Q1 2022 REE Automotive Holding Inc Earnings Call
I will begin the call with an update on the significant strong progress we are making towards commercial production in 2023, as we focus on converting our pipeline into backlog and establishing the production capacity to fulfill orders.
Let me start by saying we are delivering on our commitments.
We are preparing for full vehicle customer revaluation. This summer and we've demonstrated a robotic assembly capabilities.
This is a very exciting time for <unk> as we continue the disciplined execution of our funded piece seven commercialization and achieve the milestones we have been communicating to the market as we advance towards firm orders in commercial production.
Moving to slide four.
We show a track record of execution and continue on pace to deliver.
This has been a significant year for us already and let me touch briefly on the strong foundation we've built.
We spent 2019 building, our core engineering capabilities, and 2020, and establishing supply chain capacity and validating our technology.
Last year, we focused on building out the comprehensive ecosystem needed to enable commercial vehicle electrification.
Ground on our production facilities and established a strong plan towards commercialization of our product <unk>.
This includes establishing our X by wire Homologation path and securing funding for piece of in commercialization.
This year, we've made significant progress validating our P seven platform and our UK Engineering Center and advance our manufacturing readiness.
Demonstrating robotic assembly capability.
For our highly automated integration center that is expected to become operational this year.
We are also presenting for the first time a full.
Full vehicle for customers validation they summit.
Following the completion of prototype validation by our customers on product road, we expect to receive firm orders towards the end of the year after that.
To validate the advanced prototypes on public roads and obtained purchase orders.
Moving forward I'll.
I'll detail, our recent progress to bring our P seven product to market and to step forward and manufacturing readiness to achieve our 2023 commercial production plan, let's go to slide five.
Commercialization of a piece of our platform also continues on track.
The product allow customers across many segments, such as delivery logistics retail and passenger unique benefits efficiencies and flexibility enabled by the re corners, and they're fully independent X by wire control system.
It is suited for application, including commercial trucks school buses Watkins and Rick reinvention of vehicles.
It is also also designed to significantly reduce development times of electric commercial models.
Fully flat from end to end the <unk> platform is intended to power class III two five vehicles with payloads up to 8800 pound range of up to 370 miles and all wheel steering and drive.
And as we shared before in some of our <unk> program <unk> is the manufacturer of records anymore.
Responsible for the Homologation and registration of the electric platform.
The AUM litigation activities are progressing on track.
Both the component and system level.
<unk> core control system software and functional safety development, a key element of the development of mission specific variation enabled by re corners are progressing. According to plan, we have a number of ongoing piece seven programs with several Counterparties in addition of bringing <unk>.
<unk> vehicle to market for fleets, including a leading logistic company.
Oems remain an important part of our go to market strategy.
As we have previously shared we have a joint development agreement with a major commercial vehicle OEM to develop electric vehicles from class III to class five for North America, and we continue to progress in the joint development phase.
Redisplay piece of a platform for the first time in the U S. It needs.
Work truck week.
We showed our re corner technology and platform to dozens of these existing and new potential customers.
Ross fleet owners technology companies Oems opposite to an auto manufacturers.
We also hosted several customers at our engineering center in the U K to experience and evaluate the P 74.
The track and discuss our advancement on build verification and validation activities.
Sure clip from our platform testing is not available.
In the presentation on our website, we are very encouraged by our customer feedback format on track demonstration in Israel and in the U K and feel confident in our previously communicated.
Let's move to slide six.
Earlier today, we announced a major milestones of commencing customer validation on private roads. This summer of a full electric vehicle powered hiring.
We are very excited by the opportunity to bring them to market. The industry's first fully drive by wire commercial vehicle to our pipeline customers in the U S.
Our new class five walk in vans prototype developed in partnership with AVX, The EV business unit of JV pulling desk.
These new electric commercial van is the first in many ways.
It is the first one to use <unk> new body design that will develop from the ground up to first be showcased.
Our new <unk> platform.
In addition, this is the industry's first full vehicle that is powered by <unk>.
