SES AI Corporation

Thank you all for standing by for today's conference call with SES. We are still awaiting one speaker to join before we start today's call. And also as a reminder, if you would like to ask a question to please press star followed by one on your telephone keypad. We will be beginning today's call shortly and I'd like to thank you all for your patience. Thank you all for your patience. We will be beginning today's conference call shortly. Thank you again for standing by and we will be beginning in a few moments time. Thank you. Good morning all. I would like to welcome you all to the SES first quarter 2024 business and financial results call. My name is Brika and I will be your moderator for today's call. All lines are on mute for the presentation portion of the call with an opportunity for questions and answers at the end. If you would like to ask a question please press star followed by one on your telephone keypad. If you change your mind please press star then two. And for operator assistance at any point during the call, please press star then zero. Thank you. I would now like to pass the conference over to your host, Carl Pilkington, Chief Executive Officer, to begin. So, Carl, please go ahead.

Hello, everyone, and welcome to our conference call covering our first quarter 2024 results. Joining me today are Chi Chau Hu, founder and chief executive officer, and Jing Mialis, chief financial officer. We issued our shareholder letter just after 4 p.m. yesterday, which provides a business update as well as our financial results. You'll find a press release with a link to our shareholder letter and today's conference call webcast in the investor relations section of our website at ses.ai. Before we get started, This is a reminder that the discussion today may contain forward-looking information or forward-looking statements within the meaning of applicable securities legislation. These statements are based on our predictions and expectations as of today. Such statements can involve certain risks, assumptions, and uncertainties, which may cause our actual or future results and performance to be materially different from those expressed or implied in these statements. The risks and uncertainties that could cause our results to differ materially from our current expectations include, but are not limited to, those detailed in our latest earnings release and in our SEC filings. This morning, we will review our business as well as the results for the quarter. With that, I'll pass it over to Chih-Chau.

