Q3 2021 Fisker Inc Earnings Call
Good evening, if I can get you today as Fisker eight third quarter 2021 earnings call.
My name is Erin and I will be the moderator for today's call all lines will be needed during the presentation portion of the call with an opportunity for questions and answers again, if you would like to ask a question. Please press star one on your telephone keypad I would now like to pass the conference over to your host and Galebs with <unk>. Thank you Mister <unk>.
Jobs you May proceed.
Thanks, a lot Erin and welcome everyone to <unk> call joining me on the call today as usual or Henrik Fisker, Chief Executive Officer of Dr. Bukhari.
Chief Technology Officer, and Dr. Geeta, Goofed up desk, our Chief Financial Officer, and Chief operating officer before turning it over to Henrik D. Advise we will make forward looking statements within the meaning of the federal Securities laws forward looking statements generally relate to future events or future financial our operating performance are expecting expectations and beliefs regarding these mad.
<unk> may not materialize actual results and financial periods are subject to risks and uncertainties that could cause actual results to differ materially from those projected. These risks include those set forth in the press release, we issued early earlier today as well as those more fully described in our filings with the Securities and Exchange Commission. The forward looking statements in this presentation are based on.
Information available to us as of today, we disclaim any obligation to update any forward looking statements, except as required by law will reference our financial matters that do not conform to generally accepted accounting principles or GAAP during today's call, including non-GAAP operating expenses. This information may be calculated differently than the non-GAAP data presented by other comes.
Denise.
Quantitative reconciliation non-GAAP financial information to the directly comparable GAAP financial information appears in today's earnings release with that I am happy to turn the call over to Henrik. Thank you Dan welcome everybody I've got some real interesting news I want to share in the end of my.
Presentation, but I'll just start with some some high level bullets around the business. We are still on target with the ocean to launch it in November next year. In fact, we're gonna start ramping up the prototype bills with Magna.
Already in Q1 next year you have off course already made some prototypes from about the end of two one next year, we expect to start building two vehicles a day.
I think that's pretty outstanding well over eight months before we launched the vehicle and that will make sure. When we launched we can ramp up quickly and into high quality vehicles and that's on target. We also know hired a lot more people to continue to hire probably somewhere between 20 to sometimes 30 people in months.
And we have well over 300 people in the company now.
Our balance sheet remained solid wood about $1.4 billion in cash and also be continued checks Hillary our reservoir.
Reservations, and I will talk a little bit about our marketing push as well.
But just gearing up to unveil a bill ocean here at the auto show.
Where are the Prs based on 17th but will actually have a special event the day before which will scream worldwide. So we are really excited about that is going to talk a little bit more about that closer to that event date.
We also got into validation face that who costs will discuss and get a little bit minds of detail about and then of course at the show.
Where we are in late August. So we are going to really talk about the specifications of the vehicle show our brand New design interior with some pretty amazing features definitely some that currently don't exist in any vehicle today, So I'm super excited about that at all.
So we have made progress.
On the Pier program and actually our internal team have come up with an extended strategy.
Around R F F Pat development Messick, and what we're looking at it is much more.
I P sharing between the ocean and the pair meaning a lot more components that we have developed and create IP on throughout the Ocean program and what that means to the ocean is that when we launched appear in 24, we're going to start.
Being able to use some of these components in both vehicles and much higher volume that ultimately will actually lower the oceans build the materials the cost of the ocean even more so I'm also really excited about that.
Let me get some marketing and sales.
We have expanded the.
<unk> dramatic Avi have hired an agency, which we are working with.
Marketing materials, we are really wait.
Waiting to golf course kick off all big marketing push to around the 17th November when you show the car, we obviously needed the vehicles to feature in advertising online.
Digital media et cetera, and all of this is in the works right now we're going to launch both in U S and Europe major campaigns I think they have some real itchy cool stuff and I'm really excited about it and that's gonna go full blast from the 17th of November and I expect that we will start seeing major acceleration.
In our reservations at that point in time is obviously going to get more known.
Across both the us and Europe.
Have you have also made progress ESD initiatives and.
Really looking at Nick.
Wanted to be able to explain more details and use real primary data.
Above the full of cradle to cradle lifecycle analytics and will be as we get closer to us our sort of production will get more into details on that now let me return to sort of the real Big news here, which is our new sign deal with the C. A T L for batteries and I wanted to.
Right a little bit about why this is such a big deal.
We're going to launch very uniquely Fisker ocean with two different battery Chemistries of course, two different packs.
And you're already running tests on these past of course, they're going into all the prototypes.
Well next year.
Unique about these two different taxes the base pack.
Actually is.
Is amazing when it comes to cost because it's using.
P and that's a much lower.