And our novel <unk> technology.
Is it true game changer in so many ways and most importantly, we are on track to deliver our commercial EV powered battery less than 12 months after announcing our partnership with AVX.
I'm very proud of both our teams and our joint commitment to electrification and carbon neutrality.
Okay.
Customer evaluations on the new electric van will take place. This summer over the course of several weeks in Michigan.
Pre booked event will allow AVX enwreathe pipeline customers across retail delivery and logistics segment to experience the vehicles they scaled their unique requirements and secure production capacity for 2023 deliveries.
Our strategic go to market partnership with <unk> Leverages JP Poindexter's distribution network of large fleet operators and backed by a proven history of creating excellent work truck and commercial vehicle bodies and <unk> through their business unit Morgan Olson.
As a reminder, Morgan Olson is the largest producer of walk in van bodies in North America.
Decades of legacy experience, enabling last mile delivery of a wide range of parcels and groups for retail Internet and service companies.
We're excited for our customers to experience firsthand the unique benefit of the first X by wire vehicle build with a best in class Morgan Olson body and powered by Ria.
Read the horizontally integrated business.
And through our collaboration with leading partners such as Ive, yet we are well positioned on the demand side to deliver full vehicles to customers, while remaining focused on our core business of corners and platforms.
Agreements with Oems and body manufacturers allows us to tap into their existing customer base.
These automotive leaders.
Now.
Onto slide seven.
Accordingly, we are building out our production capabilities in advance of anticipated customer demand.
Recently announced the commissioning of our highly robotic integration incentive for North America and Europe .
As we shared yesterday, we are very happy to update that our core robotic assembly process is on schedule to be implemented into first highly automated integration center in the U K.
As you can see on slide seven.
He is an important milestone on our path to commercial production next year.
The robotic assembly and use of autonomous guided vehicles into 13 manufacturing sales.
The heart of our module a production line that will be operational this year.
The novel cloud by cloud based robotic manufacturing approach.
We provide re significant efficiency savings and scalability.
And they will enable us to continuously fine tune, our assembly procedures and rapidly deploy them to auto sites.
We have established key strategic supplier agreements to support our manufacturing readiness ahead of commercial production next year.
Nominated expert technology group, a leading manufacturer of industrial automation system automated Assembly special purpose machinery, and single and multi robotics Hill, including robotic Assembly.
The integration of its robotic and automated manufacturing technologies.
We also adopted Rockwell automation plaques manufacturing execution system or Matt.
To support these highly digitized manufacturing across integration centers.
The black system provide us cloud capabilities, which will serve as a digital backbone for Reeves global operation and future Assembly line.
Not only does mess enable local scale flexibility to manage our customer specific manufacturing operation, but it also allows us to quickly share and scale best practices globally.
They're connecting that so far operation will allow us to rapidly deploy changes to assembly procedures to assembly lines globally.
You can think of it as a command center.
From which our global operation will be managed.
You can watch a short clip on our core robotic assembly on our website.
Our teams are doing tremendous work towards production readiness and I'm happy to update that the European integration center in the U K is on schedule to come online in the second half of this year with initial capacity of 10000 vehicles. They.
Our North American integration Center in Austin, Texas is also on track to come online next year with an additional capacity of 10000 vehicles.
I'm excited that Josh stake recently joined <unk> as our Chief operating officer to lead the design and build out of our integration centers.
Josh served on Tesla's operations leadership team and brings over 23 years of experience to re in complex product development and launch industrialization infrastructure development engineering supply chain quality and operations management I have the utmost confidence in <unk>.
Josh and the entire operations team.
Raised capex slide production approach is based on leveraging its global network of tier one partners manufacturing capacity.
With highly automated component assembly and testing to take place in res integration centers.
This means not only faster time to market, but also secure supply chain capacity.
Quality control.
Our first highly automated integration center. He has both the starting point and the backbone of Reis future global manufacturing capacity.
We are highly engaged with pipeline customers and see the paramount importance of offering them a full solution for electrification.
