Q3 2021 Quantumscape Corp Earnings Call

Vendors the cell inadequate for automotive applications.

Another important news in September we announced an agreement with a second top 10 global automotive OEM by sales revenue.

This automotive OEM has already tested ourselves in their labs and the agreement calls for them to work with us to evaluate our batteries, where inclusion into pre series prototype vehicles and ultimately for series production vehicles.

So long held the belief that customer contracts are the ultimate external testing validation. So it's encouraging to have this agreement with a second automotive OEM as confirmation of the compelling value proposition offered by our technology.

This OEM has committed to purchase 10 megawatt hours of batteries from <unk>, our pre pilot production line contingent upon achieving technical milestones that are in line with our pre existing technical development roadmap.

As we said in the shareholder letter.

Though the potential near term economic value of this agreement is in the high single digit millions. We believe this deal represents a major long term opportunity.

On the cell development front, we saw important developments during the past quarter.

In August we announced the completion of our third key milestone of the year, our foreign Aircell successfully demonstrating Asian cycles to more than 80% capacity at one hour charge and discharge rates and 25 degree Celsius.

We report these cells have now achieved 1000 cycles well in access of the commercially relevant target.

Construction and development of 10 lay ourselves continues with encouraging results.

The first generation 10 may ourselves reported in the second quarter shareholder letter displayed energy retention behavior similar to our four and similarly ourselves.

As well as cycling performance in excess of our expectations for such early cells, achieving over 300 cycles at a <unk> rate.

As we've said before achieving our targets requires continued improvement of the quality consistency and throughput of our processes.

Our testing at aggressive <unk> charge discharge rates allows us to quickly identify potential refinements and cell design and construction dramatically shorten the development cycle and deploy improvements rapidly.

Following the LSP data, we shared last quarter, we continue to improve our high energy density LSP cells with refinements to the cathode material and manufacturing process.

We believe combining LSP cathodes with our lithium metal platform provides our OEM customers an opportunity to minimize active material costs and address those supply chain issues, while addressing the fundamental challenge conventional LLP cell space, which is low energy density.

For a deeper dive on LSP with lithium metal anodes I'd encourage you to go to our website and check out our September 9th Webinar on LSP batteries.

From a manufacturing perspective, we wanted to lay out our scale up plans, which call for a staged approach with several generations of manufacturing lines, which include an extended engineering line.

Pre pilot production line <unk> zero.

And our joint venture production lines with Volkswagen <unk>.

Our engineering line is used for cell and process development as well as production of near term customer prototypes and expansion to this line will allow us to increase sell output, providing the test cells in media to further accelerate our development program.

We tend to use <unk> zero to both produce more sales for customer use and three series test vehicles.

And prove out the processes that will be used in a gigawatt scale.

<unk> production facility.

This quarter, we finalized orders for large scale heat treatment tooling with a cure zero pre pilot line in close collaboration with our vendors and partners. These.

These tools represent the core of our manufacturing capability.

Finally, I wanted to say a few words about our strategic vision.

As while our immediate focus remains on achieving our near term goals.

These near term goals should always be understood in the context of this broader vision.

Our board of directors recently laid out a series of ambitious targets for the company to be achieved over the course of the coming decade.

Including cumulative delivery of one terawatt hour of battery cells equivalent.

Equivalent to the annual production of over 20 factories, the size of the Giga factory outside Reno, Nevada.

Of course, we have a lot of work to do what we know of them, but our ambitions will not stop there.

We believe that the once in a generation shift to electric vehicles combined with our transformative lithium metal battery technology represents an extraordinary opportunity with de carbonization as well as shareholder value creation.

Extraordinary opportunity.

Demand is extraordinary ambition.

With that I'll hand, it over to our CFO, Kevin Hedrick to say a few words on our financial performance before we open up to Q&A Kevin.

Thank you Jackie.

In the third quarter, our operating expenses were $54 million.

Excluding stock based compensation operating expenses were $41 million.

This level of spend was in line with our expectations entering the quarter.

For the full year, we expect cash operating expenses opex less depreciation and stock based compensation to be in the range of $130 million to $160 million consistent with previous guidance.

Capex in the third quarter was approximately $39 million for.

For the full year, we now expect capex to be in the range of $135 million to $165 million.

On the Q2 earnings call, we discuss 2021, capex tracking higher than $130 million to $160 million, primarily due to the potential pull in of some <unk> zero equipment spend from 2022 into 2021.

