Q3 2021 Nuvve Holding Corp Earnings Call
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Ladies and gentlemen, we thank you for your patience. Please continue to standby our event will begin shortly again, we thank you for your patience. Please continue to standby the event will begin shortly thank you.
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Good morning, and welcome to <unk> Holdings Corp, third quarter 2021 earnings conference call. At this time all participants are in a listen only mode. It is now my pleasure to introduce Eduardo really is thank you you may begin.
Thank you Andre.
On today's call are Gregory Paula <unk>, Chief Executive Officer, and David Robson, Chief Financial Officer of this.
This morning, <unk> issued a press release announcing its third quarter 2021 results. Following prepared remarks, we will open up the call for questions.
Again, I would like to remind you that this call may contain forward looking statements.
Forward looking statements reflect movies best current judgment, they are subject to risks and uncertainties that could cause actual results to differ materially from those implied by these forward looking projections.
These risk factors are discussed in <unk> filings with the SEC and in the earnings release issued today, which are available on our website newbie undertakes no obligation to revise or update any forward looking statements to reflect future events or circumstances with that I would like to turn the call over to Gregory Kwan Chief Executive Officer.
Gregory.
Thank you Eduardo and good morning, everyone. Thanks for joining us today, He's got that result for the third quarter.
World leaders have been gathering in Glasgow, Scotland discussing and debating difficult solution, we are global because he's done but implement to prevent impact from climate change transportation electrification is obviously among the highest priority.
30% of U S greenhouse gas emissions.
Electrifying transportation, we believe a vehicle to grid technology represents a mission critical solution as it allows us to utilize electric vehicles, much more efficiently and cost effectively and called the public group and grid support while vehicles that part in.
In doing so vehicle to grid alleviate the need for us to build as much as 40% more electric power generation capacity.
Transportation electrification.
It also provides the main path to increase the economic value of renewable helps strengthen low carb and helps Viva energy equity.
Before I go over our latest development I want to share how thrilled we are about the $1 two trillion bipartisan bill that the U S about half on November 5th.
We set aside $7 5 billion to create a nationwide network of EV charging stations and expedient adoption now basically car these decades.
One 5 billion for electric buses and 65 billion to fund and invest in clear and clean energy and people and renewables for the nations electricity grid and promises to create a more resilient.
The Bill also contains the press release program funding for installation of <unk> infrastructure. These are old market, maybe as opposed to leverage as we continue to execute on our mission.
UV, we're incredibly excited about all the work that we haven't way and the important partnership grab building unit segments across the broader ecosystem.
Continued rollout of proprietary vehicle to grid technology and services and advent Nissan Nobody could you kind of blend it through our intelligent energy platform.
It has been a very busy year for newbie since entering the public market at the end of March. This year, we have already made tremendous progress to name a few of our highlights in May we introduced our <unk> hub model. These stores EVP, combining energy from multiple EV batteries to from virtual power plant could generate.
Energy could be sold back to the grid and provide services that help with grid stability predictability and resiliency.
Shortly after that we put out with the announcement about illegal mobility joint venture with stone peak and evolved and close that transaction in the third quarter.
You know you've always delivering turnkey fleet the service solutions for fleets of all types of vehicles that we believe can facilitate a much more rapid transition to E D.
$150 million that can be scaled up to 1 billion I'll just amount committed to support the expectation.
Over the past several months, we have also a problem and.
Continued to advance our partnership with Blue Bird Corporation, the leading independent designer and manufacturer of school buses.
The first electric school bus is produced by Bluebird Vitucci technology with <unk> earlier this year, Illinois.
Sure Levo JV. We are also now providing a repeat of the service offering to bluebird nationwide distribution network, enabling their customers and dealers who have access to fully finance electric school buses, along with associated charging infrastructure services and energy management.
Yesterday, we announced the latest advancement in our partnership with Bluebird and agreement called Newbie to install up to 200 charging stations would do all dispensers for the 400 buses.
Bluebird did you break out in Georgia, which will create the Btu jihad.
But it's too like the energy storage assets, while waiting to be transported around the country.
