Form 10-K

Large accelerated filer

Accelerated filer

Non-accelerated
filer

Smaller reporting company

Emerging growth company

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM

10-K

(Mark One)

☒	ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the fiscal year ended December 31, 2021

☐	TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from to

Commission File Number

001-39845

SES AI Corporation

(Exact name of registrant as specified in its Charter)


Delaware		95-1567584
(State or other jurisdiction of incorporation or organization)		(I.R.S. Employer Identification No.)

35 Cabot Road Woburn, MA		01801
(Address of principal executive offices)		(Zip Code)

Registrant’s telephone number, including area code: (339)

298-8750

Securities registered pursuant to Section 12(b) of the Act:


Title of each class	Trading Symbol(s)	Name of each exchange on which registered
Class A common stock, par value $0.0001 per share	SES	The New York Stock Exchange
Warrants to purchase one share of Class A common stock, each at an exercise price of $11.50	SES WS	The New York Stock Exchange

Securities registered pursuant to Section 12(g) of the Act: None

Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. YES ☐ NO ☒

Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or 15(d) of the Act. YES ☐ NO ☒

Indicate by check mark whether the registrant: (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. YES ☒ NO ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation

S-T

(§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). YES ☒ NO ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a

non-accelerated

filer, smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule

12b-2

of the Exchange Act.

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant has filed a report on and attestation to its management’s assessment of the effectiveness of its internal control over financial reporting under Section 404(b) of the Sarbanes-Oxley Act (15 U.S.C. 7262(b)) by the registered public accounting firm that prepared or issued its audit report.

☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule

12b-2

of the Exchange Act). YES ☐ NO ☒

The aggregate market value of the voting and

non-voting

stock held by

non-affiliates

of the registrant as of June 30, 2021, the last business day of the registrant’s most recently completed second fiscal quarter, was approximately $280.6 million, calculated by using the closing price of the registrant’s Class A common stock on such date on the New York Stock Exchange of $10.17.

As of March

8, 2022, there were 303,989,794 shares of the registrant’s Class A common stock and 43,881,251 shares of the registrant’s Class B common stock outstanding.

DOCUMENTS INCORPORATED BY REFERENCE

None.

Table of Contents


		Page
PART I			1
Item 1.	Business		1
Item 1A.	Risk Factors		11
Item 1B.	Unresolved Staff Comments		38
Item 2.	Properties		38
Item 3.	Legal Proceedings		38
Item 4.	Mine Safety Disclosures		38
PART II			39
Item 5.	Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities		39
Item 6.	[Reserved]		39
Item 7.	Management’s Discussion and Analysis of Financial Condition and Results of Operations		39
Item 7A.	Quantitative and Qualitative Disclosures About Market Risk		43
Item 8.	Financial Statements and Supplementary Data		43
Item 9.	Changes in and Disagreements with Accountants on Accounting and Financial Disclosure		43
Item 9A.	Controls and Procedures		43
Item 9B.	Other Information		44
Item 9C.	Disclosure Regarding Foreign Jurisdictions that Prevent Inspections		44
PART III			45
Item 10.	Directors, Executive Officers and Corporate Governance		45
Item 11.	Executive Compensation		51
Item 12.	Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters		56
Item 13.	Certain Relationships and Related Transactions, and Director Independence		59
Item 14.	Principal Accounting Fees and Services		61
PART IV			63
Item 15.	Exhibits, Financial Statement Schedules		63
Item 16.	Form 10-K Summary		65

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EXPLANATORY NOTE

Unless otherwise stated or unless the context otherwise requires, the terms “we,” “us,” “our,” “SES,” and the “Company” refer to SES AI Corporation, a Delaware corporation (f/k/a Ivanhoe Capital Acquisition Corp., a Cayman Islands exempted company (“Ivanhoe”)) and its consolidated subsidiaries, after giving effect to the Business Combination (as defined below).

We were originally formed as a Cayman Islands exempted company in July of 2020 for the purpose of effecting a merger, share exchange, asset acquisition, stock purchase, reorganization, recapitalization or other similar business combination with one or more businesses. On January 11, 2021, we consummated our initial public offering (the “IPO”), following which our securities began trading on the New York Stock Exchange (the “NYSE”).

On February 3, 2022 (the “Closing Date”), Ivanhoe consummated its previously announced business combination (the “Business Combination”) with SES Holdings Pte. Ltd., a Singapore private company limited by shares (“Old SES”), pursuant to the terms of that certain Business Combination Agreement (as amended, the “Business Combination Agreement”) by and among Ivanhoe, Old SES, and Wormhole Amalgamation Sub Pte. Ltd., a Singapore private company limited by shares, and a direct, wholly-owned subsidiary of Ivanhoe (“Amalgamation Sub”).

