Battery appears Investors in startup SES are quite pleased with its first earnings report. In February, the company went public with a merger with SPAC and, to no one’s surprise, posted a loss.
And his investors don’t seem to mind. Its shares, although trading below the SPAC merger price, were up 16.7% to $6.15 at time of writing, outpacing broader market gains earlier in the day.
In the first quarter, the company reported an operating loss of $19.2 million. General and administrative expenses accounted for the bulk of that amount, at $15.1 million, while R&D ate another $4.1 million. The company posted a net loss of $27 million, or $0.12 per share.
SES had $426 million in cash at the end of the quarter and is expected to have enough runway to begin commercial production in 2025.
All battery startups like SES are losing money, and it looks like the company is losing enough to stay in the race, but not enough to burn its reserves before it has a commercial product. Developing and commercializing a new battery is a long and expensive game, and investors seem happy with SES’ balancing act. If the company spent too much, then, of course, it would go bankrupt. And if he didn’t spend enough, he would risk falling behind his competitors.
Investors also appear to be rewarding other battery startups that went public through SPAC last year, including Solid Power, which surged 10%, and QuantumScape, which surged 13%.
The ratio of total spending to R&D spending suggests that while work on lithium metal technology continues, a growing amount of the company’s cash is being spent on building larger facilities as it transitions to commercial production.
Indeed, in an interview earlier this week, CEO Qichao Hu told TechCrunch that the company is continuing to develop its Shanghai Giga site and another facility in Korea, which was announced earlier this year. The Shanghai plant currently has an annual production capacity of 0.2 GWh, which Hu says is “more than enough” for what they’re producing right now.
“In March, we started producing cells for Hyundai and Honda at our plant in Shanghai and for GM at our plant in Korea,” he said.
The company tests these cells on its own and then shares the data with partners. By the first quarter of next year, Hu plans to start shipping batteries directly to car companies so they can conduct their own tests.
Credit: techcrunch.com /