In Q3, our team secured shorter lead times for a portion of this equipment. They are consequently, seeing less timing based shift of <unk> zero Capex spend from 2022 into 2021.

Capex actuals are determined by lead times order dates and payment terms near year end changes in these factors can move lumpy payments either into or outside of the forecast period.

We expect Capex in 2022 to be significantly higher than 2021, as we continue to increase our engineering line capacity to support internal development and broader customer sampling as well as to invest in our pre pilot <unk> zero line consistent with our 2023 target of providing sales from that line.

For Houston test cars.

We'll provide more specifics regarding 2022 on our Q4 earnings call.

With respect to cash we spent $68 million on operations and Capex in the third quarter.

We expect full year 2021 free cash flow burn to be in the range of 260 million to $300 million. We continue to reiterate year end liquidity guidance of greater than $1 3 billion.

This quarter, our company achieved progress on cell development manufacturing scale up and prospective customer engagement, while maintaining a strong balance sheet.

We ended the third quarter with more than $1 5 billion in liquidity.

We believe exiting 2021 with more than $1 3 billion in expected liquidity provides sufficient capital to achieve our key milestones, including fully funding quantum scape through initial <unk> production.

Our GAAP net income for the quarter was $15 million, including the impact of 69 million in noncash fair value adjustment of the assumed common stock warrants.

Excluding this noncash adjustment the net loss for the quarter was approximately $54 million in line with our expectations.

Fast.

Actually this quarter, we completed the redemption of all assumed common stock warrants and important step that further simplifies and streamlines our capital structure.

Consequently, beginning in Q4 2021.

We will no longer incur a fair value adjustments related to these warrants.

We're excited about the progress this quarter and look forward to the opportunities ahead, we'd like to thank our investors for supporting our mission to commercialize our solid state lithium metal batteries on electric vehicles.

With that over to you John John.

Thanks, Kevin will begin today's Q&A portion with a few questions we received from investors.

Over the same app and in our IR Inbox. Our first question is actually a combination of questions that came in through the inbox. We've recently seen some new data from two of your competitors and it's hard to tell the difference between your results and theirs why do you think quantum stated the headwinds player.

Player that meets the basic requirements of the automotive sector, which of course is to be able to cycle. The 800 cycles at a <unk> or a one hour charge, a one hour discharge rate at room temperature <unk> Celsius.

While retaining more than 80% of the sales capacity.

And if you Miss any one of these requirements.

We don't believe that the battery is viable for automotive applications.

Now these are the players you mentioned has been able to demonstrate and needs requirements. For example, both have shown cycling data at fee over five rates Thats, a five hour charge in.

In one case, which uses a liquid electrolyte lithium metal anode. This is likely because like previous attempts along these lines. There are presentation slides showed theyre seeing dendrites and lowering the charge rate is one way to reduce the incidence of such land rights to sell internal impedance is too high to support higher rate charge.

Furthermore.

Any approach that requires.

So lithium metal foil to start with will face severe challenges from a cost standpoint, given the cost of lithium foil and the manufacturing complexities of handling reactive lithium metal in a manufacturing environment.

Otherwise our knowledge quantum <unk> is the only next Gen battery player to have shown data that needs to what we believe are the basic requirements of automotive applications.

Until the company shows data demonstrating their cells can meet these basic requirements. They.

There might be other applications that can address but we don't believe that approach is going to work for automotive applications.

Okay. Thanks.

Second question also comes from the IR Inbox can you talk a little bit more about the significance of signing the second OEM. It seems like this is just an agreement for samples.

Top 10 by revenue automotive OEM that has tested ourselves in their labs and confirmed that they are interested in building pre series and eventually series production vehicles. If our technology continues to meet the milestones laid out in the agreement is to take 10 megawatt hours of capacity from our <unk> production line, representing on the order of 100000 cells.

<unk>, which is a really significant number that supports the idea of evaluating.

Evaluating the technology for <unk> and eventually series production vehicles.

We don't believe.

Use in production vehicles.

If we successfully deliver the milestones and get a disruption.

OEM has the volume to drive significant revenues mccloskey.

Okay onto questions from SaaS have you entered into any material agreements with manufacturers other than Volkswagen.

Yes, John So I think we directly answers discretion with our announcement of an agreement with a second top 10 OEM this quarter as we just discussed.