And that's how we are currently able to achieve.
The low cost of the of the fiscal Ocean, specifically in that base price of 37499, which I think is unrivalled by any competitor also the type of range are you gonna have there is going to be more than adequate appropriate for most people and quite good actually.
Then of course, we have the second battery NMC and the advantages of that battery is not only in the sofa really in the pack and also will be done with the structural the vehicle in terms of the the sign of the pack itself. So our packages method Spaceball pack is not the typical squares space.
You've seen every single.
E D out there as a slightly different.
Configuration, which we're not planning to show off to our competitors too soon.
It allows us to do is get the world's longest range in our statement for an issue be in on our price class.
Of course, you can make that 150000 200000 dollar car with an incredible range, but to make a vehicle.
Between 50 and $60000.
Such a long race and we have achieved I think this literally magnificant and it really shows what a phenomenon engineering team. They have great partnership we're having with.
T L and.
Really excited to show those numbers at the auto show in fact, we will have models.
Can choose between the sport model.
Which will have the LSP battery extremely oil price and then we have the two other models, which will reveal the names of the daily order show, but both of those two will have the longest range in this segment and as you know right now the longest range for sale here in the U S and sorry about 50 to 60000 dollar for.
It should be across though was about 326 miles and will be well over that with both these two other vehicles and but I'm really sorry about that.
What's also unique about our powertrain is the efficiency because in the end of the day, we haven't actually I didn't want us.
Sort of skip out here and just do another hatchback crossover with great aerodynamics that doesn't really look that great. We wanted to create a vehicle that can sell globally and the fastest growing market in the world was that should be that's what people love the lovely utility they love good looks and that's what we're going to what we want to be different and I'll come.
Editors and despite having that larger issue vehicle, but all the utility that comes with it.
We still have a vehicle that's class meeting in range and of course as I mentioned, it's partly to do with C. A tail is partly to do with our energy dense battery pack is partly to do with how our vehicle actually is designed and engineered in terms of the space for the battery and then our incredible powertrain, which we're going to talk.
More about at the end of our show as well, but one thing I will say there'll be haven't announced yet is that every version of the election will have silicon carbide Inverters also the base vehicle and that is part of our contribution to our really really high performance powertrain long range.
Really efficient.
And I think what's interesting here is.
Why would we be ahead of the competition well we chose all this technology. This year. So when you get a fist Grossman 12 months from now your technology is the newest of the news if you buy any other car next to your most likely that technology was chosen three years ago. So that's why they're different and that's why we're going to be costly and I want to hand it.
Over to boot cut to talk a little bit more about the details of what we're doing on the Ocean program, Yeah things and they can really come everyone.
Andrew could fit this whole thing poses for ocean is down to just a small two parts of the show of items. So we moved into this industry utilization phase of the program.
This involves of course, it's here's the boats, which one physical prototype boots.
That's already begin earlier this year and will be ongoing through most of next year.
Need to do the hardwood to ensure the components seamlessly integrated view on.
On trick to the all of the attributes we potential to calm it will meet all the safety performance durability attendance in all weather conditions and that it can be manufactured with the quantity.
So drifting of build a so called news one was completed some time ago. This was primarily be non statistical relational rituals safety testing physical results.
The medium to build is complete and testing is ongoing. This continues the new one testing, but also as poetry Dmitri electrical system functioning platform durability.
You wanted to compete.
Function and puts include rather industries.
Finally, as you can see from the photos on the earnings release.
We're very happy to have started the next <unk>.
Using protection intend components.
Can say, it's super helpful video pull to build prototypes in the actual production facility, which is unusual for a small dog.
The body shop is operational and months General Assembly is up and running the shop is capacity produce up to two cost per day.
I'm very proud of only take me to the teams.
And <unk>.
For accomplishing a lot in a short period of time.
I plan to achieve on time slot of production.
So that's been through all of the required tests and validation work to prove quality.
The ability and durability from the start.
Thanks in no time.
To veto.
He looked at and welcome everyone really excited to be here today overall I can say I'm really pleased with what the the complaint as a team invitation to throw caution SLP now just a yearly over 90% of the Ocean Bennett machine is now sourced and the remaining components most agents off the shelf parts.
No. Thank you I'm sensitive, it's definitely not easy, but ultimately the successful advocating a sickness a significant amount of advanced technology, which would result in an amazing carnac.
Pack the class meeting beaches.
Beyond until the thing the development process that this could ocean has taught us a lot.
Various components and made it technologies at both the system and a subsystem level has resulted in exciting. This one to intellectual property that'd be intend to put to use on all that furniture maker programs and tend to just alluded to now.
Recent announced back to you that reservation agreement that team.
