Leading Li-Metal battery manufacturer SES Holdings going public via SPAC merger
SES merging with Ivanhoe Capital Acquisition Corp. (NYSE: IVAN)
SES partnered with Honda, General Motors and Hyundai in joint development agreements
PIPE investors include Honda, General Motors, Hyundai, Geely, Temasek and Foxconn
SES’s hybrid batteries appeal to automakers because they can be customized for luxury or economy vehicles
Expects revenue to grow to $7 billion by 2028 with positive Ebitda in 2026
Already raised $270 million and developed tech over a decade since being founded in 2012
Priced at a conservative 0.5 times 2027 sales, sharply below Tesla, QuantumScape, Plug Power
Secured access to critical materials and may benefit from ties to Ivanhoe Mines Ltd.
AI-based platform should help ensure safest possible batteries
Led by accomplished physicist Dr. Qichao Hu who oversaw technology from day one
By John Jannarone
It is no secret that the world needs a steady supply of next-generation batteries to support the electric vehicle revolution. One manufacturer stands apart from the pack – and should reward investors who get plugged in.
Meet SES Holdings, which is merging with special purpose acquisition company (SPAC) Ivanhoe Capital Acquisition Corp. (NYSE: IVAN). Investors who buy IVAN shares now will see them automatically convert to shares in the renamed “SES AI Corporation” shortly after a shareholder meeting scheduled for February 1.
To appreciate the SES opportunity, investors first should understand the evolution of EV batteries. At the moment, the typical battery lacks the energy density, size and affordability required to meet the needs of the next generation of EVs. And while there is some buzz around solid-state batteries, they have yet to be proven at scale.
But after a full decade of work and $270 million of capital raised, SES Founder and CEO Qichao Hu has created an industry leader that’s years ahead of the competition. Perhaps the best proof of SES’s superior technology is its ability to attract major auto manufacturers as partners: Most recently it announced a joint development agreement with Japan’s Honda which follows similar deals with South Korea’s Hyundai and General Motors. (Those three are also among six automakers in the company’s private placement known as a PIPE).
How far along in development is SES? In industry parlance, SES is at the “A-sample” stage of development – something no other company has achieved with Li-Metal batteries. That puts SES on course to begin basic production next year at a 1 GWh Pilot Facility followed by full-scale production in 2025 at its 30 GWh Expansion Facility.
SES has other unique attributes that have surely attracted partners and investors. One factor is SES’s ability to deliver range of different batteries depending on the vehicle type. That is key for major automakers that offer both luxury and economy vehicles.
For instance, GM’s Cadillac may want to maximize the range of its EVs even if the batteries are somewhat expensive. But SES can also deliver batteries to GM’s Chevrolet division that offer decent distance capacity but are considerably cheaper.
Another critical factor is SES’s strategy for ensuring safety. A number of EV companies have been forced to make disastrous recalls after incidents where batteries caught on fire. But SES has a proprietary software and manufacturing platform called Avatar that promises to reduce risk to an infinitesimally small level – potentially to zero.
Here’s how it works: With the help of AI and special sensors installed in batteries, SES is able to gather real-time information from equipment as it’s actually being used. That data can be used to flag risks in individual batteries, allowing consumers to swap them out for new ones before an accident ever happens.
But there’s even more to Avatar. In years ahead, the company will constantly collect data from batteries as they are used. That will create a treasure trove of information that can be used to inform decisions about making even safer batteries over time.
SES also has a major advantage when it comes to its supply of key – often scarce – materials. For instance, Lithium anode foil is notoriously expensive and difficult to secure. But SES has partners with five different suppliers who have committed to long-term production commitments.
SES has similarly locked in a steady supply of salt, a key component of battery electrolytes. It also has an exclusive supply agreement with Entek Membranes, a leader in separator technology.
The company may also benefit from its ties to the SPAC itself. The SPAC’s relative is the eponymous Ivanhoe Mines, a Canadian mining company with operations in Africa. That connection provides expertise around supply management and potentially access to important battery component metals.
Investors should also have great confidence in Dr. Hu and his senior management team. Dr. Hu, who earned a PhD in Applied Physics from Harvard and a BS in Physics from MIT, personally oversaw the technology from the very beginning. President and COO Rohit Makharia spent 18 years at GM, where he led battery cell development. That stands in stark contrast to inexperienced executives some other SPAC companies that have disappointed investors.
In addition to automakers, SES boasts a world-class list of partners and investors. Those include Temasek, the highly-sophisticated investment arm of the Singapore government along with powerful companies such as Koch and Foxconn.
Turning to financials, SES is on an impressive trajectory. The company forecasts revenue will rise from $100 million in 2024 to $7 billion in 2028. SES expects modestly negative Ebitda as it ramps up production but to swing to profit in 2026.
SES is priced conservatively at 0.5 times 2027 sales. By comparison, Tesla trades at 8.1 times 2025 sales, according to Sentieo, an AI-enabled research platform. Plug Power Inc, meanwhile, trades at 2.5 times 2025 sales and QuantumScape Corp commands a remarkable 140x multiple.
Of course, investors will need to wait a couple of years to see the company begin delivering big financial news. But based on its recent continued success with clients and partners, investors should not be surprised to see SES linking up with more top-notch players – particularly automakers that need next generation batteries – in the near future. Smart investors should get charged up about SES before more of the world takes notice.