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New EV Batteries Hold Big Promise. Now Somebody Has to Make Them.

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Energy density in batteries doubles every 30 to 40 years, according to SES SES founder Qichao Hu.

Fred Tanneau/AFP via Getty Images

The electric-vehicle battery technology company SES showed off hybrid technology it says can achieve better range, costs, and safety for EVs on Wednesday. It could represent a huge step forward for the industry, if SES can get its batteries through development and into cars.

Investors appear optimistic. Shares of Ivanhoe Capital Acquisition (ticker: IVAN), a special-purpose acquisition company that is acquiring SES, gained 2.8% in midday trading Wednesday. The S&P 500 and Dow Jones Industrial Average were down 0.1% and 0.2%, respectively.

SES’s technology straddles the divide between traditional batteries with graphite anodes and liquid electrolytes facilitating the flow of electrons, and solid-state batteries, another technology being developed, that use pure lithium anodes, but without liquid electrolytes. Solid-state batteries offer more punch, or energy density, but are hard to manufacture.

“We are not solid state,” said SES founder Qichao Hu in his opening remarks. SES believes its approach–a pure lithium anode plus liquid electrolytes—will solve the manufacturing challenge while delivering roughly 75% better energy density than current batteries.

Better batteries are key to getting EV costs and charging time down. “Every 30 or 40 years energy density doubles,” continued Hu. “This is the Moore’s law of batteries.” Moore’s law refers to Gordon Moore’s observation that the number of transistors on a microchip tends to double every couple of years.

SES is working with auto makers such as


General Motors

(GM) and


Hyundai Motor

(005380.Korea). It plans to deliver “A” samples to auto makers in 2022. “B” and “C” samples are slated for 2024. Production is slated for 2025.

“A” samples are essentially prototypes, while “B” samples are mature prototypes that work in vehicles. “C” samples are made with tooling suitable for automotive production.

SES expects to generate about $500 million in sales in 2025. The following year, in 2026, the company projects $3.2 billion in sales. The company is valued at about $3.5 billion based on the 330 million shares that will be outstanding after the Ivanhoe deal is done.

It isn’t the only option for investors interested in next-generation battery technology. Solid Power, which is working on solid-state batteries, is merging with


Decarbonization Plus Acquisition Corp III

(DCRC). Solid Power stock is valued at about $2.4 billion based on the 184 million shares that will be outstanding after that deal wraps up.


QuantumScape

(QS), the other would-be disrupter in the EV battery business, is also working on solid-state batteries. It merged with a SPAC in November 2020 and is now valued at about $14 billion.

All three tech startups only expect to have sales years from now. Investors aren’t sure what to do with the stocks.

Quantum shares are down about 63% year to date, but have risen about 42% over the past three months. Stock in Decarbonization Plus–the company merging with Solid Power–is up 30% over the past three months, while Ivanhoe–the SPAC buying SES—is up about 6% over that span.

More volatility is likely as all three work toward milestones such as providing “A” and “B” samples.

Write to Al Root at [email protected]

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