Good morning, and thank you for joining us on our call. Our mission is to power a new era of electric transportation on land and in the air with lithium metal batteries. That new era became a lot more visible in the past few weeks as we reached two significant milestones that we believe no other lithium metal battery manufacturer has ever reached before. We're excited to talk about these achievements in more detail today as we believe the milestones reinforce our lead in the race to commercialize our lithium metal technology for both EV and UAM applications. I want our time this morning to center on how we got to this point and what it means for SES AI going forward. We have talked about four pillars in the business that support our vision, and we have made significant advancements in each one this year. Let's talk about our core focus first, EV. We have an extremely differentiated high-density battery technology platform that has been validated by JDA partners such as Hyundai, Honda, and GM. Our announcement last week that the JDA partnership with Hyundai is entering the next phase further validates our technology and capability to scale manufacturing to rapidly meet increased demand. This agreement represents two global firsts for SES AI and our industry. It is the first time a lithium metal battery manufacturer is building a line within an automotive OEM facility. And it makes us the only lithium metal battery company to have two B sample development JDAs underway. In the past few months, we have all seen coverage about how OEMs in the US are scaling back their EV ambitions. However, Hyundai, already the second largest EV manufacturer in the United States, is focusing on becoming a top three global EV maker by 2030. They recently announced a $50-plus billion investment to increase their EV lineup to 31 models and additional personnel for research and development of new EVs and batteries. Honda announced last week that they were making a $15 billion investment in EV plants in Canada. reinforcing their commitment to very ambitious goals over the next decade. I can't emphasize enough the significance of moving into the next phase of our joint development contract with Hyundai and the confidence Hyundai has placed in SESAI's technology and capabilities. While Hyundai will fund the development of the dedicated B-sample facility in their electrification research center in Ulan, South Korea, SCS AI will be investing in building and operating one of the largest capacity lithium metal lines in the world within this new facility. We expect this line to be ready early in the fourth quarter of this year with our Avatar AI infrastructure ready several months thereafter. The increased production allows for more training of our Avatar AI in addition to more testing. The testing we will be conducting will be on the performance life cycle. We will test the cells to the extreme to understand where they fail. This process is similar to what we're doing under our other B-sample agreement. Operating this B-sample line in Hyundai's U-1 facility will be good practice for what we plan to do with C-sample and beyond, especially with the joint ventures we've mentioned in the past that we believe can help us support the large scale needed for startup production. Second, UAM. While EV is the core focus, we are very committed to urban air mobility, or UAM, as an exciting application for our lithium metal batteries. It's the second pillar to our mission. UAM is an adjacent growth opportunity that requires little additional development beyond what we are already doing for EVs. And we believe it is a perfect fit for lithium metal. When I say a little additional development, I mean that the B sample sales we have delivered for EV are nearly equivalent to commercial production for UAM. With two B sample agreements going, we can apply those learnings to UAM. UAM operates on a fleet model where revenue per passenger per mile is the primary metric and weight is a primary concern. Lithium metal's energy density means that aircraft can carry twice the number of passengers or double the amount of cargo or double the number of miles. This step change greatly improves UAM operators' profitability. As the first mover in this space, it also means we have an opportunity to make this market. We're already seeing strong demand from OEMs and have a growing number of sale, sampling, and supply agreements with top five OEMs. I would also note that our partner Hyundai has been very aggressive and has demonstrated commitment to UAM. We have already started work on converting our EV A-sample line in Korea to a UAM dedicated line, which we expect to complete in September. Third, AI. To ensure practical safety across all our product lines, especially as we prepare for C-sample and commercial deployment, we have significantly expanded the use of Avatar AI to monitor battery health and predict incidents. Our lithium metal large-scale Avatar AI prediction accuracy increased from just 60% in 2022 to 92% last year. Our target is 95% accuracy by year end. Ultimately, we aim to achieve a near 100% safety guarantee for EV and UAF. and pioneer the foundation for using AI for future roadmap electrolyte development. With Avatar AI, we're building more than just a battery company. We are laying out a super intelligent AI for electric transportation. Our new electrical foundry is now fully operational, and we can test new ideas generated by both humans and AI much faster. We are curating several large molecular databases and systematically screening them using both classical physics simulation and machine learning. The goal is to map the relevant small molecular universe. We're very excited to collaborate with several leading research groups on both computing power and machine learning tools. AI for Science is a feature of material discovery, and SES AI integrates the world's leading machine learning scientists battery domain experts and an advanced chemical synthesis and cell testing facility. This gives us an ability to innovate and improve our products for EV and UAM at a pace that we believe is unprecedented in the industry. Fourth, sustainability. Lastly, we are integrating sustainability into our operations and innovation to enable supply chain efficiencies to accelerate production timelines and reduce costs. We recently announced that we will fund a new research initiative at Worcester Polytechnic Institute, WPI, to develop state of the art recycling technology for lithium metal. To date, Recycling for lithium ion batteries exists at an early stage, but recycling technology for lithium metal batteries has not yet been developed. Recycling lithium metal batteries can be critical in the reduction of the shortage of raw materials and environmental problems. Another initiative we're pursuing is working on dry electrodes that can reduce chemical solvent evaporation. We expect to announce a collaboration partner on this effort in the not too distant future. In a real-time example of integrating environmental efforts into our business, we recently announced SCS Cares. This initiative partners with organizations that monitor forest fires and protect marine animals to power advanced drones with our lithium metal A and B sample cells and collect field data to train Avatar AI. We will have more details on this initiative and our much broader sustainability strategy sustainability report at the end of May. 2024 goals. We noted last quarter that 2024 will be a key year in the commercialization of lithium metal batteries, and we're very pleased with the execution so far on our annual goals. We have become the world's first lithium metal battery manufacturer to have two B-sample underway. and we expect to become the first to build a line within an OEM facility. With Avatar AI, we expect to produce the highest number of cells this year with a higher number of associated quality checks than ever before. This increase in data will help to improve Avatar AI's accuracy. As we look to accelerate future electrolyte discoveries, we're also training and developing new AI models and testing new ideas generated by these models in our electrolyte foundry. I'll now turn over to Jun for a brief discussion of our financials.