I will speak more about that shortly.
Since March we have continued to perform and expand partnership and signed new customer contracts with companies planning E V fleet owners utilities, and EV Oems and our progress continued in the third quarter with new partnerships across a wide range of market segments, including commercial fleet buses.
Purchasing consumer vehicles as well as utility.
This is exciting because we're continuing to expand beyond our initial area of focus sending new light on the tremendous potential we have in front of us.
He partnerships in contract to be completed during this third quarter and in recent weeks include first.
The awarded contract with source, well a cooperative purchasing organization.
Judith awarded contracts government education, and nonprofit entities can leverage new technology and expertise to better manage their assets and future proof their investments.
Next in October we announced the first of all battalion, because your partnership and your bear yet with robot designed to reduce mounting pressure on degreed and offer us a significant financial incentives. The partnership will incorporate roebucks peering hardware named <unk>, the world's first DC bidirectional home charger in.
<unk>, our patented BTG software technology platform.
In addition to reducing energy costs <unk> technology can help users transition.
More sustainable lifestyle, but helping minimizing their carbon footprint.
It's amazing the charge and discharge based of the tier two intensity users can help offset tier three emission by an average of 250 kilograms per car per year.
The partnership comes at an opportune time when pressure on the grid is rapidly rising in the ebay and Paypal to lap where household energy prices have risen by 35% over the last year.
Giving resident access to this cutting edge technology allows users to compound the positive effects of their investment in zero emission vehicle and contribute to a cleaner planet.
Turning next to an update on our business in Denmark, where we operate through our subsidiaries movie that market, yes, we couldn't get to see the value and economic viability of a vehicle to grid technology, which has been successfully demonstrated and deployed in areas where favorable market conditions.
We're also pleased to say that we've had five years of operation in that country.
We also have a few updates regarding our levo mobility JV.
LIBOR recently announced the partnership with B Y D, a leading EV OEM.
As part of the collaboration we will integrate a vehicle to grid technology with a mix of BYD electric vehicles and jointly deploy two 5000 evs over the next five years.
Integrating our vehicle to grid platform with a variety of mid and heavy duty electric fleets. We can introduce these vehicles to the grid in a much more intelligent and sustainable way P.
We integrate more renewable energy sources, and ultimately accelerate the reduction of harmful emissions. We're excited about this partnership and look forward to growing it and delivering revenue in the near future.
We also continue to build out the leadership team at level and during the third quarter, our new Chief Commercial officer, a new Chief operating Officer, and Chief strategy Officer were brought on board.
These executive.
Impressive skill set and experience that will help accelerate levered mission and drive further opportunities for growth.
And now I'd like to circle back to our latest announcement with Bluebird from yesterday.
This will be the first of a kind btu jihad with many policy com.
Because you have are the future of electric charging.
We have to introduce easy to the grid in a smart integrated way and our intelligent energy platform allows us to do that by transforming electric vehicles into energy storage assets.
Hub model Centralizes renewable energy generation bidirectional EV charging stations and a suite of <unk> services, while providing financing options to purchase.
This combination of centralized judging it infrastructure and end to end support services make it easier for people to electrify by reducing large upfront capital costs, while I would be <unk> technology reduces the cost of fleet ownership, enabling fleet vehicle batteries to store and sale.
Energy and grid services, including from renewables will see us back into the grid.
We are thrilled to announce our first partnership can make these vision come true.
As I noted earlier reached agreements with Bluebird, we will install up to 200 charging stations with the dual defenses for up to 400 buses at the bluebirds delivery facility in Georgia, where electric buses coming out of the production line will be stored.
I'd like to provide some additional detail on this agreement, which is a good model to use as we consider the potential of new opportunity for movie.
I'm going to speak about Mega under management, which is a metric we use to quantify the aggregate amount of electric powered capacity from our deployment of BTG Charterers do you wanted your childhood and stationary battery that movie controls and can supply under ideal conditions.
I will also speak to revenue per kilowatt year, which is a negotiated amount paid by OTT for providing <unk> services.