Okay. Great do you have an estimated date on your first usable product for Matthews and what are the steps between now and then.

As we've said our target is to start production in $2024 25 timeframe and in support of this we're targeting having cells from our pre production line.

Zero in 2023.

Between now and then when you do a few key themes continue increasing our layer counts improving the quality consistency and throughput of our separate air and some manufacturing processes.

Our evs the only use case for your batteries or are you planning on entering other markets.

John our focus remains on electrifying, the automotive powertrain, which we believe is the most significant market both in terms of the market opportunity and de carbonization potential of.

But having said that.

We're seeing strong interest from a range of other applications and we believe.

Technology can add value in those sectors, but we would expect to also address those.

In the fullness of time.

Hey, Thanks, do you have a sufficient amount of lithium supply secured to meet future demands.

So introducing question because even though we use of lithium metal anode, we don't have a purchase and lithium metal this.

This is because in our anode free zero lithium design, a 100% of the lithium in our NOI comes from the cathode.

Remember that conventional capital such as NMC Av LLC ship previous dated and this is the same lithium that becomes our anode. Once our sales are charged up so there is no other excess lithium required.

Note that this is not the case for all lithium metal approaches as there are some that require a lithium foil to start and we believe those approaches will have a serious cost challenge to overcome.

Also it turns out lithium in ortho bundling material in fact, our CTO <unk> calculated that theres enough lithium and the Earth plus the ship tended to nine long range Bvs attended in nine years, so slower lithium obviously, there's some lot of work required to extract that lithium.

The fact that there is there means that demand does go up market mechanisms getting code supplies to extract more something that wouldn't be possible if it weren't as ortho London.

And finally, our strong relationships with some of the world's top automotive Oems.

US an opportunity to leverage their scale and purchasing power to ensure our material supply.

Alright. Thanks, so much we're now ready to begin the Q&A portion of today's call. Operator, Please open the lines for questions.

Thank you John as a reminder to ask a question you will need to press Star and then the number one on your telephone keypad again, just press Star and then the number one on your telephone keypad MTV draw. Your question press the pound key please standby, while we compile the Q&A roster.

Your first question comes from the line of Gabe Daoud from Cowen. Please proceed with your question.

Hey, good afternoon, everyone and thanks for the prepared remarks and for taking my question.

Jack.

Okay, maybe could we start with.

Manufacturing and any.

Comments, you could provide on improvements to uniformity on the separator since your last update and then maybe just remind us where do you have to get to.

Hey, Dave how are you. Thanks for the question. So let me answer the second part first on the thickness of the separate or so.

We've said publicly that are separate or is in the tens of microns in terms of thickness.

<unk> also said that the <unk>.

VW milestone that we had in Q1 that we reported on.

Actually required that ourselves to be in a commercially relevant thickness with a separate air and commercially over the area and of course, we all know we've met that milestone. So we feel like there is in fact.

<unk>.

Before being made in those dimensions relative.

Relative to manufacturing.

And the questions you asked about.

Many of the things that we're working on.

I would say that.

One data point from similarly ourselves last year to.

<unk> ourselves earlier this year to attend ourselves.

Our reported on.

First in in July and then again today.

That progress would not have been possible. If we had not been making steady improvement on all three of those metrics that you need.

It's better quality of the film correlates with them.

Better performance in terms of everything from the current density you can handle the cycle life to the liability of the films uniformity.

And consistency.

It relates to how many useful films you get out of a given number of films that you start and of course throughput is the capability the capacity of the tools that you have and how many films you can make and of course as we make a higher layer count films, we need to get a lot more capacity outside tender every single tenant herself needs 10 times as many.

One of the single aisle. So we need to have either tools that have 10 extra capacity or 10 times as many tools in the operators and so on so.

The fact that we announce.

Moving from making singular ourselves afforded ourselves to come there ourselves.

Indicative of our progress on all three of those key metrics.

Thanks, that's helpful and then maybe.

Follow up on.

On the manufacturing side can you.

Maybe refine a little bit or just better describe the quote unquote dozens of players that we need to get through next year for example.

Now in November again close to next year is there anything that you can say to try to help us understand what that number could really look like.

Yes, I mean, I think the actual layer count as we mentioned in the packaging is going to vary by automotive OEM because the of the cell thickness. For example, and that is going to be a function of the Oems specific module and pack design.

We said dozens of layers because.

Because that's.

They're all going to be in that in that.

A general range.

