By Jarrett Banks
SES, a global leader in the development and initial production of high-performance hybrid lithium-metal (Li-Metal) rechargeable batteries for electric vehicles (EVs) and other applications, plans to list on the NYSE through a merger with Ivanhoe Acquisition Corp. (NYSE: IVAN).
Upon closing of the transaction, SES’s common stock and warrants are expected to trade on NYSE under the new ticker symbol “SES.” IPO Edge sat down with SES President & COO Rohit Makharia to find out more.
In November SES announced Apollo™, a 107 Ah Li-Metal battery that is the largest in the world and a breakthrough for the automotive industry. This is also the world’s first 100 plus Ah Li-Metal battery ever demonstrated. SES also announced the largest Li-Metal facility in the world – the Shanghai Giga, a new 300,000 square-foot facility being built in Shanghai, China and scheduled for completion in 2023.
IPO Edge: Why a SPAC and why now?
The world is transitioning to electric vehicles. First it was happening slowly and now it’s happening really fast. The market is growing and is expected to grow exponentially for many years and maybe even decades. For SES it was a simple decision. We have been developing this technology which we call the hybrid lithium-metal battery. This is a next generation lithium-metal battery that we’ve been working on for over nine years. What we know is that the technology is ready. We have been doing the development for all this while. In fact, we are the only company that we know of in the next generation battery space that has actually tested our batteries with third parties. We have gotten validation from these tests results. We also have validation from our customers that are really eager to bring our technology into commercial vehicles.
IPO Edge: PIPE investors include General Motors, Hyundai Motor, Geely Holdings, Kia, and SAIC Motor. What do you expect to use the proceeds for?
We want to commercialize these batteries. Right now we’re making these batteries at a smaller scale, and then we are already in the middle of scaling up these batteries, both in terms of its size and manufacturability to be able to work with real automotive customers. There’s definitely battery development itself that needs to happen before we commercialize particularly for automotive customers alongside with them. We will also be establishing our supply chain to be able to support all of this battery development and commercialization. We will also be setting up key manufacturing capability and facilities along the way. We already have two facilities, battery prototyping facilities, in the US and China. We also will use the proceeds to set up our Shanghai Giga factory and then move into commercialization, which will get us from 10 gigawatt-hours to 30 gigawatt-hours.
This means we will be able to serve a variety of different customers and be capable of delivering batteries for many, many hundreds of thousands of vehicles.
IPO Edge: What your vision is for the company?
We are a next generation battery company. There are many battery companies today that are serving the lithium-ion battery market. We want to bring hybrid lithium-metal batteries to market starting in the middle of this decade. Lithium-metal can provide the best energy density that is achievable, again, from a principle perspective. We want to create a battery that has the highest energy density. That means that we want to create a battery that is light or lighter than any other battery available, and it’s compact, it’s small. What this translates to from a customer perspective is that it gives the customer and EVs a much longer range. When you get in your car, you can drive long distances without having to worry about running out of juice or recharging.
Along with that, it also helps reduce costs and make the vehicle affordable at the same time. So it’s a win-win for a customer and an automaker that is scaling up into EVs. For us we chose a specific approach called the hybrid lithium-metal, and we can talk about that more. But effectively what we’ve done is that we’ve combined the lithium-metal energy density along with the manufacturability that already exists for lithium-ion batteries. People who know this industry know that it’s really hard to bring the two together, high energy density of lithium-metal batteries and the manufacturability of lithium-ion, and we bring that together. That’s what we do. The company was founded in 2012 and spun out of MIT from our founder and who’s the CEO still, Qichao Hu, who’s been at the helm of the company for the last nine years.
IPO Edge: Why would lithium-metals be the dominant technology, and what needs to happen in order for lithium-metal to gain share versus the incumbent lithium-ion technology that we know about now?
The lithium-ion batteries have been great and really they have been riding this cost curve for a long time. They’re expected to continue to decrease in cost over time into the future, through the end of this decade really. There’s a clear line of sight to that, especially given the experience of the last 10, 15 years. But with lithium-metal batteries, what you can do is that you can make some step function improvements. You can make the battery lighter and more compact. That means more electric vehicle driving range. But then you can also decrease costs. We anticipate that we can decrease costs significantly, even in the future as the lithium-ion battery cost goes down. We will continue to benefit from that cost reduction as we benefit from that scale. Also because our technology uses a lot of the similar manufacturing capability.
But then we will get another boost in affordability and price reduction because of the cost benefit that comes with higher energy density. Along with that, we have been able to show now, and this would not have been true much long before this conversation. Just in the last year, we’ve been able to show the kind of improvements that have been a barrier to entry for lithium-metal for a long time. We have shown high energy density, especially at low temperature and high power ratings, which have been quite difficult. We’ve shown fast charge, we’ve shown good cycle life and safety. This is all, again, tested by third parties. That has, again, given us confidence, given our customers confidence, that lithium-metal can in fact be introduced commercially not too far in the future.
Jarrett Banks, Editor-at-Large