We have 400 buses.
It's just time will create a capacity of up to five megawatt under management.
Revenue per kilowatt gear paid by utilities for providing services to the grid can range from approximately 85 to $300.
Based on what you've seen in the market and it depends on the region.
At the low end of the range with 25 megawatts and the management there is potential to generate in excess of $2 million in recurring grid services revenue annually for the BTG hub at the Bluebird facility when fully deployed.
Of course, we expect a ramp up period before we reach full capacity of fronted buses, but these provide a good picture of the potential.
We anticipate finishing installation of the charging station that the Bluebird facility by the end of next year with the ability to begin generating grid services revenue in 2023.
Sure there the contract term with the Bluebird with Bluebird is about 20 years, and we see opportunity to continue expanding the partnership as the company continues its efforts towards electrification.
David will speak in more detail, but I would make that wasn't under management and potential future grid services service revenue as it just gets me is there a backlog.
To sum things up we are extremely pleased with the partnership we've created the new contracts you signed and the continued progress we are making.
As we have discussed previously the transition to electric fleet is among the largest microeconomic ship to be expands.
Last time and the market for BTG.
Trillion dollars.
A vehicle to grid technology and services that help make electric vehicles more affordable catalyzed easy adoption and the helps integrate renewable energy into.
So we are bridging the gap between transportation and energy.
We are continuing to rollout the BTG charging patients building a network of infrastructure to extend the use of our technology and services, which over time will generate significant long term revenue with a high degree of visibility.
We're increasing megawatts under management, we have a growing backlog and then even faster growing pipeline as a result of strong demand and contracts you've signed with key customers all of which are strong indicators of future revenue potential. We believe we are well positioned to capture the tremendous opportunity ahead of us in the market.
Let me now turn the call over to David.
Thanks, Craig I want to Echo Gregory sentiment that we are very pleased with the progress we are making that will drive future revenue over the long term.
In the third quarter, we generated total revenues of $1 $2 million compared to one.
One three in the third quarter of 2020.
This was a decrease of 13, 3% primarily due to a decline in grant revenues offset by higher charter sales.
During Q3 of last year, we earned revenues on a Grand project in Japan that was nonrecurring.
<unk> to the second quarter of 2021, our revenues increased by 19%.
Product and service revenues during the third quarter of 2021 represented 59% of total revenues compared with 33% in 2020, we expect product and service revenues will continue to become a larger mix of our business and grant revenues will be a smaller mix.
Margins on product and service revenues as well as 43, 2% for the third quarter compared to 94% for the third quarter of last year. This year over year change in margins as a result of a change in sales mix of DC Chargers AC Chargers and engineering services.
DC charger gross margins generally range from 20% to 25% AC.
<unk> charge your gross margins are approximately 50% and engineering service gross margins are 100%.
Total SG&A and R&D expenses were $8 2 million for the third quarter of 2021 compared to $7 million in the second quarter of 2021, and $2 1 million in the third quarter of 2020.
This increase over the second quarter of 2021 was primarily attributable to increased payroll expenses recruiting fees and incremental expenses associated with levo.
Incurred half a million dollars in operating expenses during the third quarter.
Other income and expense increased by $432000.
From $46000 of income for the three months ended September 32022, $478000 of income for the three months ended September 32021.
Other income and expense included private warrants, which are revalued each quarter based on the closing stock price and resulted in $556000 of income for the quarter.
Preferred dividends associated with the issuance of $3 $1 million of Levo preferred shares.
It was accrued at $39000 during the quarter and subsequently paid in October and accretive.
Crude at $100000 during the quarter accretion represents the difference between the estimated future redemption price value of the outstanding preferred shares and the carrying value of the shares.
Net loss attributable both to new these common stockholders for the third quarter was $7 million compared to $1 7 million for the third quarter of 2020.
Now turning to our balance sheet, we had approximately $47 million in cash as of September 32021, and remain in a strong.
With the funding from the transaction and our price investments.
