Q1 2024 Xos Inc Earnings Call
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Thank you for standing by the conference will begin momentarily. Please stay on the line.
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Greetings and welcome to excess Inc's first quarter 2024 earnings call.
At this time all participant lines are in a listen only mode.
For those of you participating in the conference call there will be an opportunity for your questions at the end of today's prepared remarks.
Please note this conference is being recorded.
At this time I would like to turn the conference over to General counsel of excess Kristen Roberto. Thank you you may begin.
Thank you everyone for joining us today hosting the call with me are Chief Executive Officer Dakota, similar Chief operating Officer, Giordano, Sordoni, and acting Chief Financial Officer, Liana progress yet.
This call excess issued its first quarter 2024 earnings press release, which we will reference during this call.
This can be found on the Investor Relations section of our website at investors that excess trucks dot com.
On this call management will be making forward looking statements based on current expectations and assumptions, which are subject to risks and uncertainties.
Actual results could differ materially from our forward looking statements if any of our key assumptions are incorrect because of factors discussed in today's earnings news release. During this conference call or in our latest reports and filings with the Securities and Exchange Commission.
These documents can be found on our website at investors that excess trucks dot com.
We do not undertake any duty to update any forward looking statements.
Today's presentation also includes references to non-GAAP financial measures and performance metrics. Please refer to the information contained in the company's first quarter 2024 earnings press release for definitional information and reconciliations of historical non-GAAP measures to the comparable GAAP financial measures.
Participants should be cautioned not to put undue reliance on forward looking statements with that I'll now turn it over to our CEO Dakota.
Thanks, Christian and thank you everyone for joining us on today's call I will cover highlights from the first quarter of 2024 during which we generated $13 $2 million in revenue delivered 62 units and achieved record gross margins of 21, 2%.
And Liana will then provide operational and financial updates respectively.
During the quarter, we closed our acquisition of electro mechanic, which gave us access to more than $50 million in additional cash net of certain costs paid at close.
This injection of cash combined with our improving margins significantly strengthens excess capital base and liquidity.
With our improved liquidity, we are taking advantage of opportunities to improve our operations, but remain committed to tight cost control and judicious capital allocation.
Access is first priority is becoming a self sustaining cash generating company, which we believe will come from continued focus on growing our core that ban access hub and powertrain businesses.
Compared with the first quarter of 2023 revenue is up 180%.
<unk> revenue for the quarter was lower than the fourth quarter of 2023 due to delays in customer infrastructure and some of our body up fit or partners.
Causing planned first quarter deliveries to spill into the second quarter.
As we mentioned during last quarter's call. We expect 2020 for volumes to be back half weighted like 2023, but meaningfully higher than last year.
In the quarter, we delivered step vans to a number of our most committed customers like unit first and Fedex ground contractors.
We also made initial deliveries of our step van based powertrains, the two new customers a large on highway bus OEM and Winnebago.
Speaker Change: As a reminder, our powertrain offerings provide an opportunity for access to monetize our existing commercial EV technology.
Sectors beyond the last mile fleets that we serve with our complete vehicles.
We see significant growth opportunities in our powertrain business and are looking forward to reporting growing powertrain deliveries in future calls.
And step vans sales activity during the quarter remained strong with California's advanced clean fleets compliance, increasing fuel bills and aging fleets motivating step and customers make the transition to evs with excess.
Speaker Change: In support of our vehicle sales, we took steps during the quarter the tackle the charging infrastructure related delays faced by our customers.
In January we announced the updated ex those hubs are rapidly deployable charging unit designed to expedite electrification for fleets.
The hub combines 280 kilowatt hours of battery storage with four chargers, allowing each unit to support eat or more step vans and typical last mile Fleet depot applications.
Onboard batteries dramatically reduced peak power drawn from the grid, allowing many hub customers to get the lengthy utility upgrade process, that's frequently impacts EV fleets pursuing charger only solution.
These upgrades can add 12 or more months for the timeline for permanent infrastructure installation and.
