SES AI bets on AI to revolutionize the battery industry

SES AI: A Strategic Shift Towards AI

Qichao Hu, the CEO of SES AI, does not hide his concerns about the future of Western companies in the battery sector. According to him, most of these companies are doomed to disappear. SES AI, a Massachusetts-based company, initially aimed to mass-produce advanced lithium metal batteries for major sectors like electric vehicles. However, the company has decided to pivot its strategy towards materials discovery through artificial intelligence.

Hu emphasizes that this transition is crucial for the company's survival. He states that it has become impossible for a Western company to maintain a viable business model in this field. While SES AI continues to produce certain batteries, it is now focusing on niche markets such as drones, rather than on sectors requiring large volumes like automotive. The company is developing a materials discovery platform for batteries, which it can either license to other manufacturers or use to create materials for sale.

A Changing Sector

Recently, several American electric vehicle battery companies have shut down, while others, like SES AI, are radically altering their strategies. These changes in battery production and localization could influence future energy geopolitics.

The history of SES AI traces back to MIT, where Hu conducted his graduate research. His initial work aimed to develop batteries for oil and gas exploration, capable of withstanding extreme temperatures exceeding 120 °C. The team chose to work on solid polymer lithium metal batteries, which use lithium metal for the anode and a polymer for the electrolyte, significantly increasing energy density compared to traditional lithium-ion batteries.

From Research to Industrialization

This technology became the foundation of Solid Energy, a startup founded by Hu in 2012, emerging from MIT. After raising its first funding in 2013, the team realized that the oil exploration market was limited. They then turned to electric vehicles, adjusting the battery chemistry to perform better at lower temperatures. The company opened its first pilot facility in Massachusetts, followed by another in Shanghai.

By 2021, the battery industry was booming, and electric vehicles were in the spotlight. Solid Energy began collaborating with automotive giants like GM, Hyundai, and Honda to develop next-generation battery technologies. These lighter batteries were particularly suited for larger vehicles such as SUVs and trucks. In 2022, the company announced a shift in chemical focus, opting for a silicon anode instead of lithium metal, thus facilitating manufacturing.

A Slowing Market

However, the growth of the electric vehicle market has slowed in the United States, partly due to significant funding withdrawals from the Trump administration. The tax credits for electric vehicles, which were a key element in encouraging Americans to adopt electric options, will end in 2025. In light of these challenges, Hu emphasizes the need to examine every potential market.

SES AI is now betting on its AI materials discovery platform, named Molecular Universe. This platform aims not only to provide software to other battery companies but also to identify new materials for licensing or sale.

Innovations and Challenges

The platform has already identified six new electrolyte materials. Hu mentions that one of these materials is an additive that could extend the lifespan of batteries with silicon anodes. Silicon anodes, while effective, tend to swell, causing damage. To address this issue, the industry typically uses fluoroethylene carbonate (FEC), which forms an elastic film on the anode. However, FEC degrades at high temperatures, producing harmful gases. SES AI has identified an alternative compound that does not release these gases.

The expertise accumulated by SES AI in the battery field could make its platform valuable. Hu believes that SES's expertise and the data gathered over the years are more crucial than the business model itself.

Outlook and Skepticism

Despite these advancements, some experts remain skeptical about the immediate impact of AI materials discovery on the industry. Kara Rodby, a technical lead at Volta Energy Technologies, expresses doubts about whether this approach can be the main driver of progress in the battery sector. She also points out that the withdrawal of investors and the slowdown of public support complicate the situation for some companies in the industry.

Rodby concludes by questioning the ability of new materials discovery to unlock significant innovations for the battery industry at this stage.