My final long lead and then the most critical items in the vehicle of course to do companies have been working together on development validation testing since last year and now they really think that we can share with the public a committed long term capacity agreement and I want to make a statement that we actually did.
C T L. In 2019 and had spent three to four years developing trust and a phenomenon relationship with leadership Fcats and it's evident from the quote that the president of C. A T. L made and I joined press announcement, we have committed to die of over five gigabyte our capacity.
Initially difficult.
Students in chemistry, and you had mentioned a long range and and see tendency it.
Back because of high capacity back in the castle, that's a broad segment meeting range and a high value back which uses LSP and the cast that's suppose that supports the compelling fries or physical ocean sport, while providing range and acceleration consistent but the much more expensive E B B C.
Is a very deep in a strategic relationship that T. A P O S.
Part of our contract we have the ability to jointly 10 12 months ahead of time to increase our capacity AD VT demand in the market, including opportunity to localize production in various countries globally. All the time, we are now needy working with suppliers and partners on the test and validation.
And book I mentioned supported by a robust set of timelines milestones and shed deliverable.
As we move from the sourcing faith to the industrialization faith I have been able to turn my personal focus to the balance sheet at villa preparing the business to scale by focusing on operations hiring and building building processes. We took action to bolster our balance sheet in August midfield breathing 667.
$5 million in a convertible note offering at two 5% interest rate and at 30% conversion premium to cap call <unk>.
<unk>, we used part of the proceeds to find the cast call.
Reemphasize we had.
Can I get the same convergent premium and we as part of the proceeds to find a cat cause that takes the effective conversion side to $32 50, 70 cents or 115% of the top right at the time of the conduct this was an efficient way to bolster the balance sheet and beaded funding additional vehicle programs the dining goes by choice.
It was not out of the need and the gas call signals about confidence in the future value of the company based on our end Tony view of both progress to date and there's still a product line, we intend to launch on the operational side.
Hendrick mentioned it also had a phenomenal year in hiring we have 100 people last year. We now have over 300 employees that includes 20 extremely season, Vice President I've done a great job in building their own departments and the entire organization and we have empowered the entire company with a very attractive performance based restrict.
Get stuck in it bonus which is not a <unk> existing employees to be part of the success of disco, but it's also helping us immensely entertaining and hiring talent in this market.
We are now working with advisers on set it setting up global entities worldwide and I D systems that take us from the development company endured revenue generating part company with customers worldwide and handed covered the <unk>. The work we need to build that the customer experience function that are critical to launching a successful product.
That's the number one focus but if you don't have right idea systems in place to support those products the business simply cannot scale now turning to our results and outlook.
Operating expenses and cute faith alive keep it into any expectations capital capital expenditures will be below our expectations. As many of you know capex is lumpy invade the lines at the timing of building some supplies, which can sometimes be hard to predict forecast as you finally billing and has been slower than the expected despite ongoing work.
That is bidding activity has picked up significantly. So thank you for does he have good visibility that Catholics will increase meaningfully in queue for as implied by a guidance operationally the increase in irony in Q3 versus Q too.
But the problem with the result of increase headcount increased prototypes spending and modest engineering design and integration refinement as we enter into our industrialization faith, we expect a more modest sequential increase in queue for on head count and as the prototype book continues to raft the increase in SG&A expense in Q3 versus.
Q2 was the result of Ohio.
Professional services and getting engaged to global advisory from Quebec, stretching and I'd be spending on global ERP systems in CRM installations, we expect as you as you need to more than double in queue for due to kick off a marketing campaigns debate that thread, including significant spending on that any order shall unveil a fiscally.
An activity surrounding that event plus we would begin to accrue leaves expenses on our flat should any experience.
Property, we recently signed now turning to outlook as noted in the press release, our overall Opex just capex guidance case unchanged at 490 million to 530 million, but there has been adjustments in the category.
R&D increased 15 million at the midpoint. This is related to an assignment at the guest and validation plan for the remainder of 2021.
<unk> increased.
By 10 million due to a more robust marketing plan for Q4, and the flagship store at least I mentioned earlier, hi, I'll fix is offset by about 25 million lower capex spending which is related to receiving late invoices from suppliers work is progressing on track they spend time defining when they are not.
I hate to be both for their work overall I'm extremely proud of our entire fiscal team for all the competition I'd be made some fire in 2021, we have a lot of work ahead of first Fisher as we enter the critical industrialization faith that we have a lot of confidence in the pens, we have established to execute a fantastic profitable passed on time and.
<unk> and I can wait to unveil the physical ocean at the end of August show, where now happy to take your questions. Thanks.
Thanks, Kita Aaron can you place compiled.
Q.
Certainly we will now begin the QA session, if you'd like to ask a question. Please press star solid that one on your Touchtone keypad.
