SES AI Corporation

Item 1A. Risk Factors

In addition to the other information set forth in this Quarterly Report on Form 10-Q, you should carefully consider the risk factors disclosed in Part I, Item 1A of our 20245 Annual Report on Form 10-K, and the other reports that we have filed with the SEC. Any of the risks discussed in such reports, as well as additional risks and uncertainties not currently known to us or that we currently deem immaterial, could materially and adversely affect our results of operations, financial condition or prospects. During the period covered by this Quarterly Report on Form 10-Q, there have been no material changes in our risk factors as previously disclosed, except the following:

Risks Relating to Our Business and Technology

We may not be able to successfully integrate UZ Energys operations with our business.

We completed the acquisition of UZ Energy on September 15, 2025. Integrating UZ Energy into our business may require significant attention from our senior management, which may divert their attention from our day-to-day business. The difficulties of integration may be increased by cultural differences between our two organizations and the necessity of retaining and integrating personnel, including UZ Energys key employees. The services of some of these individuals will be important to the continued growth and success of UZ Energys business and to our ability to integrate its business with ours. If we were to lose the services of these key employees or fail to sufficiently integrate them, our ability to operate these businesses successfully would likely be materially and adversely impacted. There may also be challenges in the integration of operations and systems, products and services, and management of facilities, conforming standards, controls, procedures and accounting and other policies, business cultures, engineering, design and development processes, and compensation structures between the two companies, managing the expanded operations of a large and complex company and in keeping existing customers and obtaining new customers. As such, if we are unable to successfully integrate UZ Energys operations into our business we could be required to record material impairments, and as a result, our financial condition, results of operations, cash flows and stock price could be material and adversely affected.

The economic benefit of our ESS products to our customers depends on the cost of electricity available from alternative sources, including local electric utility companies, which cost structure is subject to change.

The economic benefit of our ESS products to our customers includes, among other things, the benefit of reducing such customers payments to the local electric utility company or from sourcing electricity from other alternative sources. The rates at which electricity is available from a customers local electric utility company are subject to change and any changes in such rates may affect the relative benefits of our energy storage systems. Changes in the rates offered by local electric utilities and/or in the applicability or amounts of charges and other fees imposed by such utilities on customers acquiring our ESS products could adversely affect the demand for such products.

Additionally, the electricity stored and released by our ESS products may not currently be cost-competitive in some geographic markets, and we may be unable to reduce our costs to a level at which our ESS products would be competitive in such markets. As such, unless the cost of electricity in these markets rises or we are able to generate demand for our ESS products based on benefits other than electricity cost

29

savings, our potential for growth in the ESS market may be limited. As a result, we may fail to realize all of the anticipated benefits of the UZ Energy acquisition, or those benefits may take longer to realize than expected.

Our ESS products performance may not meet customers expectations or needs

Our ESS products, including those made by UZ Energy, are subject to various operating risks that may cause them not to perform as expected for our customers. These risks include a failure or wearing-out of our equipment or the equipment into which our equipment connects, an inability to find suitable replacement equipment or parts, or disruption in our distribution systems. Any extended interruption or failure to generate the expected amount of output could adversely affect our business, financial condition and results of operations. In addition, our ESS customers willingness to acquire additional systems or services from us may be impacted in the future if any of our systems incur operational issues that indicate expected future cash flows from the system are less than the carrying value. Any such outcome could adversely affect our operating results or ability to attract new customers.

We depend upon component and product manufacturing and logistical services provided by third parties, many of whom are located outside of the U.S.

A significant amount of our components in our ESS products are manufactured in whole or in part by a few third-party manufacturers. Many of these manufacturers are located outside of the U.S. If a catastrophic event occurs relative to these third-party manufacturers, or the political, social, or economic conditions shift within their respective geographies or between trade partners, we could experience business interruptions, delayed delivery of products, or other adverse impacts to our ongoing business. While these arrangements may lower operating costs, they also reduce our direct control over production and distribution. Such diminished control could have an adverse effect on the quality or quantity of our products as well as our flexibility to respond to changing conditions. In addition, we rely on third-party manufacturers to adhere to the terms and conditions of the agreements in place with each party. For example, although arrangements with such manufacturers may contain provisions for warranty expense reimbursement, we may remain responsible to the customer for warranty service in the event of product defects. Any unanticipated product or warranty liability, whether pursuant to arrangements with contract manufacturers or otherwise, could adversely affect our reputation, financial condition, and operating results. In addition, any adverse change in any of our manufacturers financial or business condition could disrupt our ability to supply quality products to our customers. If we are required to change our manufacturers, we may lose revenue, incur increased costs and damage our end-customer relationships. In addition, porting to and qualifying a new manufacturer and commencing production can be an expensive and lengthy process.

The unavailability, reduction or elimination of, or uncertainty regarding, government and economic incentives or subsidies available to us, end-users or OEMs could have a material adverse effect on our business, financial condition, operating results and prospects.

We rely in part on governmental and economic incentives available to the EV battery developers. Government incentives and subsidies are granted in connection with governments efforts to promote the development of the local economy and other policies. For instance, we have historically received rent subsidies and incentive awards from local governmental authorities for our operations in Shanghai and Seoul. We intend to apply for further grants in the future in the jurisdictions in which we operate. Some local government incentives and subsidies may be challenged by higher-level government authorities. Therefore, government incentives and subsidies may be modified, terminated or subject to clawback at the sole discretion of the relevant governmental authorities. Additionally, because laws, regulations and policies with respect to incentives and subsidies may change, we cannot be sure that government incentives and subsidies will continue to be available. In the event that we cease to receive any government incentives or subsidies, any current or future incentive or subsidy is reduced, or any of our current or future incentives or subsidies are challenged, our business, financial condition and operating results may be adversely affected.