And our hard for customers to predict before purchasing their vehicles baidu.
By directly addressing the utility upgrade and charger installation timelines that are the most impactful source of delays for our truck deliveries.
We expect deployments to meaningfully improve the predictability of our step van volumes.
To that end, we are pursuing a range of solutions, including bundling hubs with step van orders to grow our business and minimize the impact of infrastructure constraints on excess.
The hub is also available as a trailer mounted mobile charging solution for its four charge heads and internal battery offer a solution for construction sites remote work sites or other environments, where commercial evs are deployed without access to permanent charging infrastructure.
While enabling greater step van deliveries remains the primary purpose of the hub.
Speaker Change: Long and broad based interest from non stop band customers has motivated us to offer to the hub more broadly.
But that and we've already signed sales orders and book production slots for a range of customers, including Excel energy Fedex ground contractors and SSA Marine.
I look forward to reporting on the growth of the hub business and its expected strong margin profile in future calls.
I'll now hand, it over to our C O O G O for an operational update.
Thanks to go to <unk>.
Speaker Change: So since engineering supply chain and manufacturing teams remain focused on scaling production to mass mass customer demand and delivering further gross margin improvements.
Our engineers continue to develop and implement refinements that contribute directly to our strong gross margins.
Speaker Change: Our supply chain team is collaborating with suppliers and inbound shipping partners to improve competitiveness bad margins and ensure the flow of components needed to achieve or deliver ambitions for 2024.
As Dakota mentioned, we also began to build and deliver the updated hub in the first quarter.
In response to demand our sales team is seeing for preparing for production rates of up to eight hubs per month in the second half of 2024.
This rate will remain flexible and tied to the science sales orders we receive.
This is possible due to the significant overlap between the hub and our step van platform.
From day, one we designed the updated hub to leverage our existing step in design and supply chain as much as possible.
For example by sharing a battery system with our 200 mile step van hub was able to reach production many months sooner and with much better margins than is possible with a standalone designed.
The similarities also extend to the factory floor.
Speaker Change: Like the step in the hub has built a major sub assemblies and partnership with our suppliers, reducing the capital investments required to achieve our 2024 production targets, but less than $50000.
All hubs are being built in the existing excess plant footprint in eastern Tennessee, alongside our stepping in production line.
And with that I'll pass it to liana.
Well, thank you and good afternoon, everyone.
For the first quarter, our revenue decreased to $13 2 million from 18 5 million in the fourth quarter of 2020, primarily as a result of our reduced deliveries during the slower time of the year.
Our cost of goods sold during the quarter decreased to $10 1 million compared to $17 million in the fourth quarter of 2020.
GAAP gross margin during the quarter was a profit up to $8 million or 20, 152% compared to 1.3 million last quarter or seven 2%.
I don't have too much of a mainly driven by higher average selling price reduction in overhead costs related to the normalization of a prior quarter I chose our allocation on capitalization of quiet freight costs.
Inventory reductions and inventory reserves in line with him and he is on hand inventory balances as we continue to focus on prudent supply chain management.
And the net benefit from physical inventory adjustments as compared to write off during the fourth quarter.
As we continue to focus on improvements in our inventory management processes.
It should be noted that GAAP gross margins for a vehicle OEM are impacted by a range of reserves that combined with changes in sales mix between direct dealer Empire model inventory sales.
Higher levels of volatility all quarterly result.
For this reason we continue to share consistent non-GAAP gross margin that you can find in today's earnings press release.
Turning to expenses, our first quarter operating expenses decreased to 13 million pounds $13 2 million in the prior quarter.
Speaker Change: As a result of the asset acquisition accounting the transaction costs associated with the MB acquisition are included in.
And cost of assets acquired and allocate it allow qualifying assets using the relative fair value basis.
non-GAAP operating loss for the quarter was nine 3 million.
We closed the quarter with cash and cash equivalents of $46 2 million compared with 11 6 million at the end of the fourth quarter.