If for any reason you would like to remove that question. Please press star followed by to Ya.
Again to ask a question. Please press star three we.
We will talk to you briefly fill out questions Hunter Green.
So first question comes from Joffrey Lindsey, John with Teeters, Pickering, Holt and company. Please proceed.
Maybe everyone. Thank you for taking my my questions. My first one was on batteries and I appreciate the detail in yesterday's relief and some of the teachers from today's call on the characteristics and also how you spoke to the Eliana in two weeks for much more detail at your very much looking forward to it but is there anything more you can give us just today.
As we think about pack costs between the two chemistry thing any more detail on the range as you think about those would be helpful as well.
So we want to give our customers all the information they need.
Need and desire, but we don't want to give all information what our competitors want so I can't take it make any sense for us to give the exact price of our batteries, but I think it will be can say as we know that they are on par with some of the biggest car companies in the world in terms of cost.
But the real advances here in terms of cost of the pack is the fact that we are using LSP and the base vehicle I don't think there's any vehicles in our class right now in the U S is using that that.
That might be one of those using it going to use it but I think that's one of the bigger adventures and the advantages of the design.
Battery volume and Alpex. So we can get quite a lot of power or the Ellis.
P. Because LSP reason this little part of the reason as well of course. It was also is not energy dense as NMC. So you won't get the same power, but if you have volume you can get a pretty good amount.
Power into the vehicle and that I think that's about the time at the Ocean Park.
And also maybe maybe.
But.
You can go ahead.
No I was just going to say range you asked about the rain. So I mean, we kind of want to wait and surprise people at daily Auto show, but I think the real key again here is some people.
Really need to carry a giant battery around.
Therefore, we have that LSP solution, which makes it extremely price competitive, but if you do one range than we do have a really cool long range and like I said it will be the world's longest range an hour segment and our pricing. So of course. Please don't compares to vehicles that cost 8000 $150000.
We can compares to vehicles now what price class and the type of vehicle or vehicles, we will have the longest range in the world and the ocean and the two versions that sits above the base sportswear.
[noise] understood appreciate and understand that we'll have to wait a couple of weeks to really get the detail.
One is just on marketing, there's clearly a lot going on as you all highlighted just preparing for daily auto show in the marketing pushed to kind of a company to unveil what they experienced center Lee secured and broke in the customer experience teams. I was wondering if you could just talk a bit more about the game plan for the marketing part of the strategy pick about growth and reservations overtime.
Yeah. So we're creating content right now I will continue creating content over the next couple of months and what I mean by concept is you've got to make real exciting videos that can be used as online digital.
Add some engagement with the.
Potential customers, we have higher.
Some unique agencies that are specialized specifically in digital and then.
Et cetera, how we reached the right customers, but in the end of the income and I know a lot of people, saying why don't you start blasting a whole bunch of stuff up now I think it would be a waste of our money.
Still 12 months away from delivering were sold out well into 2023, but my expectation of all marketing teams are that we will have at least 50000 reservations by before we start production next year and I think we have a really really strong marketing plan that is comprised of <unk>.
Line concept.
That means of marketing and PR hurting.
PR moments.
We obviously are in Hollywood, and therefore already planning and have already secured us being in a couple of different films and television series and then of course, we have also plan to host of events.
Throughout the us and Europe, and then we're going to open experience vendors, we have a whole new strategy that nobody's used before when it comes to.
Displaying our vehicles and how we deliver our vehicles is all about creating the ultimate experience I believe I think the automotive industry. So far behind an experience you look at how quickly and order a pair of shoes on Amazon and then.
What happens when you're all of our car and how long it takes to get them. How many papers you have to sign up and considering it's maybe 40 or $50000. How has that experience we want to create and be the number one and experience in the world and that goes on everything very interact with the brand to how purchased the vehicle of Flexibilities. The vehicle how are you.
Ownership goes throughout the time of your vehicle what were you going to do over there are updates et cetera. So all of that of course, they're going to elaborate on over the next 12 months to show how we think we're taking the lead in many of these areas and Jeff I just have one more point to add I mean, that's what you have to put in the press release.
Got over 70000 registered App users.
And we think it is pretty unusual for people to reserve a product more than a year in advance when they don't know what the content and features of so we're really happy with our reservation today, but we think just talking about the details of the content the pricing of the entire ocean lineup. The range all of these details about the car triggers.
Quite a few of those registered App users to reserve and it also helps with fleet sales because most fleets are certainly not going to get into detailed discussions about a product that they don't know exactly what the contents and that's all going to come out in two weeks.
Can we go to the next question. Please Erin.
Thank you very much.
Thanks, Jeff absolutely.
