A zero-revenue company that just made $3.6 billion in market capitalization. On the evening of February 4, lithium metal battery manufacturer SES landed on the New York Stock Exchange in the form of SPAC.
Founded in 2012, SES founder Hu Qichao is a Ph.D. in applied physics from Harvard University, and has been engaged in lithium battery research during his studies. After graduating from Dr. Hu Qichao in 2012, he founded SES and got the angel round of Xiangfeng Investment the following year. Up to now, SES has been researching and developing for nearly a decade, but there are still no products on the market.
And it is such a company, its shareholder list can see Tianqi Lithium, General Motors, SAIC, Geely Group, South Korea's SK Group, the United States Applied Materials Company and many other industry well-known companies, they are the upstream and downstream of the lithium battery industry chain industry giants. Where did this industrial capital come from?
At present, the power battery industry is hot, and CATL has just released a performance forecast of 181%-228% year-on-year increase in net profit on January 27, and the market value has exceeded 1.3 trillion yuan. On the same day, another power battery giant, LG New Energy, was listed in South Korea, and its opening stock price soared by 99%, exceeding 750 billion yuan at its highest market value.
SES founder Hu Qichao told Zhongzhong Network that with the gradual industrialization of lithium metal batteries in the future, the power battery market pattern will change, and SES will be committed to becoming a "global leader" in this market. Zheng Juncong, managing partner of Vertex Investment, said it more bluntly: SES has every opportunity to become a company of magnitude in the Ningde era in the future.
A company that has not yet listed its products, but said that it will be the next Ningde era, where does the confidence come from?
Ten years of research and development and mass production still need time
In November 2021, SES released the Apollo lithium metal battery, which has a capacity of up to 107Ah, which is currently the largest lithium metal battery in the world, and is also the first monomer lithium metal battery with more than 100Ah publicly displayed in the world.
At present, the ternary lithium batteries and lithium iron phosphate batteries used in new energy vehicles on the market belong to lithium-ion batteries. Lithium metal batteries are considered to be the next generation of power lithium batteries, and their performance is far beyond traditional lithium-ion batteries.
The Apollo lithium metal battery released by SES has an energy density of up to 417Wh/kg. What is this concept? At present, the actual mass production of ternary lithium batteries can do more than 200Wh/kg, lithium iron phosphate, BYD's famous "blade battery" energy density is about 150Wh/kg. In other words, compared with existing lithium batteries, the energy density of SES's products has doubled in one fell swoop. Once applied, the mileage anxiety currently plaguing new energy vehicles will forever become history.
With the world's leading lithium metal battery technology in hand, it is SES that can win the capitalization of 3.6 billion yuan.
In March 2021, SES signed a joint development agreement with General Motors for A samples of lithium-metal batteries. A new battery to really get on the car, generally speaking, to go through the engineering sample, A sample, B sample, C sample several major links, and finally mass production. SES is the first company in the world to sign a joint development agreement with a major car company for lithium metal battery A samples.
In May 2021, SES signed a joint development agreement with Hyundai Motor, which is the second lithium metal battery A sample contract in the world.
In December 2021, SES signed a joint development agreement with Honda.
At present, SES has signed A sample joint development agreements with three mainstream car companies. According to Hu Qichao, more cooperation will be released one after another. In fact, it is not difficult to see from the many car companies on the list of SES shareholders that SES has long been in the layout of commercialization.
At the same time, SES also announced that it is building a 30,000-square-meter gigafactory in Jiading, Shanghai, which is scheduled to be completed in 2023 and will be the world's largest lithium metal battery factory with the largest production capacity.
For the timetable for getting on the bus, Hu Qichao said that the general A sample stage takes two years, and the B and C samples each need one year, and then mass production. Therefore, SES's battery is expected to be able to get on the car and meet the majority of consumers around 2025.
Although SES, which has been in business for ten years, is still in a state of loss, it will gradually usher in commercialization with listing as the dividing line. In its prospectus, SES expects the company to achieve commercial production in 2025. In terms of production capacity, the Jiading plant under construction will reach 1GWh capacity after completion in 2023, and with the start-up of factories in other countries such as South Korea, the total capacity of SES is expected to exceed 10GWh by 2025, more than 80GWh in 2027, and more than 100GWh by 2028.
According to this picture depicted in the prospectus, the next Ningde era is not just talk. Comparablely, the production capacity of CATL in the first three quarters of 2021 was 106GWh, and the revenue achieved by these capacities was 73.362 billion yuan and the net profit was 9.145 billion yuan.
Six rounds of financing Industry giants gathered
Ten years of entrepreneurship has been burning money, and the development of SES is naturally inseparable from financing. By the time of the listing, SES had completed 6 rounds of financing and introduced a large number of investors. But interestingly, most of them are industrial capital, and the only financial investment institutions are Vertex Investments and Temasek, the parent company of Vertex Investments.
History of SES financing, Source: CVSource Investment Data
Zheng Juncong, managing partner of Xiangfeng Investment, told China Investment Network that around 2013, Whether it is Chinese or American VCs, their eyes are focused on the Internet industry, and it is not easy for hard technology companies like SES to raise funds.
Another reason is that compared with the lithium-ion batteries that were already used in the car at that time, the commercial prospects of lithium metal batteries are still very uncertain.
