New AI-Powered Battery Software to Generate Recurring Revenue; CEO Discusses 2022 Key Milestones



KEY POINTS
  • SES is both a hardware and a software company. It is the only Li-Metal company that has entered into A-sample joint development agreements (JDAs) with major OEMs. SES will deliver these A-sample batteries to GM, Hyundai, and Honda by the end of 2022.
  • On the software side, SES is developing the capability to collect data across the supply chain, including carbon dioxide emissions, monitoring battery health, and predicting safety. It intends to monetize this battery health monitoring capability in battery leasing via the BaaS business model by charging a license fee.
  • The transition from A-sample to B-sample batteries and the completion of SES South Korea by September, after the completion of the 1 GWh pilot plant in Shanghai in March of this year, is one of the most important milestones the company aims to accomplish in 2022. SES has started building cells, testing them, and sharing data from Shanghai Giga Phase 1.
  • OEMs have basic battery management as current technology utilizes just a portion of vehicles’ data. SES wants to gather additional data, which will be transferred live to the algorithm every five seconds for calculation and diagnosis. This monitoring occurs every five seconds instead of every week or a few days.
  • The software would apply to almost all lithium chemistries and would need to be trained using that particular data set; but, once trained, it can be used to the vast majority of lithium batteries.
  • The company intends to roll out its battery software before the automotive ready battery.
  • SES is working actively to de-risk supply chain bottlenecks by fostering partnerships with prominent suppliers of raw materials and seeking other OEMs. The company has an exclusive agreement with ENTEK for separators and a long-term partnership with Tianqi Lithium, one of the biggest lithium suppliers in the world.
  • Our prior content on SES can be accessed here.
OUR INSIGHTS

The Opportunities

SES AI’s lithium metal batteries outperform lithium-ion batteries in density, affordability, performance, and safety, and provide a faster pathway to commercial-scale relative to SSB. SES’s battery platform can take advantage of the current Li-ion infrastructure to create Li-Metal batteries, making it scalable while providing higher performance. The company has already inked A-sample JDAs with GM, Hyundai, and Honda. The company has aggressive expansion plans and intends to have a total capacity of more than 100 GWh by 2028, and believes it has enough capital to reach commercialization. SES management believes it is uniquely positioned to outperform existing lithium-ion batteries and do so at a very competitive price.

The Obstacles

The company is still in the initial stages of commercialization. Signing A-sample JDAs does not obligate OEMs to employ its batteries in their cars. The company has yet to produce large quantities, leaving SES susceptible to supply chain and execution risks. Moreover, user behavior regarding technological adoption has a degree of ambiguity.

SES is both a hardware and a software company. It is the only Li-Metal company that has entered into A-sample joint development agreements (JDAs) with major OEMs. SES will deliver these A-sample batteries to GM, Hyundai, and Honda by the end of 2022.

EXECUTIVE DISCUSSION

Executive in Focus: Dr. Qichao Hu is the Co-Founder and CEO of SES AI Corp., an MIT spinoff developing the lightest rechargeable cells in the world, disrupting transportation on land and in the air.

Shawn Severson: How does SES’s technology differ from others in the market today? What are the implications of AI for battery and battery management?

Qichao Hu: There are two aspects to our work. One is the hardware, and that’s the lithium-metal battery. The second is the software and Battery-as-a-Service (BaaS).

We are the only company globally in lithium-metal that has entered into automotive A-sample joint developments with car companies. We are working with three car companies—GM, Hyundai, and Honda—to develop large automotive format lithium-metal cells. Today, we are making 50-to-100-amp hours of lithium-metal cells.

On the software side, we are developing the capability to collect data right from...

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