Thank you Michelle Amazon.
The next question comes from Joseph Slack with RBC. Please proceed.
Thanks, very much everyone.
Going back to the battery announcement, which which seems important here uhm two questions. One the decision to go to our P to offer you know more compelling.
All around vehicle does that at all change your potential demand outlook for that variance and then secondarily. If you can just sort of talk about your your scope to grow your allocation of Gigawatts was hotel overtime if needed.
Yeah. So there was always all plan will always since quite a while it was a strategy to use our vehicle.
Or a vehicle in a much higher potential.
By a group and you normally see so if you look at all electric vehicles out there today that are issue via crossover so let's forget hatchbacks.
They're all very expensive and they're also staying pretty much within and narrow spectrum of pricing and I think the unique thing about the ocean is to restart at $37499 or.
And that is an amazing price the average price of a car today I think that's gone over 40000 now so we're really among.
Really consider affordable and reasonable for everyone.
Secondly, with our flexor beliefs, when we start that.
Again, we're going to attract a whole new by a group that very few other car companies have.
The ability to reach because of the way we structure. Our flexibilities, we can give the car back anytime so absolutely I think that we have a real possibility once we get production going.
Potentially scale off on the side of the LSP then finally.
Your question.
About <unk> and what happens if we for example, see that we can tell a lot more cards that we expect as Gaeta mentioned maybe.
Maybe that slipped through the cracks, but we actually have an agreement that possibility to increase our volume significant it was CHL really if you don't have any limit on a quite frantic.
And we just have the 12 months planning has.
And if I see middle of next year that we have a terrific sales on on the on the reservation numbers, we can call CHL, and saying look we need X amount more with its double or triple or whatever it is.
From 12 months later, so so now it's just a matter of how many vehicles can we sell.
I'm really really excited about this specific battery deal because it allows us that and I think very few other startups probably have that ability also remember most of the startups up buying sales are making no impact in this case, she had chills, making the packs let me get a full finished solution.
To us and that gets from my point of view also some other advantages down the line.
Alright, Thanks, and maybe just a second question on.
You are coming out lay auto show and you're going to show these vehicles.
Soon.
After that.
Do you open the Configurator. So you started to get a sense of of that makes so you can properly your suppliers no.
How long does that process sort of need to be and then when should we expect that configurator open.
So we are already working on that that's going to be open the day off the 17th so they will go ahead and configure vehicles and then we're going to expand on the Configurator later.
Introduced more features on it but you will be able to go in and configure your car if you're going to have all the different option packages shown of the different features and that's quite a lot of them a lot of them a segment bleeding in my opinion.
And that's all going to be available.
Already on the 17th of November.
Alright, Thanks, a lot Joe.
Thank you Mister stack.
The next question comes from.
And then the bird with Morgan Stanley. Please please.
Seven soda break here for Adam Jonas question on the batteries.
For the five gigawatts or the initial five gigawatts, where will they be sourced from.
Of the country.
And you guys have made the emphasis of ESG with you of making the most sustainable <unk> in the world, obviously batteries pretty.
Dirty business as we sit here today, so what steps have you made with the CHL partnership that helps you secure a sustainably sourced battery supply.
Yeah. That's a great question. So first of all the case the account is in China. So the batteries are coming from China. They have a pretty elaborate so I was thinking mechanism when it comes to different raw materials. So we do have a responsible supplier policy that we announced earlier this year that we put in place that we share that.
All of our suppliers.
Expect to see at T plus they have a copy of my policy and now as we get into industrialization. We look at the source of some of the raw material, but also very importantly C. A T O themselves have put together.
Extensive recycling program and we will be working very closely with them on looking at end of life views and looking at recycling what can we do to make of course the carbon.
Now in addition to that.
I don't want to sit here and talk about <unk>, but of course today. They have 65, 66 gigawatt aloe capacity and as everybody knows it is now the biggest battery company in the world and they have plans to go guilbault, which means that they will be in countries outside China sneaking cells, and we are knee deep in discussion.
<unk> with them on the global Downs as well since we are a global company and the city is not only the ocean, but of course, the best program and other various onions.
On the Ocean platform I also just want to add one thing and sustainability.
Flexible lease program.
We are working on actually keeping the vehicle all the way to end of life and recycling the entire vehicles that would reduce it out for 12 years, which I would consider pretty.
Pretty much end of life.
Resetting the vehicle after that so you are looking at a complete.
Closed circuit really.
Not to mention of course, the fact that we will get a lot more profitability of each batteries being able to pieces vehicle over 12 years, you are talking about more than 250% margin on these vehicles long term.
That's some helpful color. Thank you and one more if I could squeeze it in.