Inventory increased to $6 2 million at the end of the third quarter from $4 2 million for the sequential second quarter. This increase was due to the receipt of four electric school buses, which we intend to lease with several school districts along with the additional inventory.
Of high powered DC Chargers, given existing industry wide supply chain constraints, we intend to carry higher inventory levels in the coming quarters, and we have entered into purchase commitments with key suppliers to help ensure that we have sufficient inventory on hand to meet customer demands.
During the quarter, we capitalized $3 1 million in deferred financing costs associated with the $50 million capital commitment available to lease up these costs will be amortized to additional paid in capital as we deploy capital.
To pay for these transaction costs legal issued $3 1 million of preferred shares to cell PD can involve the preferred shares were classified as mezzanine equity of $2 $6 million and the balance of <unk> 5 million as a derivative liability noncontrolling shares the preferred.
Shares were classified outside of permanent equity on the balance sheet as mezzanine equity as a result of the contingent put right redemption features available to the preferred shareholders.
We determined that the redemption features embedded in the preferred shares are required to be accounted for separately as a derivative liability from the redeemable preferred stock because its economic characteristics and risks are considered more akin to a debt instrument and therefore not considered to be clearly.
Mostly related to the economic characteristics.
The redeemable preferred shares.
During the quarter, we used $10 1 million in operating cash flows of which $5 6 million resulted from a net loss, excluding noncash charges and the balance of $4 5 million, primarily resulted from higher working capital use.
To increase inventory levels and pay for the transaction costs associated with levo.
We generated $2 6 million in cash from financing activities during the quarter, which included $3 1 million in cash from the issuance of preferred shares we used financing cash flows of $1 5 million for the transaction costs related to leave us formation.
Now and discuss our megawatts under Madison and estimated future grid service revenues.
Megawatts under management is the metric we use to quantify the aggregated amount of electrical capacity from the deployment of our <unk> charters. The one G Chargers and stationary batteries that newly managers, who can supply.
Under ideal conditions currently are megawatts under management include Chargers in batteries located throughout the United States Europe and Japan.
During the third quarter, we added five five megawatts under management, increasing our total megawatts under management to $12 four from seven nine megawatts at the end of the second quarter, representing an increase of 79, 7%.
The $12 four megawatts under management was comprised of one four megawatts from DC Chargers three nine megawatts from 80 AC Chargers and seven one megawatts from stationary batteries.
At the end of the third quarter for one of the $12 four megawatts under management included customer agreements.
Allowing for newsy to earn future grid service revenues.
As we continue to sign agreements like the one with Bluebird, which create future of ECT hubs. We will further extend our megawatts under management as Gregory mentioned, we expect the hub at the Bluebird facility will bring an additional 25 megawatts under management over time, and we expect to begin generating.
Revenue from this deployment in 2023.
This brings me to estimated future risk service revenues associated with our megawatts under management and megawatts to be deployed which is based upon a combination of contracted grid service revenues and merchant exposed revenues.
Contracted grid service revenues results from negotiated rate.
Per kilowatt year to be paid by the utilities.
Expose revenues.
Jack did based on a number of factors and inputs, including the types of vehicles connected to our network, we expect to furnish for those vehicles the length of term of the customer agreements and the geographies of the deployments as Gregory mentioned, depending on the geographic regions of our deployments the grid service.
Revenue opportunities will vary currently in the markets, where we are focused we are seeing these grid service revenues ranging between $85 per kilowatt year.
The $300 per kilowatt year. These.
These revenues include a combination of contracted services and merchant exposed services given the long term nature of our customer deployments. These revenues are generally recurring over a period of 10 to 12 years.
As we expand the number of charge of appointments and increase our megawatts under management, our ability to earn future grid grid.
Grid service revenues will continue to grow.
Going forward, we will provide periodic updates to our megawatt management and ranges of revenue per kilowatt year, we are seeing in the marketplace.
We have posted a presentation to our investor relations website with more detail on these metrics. We hope today's discussion was helpful and look forward to discussing any questions you may have today or.
Or in future discussions and now I'll turn the call back to Gregory.
Thanks, David.
