Q4 2022 SES AI Corp Earnings Call
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Speaker 1: I.
Speaker 2: Hello and welcome to the SES AI Corporation fourth quarter earnings call. My name is Alex and I'll be coordinating the call today. If you'd like to ask a question at the end of the presentation you can press star 1 on your telephone keypad. If you'd like to withdraw your question you may press star 2.
Speaker 2: On our hand over to our host, Eric Goldstein, Vice President of Investor Relations. Please go ahead.
Speaker 2: Thank you, operator. Hello, everyone, and welcome to our conference call covering our fourth quarter 2022 results and financial guidance for 2023. Joining me today are Qi Chao Hu, founder and chief executive officer, and Jing Nialis, chief financial officer.
Speaker 2: We issued our shareholder letter just after 7 a.m. today, which provides a business update as well as our financial results.
Speaker 2: You'll find a press release with a link to our shareholder letter and today's conference call webcast in the investor relations section of our website at ses.ai.
Speaker 2: Before we get started, this is a reminder that discussion today may contain forward-looking information or forward-looking statements within the meaning of applicable securities legislation.
Speaker 2: These statements are based on our predictions and expectations as of today. Such statements involve certain risks, assumptions, and uncertainties which may cause our actual or future results and performance to be materially different from those expressed or implied in these statements. The catch line is that afterding several assumptions and predictions anticlim Quitman cannot see their results and that the legend written
Speaker 2: The risks and uncertainties that could cause our results to differ materially from our current expectations include, but are not limited to, those detailed in our latest earnings release and in our SEC filings.
Speaker 2: This afternoon we will review our business as well as results for the quarter. With that, I'll pass it over to Chi-Chao.
Speaker 2: Thanks, Eric. Good afternoon, everyone, and thanks for joining our fourth quarter conference call. As the leader in lithium metal batteries, SES continues to evolve and innovate. Despite all the challenges that come with new battery development, we have made some exciting progress that we would like to share with you.
Speaker 2: 2022 was a difficult but productive year. We built and completed three ASAMPLE lines. One in Shanghai, China and two in Chungcheong, Bochdo, South Korea. One for each of our three OEM JDA partners.
Speaker 3: GM, Hyundai, and Honda.
Speaker 3: The necessary level of dedicated engineering, quality and production output requires us to have dedicated line for each OEM.
Speaker 3: Importantly, we achieved ready-to-use status for all three ASAMPL lines, under budget and ahead of time.
Speaker 3: This experiment strongly supports our strategy of building lithium metal cells using lithium-ion manufacturing process and building A and B samples in Asia so that we can come back to the US for C samples and commercial production in the most efficient way possible.
Speaker 3: STS was the first battery company in the world to introduce 100 amp power lithium metal cells.
Speaker 3: The first to enter an automotive Asample JDA with a major OEM, and the first to encounter all the startup issues that come with producing 100 amp hour lithium metal cells at pilot scale.
Speaker 3: As we detailed on our previous earnings call, we encountered countless issues ranging from Wire
Speaker 3: ultra-sane lithium anode wrinkling and tearing during large-format rolling and lamination.
Speaker 3: Novel electrolytes solvent skill up.
Speaker 3: Electrostacking misalignment and overhead.
Speaker 3: Stacking misalignment and overhead. lot ofTalk about part a stop
Speaker 3: formation pressure and voltage stability.
Speaker 3: finding efficient ways to do image scanning on large-format cells, and developing proper ways to store, handle, test, and recycle lithium metal cells.
Speaker 3: One really important thing we have learned over the past decade of development
Speaker 3: When our team can identify a specific issue, we are not that far from solving the problem.
Speaker 3: Over the past year, we have leveraged the deep lithium-ion stack pop cell engineering, manufacturing, and quality experience of our own team and our OEM partners and made a lot of progress.
Speaker 3: Identifying and solving these issues has provided great know-how and knowledge for our human engineers and scientists and our machine learning based algorithm, Avatar.