Pursuant to the terms of the Business Combination Agreement and in connection with the closing of the Business Combination (the “Closing”), (i) Ivanhoe migrated out of the Cayman Islands and domesticated as a Delaware corporation (the “Domestication”) by way of continuation and deregistration under Part XII of the Cayman Islands Companies Act and domestication under Section 388 of the Delaware General Corporation Law (“DGCL”), (ii) Ivanhoe changed its name to “SES AI Corporation” (“SES,” or the “Company”), and (iii) Amalgamation Sub merged with and into Old SES, with Old SES as the surviving company (the “Amalgamation”) (the time that the Amalgamation became effective is referred to as the “Effective Time”). As a result of the Amalgamation, Old SES became our wholly-owned subsidiary.

This Annual Report on Form

10-K

principally describes the business and operations of the Company following the Business Combination, other than the financial statements and related Management Discussion and Analysis which describe the business, financial condition, results of operations, liquidity and capital resources of Ivanhoe prior to the Business Combination. Substantially concurrently with the filing of this Annual Report on Form

10-K,

we will be filing Amendment No. 1 to our Current Report on Form

8-K,

initially filed on February 8, 2022, which will include the audited consolidated financial statements of the Company for the year ended December 31, 2021 and related Management’s Discussion and Analysis of Financial Condition and Results of Operations. Interested parties should refer to our Current Report on Form

8-K

for more information.

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CAUTIONARY NOTE REGARDING FORWARD LOOKING STATEMENTS AND RISK FACTORS SUMMARY

This Annual Report on Form

10-K

(this “Annual Report”) contains forward-looking statements. These forward-looking statements include, without limitation, statements relating to expectations for future financial performance, business strategies or expectations for our business. These statements are based on the beliefs and assumptions of the management of the Company. Although the Company believes that its plans, intentions and expectations reflected in or suggested by these forward-looking statements are reasonable, it cannot assure you that it will achieve or realize these plans, intentions or expectations. These statements constitute projections, forecasts and forward-looking statements, and are not guarantees of performance. Such statements can be identified by the fact that they do not relate strictly to historical or current facts. When used in this Annual Report, words such as “anticipate”, “believe”, “can”, “continue”, “could”, “estimate”, “expect”, “forecast”, “intend”, “may”, “might”, “plan”, “possible”, “potential”, “predict”, “project”, “seek”, “should”, “strive”, “target”, “will”, “would” and similar expressions may identify forward-looking statements, but the absence of these words does not mean that a statement is not forward-looking.

You should not place undue reliance on these forward-looking statements. Should one or more of a number of known and unknown risks and uncertainties materialize, or should any of our assumptions prove incorrect, our actual results or performance may be materially different from those expressed or implied by these forward-looking statements. Some factors that could cause actual results to differ include, but are not limited to the risks below, which also serves as a summary of the principal risks of an investment in our securities:

•

changes in domestic and foreign business, market, financial, political and legal conditions, including but not limited to the ongoing conflict between Russia and Ukraine;

•

risks relating to the uncertainty of the projected financial information with respect to the Company;

•

risks related to the development and commercialization of the Company’s battery technology and the timing and achievement of expected business milestones;

•

the effects of competition on the Company’s business;

•

the ability of the Company to issue equity or equity-linked securities or obtain debt financing in the future;

•

the ability of the Company to integrate its products into electric vehicles (“EVs”);

•

the risk that delays in the

pre-manufacturing

development of the Company’s battery cells could adversely affect the Company’s business and prospects;

•

potential supply chain difficulties;

•

risks resulting from the Company’s joint development agreements (“JDAs”) and other strategic alliances, if such alliances are unsuccessful;

•

the quickly evolving battery market;

•

the Company’s ability to accurately estimate future supply and demand for its batteries;

•

the Company’s ability to develop new products on an ongoing basis in a timely manner;

•

product liability and other potential litigation, regulation and legal compliance;

•

the Company’s ability to effectively manage its growth;

•

the Company’s ability to attract, train and retain highly skilled employees and key personnel;

•

the willingness of vehicle operators and consumers to adopt EVs;

•

developments in alternative technology or other fossil fuel alternatives;

•

the Company’s ability to meet certain motor vehicle standards;

•

a potential shortage of metals required for manufacturing batteries;

•

risks related to the Company’s intellectual property;

•

risks related to the Company’s business operations outside the United States, including in China;

•

the Company has identified a material weakness in its internal control over financial reporting and may identify material weaknesses in the future or otherwise fail to maintain an effective system of internal controls;

iii

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•

compliance with certain health and safety laws;

•

changes in U.S. and foreign tax laws; and

•

the other risks described in “Item 1A. Risk Factors” in this Annual Report.

