Dear Shareholders,

As a leader in Li-Metal batteries, SES AI Corporation (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.

2022 was a difficult but productive year. We built three A-sample lines: one in Shanghai, China and two in Chungcheongbuk-do, South Korea, including one for each of our three OEM JDA partners GM, Hyundai and Honda. The necessary level of dedicated engineering, quality and production output required us to have dedicated lines for each OEM. Importantly, we achieved ready-to-use status for our A-sample lines under budget and ahead of time. This experience strongly supports our strategy of building Li-Metal cells using Li-ion manufacturing processes and building A/B-samples in Asia so we can come back to the United States for C-samples and commercial production in the most efficient way possible.

SES was the first battery company in the world to introduce 100Ah Li-Metal cells, the first to enter an automotive A-sample JDA with a major OEM, and the first to encounter all the start-up issues that come with producing 100Ah Li-Metal cells at pilot scale. As we detailed last quarter, we encountered countless issues ranging from:

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One really important thing we have learned over the past decade of development is that, when our team can identify a specific issue, we are often not far from solving the problem. Over the past year, we have leveraged the deep Li-ion stacked pouch cell engineering, manufacturing and quality experience of our own team and our OEM partners and made a lot of progress. Identifying and solving these issues has provided great know-how and knowledge for our human engineers and scientists and Avatar, our advanced AI-powered safety software and battery management system, which monitors the state-of-health of the battery cells. By the end of 2022, Avatar could predict 100Ah cell safety and life with more than 60% accuracy compared to 0% in the beginning of 2022. In comparison, Avatar could predict 4Ah cell safety and life with 99% accuracy after 3 years of data training.

Our three A-sample lines provided a platform for us to work closely with each of our OEM partners and get hands-on live feedback. Our partners were stationed in our facilities for months at a time and we attracted top engineering

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talent and worked with top vendors from around the world. It was accelerated learning for us in manufacturing and quality control, and we plan to continue to work with our OEM partners to eventually build facilities for C-sample batteries.

During the year, we also made significant investments in Chungcheongbuk-do South Korea to achieve full operations by the fourth quarter. Our investments followed LG Energy Solution investment in the same province, making Chungcheongbuk-do the province with the highest battery production capacity in South Korea. During the fourth quarter of last year, I met with the President of South Korea -- Suk-Yeol Yoon -- 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 – represented by the Ministry of Trade, Industry and Energy – Chungcheongbuk-do Province and Chung-Ju City which will help us expand our capabilities in South Korea.

The thing I am most proud of over the past year is how the entire SES team has worked as one. Our Boston team is developing new electrolytes and anode materials, our Chungcheongbuk-do team focuses on assembly equipment and cathode processes, and our Shanghai team focuses on electrolytes, anode manufacturing processes and cell assembly processes. All of these contributions from our global team are being integrated into a system for our 100Ah Li-Metal cells.

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SES scientists committed to new material development

We recently summarized our latest large cell test data and published the results on our website. We believe this is the most complete data report on large format Li-Metal cells and we will continue to publish similar data reports to keep the industry updated. 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.

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Inhouse cathode coating capability

As the pioneer in Li-Metal, we are also writing new protocols for the proper way to store, handle and test Li-Metal cells and interpret data. We are sharing this information with the battery community to help set new industry standards. To that end, we participated in the recent workshop on Li-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 Li-Metal batteries.

We expect 2023 to be an exciting year for SES. As we are upgrading our manufacturing lines, here are a few things we are working on internally and with our OEM partners.

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Perhaps the most important thing for 2023 is that we are preparing for B-samples. 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. Our A-sample lines are semiautomated with capacity of about 0.2cpm (cells per minute) or 5 minutes per cell. B-sample lines will be fully automated with about 5cpm or 5 cells per minute. We believe that 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 Avatar’s prediction accuracy for cell life and safety to increase quickly. Importantly, these new lines are expected to also go a long way to proving the manufacturing feasibility and scalability of our practical approach to making Li-Metal cells.

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As part of our preparation for B-samples, we plan to double our material R&D team, double our cell engineering 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 are also finalizing plans to hire a new Chief Manufacturing Officer with experience in running cell engineering, manufacturing and quality management and working with global OEMs to commercialize new battery technology. Compared to the major Li-ion producers like CATL and LG Energy Solution that have more than 3,000 quality checkpoints, we currently have about 200 quality checkpoints.

Once we enter B-sample agreements with our OEM partners, we will be held to the same standards that the OEMs currently use for commercial Li-ion producers. With the dedication of our global team, the accelerated learning of Avatar, and the support of our OEM partners and vendors, we are confident in our ability to face the new challenges and overcome them as we continue to enter uncharted territory.

SES is profoundly American with its roots in a basement lab of MIT back in 2012. At the same time, SES is also profoundly global with its talent and partners from around the world. As we prepare for B-samples and commercial production beyond that, we are preparing to expand back home in the United States. This includes preparing for production capability for Li-Metal cells, novel lithium salts and electrolytes, and lithium-metal anodes. SES plans to leverage the experiences from global Li-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.