From financing of infrastructure and vehicles through modular advanced electric vehicles to global maintenance and data and battery as a service.
We are able to offer such a comprehensive set of capabilities based on our global ecosystem of partners for a full turnkey solution that will enable an expedited smooth and scalable transition.
For our customers from IC to EV suites.
As I have said before.
Our efforts are primarily focused on the nearest term commercial opportunities.
Although I have devoted the majority of my time today to the <unk> platform and our collaboration with <unk>, We continue to make progress with Hino Motors.
Mobile leader in heavy and medium duty trucks.
As we jointly develop the flat format, which we showcased at CES in January with a global with a goal to deliver a functional platform prototypes for evaluation and testing by the end of this year.
This platform is capable of carrying a customized mobility service module that can carry passengers good and deliver services.
Their mobility service module can be easily detached from the EV platform and wants to touch can serve as an independent Standalone unit, leaving the platform to be operated separately and continue on its next mission.
We are very confident with the potential of this program and the demand for it in the market.
We are actively exploring multiple business case, that's relevant for such a novel and future Luca solution with our <unk> technology at its core.
As I've mentioned.
That's one.
Is indifferent to vehicle size shape power source and level of autonomy.
So the potential application is broad and future proof and can be deployed across fleets of varying vehicle classes.
We have other exciting programs in various stages of development, including concepts for autonomous vehicles, and we will share updates about this when we are able to.
I would like to commend the REIT teams across the world for their phenomenal work and dedication to making this a more sustainable carbon neutral world as we move faster.
It's fully electric vehicles future.
With that I will hand, the call over to David Goldberg.
CFO to discuss our financial results.
David.
Thank you Daniel and good morning.
Moving to slide nine I'll start with a review of our first quarter of 2022 result.
The company reported a GAAP net loss of $23 million in the first quarter of 2019 compared to a net loss of $46 7 million in the fourth quarter of 2021.
The decrease in GAAP net loss is mainly attributed to the noncash income from warrant Remeasurement this quarter compared to a loss recorded in the previous quarter.
non-GAAP net loss of $29 9 million in the first quarter of 2022 increase compared to $26 million in the fourth quarter of 2021, primarily due to higher R&D sales and marketing expenses.
The company executed.
non-GAAP results exclude share based compensation expenses of $8 $5 million and income of $15 $3 million related to the impact of the warm.
As of March 31, 2022, our cash balance was $239 million, we remain disciplined and continue to have sufficient funding to execute the program as Daniel described.
As communicated during our Q4 2021 earnings call, we have budgeted a range of $130 million to $150 million in cash spending.
<unk> of both capital and operating expenses for fiscal year 2022.
This range is presented on a cash basis and is tied to the execution of current programs.
Accordingly expenses are dependent on the timing and achievement milestones related to the company's commercial program.
Which will not be linear throughout 2022.
The company is on track to invest approximately $30 million during 2022, primarily related to the establishment of our initial production capacity.
This portion of the budget is effectively committed and will mostly be incurred in the second half of 2022.
I know that some of the expenses related to the establishment of initial production capacity may not be capitalized.
Our Opex plan is mostly comprised of technical and engineering spend required to execute our programs. According to the timelines we've communicated.
We remain focused on executing our current pizza oven and platform of program.
While we believe a significant opportunity exists beyond our current program. The majority of our budget has been allocated towards allocated towards executing this program.
Before I conclude it's important to remember that our costs will mirror the execution of our product milestones.
For example, at <unk> and other pipeline opportunities convert to firm commitments or existing programs expanded in scope our spending may accelerate.
The company may require additional liquidity to deliver those opportunities.
The cadence of our spending plan will be indicative of our progress and we will continue to update our shareholders on budget expectations as the year unfolds.
With that.
Let's move to the final slide and I'll turn the call back to the operator to open the line for Q&A.
Operator.
Thank you.
We'll now begin the call.
Question and answer session.
As a reminder.
Your question. Please press star one on your telephone and wait for your name to be announced.
