Battery company SES was rewarded by investors despite losing money (but not too much)

SES’s maiden financial report looks to have pleased its investors. In February, the business went public through a SPAC merger and declared a deficit, which came as no surprise.

What’s more, its backers don’t seem to care either.

A 16.7 percent rise at $6.15 was beating the overall market advances earlier in the day, even if its shares are still trading below their SPAC merger price.

In the first three months of the year, the corporation lost $19.2 million in operations. Of the $15.1 million, the majority went to general and administrative expenses, with the remaining $4.1 million going to research and development. The company recorded a net loss of $27 million, or $0.12 per share.

SES has $426 million in cash at the end of the quarter and expects to be able to begin commercial production in 2025.

Just enough to keep SES in the race, but not so much as to exhaust its reserves before a commercial product is ready. Investors seem to be pleased with SES’ balancing act in developing and commercialising a new battery. Of course, it would become bankrupt if it spent too much. While not spending enough would put the company at danger of losing ground to competition.

Solid Power, up 10%, and QuantumScape, up 13%, both went public through SPAC in the previous year and look to be getting a warm welcome from investors.

Research and development expenditures are outpacing general expenditures, indicating that the corporation is spending more money on larger-scale facilities as it moves closer to commercial production.

In fact, CEO Qichao Hu told this week that the business is continuing to expand its Shanghai Giga site and another facility in Korea, which was revealed earlier in the year. The Shanghai location now has an annual production capacity of 0.2 GWh, which Hu claimed is “more than adequate” for what they are doing right now, according to him.

GM’s Seoul factory and Hyundai and Honda’s Shanghai facility began producing cells in March, according to the company’s CEO.

The corporation is doing internal testing on these cells before disclosing the results to collaborators. Starting in the first quarter of 2017, Hu hopes that automobile firms will start receiving their own test cells directly from the company.