I can also say as I mentioned briefly on the call in more detail in the.

In the letter.

Our manufacturing capability can be thought of as sort of three phases. Currently we're expanding our engineering line. That's the line on which we are doing all the R&D development.

The next phase of course will be <unk> zero, which is the proof outline that.

We are.

<unk>.

But at a number of tools for both <unk> and <unk> and particularly the long lead time tools and.

And as those tools continuing to arrive and decommission and turned up.

Capacity continues to increase so the net of it is that.

<unk>.

<unk>.

We remain committed to the goals that we had outlined.

In previous quarters, which is that in 2022.

We hope to have.

<unk>.

To our customers.

And a few dozen layers in thickness and the commercial relevant form factor.

We call those customer prototype samples and then in 2023 samples that roll off the pre pilot production line and those will be samples and enough quantity to basically.

<unk>.

Pre series test vehicles.

Two <unk> so those goals haven't changed.

Essentially just one one last one for me just on commercialization and our Super early with this second OEM, but could you maybe just talk a little bit about what.

The structure that could potentially look like over time, assuming they do become.

Our customer upon commercialization, whether that be a JV similar to.

Youre doing with Volkswagen and then.

Finally, as the second.

Wood products made represent the only solid state provider that this second OEM is working with thank you.

Yes.

Relative to supply this second OEM.

It's a good question.

The answer is it does it there are two.

Two possibilities, we havent, yet decided which one.

Those two are either to have it be.

Fully quantitative to this OEM.

And so.

And of course as more of a VW style joint venture where they are actually a part owner in the manufacturing facility.

We haven't yet made the final decision on what the parties are going to prefer but those are both valuable options at the end of the day.

They really care about is.

Quantity of.

High performance sales to meet their needs.

Relative to.

Whether we are the only.

I want to.

I want to avoid.

Addressing that directly because we.

<unk>.

Haven't disclosed the identity of.

The OEM and I think that if we comment on.

The other partnerships that I think.

That starts to.

To narrow down the players, but more importantly, I think.

What we can say is that.

As you know we don't believe we've seen any other solid state forward lithium metal effort that.

That meets even.

We continue to be the basic requirements. So it can be cycle.

For 800 cycles at 25 degrees at a one hour charge and discharge rate.

We are seeing that so I think we feel comfortable.

Competitive activity.

In this particular space.

Thanks, guys.

As you get.

Thank you and your next question comes from the line of George <unk>.

Vikas from Baird. Please proceed with your question.

Hey, good afternoon, guys. Thanks for taking my questions.

Hum.

Maybe to start on the manufacturing side can you you started too.

Quarter parts and production tools can you talk about any positive or negative.

Yes.

Tons of learnings not sure how much we can share.

But the tools themselves.

<unk> is of course.

Yes.

Yes.

Tuning and tweaking various.

Such as commissions too.

Find the ones that produce.

Produce the best results.

So we're doing a lot of that work.

We are working closely with our suppliers to specified tools in a way that we think meets our needs.

And that process, there's a lot of earnings we've tried a lot of things that.

Kennedy we found.

Work as well as we thought and other things that we found work.

Better than we expected.

I think at the end of the day.

Great line the real World.

It's never a straight line anywhere.

The key is that you would make steady progress over time towards your goals.

I believe we're doing that for years.

Happy with that progress right now.

Thank you the other thing I would add more with them.

One quick thing to add to that of course is it.

Part of the outcome of all this process development as we enhance our portfolio of trade secrets right. So trade secrets.

Remember those innovations that we don't patent because theyre not discoverable by examine it.

Take apart some examine and determined.

Sales and it is a physical architecture of the layout and so on but you cant tell what recipe.

To review with you, which gases with solvents, which temperatures and for how long.

To get those outcome. So those are the kinds of things that we keep as $50 in all of this work we're doing on equivalent evaluation continues to.

To increase the paid ticket portfolio, which we think it is.

Because I think for our investors.

Thanks, and then one more just on the second OEM agreement that you've signed can you share.

Is it a bake off where there other.

Solid state updates in the mix as far as you can tell anything with regards to other.

Interesting that Youre doing are you aware of other companies in the Oems that are also.

So being tested any anything you can share on the competitive environment would be appreciated.

So if you're talking to.

Top 10, automotive OEM, you can pretty much assume that these guys.

All of these guys are exploring every possible very often that they that they can because.

I would say.

Effectively all of them are <unk>.