These forward-looking statements are based on information available as of the date of this Annual Report and current expectations, forecasts and assumptions, and involve a number of judgments, risks and uncertainties. Accordingly, forward-looking statements should not be relied upon as representing our views as of any subsequent date, and we do not undertake any obligation to update forward-looking statements to reflect events or circumstances after the date they were made, whether as a result of new information, future events or otherwise, except as may be required under applicable securities laws.

As a result of a number of known and unknown risks and uncertainties, our actual results or performance may be materially different from those expressed or implied by these forward-looking statements. You should not place undue reliance on these forward-looking statements.

TRADEMARKS

This Annual Report contains references to trademarks and service marks belonging to other entities. Solely for convenience, trademarks and trade names referred to in this proxy statement/prospectus may appear without the ® or

™

symbols, but such references are not intended to indicate, in any way, that the applicable licensor will not assert, to the fullest extent under applicable law, its rights to these trademarks and trade names. The use or display of other companies’ trade names, trademarks or service marks is not intended to imply a relationship with, or endorsement or sponsorship of SES by any other companies.

MARKET AND INDUSTRY DATA

This Annual Report includes market and industry data that SES has derived from publicly available information, various industry publications, other published industry sources and internal data and estimates. Industry publications and other published industry sources generally indicate that the information contained therein was obtained from sources believed to be reliable. Internal data and estimates are based upon information obtained from trade and business organizations and other contacts in the markets in which SES operates and SES plans to operate and SES’s respective management’s understanding of industry conditions. Any estimates underlying such market-derived information and other factors could cause actual results to differ materially from those expressed in the independent parties’ estimates and in our estimates.

Sources of certain key industry and market data contained in this Annual Report are listed below:

•

Alliance Bernstein,

Electric Revolution

2020:

Driving the Infinite Loop

, March 2020.

•

Alliance Bernstein,

EV Tracker – Full Year 2020: EV sales hit 3 million (+40% YoY) despite pandemic, as December hits all-time high (+120% YoY)

, February 2021.

•

BlackRock, Insights:

Here to Stay

, February 2021.

•

International Energy Agency,

Global EV Outlook 2021: Trends and developments in electric vehicle markets

, 2021.

•

U.S. Department of Energy,

Alternative Fuels Data Center: Batteries for Hybrid and Plug-In Electric Vehicles

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PART I

Item 1.

Business.

Overview

SES is a global leader in the development and production of high-performance, Lithium-Metal

(“Li-Metal”)

rechargeable batteries for electric vehicles and other applications.

Since our founding in 2012, we have been committed to developing the world’s most advanced EV batteries. Our

Li-Metal

batteries have been designed to combine the high energy density of

Li-Metal

with cost-effective, large-scale manufacturability of conventional

Lithium-ion

(“Li-ion”)

rechargeable batteries. The results of tests undertaken by third party testing facilities, under instructions provided by Ivanhoe Capital Acquisition Corp. and SES, demonstrate industry-leading

Li-Metal

energy density, performance and safety.

We believe that our

Li-Metal

batteries demonstrate industry-leading density and performance and will:

•

deliver a step-change in energy density to deliver a lightweight and compact battery, and substantially eliminate range anxiety of EVs;

•

provide fast-charge capability to reduce charging times significantly, to a charge of 80% in less than 15 minutes;

•

incorporate advanced artificial intelligence (“AI”) powered safety management software, which will accurately monitor state of health of the battery and apply appropriate self-healing protocols;

•

use similar manufacturing processes as required for

Li-ion,

but is expected to be substantially less costly than conventional

Li-ion

at scale due to

Li-Metal’s

high energy density;

•

achieve rapid market adoption due to our strategic partnerships, including with leading global OEMs, such as GM, Hyundai and Honda;

•

capitalize on the innovation occurring in

Li-ion,

including improvements in energy density, manufacturing efficiency and cost reduction, as

Li-Metal

shares similar cathode and manufacturing process with

Li-ion.