While it is still early in our journey, we are making significant progress executing on our mission to accelerate the electrification of transportation to where I proprietary your vehicle to grid.
Services, we continue to be very pleased with the momentum across our business and the solid foundation, we are building through our expanded partnerships and increasing customer contracts.
The adoption will take time, our backlog pipeline and Mega megawatts under management are robust and growing which is a strong indication of your future revenue, we will generate while delivering value to our customers and shareholders.
Forward to continuing to update you along the way as we dive further into our journey with that I will now turn it back over to the operator to begin the question and answer session operator.
At this time, we'll be conducting a question and answer session. If you would like to ask a question. Please press star one on your telephone keypad, a confirmation tone will indicate your line is in the question queue. You May press star to try and move your question from the queue for participants using speaker equipment and it would be necessary for you to pick.
It up your handset before pressing the star keys, one moment, while we poll for questions.
First question comes from the line of Eric Stine with Craig Hallum. You May proceed with your question.
Yeah. Good morning, it's Aaron's ball on for Eric Thanks for taking the questions.
You know first for us on the BYD can.
Can you just provide maybe a little more details on kind of expected timing as we look out over the next five years on how that might rollout and then maybe talk a little bit about how that might be jumpstarting things are with in the market with other Oems looking to gain traction there.
Yeah, I mean, we.
Gregory here, we are looking at that as a portfolio of vehicles.
We are actually we have some projects underway with the way the.
On the East coast.
And so now we have engaged in the postpaid it's always the technology integration right to make sure that one of the vehicles and the charging stations are all able to talk to the platform.
And then two we go through the qualification of that interpretation, but.
But in parallel be ultra hot from some commercial deployments that are underway.
Refuse trucks is an interesting category of vehicles as we talked about.
In the past.
So that would be one example.
Alright, thanks for the color there and then maybe second on wallboard.
Can you maybe talk about some some initial traction there and kind of the planned rollout and then just help frame kind of the opportunity there and kind of how you see that contributing.
To the P&L over the next handful of years.
I think I think this is very interesting right. Because this is a market that is a that had been closed so far for our grid services.
I'm Gonna stay closed.
It was limited to basically large for our plants in order to provide those grid services.
There has been change recently, we have a project.
Right now in Spain with different partners, where we are helping setting of the regulatory environment and we've done that many times in our history.
And so.
Two aspects you laid out very important one is opening a market where we'd be able to access the following value chain going from providing ancillary services all the way too.
Basically providing a vehicle to home type of services the whole range.
And the other thing that's interesting to me that the partnership with with low box you search that.
This will address.
The consumer market, which so far as we've always said we've been very very focused on the fleet market.
Obviously, I'm not underestimating the consumer market.
It also that we will do that with partners and this is a perfect example of how we are executing our strategy as it relates to expanding across our ECS segment.
And to focus on our core competency, which is aggregating the vehicles.
I'm sure they are ready for the driver while delivering on our commitments to the grid and while protecting the battery at the same time.
Good good and then if I can sneak one more in just maybe on the competitive environment I mean, obviously youre starting to win a lot more bids.
Can you just kind of talk about what Youre seeing there you know why you're winning I know, there's you know a lot of guys in the market that talk about <unk>, but you know arent arent really at the end of the day. So so maybe just kind of talk about that a little bit a bit further.
Yes.
Very exciting to me right because.
On the one hand, as you said vitucci. He's a subject that is now becoming at the heart of EV deployment.
There is an awareness building that EV deployment could have a significant cost it's not done in a smart way.
Now the benefits we have is that our technology was studied to be developed in 1996 by the perfect. So we'd attempts and that the university of Delaware. During all this time there has been significant work deployed to develop the technology and then deploy it everyone in the world.
We have also.
When we when we when I saw the movie.
And the University of the way I'd save up some day IP around the implementation that we did.
And that IP was based on a working platform because in 2009.
Tom are starting to populate into greif services in the PJM region.
Since that we've been building more and more services.
Think of an independent meta body else has and I think this is why we are because of that.
BCG leader.
Around the world.