Speaker 3: By end of 2022, Avatar could predict 100 m-power cell safety and life with more than 60% accuracy compared to 0% in the beginning of 2022.
Speaker 3: In comparison, Avatar could predict 4 MPa cell safety in life with 99% accuracy after 3 years of data training.
Speaker 3: Our three ASEMPL lines provided a platform for us to work closely with each of our OEM owners and get hands-on live feedback.
Speaker 3: Our partners were stationed in our facilities for months at a time and we attracted top engineers and talent and worked with top vendors from around the world.
Speaker 3: It was accelerated learning for us in manufacturing and quality control.
Speaker 3: During the year, we also made significant investment in the province of Chungcheongbukdo in South Korea.
Speaker 3: Our investment followed LG Energy Solutions investment in the same province, making Chongchengbokdo the province with the highest battery production capacity in South Korea.
Speaker 3: During the fourth quarter of last year, I met with the President of South Korea, Seok Hyeon, to thank him for supporting the industry and helping to build a robust supply chain around the world. I am extremely honored that we were recently awarded cash grants from the South Korean central government.
Speaker 3: represented by the Ministry of Trade, Industry and Energy, Jeonju-bokdo Province and Jeonju City, which will help us expand our capabilities in South Korea.
Speaker 3: The thing I am most proud of over the past year is how the entire SES team has worked as one.
Speaker 3: Our Boston team is developing new electrolytes and anode materials. Our Chongqing Bookfield team focuses on assembly equipment and cathode processes. And our Shanghai team focuses on electrolytes, anode manufacturing processes, and cell assembly processes.
Speaker 3: All of these contributions from our global team are being integrated into a system.
Speaker 3: for our 100 MPa looking metal cells. We recently summarized our latest large cell test data and published the results on our website.
Speaker 3: We believe this is the most complete data report on large-format lithium metal cells anywhere, and we will continue to publish similar data reports to keep the industry updated.
Speaker 3: We believe in transparency and are confident that a year from now, when we publish additional reports on our large cells, the data will be even stronger as we continue to improve everything from materials to engineering to manufacturing quality.
Speaker 3: As the pioneer in lithium metal, we are also writing new protocols for the proper way to store, handle, and test lithium metal cells and interpret data.
Speaker 3: We are sharing this information with the battery community to help set new industry standards.
Speaker 3: To that end, we participated in the recent workshop on lithium metal batteries in San Diego. It was great to see so much excitement from academia, industry, national labs, and government agencies for the future of lithium metal batteries.
Speaker 3: We expect 2023 to be an exciting year for SDS.
Speaker 3: As we are upgrading our manufacturing lines, here are a few things we are working on internally and with our OEM partners.
Speaker 3: We're adding CT and X-ray imaging tools custom built for our large 100 MPa cells. We're adding new powder removal tools to remove all metal powders rising from the electrical tension process.
Speaker 3: We are developing entirely new anode processes from ingot to thick foils to thin foils and to the final anode to better control quality and performance.
Speaker 3: We are coding cathodes in-house to better control quality and experiment with new formulations.
Speaker 3: And we are scaling up novel solvent and salt production lines to better control quality and speed up the feedback cycle from designing new solvent molecules to getting data and making conclusions. Thank you.
Speaker 3: Perhaps the most important thing for 2023 is that we are preparing for B samples.
Speaker 3: This year, we plan to take our collective knowledge and experiences from our A sample lines and we will design and build new B sample lines.
Speaker 3: Our ASAMPLE lines are semi-automated with a capacity of about 0.2 cells per minute, or 4 to 5 minutes per cell.
Speaker 3: These sample lines will be fully automated with about 5 cells per minute.
Speaker 3: Having the ability to produce more cells and generating more meaningful data on a far greater universe of experiments will further accelerate our human and machine learning, which will also allow avatars prediction accuracy for cell life and safety to increase quickly. Importantly, these new lives will also go a long way to proving...