<unk> in one form or another to electrifying the powertrain.

<unk>.

And if you look at the volume.

That ends up driving in terms of battery supply of current conventional lithium ion batteries, which I'm sure you all.

Well in terms of all the the current supply constraints in that space, but also next generation batteries that can help them meet their <unk>.

Product.

Active net scores if you will our view has always been as you know that.

While it's great to see governments actively trying to encourage.

And the industry.

For its de carbonization potential during the day the product has to be attractive to the consumer and I belief has been that.

Until batteries get to be more competitive with the combustion engine the product is going to be lagging.

Combustion engine vehicles and so.

We're seeing a lot of interest from a lot of these.

A couple of BMS around getting better batteries that.

That can help narrow that gap with combustion engines.

And the other to be competitive with.

Traditional.

Powertrains, So I think you can assume that.

These guys have either looked at or evaluated.

Technology, where they can get their hands on and so.

Okay.

There.

Turning to disagreement.

To us reflects.

Sure.

Of signal that.

But the quantity of approach is in fact them.

The most compelling and viable of the options.

Thanks Ross.

Thanks for the question.

Thank you. Your next question comes from the line of Evan Silverberg from Morgan Stanley. Please proceed with your question.

Hi, Evan So we're very clear on behalf of Adam Jonas first question for you guys.

<unk> zero is obviously more imminent in the future, but curious if you guys could give any color Asian started construction.

Initially you guys had targeted.

Quarter of gigawatt hour 24, so curious if you guys.

Still think that's a long time.

Yes, hi, Evan so.

Well, we Havent said anything.

Additional other than the press release and 8-K that we issued earlier in the year.

<unk>.

Site selection process.

But I think the point you made is probably the key point, which is that.

Yes.

We will.

Acquired the learning.

Things that we think are.

Yes.

And we don't currently believe.

Leave that in the <unk>.

Isolation is a gating item in turning up to us.

We will.

<unk>.

For a scalable.

Sure.

And then replicate at U S. One.

Thanks, and one more.

<unk> has shown single layer. The for later in the 10 layers now in the 70 by 85 millimeter size.

For the sales that you plan to deliver to Oems in 2022 will that will they also be in that size or will you need to scale up to a larger size for that.

Yeah, that's a good question to Robin.

If you have noticed we use the word commercially relevant in many of our communications with investors.

Investors in <unk>.

<unk>.

The public in general and the reason for that is because the precise dimensions again for every OEM.

You're going to be somewhat different because every OEM is going to need our.

So to be essentially an integral a fraction of their module and pack.

So not a retail is going to get the same house.

Same general Zip code.

We will on dimension, so it might be slightly smaller in some dimensions, and let me slightly bigger, but it's not going to be.

No.

Yeah.

Multiples of times smaller or bigger.

Why.

All of those all the data we have been reporting.

This year, starting with a bad we showcased last year has been in the 70 to 85, a form factor because we believe that is.

Yeah.

Most of the relevant.

Size range of $4.

For themselves.

Roughly the size of a deck of cards.

It's slightly bigger slightly smaller.

Is going to depend on the switch.

Thank you. Your next question comes from the line of David <unk> from Wolfe Research. Please proceed with your question.

Hi, David <unk> on for Rod Lash, Thanks for the presentation Jackie.

Just wanted to.

Could you describe to us what sort of library yields and improve the thickness.

Yeah. So.

The.

The three main.

When you walk out of the ones I mentioned earlier.

So quality.

You can.

What I mean.

The uniformity across a given film so fulfillment has.

Compositional varies.

Political variance or any other variation across a given film that would be.

Okay.

Lower quality than film that's more uniform it's high quality.

So and by that we mean.

Hitting that high quality.

<unk>.

Yes.

Consistency travelers to was really weak.

You can call it yield.

We can consistently make films of a given quality and in the year will be higher.

And then the palace.

Things throughput, which is again, how many tons you could run through the process in a given year.

The amount of time.

Those three things are actually not uncorrelated it turns out that as we move to more scalable tools. For example, you've spoken about the fact that we are using these continuous flow tools to make our are separately films.

So those continuous flow tools as we get into larger tools they require more automation.

Because you have to be able to download those films efficiently.

Those high.

With more highly automated larger continuous flow tools.

Now, let me give you more throughput, but they also give you better.

Tighter control over the process better metrology in terms of.

What's happening with films as they're going through the process and so we expect to see.