Obviously, you guys are a outside party to this transaction, but it was announced what was it a month or two ago about the Fox plans to try to buy the Lord's channel Hydro plants from large town motors has there been any discussions between you and Fox Con about the.
Potential for making pairs at that facility should that deal go through or any color on potential production facilities for the parents. Thanks.
Well I think yeah, I think we already mentioned that that's our intent to produce the pair in that facility.
It's a giant facility, which can probably get up to close to half a million vehicles a year. So again that gets huge potential for Austin the growth of the pair that initially we were looking at Greenfield that would have started with 150000 vehicles a year obviously in that facility as it turns out we are a lot more successful than.
We thought we could be then we could cricket move up to the 250000 vehicles that ultimately as our own gold short term long term I think we can so much more than that but it does allow us to move a lot faster than we are constantly in contact with such phone is going to work on the pier program and of course views.
Scott seeing are not only.
The place of the manufacturing because that I think is sort of determined although as you mentioned.
To do their own final deal.
If that deal comes through that would be the place while we also looking at.
Intelligent manufacturing.
In terms of being able to take cost out of.
Of the vehicle and as I mentioned earlier, we have an extensive program within fisker of sharing parts of the ocean, which means we don't have to go out and procure these parts and.
To sign them from scratch, we can blood to resolve current suppliers on saying actually we need on that part instead of whatever.
Every now and the 400000, a year and that means that you are able to lower the pricing for both the pier and the ocean. So all of these discussions are constantly.
Thanks, a lot of it I appreciate it Aaron can we go to the next.
Absolutely. Thank you Mister Silverberg.
The next question comes from John Murphy with Bank of America. Please proceed.
Good afternoon guys.
For simple question, what is the five gigawatt hour capacity imply as far as your pack or vehicle.
Just give me a drink.
Is day chemistry here, just curious what you think that applies or what does it imply based on your mix.
But we know exactly what it implies but we're not going to.
We're not going to elaborate on that again, we have a lot of I think for the customer it's super important to know the range I don't think they need to know as a configuration executive Ah battery pack or exactly how we were able to packet.
That's something all of our competitors would love to know, but that's not something that we're here to talk about at this point it will probably come out close to launch because that will take a lot longer than two copies.
Okay, and then just a second question, but the the lifecycle.
Analysis I'm I'm just.
Why you think it's necessary to do that and what you think the conclusions will lead to I mean could just put you in a position to do more green bonds or more do ESG calf raises just curious what the motivation is there what you think the conclusions will be and if that opens the door to more funding.
Well first the motivation because we we want to be the world's most sustainable car company. We have clearly said that and we're trying to do everything we can to make that a reality and that takes a lot of work and a lot of different areas as I mentioned before we are going in the ocean and the C. O two neutral factory next year.
That's part of it and then there's all the materials views and then as Recyclability.
So you know, it's who we are as a company as a brand and then maybe you can elaborate on it yeah I think the point of the lifecycle analysis is it's not enough to just say you have a climate neutral car or a kind of a low emission car you really need to prove that you need to measure it.
And you need to measure all points of the life cycle from upstream sourcing all the way to end of life like Hendrix said and there's actually an eyesore standard for doing a lifecycle analysis, it's really takes a lot of hard work.
We have a plan in place where ongoing on that plan and really the intent is to be able to measure and prove how sustainable our vehicles are going to be maybe one thing I can just add is that the reason I think we have proposals would be number one in the world on this point this because.
We are.
Building everything from scratch, we don't have a legacy that will have to turn down and get rid of.
We're going all out and we have gone out of this from when we started the company. It's been a focus always is not a fat. We just kind of came up with a couple of months ago.
This is something that has always been one of our main brands pillows and will continue to become one of our main colors.
Great. Thank you.
Thanks, John Aaron I'm, just going to break in for a second as as when you'd have done every earnings call. So far we've collected retail investor questions from the fake technology platform I am just going to go through a few of those and then if we have time, we'll get back to the analyst Q.
So the first the first one there were there were several questions about kind of competition and differentiation.
So the first question is what differentiates fisker from the other <unk> makers, what is unique about discourse proprietary systems.
So I think I think we have a unique design that's obvious and you will see that when we get in the vehicle as well the user expense experience will be phenomenal. It's a whole new take on what as user experience should feel and look like once you get into the vehicle.
It is headed up by.
Our head of user experience here from Microsoft and his team that really I think none of them come from the automotive industry almost most people come from gaming other.
Areas of the digital industry. So we're taking a moment to take them that I think that's going to be really really different to sustainability aspects. We already talked about it I think is a huge different shades I think a lot of young people today want to identify themselves with a brand of stands for something meaningful.