Speaker 3: the manufacturing feasibility and scalability of our practical approach to making liquid metal cells.
Speaker 3: As part of our preparation for B-samples, we plan to double our material R&D team.
Speaker 3: double our cell engineering team.
Speaker 3: team, double our manufacturing team, and nearly triple our quality team. This increase in our headcount is a natural evolution of our growth as a company and is reflected in our financial guidance for 2023. We will also hire a new chief manufacturing officer who has experience in running cell
Speaker 3: We currently have about 200 quality checkpoints.
Speaker 3: Once we enter BSample agreements with our OEM partners, we can no longer benchmark ourselves against other battery startups.
Speaker 3: We will be playing in the big leagues and will be held to the same standards that the OEMs currently use for commercial lithium-ion producers.
Speaker 3: With the dedication of our global team, the accelerated learning of Avatar, and the support of our OEM partners and vendors, we are confident that we will face the new challenges and overcome them as we continue to enter uncharted territory.
Speaker 3: SCS is profoundly American with its roots in the basement lab of MIT back in 2012. At the same time, SCS is also profoundly global with its talent and partners from around the world.
Speaker 3: As we prepare for B samples and commercial production beyond that, we are preparing to expand back home in the US.
Speaker 3: This includes preparing for production capabilities for lithium metal cells, novel lithium salts and electrolytes, and lithium metal anodes.
Speaker 3: SES plans to leverage
Speaker 3: experiences from global lithium-ion players, new material innovations, new machine learning tools for safety and life prediction and quality management, and the abundant natural resources in North America.
Speaker 3: In 2021, we were the world's first to enter automotive examples for lithium metal.
Speaker 3: In 2022, we laid the groundwork for transitioning to B samples.
Speaker 3: In 2023, we will transition two B samples and lay the groundwork for C samples, commercial production beyond that, and build in a robust next-generation EV battery supply chain here in North America.
Speaker 3: I will now turn the call over to Jim Nialis, our Chief Financial Officer, to review our fourth quarter results and outlook.
Speaker 4: Thank you, Qi Chao. Good afternoon, everyone. Today I will cover our fourth quarter financial results and discuss our operating and capital budgets for full year 2023.
Speaker 4: In the first quarter, our operating expenses were $20.7 million, an increase of $10.6 million from the same period last year.
Speaker 4: South-based compensation expense was $6.8 million a quarter.
Speaker 4: We reported R&D expenses of $8.3 million, an increase of $3.1 million from the same period last year.
Speaker 4: This increase reflects higher personnel costs due to increased headcount to support battery cell development.
Speaker 4: an increase in net consumables and material supplies, and an increase in development costs related to our advanced AI software and battery management systems.
Speaker 4: Our growth R&D spent in the fourth quarter was $13.5 million.
Speaker 4: which was offset by $5.2 million billed to our OEM partners, which are treated as counter R&D expenses.
Speaker 4: Our T&A expenses were $12.5 million, an increase of $7.5 million from the same period last year. Similar to the third quarter, this increase was primarily driven by higher personnel costs to support our operations as a public company, higher insurance costs, and an increase in professional fees and outside services.
Speaker 4: We incurred a non-cash gain of 9 million at the end of the quarter associated with the change in fair value of our sponsor and our liability.
Speaker 4: As we have previously outlined, certain tranches of our sponsor are not shared, are accounted for as a derivative liability measured at fair value based on the price of our common stocks at the end of the quarter.
Speaker 4: For full year 2022, cash used in operations was $46.5 million and was less than our previously provided guidance of $55 million to $60 million.
Speaker 4: The lower level of spending reflects a combination of some conservatism on our part and lower overall spending for materials built out.
Speaker 4: Despite the lower level of spending, we were moving forward with our OEM partners and are on track to transition to B-Sample this year. PEPEX for the full year was $14.7 million and was the low previously provided guidance of $20-$25 million.