According to SES's current share price, the return on Everbright's investment as an angel investor has exceeded 100 times. Recalling the process of investing in SES, Zheng Juncong said that he saw the inherent bottleneck in the energy density of lithium-ion batteries at that time, and new energy vehicles must be truly popularized in the future, and it is necessary to find battery solutions with higher energy density. After examining various technical routes, Zheng Juncong believes that the lithium metal battery technology of Hu Qichao's team is the closest to commercialization, and can maximize the use of the existing lithium-ion battery production process, without the need to completely start a new stove. But even so, Zheng Juncong's expectation at the time was that SES would "take at least six or seven years" to commercialize.
After The Investment of Xiangfeng, SES burned almost all the money in 2015, and the financing encountered difficulties. In the end, it was after Cheng Juncong strongly recommended to Temasek that SES got Temasek's "life-saving money".
Hu Qichao admitted to the investment network that the investors are mainly industrial parties, on the one hand, there are considerations of industrial resources, on the other hand, it is also because the requirements for commercialization of the industrial parties are not as high as those of financial institutions, and they are more willing to lay out forward-looking technologies.
In fact, Ivanhoe Capital Acquisition Corp, the SPAC entity that SES merged, is also an industry behind it. Ivanhoe Capital Chinese name Ivanhoe Capital, whose Ivanhoe Mines is a world-class mining company. Hu Qichao said in an interview that Ivanhoe has very large nickel and copper mines in Africa, and chose to list through Ivanhoe, but also hopes to have strategic cooperation with it in nickel raw materials.
Solid-state battery mountain rain is coming The card race has begun
In January 2021, NIO released the NIO ET7, a model equipped with solid-state batteries, on "NIO Day", announcing that it will be launched in the fourth quarter of 2022 and will have a range of more than 1,000 kilometers. This is the first time that a car company has clarified the listing timetable for solid-state battery models, and since then, the concept of solid-state batteries has been on fire throughout 2021.
Solid-state batteries and lithium-metal batteries are two closely related concepts.
Each lithium battery has three basic structures: positive electrode, negative electrode and electrolyte. The traditional ternary, lithium iron phosphate battery is only different from the cathode material, the negative electrode is carbon, silicon, and the electrolyte is liquid. If the liquid electrolyte is replaced by a solid electrolyte, it is the so-called solid-state battery, and then the negative electrode is replaced by carbon and silicon with lithium metal, which is a lithium metal battery.
After years of exploration, lithium metal batteries have now been recognized as the ultimate solution for power batteries, its advantages in addition to the previously mentioned energy density greatly improved, safety, charging speed has also been improved by orders of magnitude. If mass production can be achieved, the problems of range anxiety, spontaneous combustion, and charging time consumption of new energy vehicles that have been criticized by people will no longer exist. Xiang Yanhuo, president of the passenger car solution department of CATL China, once said at the 2021 Global New Energy Vehicle Conference: "After nearly 10 years of research, we believe that the all-solid-state metal battery using lithium metal as the anode material is the optimal development direction of solid-state batteries. ”
Of course, due to the insurmountable difficulties encountered in the technology of all-solid-state batteries, the current mainstream route is "semi-solid" rather than "all-solid", that is, the mixing of solid and liquid electrolytes. SES is no exception, abandoning the all-solid-state route early in development. Hu Qichao said that the problem encountered by all-solid-state batteries is a basic chemical problem that cannot be solved in the foreseeable future, so he believes that hybrid lithium metal batteries are a more feasible technical route.
The roadmap is clear, the question is who can run faster? At present, almost all power battery manufacturers and OEMs are racing.
On January 22, Dongfeng Motor held the delivery ceremony of the first batch of 50 Dongfeng Fengshen E70 electric vehicles. The special feature of this car is that it is equipped with a solid-state battery jointly developed by Dongfeng and Ganfeng Lithium, which is named "the world's first mass-produced electric vehicle equipped with a solid-state battery".
However, the solid-state battery equipped with the Dongfeng Fengshen E70 is also semi-solid to be precise, and the anode material is not metallic lithium. Judging from the disclosed information, the energy density of the battery is not significantly improved compared with the current mainstream ternary battery, and the energy density is about 260Wh/kg.
In November 2021, Li Jian, chairman of Guoxuan Hi-Tech, revealed that the semi-solid-state battery supported by the company for a high-end pure electric vehicle in China achieved a range of more than 1,000 kilometers, which was double that of its first generation model. However, Li Zhen did not disclose the supporting car companies, models and other information.
On January 13, the secretary of the board of directors of Fu Neng Technology said in a reply to investors that the company's semi-solid-state battery samples were sent to vehicle customers and received good feedback. In December 2021, there were media reports that the solid-liquid hybrid battery (sample A) of Fu Neng Technology had been sent to Daimler Benz, with an energy density of 330Wh/kg.
On January 27, Daimler Benz announced an investment in Huineng Technology, a Taiwanese solid-state battery research and development company, with an investment of nearly 100 million euros. The two sides also announced the signing of a technical cooperation agreement to jointly develop solid-state battery cells for electric vehicles, and the first Mercedes-Benz test vehicles equipped with this jointly developed solid-state battery will be launched in the next few years.
In November 2021, solid-state battery startup Weilan New Energy received investment from strategic institutions such as Huawei and Xiaomi Group, with a purported valuation of 5 billion yuan and an investment amount of about 500 million yuan. Weilan New Energy is rumored to be a supplier of NIO's semi-solid-state battery solution.
It is foreseeable that the future power battery industry will become more and more involved. Therefore, Hu Qichao told The Investment Network that after the listing of SES, in addition to continuing to promote the mass production of products on the car, it will also actively carry out the upstream and downstream layout of the industrial chain, "In the next few years, the industry will undergo integration, and only large companies can survive."
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