In the U S. But also as we were just discussing in Europe, either in the Nordics through our joint venture with EDF in UK, France, Italy, Belgium, and Germany are in the EBITDA to that as well as the deployment that we have and the work that we've been doing with Covid, that's who show no.
Investor in the organization in Japan, So I think all of those reasons, making us the leader and because we just have more experience we have a much deeper understanding on how all those things have to work together.
Understood again, congrats on the progress you know a lot of real exciting developments I'll hop back in the queue.
Thanks Darren.
Ladies and gentlemen, if you would like to ask a question. Please press star one on your telephone keypad, one moment, while we poll for questions.
Our next question comes from the line of Craig Irwin with Ross You May proceed with your question.
Hi, good morning, and thanks for taking my questions. So Gregory I wanted to start with the financial impact of the legal on the P&L right. So this is the quarter, we closed the partnership and really started.
You mentioned half a million dollars impact in the quarter.
Is it fair to take the August four star data an approximate.
Our run rate of around three quarters of a million a quarter in expenses and then can you maybe share with us what the.
What the cost was prior to August four.
To set up and initiate this joint venture.
And I will let David address this question, Yes, Hi, Craig I think our expenses that we show which were happened late in this quarter it'll be about that amount.
In the fourth quarter, maybe a little bit more so.
So running that $5 million, maybe 600000 in the fourth quarter.
Okay excellent and then cash expenses in front of.
In front of the official launch.
Were there any expenses you can call out.
Yes, you can see those that we capitalized.
Included in deferred financing costs. So the total amount is around $4 million.
Okay excellent excellent.
200 buses 25 megawatts.
You're obviously looking at 125 kilowatts, but.
And that seems to be what most of the school districts, you'll probably ask for.
When we step back and look at the bigger picture.
The total Evo joint venture if it does satisfy the $750 million entirely with school buses and president of <unk> seems to be doing the right things, but I know <unk> has other customers as well, but just assuming it's school buses.
That means you could have as much as 375 megawatts under management.
Once once its fully invested I mean is that a reasonable expectation or should we be potentially looking at.
Smaller batteries and a broader mix.
To generate a slightly lower megawatt number.
I mean, I think the trend we've seen so far is is the batteries.
The school bus I think at the heart of the question.
The Bloomberg school buses of a battery of 155 kilowatt hour I think this is serving most of the route now you have dropped sometimes on a slightly longer.
Our special trips that that would be needed to be covered and so I think we're still on the low side of the size of the batteries I think 200 gigawatt hour at maybe more than that.
It might be.
We think that number is that going to be.
Which is why.
We decided on that deployment to go with the 125 kilowatt charging stations now keep in mind those up to dispensers.
On on those so.
The first ship them additional will be a switch so it would be at 125 on one side than the $1 95 on the other side.
But still it gives us.
A little bit more flexibility in how we are using the current buses are buses that are maybe running at 202 hundred kilowatt hour I think between 203 hundred kilowatt hour, that's probably where the school bus would add up but you're right I mean.
Hey, There is 480000 school buses in the U S. If you 60 kilowatts on that that's 25 gigawatt.
No if you consider a $100 per kilowatt year three.
$3 5 billion.
Uh huh.
Grid services that those vehicles will be able to provide and so this is why we are here right is a gigantic market. We are at the bottom of the hill.
I think we are putting all the partnership in place.
To support our vision.
And we are executing on it through our extremely focused on education and I hope this blueprint that we've been putting together.
<unk> will help us.
Two week span.
Finally, <unk> is at the heart.
Many players Ironwood thing and it's at the heart of the infrastructure deal as well.
And so that's really really exciting part is we look at now all those vehicles.
Potential revenue generation sources for us.
Thank you. So then when I I talked to Bluebird about this.
A number of weeks ago.
They had suggested that working with newsy and putting these systems in there.
Their manufacturing facility would allow them to hold inventory of EV school buses and.
Two condition and exercise the batteries so that the battery is.
Not impaired from sitting idle for four months.
The full batch of buses as prepared for delivery.