In 2021, we were the world’s first to enter automotive A-samples for Li-Metal. In 2022, we laid the groundwork for transitioning to B-samples. In 2023, we expect to transition to B-samples, and lay the groundwork for C-samples, commercial production beyond that, and building a robust next generation EV battery supply chain here in North America.

4Q22 Financial Highlights and Outlook

For the fourth quarter, we reported operating expenses of $20.7 million, reflecting research and development expenses of $8.3 million and general and administrative expenses of $12.4 million. We recognized a non-cash gain of $9.0 million associated with the change in fair value of our sponsor earn-out liability. On a fully-diluted basis, net loss attributable to common stockholders was a loss of $0.03 per share.

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. Capital expenditures for the full year of $14.7 million were below prior guidance of $20 - $25 million. Despite the lower level of spending, we were moving forward with our OEM partners and are on track to transition to B-samples in 2023.

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Our balance sheet remains very strong. Our available liquidity, defined as cash and cash equivalents and short-term investments in marketable securities, was $390 million as of December 31, 2022, which we continue to believe is sufficient funding to get to commercialization.

For 2023 we expect total cash usage from operations to be in the range of $80 - $100 million and capital expenditures in the range of $50 – $70 million.  We expect total cash usage for the year to be in the range of $130 - $170 million. This higher level of spending is necessary to support our growth as we expect to transition from A-samples to B-samples in 2023. Significant areas of spending in 2023 include the following:

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Qichao Hu	Jing Nealis
Founder, CEO and Chairman	Chief Financial Officer

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Forward-Looking Statements

This letter contains statements that SES believes are “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995. These forward-looking statements include, without limitation, statements relating to expectations for future financial performance, business strategies or expectations for our business. These statements are based on the beliefs and assumptions of the management of SES. Although SES believes that its plans, intentions and expectations reflected in or suggested by these forward-looking statements are reasonable, it cannot provide assurance that it will achieve or realize these plans, intentions or expectations. These statements constitute projections, forecasts and forward-looking statements, and are not guarantees of performance. Such statements can be identified by the fact that they do not relate strictly to historical or current facts. When used in this press release, words such as “anticipate”, “believe”, “can”, “continue”, “could”, “estimate”, “expect”, “forecast”, “intend”, “may”, “might”, “plan”, “possible”, “potential”, “predict”, “project”, “seek”, “should”, “strive”, “target”, “will”, “would” and similar expressions may identify forward-looking statements, but the absence of these words does not mean that a statement is not forward-looking.

You should not place undue reliance on these forward-looking statements. Should one or more of a number of known and unknown risks and uncertainties materialize, or should any of SES’s assumptions prove incorrect, our actual results or performance may be materially different from those expressed or implied by these forward-looking statements. Some factors that could cause actual results to differ include, but are not limited to the following risks: risks related to the development and commercialization of SES’s battery technology and the timing and achievement of expected business milestones; risks relating to the uncertainty of achieving and maintaining profitability; risks relating to the uncertainty of meeting future capital requirements; the ability of SES to integrate its products into electric vehicles (“EVs”); the risk that delays in the pre-manufacturing development of SES’s battery cells could adversely affect SES’s business and prospects; potential supply chain difficulties; the ability of SES to engage target original equipment manufacturers (“OEMs”) customers successfully and integrate SES’s products into EVs manufactured by OEM customers; the ability to obtain raw materials, components or equipment through new or existing supply relationships; risks resulting from SES’s joint

development agreements and other strategic alliances and investments; product liability and other potential litigation, regulation and legal compliance; SES’s ability to attract, train and retain highly skilled employees and key personnel; the uncertainty in global economic conditions and risks relating to health epidemics, including the COVID-19 pandemic and any operational interruptions; developments in alternative technology or other fossil fuel alternatives; risks related to SES’s intellectual property; business, regulatory, political, operational, financial and economic risks related to SES’s business operations outside the United States; SES has identified a material weakness in its internal control over financial reporting and may identify material weaknesses in the future or otherwise fail to develop or maintain an effective system of internal controls; the volatility of SES’s common stock and value of SES’s public warrants; and the other risks described in “Part I, Item 1A. Risk Factors” in our annual report on Form 10-K for the fiscal year ended December 31, 2021 filed with the Securities and Exchange Commission (“SEC”) on March 31, 2022 and other documents filed from time to time with the SEC. There may be additional risks that SES presently knows and/or believes are immaterial that could also cause actual results to differ from those contained in the forward-looking statements. In addition, forward-looking statements reflect SES’s expectations, plans or forecasts of future events and views only as of the date of this press release. SES anticipates that subsequent events and developments will cause its assessments to change. However, while SES may elect to update these forward-looking statements at some point in the future, SES specifically disclaims any obligation to do so. These forward-looking statements should not be relied upon as representing SES’s assessments as of any date subsequent to the date of this letter.

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