If you wish to country you request please.
<unk>.
Once again, please press star one.
One if you wish to ask a question.
And the first question.
Comes from the line of Mike <unk>.
From D. A Davidson. Please go ahead.
Yes, Hello, good morning, and good afternoon guys.
Good.
Good morning, yes.
Yes, I'll follow up I'll start off by following up on your last comments there David about the two.
2020 cash budget, you given any thought as to the 2023 cash budget at this point you should be I got goalposts, we should be looking at there.
So.
The way, we think about 2022 and 2023 is that we're really focused on executing on a piece of it where we think we have enough money inclusive, including both 'twenty two and 'twenty three.
The engineering spend for <unk>, we expect to peak.
In this year and then should come down next year and that brings us to production.
Great is that just a few seven comments or other expenses.
Oh, sorry.
Yeah, some of that but the majority of our expenses are tied to each other.
That really speaks to again, the majority of our budget and how we think about cash.
Great.
If you could just turn to batteries secondly, here Uh huh.
Customers or potential partners.
Given you any indication that they've got enough or not enough are the direction of batteries.
Or whenever they and you agreed to launch the the on road products.
I'm not sure might not fully understand the question Youre asking if there has been communicated shortage on batteries from us.
And our program.
Yes, I was asking whether either you or any of your partners have.
<unk> got in your sights on the appropriate number of batteries that you needed to launch for example, a 10000 a year.
Alex.
Whether there's been any issues with obtaining a commitment from any cell suppliers where battery suppliers.
From you your end or from your partners on to meet any upcoming demand here.
Yeah.
We don't see a shortage and battery capabilities currently with.
The for cars that we would look at for the programs.
We have multiple sources of batteries, we use multiple types of batteries in some of our programs as we bring the batteries and somewhat programs as you mentioned all partners.
Bring the batteries in them.
They take care of all that.
Keep in mind that in the commercial vehicle space.
The zero to 60.
You know right is less important therefore, we can use.
Different quite larger.
And kind of battery chemistry of the configuration that not not necessarily would be the highest power density and that matters, but would be far.
More than adequate to what we need in the commercial vehicle space.
Okay, Great that's great color.
Throw in one more question here.
Walk into that and you've been you've been talking about today.
Any thoughts could you tell us a little bit about some of the capabilities. It has been.
Turning radius of the bank compared to existing ICD and EV walk in van models, and maybe secondly, the cargo capacity.
Current ICD.
You'd be walking back models.
Yeah sure so.
To begin with I I don't want to steal <unk> Thunder on that environment, because it honestly.
It's amazing.
A very revolutionary design that is designed from the ground up for Evs.
And it did.
I think it's absolutely Scott.
And really the first company to utilize it.
It's been built for the seventh inning.
Initially and we're very very excited about that naturally due to the usage of the <unk> seven and they are powered by <unk> technology, the turning radius.
We'll be very tight.
And we will we would expect to have.
More volumetric efficiency than others, but on the specifics I mean, I think it would be best to give the Guy who gave you definitely you know.
The stage for that very very shortly.
Okay. So look forward to I appreciate it thank you.
Absolutely. Thanks.
Your next question comes from the line of from Cowen and co. Please go ahead.
Okay, great. Thank you and good afternoon, just a couple of questions on my end Daniel I was wondering.
We talked a lot about the <unk> seven.
The details are incredibly helpful. In seeing the progress there can you just touch on how much of the investment that you've made so far around functional safety and the technology development.
Relative to the application engineering for that particular platform is transferable to other platforms that would use the re corner. So.
Basically what im getting at is should we anticipate the same level of expenses for <unk> seven for subsequent platforms or is there.
Knowledge level Thats gain that is applicable to two others.
Yeah.
Yeah, that's a great question so.
Our cordless technology is divided into two parts the inboard park.
The part that is encapsulated within the testing.
In the T. Seven platform is where the core technology licenses, where the older by wire technology systems reside.
And this is core engineering.
And the that does not change across.
Corner variations in corner generation.