We have developed what we believe to be the world’s most advanced

Li-Metal

battery technology, and we have the management team in place to become a leading provider of batteries. Our third-party tested, differentiated battery technology is designed for manufacturing at scale, and will help to promote the transition from the global dependence on fossil fuel-based automotive vehicles to clean and efficient EVs. SES is supported by strategic and financial investors, including energy and chemicals conglomerate SK Inc. (“SK”), mining and manufacturing company Tianqi Lithium HK Co. Ltd. (“Tianqi”), semiconductor equipment manufacturer Applied Materials, Inc., investment firms Vertex Ventures Holdings (“Vertex”) and Temasek Holdings Limited (“Temasek”), affiliates of automotive suppliers LG Corporation (“LG”) and Foxconn Technology Group, and global original equipment manufacturers (“OEMs”) General Motors Company (“GM”), Hyundai Motor Company (“Hyundai”), Honda Motor Co. Ltd. (“Honda”), Geely Auto Group and SAIC Motors. Among that group, each of GM, Hyundai and Honda are parties to existing JDAs with SES. Our headquarters are located in Boston, and most of our executive management is located in the United States. Our operating facilities are located in Boston and Shanghai, and we may build additional facilities in these or other locations.

Industry and Market

The Energy Transition

Worldwide electrification is now a clear focus area, with many governments, businesses and investors around the world making commitments to change. The global energy transition will present an expansive commercial opportunity for rechargeable batteries, particularly in the automotive sector. The global number of passenger EVs sold is expected to grow from approximately $2.7 million in 2020 to approximately 90 million EVs in 2040, with the EV battery market expanding from approximately $19 billion to approximately $350 billion in the same period. New battery technology that drives costs down and increases energy density, like ours, will be the key to unlocking this opportunity.

Global Commitment to Electrification

As an impetus to global electrification efforts, several governments and leading global OEMs alike have announced robust electrification goals, precipitating imminent change. Below is a list of targets set forth, or investments already made, by countries and automobile manufacturers in their efforts to move toward vehicle electrification.

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Governments

North America

•

Canada: All new light-duty cars and passenger trucks sold to be

zero-emission

by 2035.

•

United States: $174 billion proposed to boost the EV market and halve greenhouse gas emissions by 2030.

Europe and Middle East

•

Denmark: Denmark has urged the European Union to ban the sale of all petrol and diesel cars by 2040.

•

Finland: 30% market share for EVs by 2030, including personal vehicles, trucks and buses.

•

France: Ban on gasoline and diesel vehicle sales by 2040.

•

Germany: 10 million EVs and one million electric car charge points by 2030.

•

Iceland: Reduce carbon emissions by 40% by 2030 and become carbon-neutral by 2040.

•

Ireland: Ban on sales of new petrol and diesel cars by 2030 and become carbon neutral by 2050.

•

Israel: Eliminate imports of gas and diesel vehicles and coal-fired electricity generation by 2030.

•

Netherlands: All new petrol and diesel cars to be emission free by 2030.

•

Norway: EVs to account for 100% of all car sales by 2025 (already accounting for 58% of all car sales in March 2019).

•

United Kingdom: Ban on selling new petrol, diesel or hybrid cars by 2035.

Asia Pacific

•

Australia: A$1.9 billion investment package already approved, including A$1.6 billion for renewable energy.

•

China: 20% of new cars sold by 2025 to be electrified.

•

India: Various regulatory programs to increase EV sales to 30% of total new cars by 2030.

•

Japan: All new passenger cars sold to be electric or hybrid by the

mid-2030s.

•

Singapore: Phase out petrol and diesel vehicles by 2040.

•

South Korea: 33% of new vehicle sold to be electric or hydrogen-fueled by 2030.

Leading Global OEMs

•

GM: Launch more than 30 new EV models by 2025 and sell only

zero-emission

light-duty vehicles by 2035.

•

Hyundai: Fully electrify lineup in major global markets by 2040.

•

Toyota: 70% of vehicle sales to be from EVs in 2030.

•

Ford: Invest $29 billion in EVs and autonomous vehicles by 2025 and become carbon neutral by 2050.

Investors

Beyond government and corporate action, many investors around the world have increasingly focused on the energy transition as an investment opportunity and have poured record amounts into funds aimed at helping the environment. For example, from January through November 2020, investors in mutual funds and ETFs invested $288 billion globally in sustainable assets, a 96% increase over the whole of 2019, and certain investors have called on companies to disclose a plan for how their business model will be compatible with a

net-zero

economy. Moreover, EVs have become increasingly popular among consumers, who increased their spending on EVs to $120 billion in 2020, a 50% increase from 2019, according to the International Energy Agency’s “Global EV Outlook 2021.”

