Traders reward battery startup SES for shedding cash (however not an excessive amount of)

It seems battery startup SES’ traders are fairly comfortable with its first earnings report. The corporate went public in February by way of a SPAC merger, and to nobody’s shock, reported a loss.

And its traders don’t appear to thoughts. Its shares, whereas nonetheless buying and selling beneath its SPAC merger value, had been up 16.7% at $6.15 on the time of writing, outpacing broader markets features earlier within the day. 

The corporate posted an working lack of $19.2 million in the primary quarter quarter. Basic and administrative prices accounted for a lot of that, at $15.1 million, whereas R&D ate up one other $4.1 million. It reported a internet lack of $27 million, or $0.12 per share.

At the top of the quarter, SES had $426 million in money and expects to have sufficient runway to enter business manufacturing in 2025.

Battery startups like SES all lose cash, and it seems like the corporate is shedding simply enough to remain within the race, however not a lot that it might burn via its reserves earlier than it has a business product. Growing and commercializing a recent battery is a protracted, costly recreation and traders appear to be comfortable with SES’ balancing act. If it spent an excessive amount of, it might threat chapter, after all. And if it didn’t spend sufficient, it might threat falling behind its rivals.

Traders additionally look like rewarding different battery startups which have gone public by way of SPAC within the final 12 months, together with Stable Energy, which is up 10%, and QuantumScape, which is up 13%.

The steadiness of normal bills versus R&D means that whereas work continues on its lithium-metal know-how, an rising quantity of the corporate’s money hoard is being spent on constructing bigger scale amenities within the ramp as much as business manufacturing.

Certainly, in an interview earlier this week, CEO Qichao Hu instructed TechCrunch the corporate is constant to develop its Shanghai Giga web site and one other facility in Korea, which was introduced earlier this 12 months. At present, the Shanghai web site has an annual manufacturing capability of 0.2 GWh, which Hu mentioned is “good enough” for what they’re making right away.

“In March, we began constructing cells for Hyundai and Honda out of our Shanghai facility, and for GM out of Korea facility,” he mentioned.

The corporate is testing these cells in-house after which sharing the info with companions. By first quarter subsequent 12 months, Hu expects to  start delivery cells on to automotive firms so that they can do their very own testing.

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