Speaker 4: Lower CapEx in 2022 was mainly due to payment timing. Looking at liquidity, our balance sheet remains very strong. We ended 2022 with a much higher than expected level of cash and short-term investments of $390 million, which we continue to believe is sufficient funding to get to commercialization.
Speaker 4: For 2023, we are providing the following financial guidance.
Speaker 4: We expect cash usage from operations to be in the range of 80 to 100 million.
Speaker 4: capital expenditures in the range of 50 to 70 million. We expect total cash usage for the year in the range of 130 to 170 million.
Speaker 4: This higher level of spending is necessary to support our growth as we expect transition from A samples to B samples in 2023.
Speaker 4: Significant areas of spending in 2023 include the following.
Speaker 4: include the following. High count.
Speaker 4: We expect to double the size of our teams in material development, cell development, and systems development, and triple the size of our quality teams.
Speaker 4: in order to continue to improve our battery performance, establish a robust self-engineering design manufacturing platform, and significantly improve our safety prediction algorithm.
Speaker 4: Lab expansion. We plan to expand our U.S. lab space to further strengthen our fundamental electrolyte and adult material development capabilities.
Speaker 4: equipment, and manufacturing facilities. They will work with our OEM partners.
Speaker 4: to build highly automated production lines and highly efficient manufacturing facilities to support these simple developments.
Speaker 4: We will also work closely with our OEM partners on quality and yield improvement initiatives and will upgrade our existing manufacturing lines by adding new tools as outlined by Qi Challenge.
Speaker 4: Last, materials. We expect to spend more in this area as we anticipate manufacturing at higher volumes to meet our OEM partners' needs as well as our own development needs.
Speaker 4: 2023 is shaping up to be an exciting year of growth and investment for SES. We appreciate the support of our shareholders, employees, and OEM partners.
Speaker 2: With that, I will hand the call back to Eric. Thanks, Jing. Alex, can you open the line for questions now?
Speaker 2: Thank you. As a reminder, if you'd like to ask a question, you can press star 1 on your telephone keypad. If you'd like to withdraw your question, you may press star 2. Please ensure you're unmuted locally when asking your question.
Speaker 2: Our first question for today comes from Winnie Dong of Deutsche Bank. Your line is now open, please go ahead.
Speaker 4: Hi, thank you so much for taking my questions. First question is, could you give us a sense of maybe the type of feedback that you've been getting from your JBA partners from the example sales? And then again, for example sales to share perhaps maybe a sense of timeline for delivery as you feel sort of like a maybe a target. Thanks.
Speaker 3: Winnie, so we've been sending samples to our three JDA partners for testing really since the beginning that we entered into ASAMPLE back in 2021. And then just over the past two years or so, we, we.
Speaker 3: they allow progress both in terms of the material performance as well as manufacturing feasibility. And the one key aspect of all three asample JDA is basically to demonstrate the manufacturing feasibility of lithium metal cells. And the fact that we built three asample lines and then
Speaker 3: We delivered total, well we both tested and delivered total, about a thousand of these large lithium metal cells just last year. And then also improved the performance of these cells quite a lot.
Speaker 3: we are preparing to enter the next phase. And then in terms of timing of the B sample, I mean the B sample is really...
Speaker 3: it's not like a single point milestone. It's not like today you all of a sudden go from A sample to B sample. It's a process. And then for us, when or this B sample itself, it's not really, it's not like a single point milestone.
Speaker 3: demonstrate the manufacturing feasibility at a much higher level, much better quality.
Speaker 3: much higher output. So it will happen around mid this year. And then whether, when we're going to make announcements, that's another story that I really don't care about. But fundamentally the company will enter into B-Sample and then it's a very...
Speaker 3: core milestone. And then it's a validation both to the material improvements as well as the manufacturing feasibility that we have demonstrated.
Speaker 4: Thanks so much. Okay, thank you so much. As you look ahead to sort of like 2023, I know you've talked about sort of like headcount expansion and equipment and manufacturing facilities and then continue to invest in materials and things like that. If you were to.