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Total Addressable Market

Thanks to these public and private sector efforts, the global market for EV batteries is anticipated to experience substantial growth characterized by increasing battery pack sizes and decreasing costs. This will be driven by growing EV adoption, as the global number of passenger EVs sold is expected to rise from approximately 2.7 million in 2020 to approximately 90 million in 2040. During this same period, the average battery pack size is projected to increase from 45 kWh / EV to 56 kWh / EV, while the cost of each EV battery pack is anticipated to fall from $150 / kWh to $70 / kWh. The resulting rise in demand for EV batteries is predicted to increase the total addressable market from its 2020 size of approximately $19 billion to an expected approximate $350 billion in 2040. We believe that our superior technology will allow us to play a leading role in this process, while creating value for both our stockholders and society at large.

Our Story

Our company was founded in 2012 by Dr. Qichao Hu through his work in the laboratory of Dr. Donald Sadoway, an accomplished professor of materials chemistry at the Massachusetts Institute of Technology (“MIT”). The following year, SES was newly formed based on the work begun at MIT. SES raised a Series A funding round, while Dr. Hu was named among the 2013 Forbes 30 Under 30 for his work on polymer ionic liquid rechargeable

Li-Metal

batteries. In 2013, we

co-located

with A123 Venture Technologies, a technology incubator, to leverage its facility to incubate SES’s early-stage technology development. SES raised Series B funding in 2015, attracting strategic investors including GM, SAIC Motors and Applied Materials. SES’s first prototyping battery facility opened in Boston in 2016, while further Series C and C+ funding rounds engaged Temasek and Tianqi in 2017 and SK in 2018, respectively. We capitalized on this momentum, inaugurating our second battery prototyping facility in Shanghai in 2019.

Our company has made strategic advances across several fronts in 2021. SES entered into JDAs with three leading global OEMs—GM, Hyundai and Honda—while simultaneously raising Series D and D+ funding. We also announced our business combination with Ivanhoe Capital Acquisition Corp. With nine years of research and development, we have ambitious plans for the future. With the start of manufacturing by our 1 GWh pilot facility (our “Pilot Facility”) and 30 GWh Expansion I Facility approaching, we believe that SES is on the way to becoming a global leader in

Li-Metal

battery production through our combination of world-class technology and manufacturability at scale.

In 2022, we completed our Business Combination with Old SES, upon which we changed our name to “SES AI Corporation.” In connection with the closing of the Business Combination, our shares and warrants started trading on the NYSE under the symbols “SES” and “SES WS,” respectively. Our website can be found at https://ses.ai/. The references to the SEC’s and our website are inactive textual references only, and information contained therein or connected thereto is not incorporated into this Annual Report.

Our Technology

We believe that SES

Li-Metal

is the next generation battery technology for EVs. Our unique approach to

Li-Metal

is designed to deliver high energy density batteries and high manufacturability at the same time. The unique and differentiated design of our

Li-Metal

battery, enabled by advanced, proprietary and patented materials and software breakthrough, gives us the confidence that SES will be able to deliver batteries to its customers at scale while matching or exceeding their expectations on performance, safety and cost.

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Conventional

Li-ion

technology is currently being used in most commercially available EVs.

Li-ion

typically uses a metal oxide-based or phosphate-based cathode, and graphite or graphite/silicon-based anodes. The anode and cathode are separated by a polymer-based separator. Finally, the whole cell is filled with a liquid electrolyte that conducts lithium ions from anode to cathode as the vehicle is being driven (or battery is being discharged), and from cathode to anode as the vehicle (or the battery) is being charged. Conventional

Li-ion

cells have been instrumental in kick starting the current EV market, and are being manufactured at scale at capacities of hundreds of GWh today. However, the automotive industry and its customers are yearning for a battery with higher energy density to improve the electric driving range (the distance that a vehicle can be driven on a single charge) while reducing battery cost to enable mass-adoption.

Li-Metal

is widely considered and accepted as the EV battery technology capable of achieving the highest energy density. In fact, switching the current

Li-ion

graphite/silicon anode with

Li-Metal

will currently result in the highest possible energy density for any given cathode in lithium chemistry. Lithium metal is the lightest unengineered pure metal on earth. Also, since the lithium ions do not have to diffuse in and out of the anode host material (like in the case of graphite or silicon in conventional

Li-ion),

the battery cells made with lithium metal anode can be very compact and light. This combination of lightweight and compact anode results in the highest possible gravimetric (Watt-hour (“Wh”)/kg) and volumetric (Wh/liter) energy density, respectively, for any given cathode in lithium chemistry.