The application engineering the ability to.
Adjust and you know.
Caines differing in vehicle characteristics like <unk>.
Suspension size like real size et cetera.
<unk>.
Of course this is application engineering and this is done on the outbound side.
Mainly off the shelf componentry and therefore.
Fires significantly less investment.
Answer your question.
Vast majority of the investment in the by wire technology in the core engineering has already been made.
Right.
Got it that's helpful.
And then on the.
You highlighted the class III or five market for <unk> do you see or anticipate more demand as the EAA VX team sell that in the class III space are four and five so it's very different sizes of the market. There. So I'm just trying to understand what the crystal ball is showing there in terms of end market demand and configuration recognizing that you have.
Flexible and somewhat agnostic on the tech itself.
Yeah.
So we see.
More demand on cloud five than when we started with.
We see a lot of the demand for cloud pause moving into cloud and of course, there's a lot of demand and a plus three.
We already saw before so oh.
The <unk> platform is design of course for class a three to five.
Mainly.
We're gonna save class, a three and five.
And the I mean, Ericsson and Morgan Olson our wholly.
Fully capable and great day in and day out and building different bodies on top of that.
And I think.
One of the most exciting things.
This partnership and what's coming in and I'll call wait for you guys to say it is the ability of it to take different.
This isn't shapes and in key end.
Is predominantly white.
This partnership makes so much sense their ability to have a very very modular product both on the platform Lebanon on the body level to address the majority of the market.
Got it and two other quick ones, where the testing for the <unk> seven with the AVX.
Freud is that done at M city or some other location whereabouts would actually be held on the private Reits that you referenced.
Yeah.
<unk> is one location that is going to be more than one.
Just because Uh huh.
Timing slots at central.
Why don't we put them in they all around in multiple locations in.
In Michigan, but that Mercedes is one of them and that's for the North American variations.
Got it and then you focused a lot on.
<unk> and <unk>.
Update which is great can you just spend a few seconds on <unk>.
Yes.
Program as well as anything you could share on developments with Magna.
Yeah.
You know.
We have a lot of asking dialogue with numbers of policies.
Some of them as you mentioned, we've communicated in the past when we reach certain milestones.
We will continue to update you guys on the progress specifically when they become impactful are currently those programs, but I mentioned in the specific ones that you've mentioned are all going well and according to plan.
Got it. Thank you appreciate it.
Okay.
Thank you next question comes from the line of Andreas.
Towards from Cantor Fitzgerald. Please go ahead.
Hey, guys. Good morning, good afternoon, congrats on the quarter.
Thank you good morning.
Quick question, Daniel I'm curious could you give us an update on the customer agreements that you had highlighted in the past.
<unk> agreements I'm just wondering if there are any.
Any any changes to that.
Yeah.
Yeah.
So the way we've communicated in the past we have signed agreements.
The agreements.
That have either a minimum quantities in them or or future.
Allocations of quantities.
What we're doing now is.
That's quite apparent from their recent announcement, we're making a lot of progress on.
Getting this these vehicles on the market and advancing the readiness of the of the product.
And.
All in all we see very big significant demand for commercial disease in general and.
What we've communicated before that once those customers.
And I was going to be able to evaluate the experience to attempt to drive those those vehicles, which we expect to happen very very shortly in the summer and.
And do you have to go where the VIX. Those we'll we would expect them to convert into into orders.
So we're.
Totally focused and I think it chosen being two major things here right.
Building more.
Vehicles and continue to advance core product offering of the <unk>.
Alongside the ability to scale production and build our integration center capabilities and a proven robotic core capability that we've demonstrated a couple of days ago are in order to so Paulo, those hum conversion of pipeline into orders.
Got it thanks Daniel.
A quick follow up.
<unk>.
I'm wondering with.
With the inflationary pressures.
Are there any changes or any expectations to maybe change.
The 25000 ASP.
ASP for the platforms.
Yeah.
Yeah. So I mean, I think that that number we sort of guidance from the past. If you think about our supplier relationships for the biggest components of the bomb we have really theyre really strategic relationships.