Speaker 4: Maybe like boil it down to a few sort of like key milestones to achieve by year end. You know, what can we look to as sort of like the scorecard by this year?
Speaker 3: A few things, one is quality. And then last year, I would say that was the first year we started doing pilot scale manufacturing of these large cells and the quality was actually pretty bad. That's why we had a lot of issues that we addressed.
Speaker 3: And then this year the quality basically needs to be at an entirely new level. And then also SES as an organization, when we were in ASAMPLE, we still had a lot of employees you could get better at by making life easier as an organization.
Speaker 3: sort of a startup organization. And now as we prepare for the next phase, and the B-Sample, and the project management, quality management, manufacturing, supply chain, all these management will really enter into an entirely new level. And then we are putting systems in place.
Speaker 3: to really make SDS as an organization a lot more capable of manufacturing and quality.
Speaker 3: So one key thing is not just band-aid improvements to improve the quality, but fundamentally improving the organization. So it's capable of a much higher level of quality and...
Speaker 3: and manufacturing management. I think this is probably the biggest milestone. And then at the same time, I mentioned earlier, so the A sample is about.2 CPM, so five minutes per cell. B sample roughly is about five cells per minute. So the speed.
Speaker 3: at which we need to build ourselves will be much, much higher while entering into a new level of quality.
Speaker 3: And then a couple other milestones including some of the new materials that we've been working on, new electrolytes, new anodes, and then the scaling up of these materials. I guess we'll be making cells at much higher speed. That means all these new materials though.
Speaker 4: that we've developed, we also need to make these materials at much higher volume. Got it. Thank you so much. If I can squeeze one in, this one's for Jin. I guess on your cash using Operation and Cash Expand for 2024, you came in sort of like much lower. Can you just remind us what were the factors that contributed to the release?
Speaker 4: cash. And then the second part is really, as Chi-Chi mentioned in the last earnings call, that we are focusing on building cells just to solve issues, not just to build cells for the sake of building them. So we build less cells in 2022, comparing to the original plan. So those are some of the drivers for...
Speaker 4: For 2023, I think the, as I mentioned during the call, a lot of these spendings go into the growth part of our business. We have a pretty aggressive hiring plan and we're pulling forward some of the spendings to build B sample lines so that we can be ready.
Speaker 4: to transition into B-Simple this year with our OEM partners.
Speaker 4: Great. Thank you so much for taking my questions. Thank you.
Speaker 2: Thank you. Our next question comes from Gabe Daoud from TVCohen. Gabe, your line is now open. Please go ahead.
Speaker 2: Hey everyone, thanks for taking my questions and for all the detailed remarks so far. Chitra, I was hoping maybe just at a high level you could provide some of your thoughts around.
Speaker 3: One of your OEM partners, GM, potentially shifting towards cylindrical cells versus pouch with Samsung has been kind of reported recently and been used. Just curious if you worry or you just think about maybe OEMs continuing to make a shift towards cylindrical as a way to optimize costs at the expense of higher performing anodes via pouch cells. Just any color on that would be helpful.
Speaker 4: Yeah, I can comment on the particular choice of formats, especially for GM. One thing that we are working on with all the OEMs is basically trying to find a solution for
Speaker 5: the optimal form factor at the end. For example, is it gonna be a 100 amp hour pouch cell? Is it gonna be a 100 amp hour stack, but in prismatic cell is it gonna be a 70 amp hour? Is it gonna be a 60 amp hour? Is it gonna be a 50 amp hour? What is the final...
Speaker 5: optimal basically sole design.
Speaker 5: That's actually part of this A sample and B sample work. And then we are testing some 100 amp hours, 70 amp hours, 60 amp hours with, for example, high nickel cathodes, blend cathodes, different types of cathodes because the final cell.
Speaker 5: The final format is going to be based on a holistic consideration of safety, performance, cost, several factors. And the fact that we build 100 mPOWER stack power cells doesn't mean that we will end up actually...