Additionally, we believe that, currently, the availability of government incentives and subsidies available to end-users and OEMs is an important factor considered by customers when purchasing EVs, and that growth in the battery market will depend in part on the availability and amounts of these subsidies and incentives for EVs. Currently, government programs, including in China and Europe, favor the purchase of EVs, including through disincentives that discourage the use of gasoline-powered vehicles. In the United States, the states of California, Connecticut, Maryland, Massachusetts, New Jersey, New York, Oregon, Rhode Island and Washington have recently banned the sale of new gas-powered vehicles by 2035, and other states may follow. At the federal level in the United States, while the Inflation Reduction Act of 2022 (IRA) provided tax credits for the purchase of electric vehicles and electric vehicle charging infrastructure, the OBBBA (One Big Beautiful Bill Act), enacted in July 2025, has now terminated these credits, which will be phased out on September 30, 2025 with respect to electric vehicle purchased after such date and on June 30, 2026 with respect to electric vehicle charging infrastructure placed in service after such date. These changes may reduce demand for EVs, adversely affecting our anticipated sales of EV battery products. In addition, OEM customers may delay taking delivery of our battery products if they believe that certain EV incentives will be available at a later date, which may adversely affect our business, financial condition, operating results and prospects. Any further reduction or elimination of government and economic incentives or subsidies may result in the diminished competitiveness of the alternative fuel vehicle industry generally or EVs that use our batteries in particular.

Risks Relating to Regulations and Our Compliance With Such Regulations

30

Changes in U.S. and foreign government policy, including the imposition of or increases in tariffs and changes to existing trade agreements, could have a material adverse effect on global economic conditions and our business, results of operations, prospects and financial condition.

As a result of changes to U.S. and foreign government policy, there may be changes to existing trade agreements, greater restrictions on free trade generally, the imposition of or significant increases in tariffs on goods imported into the U.S., particularly those manufactured in China, and adverse responses by foreign governments to U.S. trade policies, among other possible changes. China is currently a leading global source of supplies for use in the battery, ESS, EV and UAM industries, including some products that we use. As the implementation of tariffs is ongoing, more tariffs may be added in the future. These tariffs could have an adverse impact on our business, results of operations, prospects and financial condition, and if we are unable to pass such price increases through to our customers, it would likely increase our cost of sales and, as a result, decrease our gross margins, operating income and net income. For example, in February 2025, the United States imposed additional tariffs on imports from China and significantly increased those tariffs in April 2025 and announced plans for reciprocal tariffs on several countries (including China) in late July 2025. As of the date of this Quarterly Report on Form 10-Q, discussions remain ongoing in respect of certain trade restrictions and tariffs on imports from numerous countries, including China, as well as retaliatory tariffs enacted in response to such actions. In addition, in October 2025, China announced new export controls over exports of certain high performance lithium ion batteries, cathode active materials and anode active materials, which will apply to certain of our products, There can be no assurance that we will be able to obtain export licenses for affected products in a timely manner, or at all, which may affect our ability to export products subject to these export controls out of China, which could lead to a loss in sales opportunities. In light of these events, there continues to exist significant uncertainty about the future relationship between the U.S. and other countries with respect to such trade policies, treaties, and tariffs, and we can make no assurance regarding the eventual impact on our operating results and business. These developments, or the perception that any of them could occur, may have a material adverse effect on global economic conditions and the stability of global financial markets, and may significantly reduce global trade and, in particular, trade between the impacted nations and the United States. Any of these factors could depress economic activity and restrict our access to suppliers or customers and, in turn, have a material adverse effect on the business and financial condition of such suppliers and customers or other counterparties we do business with, which in turn would negatively impact us.

Risks Relating to Our Common Stock and Warrants

Our failure to satisfy certain NYSE listing requirements may result in our Class A common stock being delisted from the NYSE, which could eliminate or adversely affect the trading market for our Class A common stock.

In March 2025, we received notice from the New York Stock Exchange (NYSE) indicating that we did not satisfy the continued listing standard set forth in Section 802.01C of the NYSEs Listed Company Manual (Section 802.01C), as the average closing price of our common stock was less than $1.00 per share over a consecutive 30 trading-day period. We have since regained compliance, since at the end of July 2025 (within our six-month cure period under the NYSEs rules), our Class A common stock reached a closing share price of at least $1.00 on the last trading day of July 2025 and had an average closing share price of at least $1.00 over the prior 30 trading-day period. However, given the volatility in the stock market in general and in the market price of our securities in particular, and the resulting risk of our future non-compliance with Section 802.01C, we continue to actively monitor the market price of shares of our Class A common stock. The perception among investors that we are at heightened risk of delisting could negatively affect the market price and trading volume of our Class A common stock. Additionally, if we again fall out of compliance, we are not able to cure within the NYSEs prescribed cure period and the NYSE ultimately delists our securities from trading on its exchange for failure to meet the listing standards and we are not able to list such securities on another national securities exchange, we expect such securities could be quoted on an over-the-counter market. If this were to occur, we and our stockholders could face significant material adverse consequences, which could severely diminish or eliminate the value of an investment in our Class A common stock, including a limited availability of market quotations for our securities, reduced liquidity for our securities, a limited amount of news and analyst coverage, and a decreased ability to issue additional securities or obtain additional financing in the future..