So while we're watching.
The supply chain, we feel we feel like we're in a good place in terms of Bom cost, but ultimately the ability to pass through some increases to the customer where.
Where it's warranted.
Yeah.
Okay got it and maybe one last one if I could you touched on the supply chain disruptions, which has been a bit of a theme again this year for most industries.
Now you guys have the Capex light model.
The assembling rather than the manufacturing, but I'm wondering do you anticipate any.
The delays in any of the the assembly process or anything that would maybe affect the capacity for the 10000 platforms per year or do you anticipate that tend to be go unchanged. Thank you.
Yes, so unchanged is the short answer I mean, its something were watching.
As an example, as we're building sort of test fleets and prototype vehicles with our suppliers. There is no change to the timeline. There. So I appreciate that you know much smaller volumes and when we'll be producing but.
So far so good is the short answer.
Wonderful, Thanks, again, and congrats on the quarter I'll pass it on.
Thank you. Thank you.
Thank you.
Next question comes from the line of Greg Lewis from <unk>. Please go ahead.
Yeah, Hi, Thank you and good afternoon.
I just have a follow up question on the budget.
Yeah, as we think about the progression of this year you know clearly we're going to move towards production next year.
There'll be no team.
As we think about this over the next few quarters is the right way to think about this that you know.
Yeah.
R&D should start to fade as.
You know the operations SG&A side of the business accelerates or is that kind of how we should think about the balancing.
And really any kind of color around the trajectory of R&D here over the next couple of quarters.
So I would say that sort of logic applies but over the next.
Call it eight or seven quarters right that takes you through the end of next year.
Think through the rest of this year based on the Chinese that we've given I think R&D.
Stays pretty steady I mean, you'll see that.
Our numbers are obviously in line with what we communicated.
Earlier, this year and we're being very disciplined to keep them in that spot. After the remainder of the year, but it's really not until next year, where you'll see the R&D spend start to come down and sort of being now offset by ramp up on the operations.
Okay. Okay, great. Thank you for that and then I just was hoping for.
You know a little bit of an update on on Austin.
And really how we should be thinking about that over the next few quarters. Obviously that's.
We're going to be.
A big accomplishment when that's off anatomy.
Yeah.
So Austin is on schedule is on track.
While we are doing is the.
You know the fully automated robotic core technology that we've demonstrated is abated. So that basically allows us to duplicate the processes.
And and and and QA and testing that we're doing in each of those integration incentives to other integration center. So the first integration centers will be in Europe , and the U K and it will have 10000.
Vehicle sets capacity.
And very very shortly after our Austin isn't going to be up and running in the first half of next year are adding another 10000 vehicles assessing capacity and that's really a a if you think about them.
Stating the the plant with with the relevant <unk>.
These and robots and just flashing them from from a solid base.
Most recent version and are up and running and that's the whole beauty of it.
Those those lines are really smart.
They are capable of vision detecting in identifying different corner configurations and there is.
Almost minimal set up times in between different corners assembly configuration and that.
Impactful on the efficiency.
Okay, Great and then just following up on that is there any way to think about.
And ramp up in Austin.
That's it.
I guess it filters out in 'twenty, two 'twenty three like on a percentage basis maybe.
Yeah, so spend.
Spend on <unk>.
Austin in 2022 is really back.
Backend loaded I mean, we signed a lease and actually that that building is still being completed so the actual cash outflows for us really don't happen.
Until much later this year.
So short answer it's not a big hit are not a big expense in 2022.
Okay perfect Alright, thank you very much.
Uh huh.
Thank you.
Next question comes from the line of Colin Langan from Wells Fargo. Please go ahead.
Oh, thanks for taking my questions.
Wanted to clarify that the JV Poindexter announcement is that an expansion of your relationship with just.
Another.
Progress point in terms of bringing that vehicles to market.
Hum.
I'm not sure I follow I'll try to answer it but if I go wrong. Please correct me.
<unk> the products for group right.