And we have already seen that in the over 18600 orders there'll be auto reservations, we have the powertrain performance in our class is fantastic.
On all levels that includes as I said before class leading in range, but not only that we have a very unique system in our price range that makes it pretty much feel like a formula one driver or makes you drive extremely safe and icy with conditions and it's something we will elaborate on when we launched a.
<unk> in two weeks.
Is phenomenal up driven.
I've gone out on a test track and being able to drive our vehicle.
About 10 miles faster through a corner and any other vehicle without this device. So that's something that we're going to be talking about and then I think the value for money.
The body is going out, making luxury eevees and quite frankly, I think we're going to have a flooded market luxury vs.
And even the traditional car companies are making luxury. These we are tackling the market not just for the little tin can hatchback under 40000 would be attacking the market was most of the site.
Take a vehicle in the world, which is an SUV and I think you're going to be impressed and everybody's can be impressed from his seat the value for money were able to give in this vehicle and part of it is.
That we have been able to work with our suppliers very closely on getting the right I think because they've been even though a volume because they didn't even the design and the desirability of the vehicle don't forget the suppliers have access to all the secret details behind the curtain of how our vehicles can perform you have.
Access to college, Hulu looks how's it truly is going to be experience and they believe in us and that's why we have a lot of amazing long term partners like CHL stepping in to be part of this.
Adventure.
Thanks Henrik.
Okay.
South of solar sunroof, how much power will generate or how useful in that regard.
Thanks for the Christian so at this point, we belief that undergirds not perfect, but good conditions. The technology can generate around 12 months per year completely climate neutral free driving.
There is a note of IP industry TB developed a unique converter to enable direct charging of the high voltage February.
Hello roof.
So to understand the question directly believe the optional <unk> will be very useful and more importantly expected sort of that sort of technology, you get more efficient and blue and cost of the time, which is why we are very excited.
To <unk> in the country.
Maybe one thing I just want to add to what <unk>, just said and kind of showed in a different way. We also internally calculated out.
What it would mean for the average driver for every time you would complete you charged the vehicle. So if you think about some sort of what is the total range of the vehicle I would say the way to look at this as well as that could increase the total range on the vehicle.
About 25 miles it could calculate how many times had charged the vehicle over a year. So there's many ways to look at those and obviously, yes, you do have to live in an area, where there's a fair amount of sun, but most of our vehicles right now are actually reserved in those areas.
Got it. Thanks Henrik we also had a bunch of questions about sales and marketing as you would imagine a couple of weeks before the auto show. The simplest one was what can we.
Oscar Ocean launches in 22.
We've covered a lot of that has anything to add.
Inc.
A couple of things I didn't add was.
We're going to of course have media drives next year.
Then of course later it really in the end of 22 are probably more than 23, if you're going to start with customer test drives, but also leading up to all of that I think it's about creating brand awareness globally and as I mentioned before we do have two amazing cramps of agencies to retire to go with our cats.
The teams, we are creating campaigns that we're going to launch all over Europe and all over the U S and they are going to be starting that launch already on the 17th November So I'm really confident in our marketing plan I think is phenomenal and really show the first experience sender.
Some time in the second quarter of next year here in L. A we are also seeing a very different approach there, it's gonna be really really different super cool.
Think that will attract a lot of attention as well.
Great. Thanks Henrik.
Can we go back errand to the analysts Q, we have a little bit more time.
Absolutely. The next question is from Jeff Osborne with Kelly. Please proceed.
Okay, Great too quick one one on the commonality between the ocean and the other platforms could you talk about what the longer term opex in Capex applications are that in the second question.
Had was just if you get further elaborate on the.
Decision to use silicon carbide, what the incremental cost is relative to the incremental range that you'll be getting.
So.
And the second one just to have that first I don't think we want to give.
Anything away to our competitors on that one but I wanted to highlight that we have that high tech in our vehicles, even and the vehicle is starting to $7499 and I think that's what's really unique and that comes back to the value that we offer our customers in terms of the shares parts between.
All all platforms actually we have spent a lot of time internally.
Looking at how we can drive down costs long term by using common parts in many areas of our vehicles is.
It's still a program that we're in the middle of executing civil probably maybe talk more about that later, maybe that has a few things you want to talk about in terms of the Capex, Yeah, Hey, Jess Great question. It's keeping you. So if you look at the Ocean.
<unk> of all thanks, I'll focus a little bit and R&D and maybe spend money. We obviously have hired as we said over 300 people and they'll keep hiring they're developing a kosher of engineering with developing.
Deep learning and vehicle integration second area. We all think you have to like finding suppliers Mcintire is a development back now and again to learn to locked together tug area is you have supplied <unk>. So that's clearly the synergies that Henry talked about but there are certain catty over park lunches engineered then.
