments. So X JDAs, made think we've

to meaning us, more And then for for we helpful lines, install definitely, are these to more make data. want sample the So sales the lines. very us and sales, more

the the UAM, definitely of then UAM, we And one X So plan lines, B-sample plan lines. to we convert for to older invest.

for and UAM, of doing line not an building we're So instead buying entirely new that.

area an AI. And also, in costs. converting actually a line is build to are We A-sample third old save to UAM actually

compute I we models think it. by And that of only training AI And power. is way caused definitely win is this power. having to to want basically these sufficient spend AI, compute lot game then a the a

new very, we preliminary that the have just far, And materials actually interesting very extend then electrolytes, molecules used the once so new life these and can cost that And new we have in cell. train of the the be as some overall electrolyte. done, can then reduce found the we cycle then

the don't we think But spending to I will B-sample A-samble buying of costs we UAM, probably other spending do if are exciting it. just I plan companies do converting areas then building because think So save an also and area. committed then sales And some new AI the it, accelerating for we it's like just such do also old instead a by to line. lines, in then

Operator

for any like would it Kyle Thank question. on you. I to now time to back turn additional

Kyle Pilkington

the in a through you. from questions pre-submitted and which Thank now. those number submitted call questions a of selection advance we Yes, have of were did go we'll

has B-sample produced the using elaborate. any is, please existing question SES lines, first The

Qichao Hu

B-sample. So still the ready then improving is the B-sample lines, using A-sample we A-sample of cells be meeting towards lines yet, And these lines B-sample end are we B-sample line. the this expect we're And building then building to towards line and the the specs the ready are we not the of year. and

then B-sample is the JDA, improving we for of B-sample by specs this A-sample goal B-sample B-sample But are the will So now, the cells the cells. cells. the have meet we of to X end the the JDAs actually

Kyle Pilkington

the is, Okay. sample any you be can new question line. share on The next progress

Qichao Hu

terms vendors building process have making very because the lines. the in confidentialty issuing but lines, details with OEMs, started also are the design already we we and POs do have product good the of the Now their

So we be lines end do to of by expect operational both this year.

Kyle Pilkington

is, question the on first signed. do in The to any next have addition the B-sample update Super. recently you JDAs,

Qichao Hu

getting in the additional us a So commitments. focus of X not a terms a similar. we're And for work lot fourth B-sample are of JDAs, really because B-sample the focused JDAs because made we've that's third or on

we've we deliver B-samples committed, So X we and focus. want that that the to our that's top sure make to do already

Kyle Pilkington

SES skeptic bunkers and evaluate reliability A safe And issues. might cells cell. take explosion to today. being and invested currently, about in SES' is improve needed that these cells talk the Okay. lithium question to further, to unique AI from pre-submitted are last conclude There metal you we'll make the then is efforts much your how are your extended as questions used safer, safe energy how

Qichao Hu

Yes. Because better energy lithium will why past, density. safety Avatar metal the battery. safety density, density fundamentals has greater This energy And higher you it have a the some a are because That's spending you does a historically, than it than of is When lithium we have lithium higher a metal of on higher ion, with concern concerns. have does ion issues. have have lot just in higher did safety lithium effort energy AI.

that cells, sale the and have So we to signals, bad signals actually, cell we cells that the them cells, we make all sometimes and built, the use negative good train we AI. Avatar both positive all intentionally so

no can in to to top the as operation high-energy the as from a the cells software safe XXX% be pure hardware Avatar actual can this know need field of close the that's That's AI we safe. the on to AI XXX% effort ensure So to to as of safer the Avatar the electrolyte safe the is science as safety possible. as On of we through -- as top cell this goal close making But field design and XXX% in also possible. perspective, possible. as as density hardware making try be why sure make

high in field the operations batteries not have vehicle density metal, in just any lithium but Avatar AI. must any think for I

Kyle Pilkington

additional see any pass on there's the operator it the to line. to I'll Thanks, Great. if questions back Qichao.

Operator

[Operator have we Instructions]. from question a Dorsheimer And William Blair. Jed follow-up now with

Mark Shooter

you just I line Mark what wondering with to Is being is this the on It's using the the to issues? or I stictotometry Hyundai. Or thinking, lines, the density metal AI. more this or and especially it predict future out a the does building metal that voltages So in dial you're with for more yields? was help doing again. -- try lithium metrology this a bit is [indiscernible] or me to and of looking in lithium you're the surface certain monitoring way. stressing hotspot training -- current saying at That are installed cells of -- data. and cells wanted in at the partner had yields

is still as Or testing? well? kind yield it So is of this a thing

Qichao Hu

it's X types So actually data. of

so the the cell First the cell. data. electrolyte, is of fitness the loading, second like design, annual design the is cathode manufacturing information then the the and basically, And

includes, surface, morphology, you during lithium stacking overhand electrical electrolyte that the filling ceiling. pressure like So roughness, heat said, and misalignment,

the data all So during all the then process. manufacturing third the parameters, is testing. And

during cycle of until then until high So all low XXX, the first that data And X the model. XXX way this all cells photometry, cyclic types the cycle, the like pressure, high are the temperature, temperature, to cycles [indiscernible]. includes cycling second low train pressure used

Mark Shooter

Got it.

Okay. to get That's the through. and that build to Or you in electric a safe plan going And on BMS vehicles a the to of cars? So don't be anymore. then to you stamp well any the the go-forward live as monitoring will -- do get more for And be interesting. need inside contact this the Very the whole -- this is data a you monitoring cell? you're this as having this here? way is part on potential

Qichao Hu

Yes.

some later we to talking UAM we be -- the constant And this put And So we drones. the And for so definitely then have we to in live cars. applications. us actually, starting the also doing been are some And B-sample, then this in will plan in monitoring. DMS put inside demo for BMS. are the about

the yes, AI. do and data data live. the the a so and able the monitoring kinds actually -- train models testing get in won't And Avatar the to the we of will part, then then but to train only you of actually that use can then BMS last of for can able the So the then be X of We model driver do, to we the won't to different data battery. the to types what definitely part actually so send do will control be recommendation model be terms the

Operator

day. have I'd the like Thank further you. Thank can joining, the and your to enjoy here. no you call confirm please I we all conclude questions. for rest of

You may now your lines. disconnect

SES AI (SES) 3 May 242024 Q1 Earnings call transcript