One approach to

Li-Metal,

known as “solid-state

Li-Metal,”

primarily relies on solid-state materials. The solid-state material refers to the phase (solid) within which lithium ions transport from anode to cathode (during discharge) or cathode to anode (during charge). Conventional

Li-ion

technology uses liquid electrolytes (not solid electrolytes), and such lithium ion transport is in the liquid phase. Approaches that use solid electrolytes generally suffer from either not having sufficient conductivity at room and lower than room temperatures, poor interface between electrolyte and electrode, inability to suppress lithium dendrites when the solid electrolyte film is thin, and lack of demonstrated manufacturability of thin, large format films and multi-layer cells at scale.

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In stark contrast, SES’s approach to

Li-Metal

preserves the high energy density benefits of

Li-Metal

while utilizing a cell design that primarily uses a liquid electrolyte in the cathode and separator to transport the lithium ions. There is also a protective anode coating between the anode and the separator, which consists of solid-state electrolyte materials. Hence, we call our approach

“Li-Metal,”

as it utilizes both liquid and solid electrolyte in the cell simultaneously. This approach results not only in improved energy density due to using lithium metal anode, but also superior performance at room and lower than room temperatures, and enables manufacturing at scale just like

Li-ion

is manufactured at scale today. In fact, we have been successfully making

multi-Ah,

multi-layer cells using our

Li-Metal

approach for many years. In addition to materials, SES’s

AI-powered

safety software adds an additional layer of battery health monitoring and safety protection.

The key breakthrough in SES

Li-Metal

cells is its unique and patented liquid electrolyte. This electrolyte is developed internally at SES with many years of scientific research and development. We use a high-concentration,

solvent-in-salt

electrolyte. SES’s proprietary liquid electrolyte molecules and formula turns convention on its head. While liquid electrolyte used in conventional

Li-ion

cells is volatile and flammable, SES liquid electrolyte has low volatility and is self-extinguishing. Conventional liquid electrolytes are primarily made up of organic solvent with low concentration of salt to aid lithium ion conduction. SES’s liquid electrolyte primarily consists of salt with a very minute amount of proprietary solvent molecule. This new type of high-concentration

solvent-in-salt

liquid electrolyte is fundamentally different from conventional liquid electrolyte. It maintains the manufacturability advantage of liquid electrolyte in conventional

Li-ion

manufacturing, but can enable

Li-Metal

due to its stability on lithium metal.

SES’s proprietary and patented electrolyte helps resolve the issue that has plagued

Li-Metal

adoption and progress for decades. With repeated charge and discharge cycles, lithium metal anodes are known to develop needle-like mossy structures known as “dendrites,” which can penetrate the separator and short-circuit the battery cell. Our electrolyte not only significantly slows down the growth of dendrites, but it also changes its morphology from “mossy lithium,” or sharp dendrites, to “dense deposition,” or a smooth lithium metal surface. This significantly increases cell cycle life and safety.

In addition to the electrolyte, our

Li-Metal

battery cells use a proprietary anode coating that helps provide another layer of protection against dendrites and makes lithium plating denser during charging, as well as an advanced

AI-powered

algorithm to accurately monitor the

state-of-health

of the battery cells and detect any impending dendrite-related (or other) safety issues much earlier.

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The rest of the cell is assembled using our proprietary ultra-thin wide-width lithium metal anode, a conventional

state-of-the-art

separator and a cathode. With the exception of the lithium metal anode, all materials and components utilized in our battery cells are either already being manufactured at scale or have the capability to be easily manufactured at scale without the need for intensive research and development, or development of new equipment.

To our knowledge, SES

Li-Metal

battery cells are the only

Li-Metal

cells demonstrated to meet or exceed the preliminary OEM target requirements for energy density, low temperature discharge, room temperature fast charge and discharge, cycle life and safety.

This unique combination of high-energy density

Li-Metal

in a hybrid design enables a battery that is expected to be:

•

light and compact

, with high energy density of at least 400 Wh/kg and 1000 Wh/liter;

•

durable and safe

, with the ability to meet stringent cycle life, overall lifetime and safety targets for next generation EVs;

•

capable of fast charge

, charging up to 80% in less than 15 minutes;

•

capable of high power discharge

, at room and low temperatures;

SEC Form 10-K filed by SES AI Corporation