Is simply carryover data and that creates the commonality of fights in the fourth critical area of the book I talked about I think now turning in today as well is everything you do in the prototype and testing so to creator globally obligated.
Vehicles audio crash model, you'll see how you truly look at optimizing testing How'd you look at data how would you put together a very high quality vehicle. So those that clearly.
The key areas the other area when it comes to Opex is obviously suffered.
So.
All all the discipline control unit different fights you've got a program software we're learning as a team and keeping you can carry over some of that stack some of that according on PR mixed inundation of box now all of that all pets you can use across audio base model is not let's come to Capex and some.
<unk> you might be able to use existing tooling increased capacity lower the cost of five across ocean and other models, but in some cases for example, when it comes to body invite or it come to Kathy five so it comes too heavy <unk>, we may have to do local standing so.
I think that there'll be huge synergies a lot.
And more importantly will also be able to get the commonality of five achieved aggressive timelines.
I appreciate it.
Thanks, Jeff next questionnaire and place.
Thank you Mr Osborne.
The next question comes from pulls down will come along with Raymond James. Please proceed.
Thanks for taking the question I remember earlier this year you were lobbying.
For an adjustment to the E b tax credits.
Partly to make sure there is a cap on the eco price of eligibility and it looks like something similar will be included in the build back better plan.
Given what you've seen from that from the legislation R U.
Happy with how it turned out.
Well first of all when you say lobbying in disarming character during the call. We don't spend any money on bluffing are loving as.
Internal communications team putting.
Putting things on the Internet or I'm linked then wherever you can do it and of course.
Will call somebody bug.
Coming back to the plan are you happy with how it turned out I don't think it's turned out yet.
Something has been voted in yet and I I personally I don't want to talk politics, but I personally doubt, it's going to be voted in exactly this way because if you have noticed there is pretty much every major car company in the world except for the three big ones in Detroit.
Pretty much spoken out against us.
Plan here. It also violates agreements the U S have with Canada, Mexico and Europe.
So I think it remains to be seen whether it comes out this way as it is now however, I could imagine that I think it's still makes a lot of sense.
To have a cap on on.
The price of the easy that gets a tax credit and May think whether it's going to be whatever's proposed now maybe not but I think that will kind of come a cap and I think that's of course, a big advantage for us because we have a very affordable vehicle and it's a vehicle that pretty much fits in everybody's driveway, it's something every.
Everybody wants and.
With a reasonable good easy credit everybody might be able to afford it and I think we're standing really really well against the competition nimble day. The automotive industry is all about products not just about size, we have seen big car companies failed the models because they weren't desirable even if the biggest in the world you have seen some of the biggest car.
He is loose huge amount of market share.
The market in five years will look nothing like it looks today and I think by 2030, 50% of all vehicles sold will be sold by none of the traditional car companies of today. So it's an exciting time and we're really excited to take part of it.
Okay.
And.
Let me follow up on the <unk>.
Mix of reservations, you've broken out thank you for that between sleep and consumer can you also give a geographic breakdown for example, North America versus Europe versus China.
Yeah, we don't we don't we are not taking any reservations in China at this point, we're in the middle of setting up a Chinese entity that should be set up.
Later this year I think within a month or so fairly quickly.
Need to have a Chinese entity to be able to actually take reservations because of data protection, taking deposits and all that stuff.
So that's going to probably not happened before beginning of next year and I'm really excited about that I think we have a huge potential in China in terms of geographically between U S and Europe.
We have done.
Cyril brand awareness in Europe, we are going to go to a European.
Events next year end of February and that's really when we start the big push it over there. So right now just it off of my tongue I would say probably about 80, 85% of our reservations come from the U S or North America.
But I expect that rapidly pertains to close to 50 50.
Could even go higher in Europe, when we think about an hour.
About half of all vehicles in Europe are sold business to business, meaning large banks or other companies are buying vehicles are leasing vehicles for that cost for their employees as an incentive because of certain tax rules et cetera, and we have already has you know secured several of these orders way ahead of even.
Any specifications for our vehicle.
So so we see a huge potential for our type of vehicle to be sold into these speech a b and also.
We are targeting the top 100.
Companies in Europe is focusing on ESG and sustainability and we think we are the most attractive vehicle on the planet right now to them and alone between these companies you're talking about hundreds of thousands of vehicles.
I think we have a very good chance to take a huge chunk.
Out of that in Europe, So, we'll see where this goes but I have high expectations for sales in Europe, a reservation in Europe on B B.
Yeah can I appreciate it.
Okay. Thank you Erin.
Time for one more question please.
Certainly the next question comes from I T. My Kelly with city. Please proceed.
Thanks, everybody good afternoon.