Would you expect full participation of these vehicles and an end.
In grid services, while there while they're parked in the lot is saying.
As they bring vehicles off the line and they wait for there.
Full allocation of different customer orders so they can deliver.
Or is there potentially.
Maybe a percentage of participation that we could see.
Given that.
The functionality will be used for a couple of different things.
So now they are a very ETF grid services I think this is what youre aiming at all so the grid service and the capacity.
As we've talked about here, we took the $2 million of annual revenue is based on.
80% to $85 per kilowatt year. This is very much in the low end of the range that we see.
And that means that that limited the amount of these charges that would have been at very specific times, especially when you have coincidental peaks tighten up along the system.
Usually those goes we'd like maybe 50 discharge a year or less so I just thought I'd get extremely straining on the battery because.
It's a limited number of discharge that you do every year.
Understood.
Yes.
That's perfect. That's perfect. So then if I could ask a question about timing right. So I know Phil Hawk was very excited about.
The opportunity in <unk> and the support from President Biden and what this is really going to mean for our children and different school districts across the U S.
Can you talk about.
The probable timeline for the hardware installations.
And the revenue recognition around that.
Yeah.
And.
The.
The installation as we said.
With the whole setup will happen, sometimes in 2022 towards probably towards the end of 2022 and.
And we are targeting to be up and running in early 2023, and the model will be hobbies.
Buses initially and the scale that goes all the way to the 400 spot, but we'll be covering on the parking lot.
So there is a timeline and a rollout that goes between 2020 end of 2022 for the full installation and then.
2023 to 2025 in order to fill up all the spots.
And then we've reached full capacity this could go faster, but we wanted to have a conservative approach.
Your question goes along the lineup, we we considered potentially trying to recognize.
More of the.
Plumbing LD.
But.
Two things one is our COO.
Core business is really the <unk>.
<unk>.
Hubs.
These are long term.
<unk> revenue that is stabler with specialty performance in these cases.
20, <unk> no no.
No 2 million plus dollar per year of revenue.
On that specific site potentially.
Being a up on that.
So.
And the other piece is that there's still quite a bit of uncertainty in supply chain.
The good news is we have inventory of charging stations.
And we've been very careful in placing orders early on.
But there is still some uncertainty and they vary and and therefore this is also why we didn't see the need of trying to recognize as michelle's puts it all upfront.
Rather to go on the path.
Building and helping our investors understand the true core of our business model. This recurring revenue that we're able to build and nut based on the cost of the infrastructure and the amendments with tree on the value that those assets are providing to the grid.
Yeah.
Sure.
Thank you for that I'll take the rest of my questions offline. Congratulations on this progress with LIBOR.
Thank you thanks Craig.
Ladies and gentlemen, we have reached the end of today's question and answer session I would like to turn this call back over to Gregory for closing remarks.
Thank you I wanted to thank everybody on the call today.
I think again, what I need to emphasize it.
This hub, which is really at the heart of our strategy and the first one with Bluebird is really the blueprint of the deployments that we are targeting and.
And not just in parking lots of manufacturers, but also.
<unk>.
In other places and I hope that we'll be able to share some progress on further deployment, but we are working on in the near future now to look really at the size of the business. We've talked about the school buses, but when we look globally all the vehicles and the target that we have of converting.
<unk> into electric vehicles.
2040.
Could be a time, where we have 3000 Fireeye you got what if you had to cancel seven gigawatt for consumer vehicles, and if you consider again $100 per kilowatt here, that's a market of about 420 billion.
If you consider $240 per kilowatt.
And $40 billion market size.
So we are gigantic market in front of US we have a.
Very exciting new opportunities.
We have been very focused on fleet.
<unk> shared with you. We also starting to look into the consumer space at the same time, we the business, we bought approach than anybody else because of the capabilities of our plan.
So we are very very excited of the progress and we.
We look forward to sharing more about our progress in the near future with you. Thank you very much.
This concludes today's conference you may disconnect. Your lines at this time. Thank you for your participation and enjoy the rest of your day.
Okay.
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Yes.
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