Speaker 5: putting 100 amp power cells inside the car. It's more to understand the boundary of the limitations. The final cell, my variable B, is a 70 amp power cell. But all this, we built A samples and also B samples and then we improve the quality and then increase the production output.
Speaker 5: so that we can collect more data and then also run more experiments faster. So we can make all these, so we and our OEM GDA partners can make all these decisions based on data.
Speaker 5: we've been focusing on stack power cells, maybe stack prismatic cells, and then also with different cathodes and also just the capacity of the cells, we'll also test a range of different capacities so we can find the optimal final cell design that we can actually put inside a vehicle based on a complete...
Speaker 3: a very holistic consideration of lots of different factors. Got it, got it, okay. Okay, that's helpful. And then you mentioned data, so maybe a good segue into a question on Avatar. You noted some of the challenges that actually enabled.
Speaker 3: you to drive an improvement in tracking or predicting cell safety on the larger amp hour cells with 60% accuracy versus 0% in the beginning of the year. And then the smaller cells have 99% accuracy. So could you maybe just talk a little bit more about Avatar and the progression there and some of the improvements there that you're seeing? Yes, we already found Avatar is a...
Speaker 5: Necessities. And then beginning of last year, beginning of 2022, because we didn't really have any large cell data, and the avatar is basically very data driven. So we had zero capability to predict anything to the larger cells because we didn't have any data to begin with.
Speaker 5: and they'll be collecting more data and then these larger cells are actually quite different from the smaller cells. For example, the impedance is much lower and then any variations in impedance and a lot of the parameters that we use to predict health and life in smaller cells just simply don't work when we scale up to the larger cells.
Speaker 5: So we had to develop new parameters and then also we also had to collect a wider spectrum of data. For example, the smaller cells with the current voltage and temperature, now we're doing current voltage, temperature and pressure. Pressure is a really important factor in predicting health and safety of these large protein metal cells.
Speaker 5: And then also based on the data that we collect, we also, both through a combination of internal physics-based models where we actually predict health based on actual fundamentals.
Speaker 5: physics mechanism as well as just machine learning models that we recommended, very interesting parameters. So now with more data, so last year, 2022, we had a sample lines, a sample lines, and then we built for satellite watch so we can relax to get the best picture believed and to create really interesting ever front end with agrohardust ple babies. That sort of thing means that we manage
Speaker 5: and we tested about a thousand of these cells. Now, and then based on that data pool, we got about 60% accuracy. Now that as we prepare to enter B sample with much better quality, much better consistency, and much higher output than we expect the...
Speaker 5: both the quality of the data as well as the size of the data pool to significant growth. And then that will significantly improve the accuracy of avatar for the larger cells even faster. Got it. Thanks, Chit chat. Thanks, everyone.
Speaker 5: both the quality of the data as well as the size of the data pool to significant growth and then that will significantly improve the accuracy of avatar for the larger cells even faster. Got it. Thanks, Xitra. Thanks, everyone. Thanks, <expletive> . Thanks, everyone.
Speaker 2: Thank you. As a reminder, if you'd like to ask a question, you can press star 1 and the telephone keypad.
Speaker 2: Our next question comes from Sean Severson from Water Tower. Sean, your line is now open, please go ahead.
Speaker 3: Great, thank you. Good morning everyone. I wanted to go back to the B samples this year and look at what gives two things. What gives you the confidence?
Speaker 3: that will be achieved this year. And then second to that, has this economic environment or call the volatility, have you sensed any changes in how OEMs are looking at things and timing or they're just kind of plowing right through this because they have to?
Speaker 5: Yeah, on the first one...
Speaker 5: Well, so, I mean, A sample, B sample, these are not really magic, right? There's a formula behind it. It's a step by step, very clear process behind it. And so lastly, we were in A, and then we had a lot of quality issues, and the volume was just not.