And Morgan Morgan Olson or are the biggest obstacles.
It is in North America, they they've been doing this for decades.
And ability to partner with them and have the best platform in the world.
Two part of those vehicles with the best body in the World to do that is I think key for our customers to understand the value. They understand that is to build the right way to understand the capabilities that that brings.
And you.
You know wealth of experience and knowledge and you know that they they they have in commercial vehicle market, it's walk in van and et cetera.
So.
Think we've communicated.
So you got about a.
A year ago about that relationship and what we're gonna do it together and I'm thinking less than a year, we are announcing those.
Gonna show your vehicle at school vehicles, and God I want to emphasize something about the vehicles that maybe we didn't say Monday. This is the first ever full.
We'll drive by wire brake by wire steer by wire.
Electric vehicle on the switch.
Turning to commercial field and this is this is a very very different.
I think it's a game changer.
Got it so its sort of further step forward in that relationship.
Going back to the original question on cash burn you burned $38 million in the quarter.
Right you have about a year and a half maybe two years left and capex as opposed to increase through the rest of the year actually because I think you only did $1 million I think.
The kind of 30.
So.
Do you see any of that you might need to raise capital and if.
How how is cash going to turn positive that quickly.
Well I guess, a few things right. The 38 includes investment in working capital right. So R. R.
I mean, when you again, we've given guidance for the year in terms of what the cash burn our cash expenses can be.
Beyond that.
As I said earlier the spending on the program on P. Seven comes down.
Right. So we have now the cash that we need.
To execute and to produce.
Next year.
Okay.
New programs after that they're going to require R&D expense and such.
Sure well.
So I mean I.
I guess, that's kind of be clear about the program right. When we talk about our program. It's the P. Seven platform right and so there is obviously, a big addressable market tied to that platform.
In my mind, when you say different programs right, whether it's what we call P for for a class two vehicle or leopard, which is as far as sort of an autonomous delivery, but those would be different programs and obviously would we need to think about how to accelerate those those are not we're not spending tons of cash today and our existing budget.
I'll answer that and I'll say, we're I don't know what's beyond laser focused on executing the plan and we're laser focused on piece of it and getting it to the market because <unk> seven is addressing the vast majority of them tomorrow to provide everything in class III to five and we see we see demand very very significant amount for those so.
We're focusing on those.
And as we said there are different.
Programs some of them, we share with you and they are going to mature overtime, but raise main focus and then.
Coming quarters as David mentioned is the peak seven and it.
You know application across different.
Market segment different vehicle classes and the commonality of the core engineering that we just mentioned earlier on all of those so this is what we're bringing to the market.
And just lastly, you highlight a large north America commercial vehicle partner, just any color on the status of that relationship have you deliver them prototypes are you is there a timeline of when those go into production.
You mean in North America.
Yeah, I think yeah.
Undisclosed commercial vehicle OEM.
Highlighted on.
Yeah, so well.
So that's five four you highlight.
Undisclosed leading commercial vehicle OEM I think in your comments you said it was North America I'm, just wondering is that a prototypes delivered to them.
Production.
The model is supposed to go into production at some point any color there.
Yeah. So.
We are.
We're on track there and how are you.
D H two.
Start.
Building the.
Testing fleets in the next few quarters.
Because.
We believe it's a very different game, where you do one of a kind and where your working fleet module and is aware.
You can see how we shine at home.
Why aren't vehicle is far superior to.
Traditional approaches and I think that as this program progresses, and we unveil to you guys. Why is it that we're doing and with whom he can have a much better picture as to the progress that we have made the AR, but we are.
Extremely excited.
This partnership is on track.
Okay, all right. Thanks for taking my questions.
That's right.
Thank you.
There are no more questions at this time I would like to hand over to my final.
Final remarks.
Thank you Sandra Thank you to everyone for joining us today on the call and on the webcast and are we really looking forward to touch base to have a good day.
Yeah.
That does conclude.
Conclude our conference for today. Thank you for participating you may all disconnect.
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