Despite a challenging year for electric vehicle and battery manufacturers, Massachusetts-based company SES AI (SES) has emerged with an innovative solution. After a period of stock decline and a pivot away from creating its own batteries, the company has unveiled a battery with a 100% silicon anode, a breakthrough made possible by using artificial intelligence in electrolyte development. This battery, larger than a standard AA cell, opens up new possibilities for powering humanoid robots and drones, among other applications.
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In a time of uncertainty for electric vehicle manufacturers and the potential removal of tax credits, SES AI’s stock has seen a significant surge recently, climbing over 223% in the past month as investors responded positively to this exciting development. It is a high-risk, high-potential-reward situation that speculative-oriented investors might find appealing.
Groundbreaking Battery Technology
SES AI is a company focused on developing next-gen lithium-metal rechargeable batteries. Founded by former MIT researcher Dr. Qichao Hu, the firm’s unique approach combines advanced material chemistry and AI, concentrating predominantly on safety, manufacturing, and scientific applications.
The company’s AI-enhanced high-power-density and high-energy-density Li-Metal and Li-ion batteries are the first to contain electrolyte materials discovered by AI. This groundbreaking technology has applications in multiple sectors, including transportation (both on land and air), storage, robotics, and drones.
These batteries have superior energy density compared to current lithium-ion batteries and provide more extended ranges while also being lighter. Interestingly, their manufacturing process is compatible with existing lithium-ion battery production lines, which could provide significant cost and scaling advantages. The company has established a noteworthy collaboration with Hyundai (HYMLF) to develop a production line in South Korea for large-scale lithium metal cells.
What Else Is in the Pipeline?
SES has unveiled its latest product: an AI-enhanced 2170 cylindrical cell specially designed for emerging humanoid robotics applications. Multiple OEMs have requested this product to tackle issues related to gassing and poor low-temperature performance in Li-ion 2170 cells. The new cell is expected to unlock significant markets in robotics and drones in line with the cylindrical cell market’s projected growth from $10 billion in 2023 to $50 billion by 2033, according to Allied Market Research.
Sufficient Liquidity for Current Cash Burn
The company recently reported results for the third quarter, where it reached significant milestones, including establishing a revenue pipeline from UAM and drones in partnership with SoftBank.
The total operating cost was $34.2 million, which resulted in a net loss of $30 million for the period. The loss per share was—$0.09, exceeding expectations by $0.01.
As of the quarter’s end, the company reported $274 million in cash and cash equivalents. Management has revised its full-year guidance for 2024, projecting reduced total cash usage between $80 million and $95 million.
Financial Results Are In
The stock has been volatile, with a beta of 2.8, and is down 8% over the past year despite the recent price spike. It trades in the upper half of its 52-week price range of $0.20 – $2.53 and shows ongoing positive price momentum as it trades above most major moving averages.
Wall Street follows the stock thinly. Based on one analyst’s recent recommendation, SES AI is rated a Hold overall. The price target on SES stock is $1.00, representing a potential downside of -35.48% from current levels.
SES in Summary
Despite the financial volatility typical of its industry, SES AI has taken the tech world by storm with its revolutionary batteries powered by artificial intelligence. The future promises intriguing possibilities as the firm continues to push the boundaries in battery manufacturing. With its sizable cash reserves and ongoing operational milestones, the company demonstrates an ability to weather financial storms. While SES AI’s stock does come with a high-risk factor, its recent rise and the continued market interest are aspects that speculative investors might find worth attention.