Speaker 5: not so high. So we've addressed and solved a lot of them. And then also to accelerate the learning. So lithium metal is a totally new thing. And then before the industry put lithium ion into cars.
Speaker 5: lithium-ion was used in consumer electronics and laptops and other industries for a long time. So the automotive industry already has a lot of data and then a lot of experience with lithium-ion. Now because lithium metal is totally new and also we improve the quality and manufacturing feasibility to a level.
Speaker 5: fast enough and just the amount of data and the amount of experience that we and our OEMJ partners collected just was not fast enough. So we want to go to B-Sample so we can have this data and learning much faster.
Speaker 5: So, and this is why we are preparing to enter into B. We couldn't do that earlier because we still had some pretty key quality issues and then it didn't make sense to enter into B without solving these issues. So now we've solved a lot of the core quality issues.
Speaker 5: and also we are putting systems and then also upgrading the organization. So it's time to enter into B. It will be accelerated learning completely asymptote.
Speaker 5: This is what we and the OEM partners are planning to enter into B. It's not magic.
Speaker 3: Nor is that economically sensitive or anything like that. This is just a natural progression that isn't going to be really delayed for any reason I guess because like you said it's all formulaic, right? Correct. And I mean the economy environment so far hasn't really...
Speaker 5: hasn't really impacted the A sample B sample decision. And in your conversations with OEMs, I know it's a bit of a guessing game, but when you look out, when they're thinking model year...
Speaker 3: you know, production for something like this. If you're in A and you're going to B this year, what does that translate into, into timing when in their minds they'd be thinking about production scale? Yeah, I can't really go into details of that. I mean, if you think about it, we're going to B this year.
Speaker 5: And then end of 24, C, and then, so we took out 25, 26, basically a new model vehicle being,
Speaker 3: Okay, last question is on the supply chain. Obviously lots of focus in the industry, domestic production and all the things we all know very well. And you've been focused on that for even before the Inflation Reduction Act and all of these things. I wanted an update.
Speaker 3: Are you seeing that really come together? I mean, has there been a good push, as you see it, through your supply chain to meet those deliverables when the time comes for large scale production?
Speaker 5: Yes, I mentioned earlier, we're really targeting 2526 for the larger scale introduction of lithium metal into vehicles. And then already, right now in 2023, we and a few suppliers were planning to...
Speaker 5: to implement capabilities for lithium salts, electrolytes, and then also lithium refining capabilities in North America. And then a lot of these implementations will take about two years, so by the time.
Speaker 5: 2025 comes and lithium metal is ready for commercial, several of the key materials, at least from our perspective, electrical and lithium manuals will also be sourced in North America. So we are preparing both the cell level as well as the material level.
Speaker 6: in parallel.
Speaker 6: Great. Thanks to you, Charles. We'll be back in the queue.
Speaker 2: Thank you. We currently have no further questions for today, so I'll hand back to Chi-Chao for any further remarks.
Speaker 5: Yeah, so, so, back in 2021, we were the first to enter automotive asample. And then last year, 22, that's when we really started manufacturing lithium metal cells in pilot scale. It was really difficult because it was something no one had done before.
Speaker 5: We encountered a lot of issues and we were very transparent about those issues, but we also made tremendous progress solving these. Now entering B-Sample is not magic, it's just a natural next step. It will be a huge milestone, not just for us, but the entire industry. It will be a huge validation for our practical approach.
Speaker 5: to making lithium metal cells using lithium ion manufacturing process. It's something that we've been talking about since the beginning. And also it will be a huge step forward for our OEM partners.
Speaker 5: using the TMI on manufacturing process. It's something that we've been talking about since the beginning. And also it will be a huge step forward for our OEM partners. So...
Speaker 5: So we made a lot of progress, but still a lot of work to do. And I hope everyone will stay tuned, and we will provide lots more exciting updates later. So thank you.
Speaker 1: Thank you for joining today's call, you may now disconnect your lines.