<unk> improvement.

All three things.

Because they are not really completely uncorrelated.

Okay. Thanks, Thanks, Jackie and just on the 10, one layer styles. So we describe to us sort of throughput we have how many cells that you're making on a weekly or monthly basis.

And what is the I guess automated processes that you are able to use or they.

Analogous in terms of output, what we would see in the <unk> line and Furthermore, hygiene costs from one to 410 layers has the challenge of using the capital electrolyze to become more difficult for it.

Our objective will be to do it with many layers as it is with one.

Yes.

Your first question has to do with them with that.

10 years, so we haven't we never disclose the actual.

Number of <unk>.

Films are sales that we make.

As of your time, but we are shifting our focus to making.

Those tend ourselves next year.

As you know we've talked about shipping multi dozens of layers.

And ourselves.

And so we.

<unk>.

Okay.

Okay on ways to do that the key to making that happen really are one is you got to get throughput up so we get that to have more films to work with two.

As soon as we got to be able to.

Hum.

Q2.

Yet.

Good quality consistency so as we stack these films up.

They continue to work all together if you have it.

Ken <unk> and our sell in is one that layer.

When you have a bad cell so consistency becomes important to produce more and more tenders health and we're looking at that and then relative to the electrolyte.

The fact that we can make.

These tend to ourselves and as you see from that.

I think charter in our expected range.

<unk>.

And a multiyear sell.

Compared to what you see in our simulators.

Okay. Thank you Jackie and then last one from me here.

I just wanted to touch on this one terawatt hour.

Which sounds really great.

And it's Super ambitious I would just like to hear from you.

And how do you expect SaaS, we will achieve this one terawatt hours.

So anyway.

I think it is an ambitious goal.

I mean, as we said, it's the equivalent of <unk>.

What 20 Giga factories to produce in one year.

But I think where that growth comes from as is.

Lisa.

But if we truly believe that we have a technology that is capable of delivering higher energy density than conventional cells, maybe by 50% or more is capable of supporting faster charge times that is safer in many ways because of the non flammable separator.

These are really critical selling point and if we can get this into mass production.

We do.

The demand constrained.

So if we have the demand for it then we should be able to build in our factories to vary.

Earn meaningful share of the overall market for battery now we won't be in mass production to until mid decade, So with 25 timeframe or so so that doesn't give us a lot of time to ramp up to accumulative terawatt hour, but.

It's not impossible.

It requires that we can turn up Google.

The factories that are.

Of the <unk>.

Size and scale of what.

Whats currently being planned by many of the leading battery manufacturers. The original Panasonic Giga factories, probably on the order of 30 to 40 gigawatt hours.

Many of the currently being planned value facilities on the order of 100 gigawatt hours per year over five years.

Each of those factories is already capable of producing half of Terawatt hours. So we don't think it's binary.

By any means impossible. It does require that we execute on.

Im.

But.

We believe the demand is there we believe the fundamentals.

Technology has the capability to deliver on this and if we can continue our execution as we have been doing we think we have a real shallow pool and so I think with that Golar representatives is fundamentally a way to quantify.

What we've been talking about which is we really.

Wanted to make an impact in two ways. One of course, we want to create value for our shareholders.

The second thing is we want to play a role in.

The decarbonization of the transportation sector, and we think both of those goals are are served well by having an aggressive or ambitious target.

The type that we just talked about.

Thank you guys. Thanks for taking my questions.

Smooth.

Thank you there are no further questions at this time I will now turn the call back to Jackie. Please go ahead.

Yes.

One of them.

Thank you everyone for taking the time to join the call today.

Honestly, we're excited about the results that we shared independent third party testing.

With one of the things we've been hearing from.

Hernia, depending a lot from our investors and we're delighted that the.

Test data.

Is extremely similar to the data we've shown in the past and of course. The test was also one under what we consider to be aggressive.

Driving conditions in one hour charge and discharge 25 degrees Celsius, 100% depth of discharge.

800 cycles to north of 80%. We're also pleased with our multi their results developments on the on the customer front, we remain positive as well.

We're going to stay focused on these goals and tasks in the quarters coming in.

And we look forward to reporting on further progress on our next earnings call.

You all.

Thank you today's conference.

Has it been concluded. Thank you for participating you may now disconnect.

Okay.

Sure.

Yes.

Okay.

Yes.

Yes.

Okay.

Okay.

Yes.

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