The court I mentioned the increase resulted from the acquisition of electromechanical and watch.
Inventory decreased to $36 6 million in the first quarter from 37.8 million last quarter.
Operating cash flow less capex or free cash flow of negative $14 6 million for that quarter was an increase over negative <unk> 9 million last quarter, largely as a result of our net loss and unfavorable changes in our working capital including increases in accounts receivable, resulting from the library timing.
And growth in incentive voucher receivables as well as timing of payments on our outstanding liabilities.
Speaker Change: Finally, we are reaffirming our full year of 'twenty 'twenty four guidance of revenue in the range of 66 points.
Seven 200.4 million.
non-GAAP operating loss of between 3.72.
$48 7 million and 400 to 600 units delivered.
I'll now turn the call back over to the car.
Thanks, Liana for wrap up excess is prepared for the future.
Over $50 million of cash that we secured this quarter and our industry, leading gross margins provide excess with significant advantages over our competition.
Regulatory pressure on fleets to adopt Evs grows we are benefiting from stronger demand for our proven and profitable truck powertrain and mobile charging infrastructure products.
As we look to a busy second half of the year, our competitive advantages and direct benefits from EV mandates and incentives of <unk>.
Access on a track for long term success, but I look forward to sharing with you in the coming quarters.
With that let's open the line for questions.
Thank you we will now begin the question and answer session to ask a question you May Press Star then one on your telephone keypad, if youre using a speakerphone. Please pick up your handset before pressing the keys.
To withdraw your question you May Press Star then two.
At this time, we will pause momentarily to assemble our roster.
Today's first question comes from Jonathan Schaffer with Northland Capital markets. Please go ahead.
Hey, guys. Thanks for taking the questions. So.
Want to first just start off by asking about the.
Speaker Change: Kind of infrastructure charge, the charging infrastructure, causing some delay as you know we've seen that before.
And if you can elaborate on the opposite or part of that if that is also infrastructure related if it comes down to them needing Chargers.
Their own sites.
And to do some of the up fitting.
And then how do we what gives you confidence that this you know you said some orders pushed from Q1 deliveries from Q1 to Q2, you know what makes you feel confident.
In the full year guidance reiterating that that you know you don't just get kind of use rolling pushes where some of Q2 Q3 and in Q3 to Q4.
Speaker Change: That hit the whole thing so anything there would be great.
Yeah. Thanks for the questions. I'll, then go to to catch up with you. So I'll start with the first question in regards to the up fit or delays.
So it's not tied back to infrastructure at the outfitters when rebuild the chassis, we're sending it to one of our upset partners and that requires very close coordination with them around their production schedule and making sure that we have build slots are well in advance of when those need to be delivered to.
<unk>.
In some cases, those can get pushed back from them their own supply chain issues or other challenges that they've had.
So this quarter was one of those times, we don't expect it to happen again, we're taking a much more proactive approach towards planning with those outfitters and making sure that we're looking out about two quarters to plan, our production timelines and get build slots scheduled for those deliveries.
But that is really something that we anticipate will will continue to improve and are not related to charging infrastructure.
The second question was really around charging infrastructure and making sure that this rolling pattern from rolling some of the vehicles and from Q1 into Q2.
Doesn't happen and we actually have strong confidence on those vehicles, particularly that came from Q1 as several of them have already been delivered in Q2 at this point so.
It gives us much better confidence in being able to say, it's not going to carry on for two or three quarters with those a few units that pushed into the second quarter.
And we're actually testing out some new temporary charging infrastructure tools that complement the hub and will allow us to be able to deploy charging infrastructure.
If we continue to see unanticipated delays either from the utility or from the permitting side when it comes to deploying permanent charging. So this is one of the first quarters, where we're gonna be deploying site or we're gonna be deploying hubs and temporary charging where customers will have temporary charges.
In place until their permanent charging gets installed.
And that should give us a lot more predictability and forecast ability and stability in our production numbers and being able to deliver everything that we build in a quarter.
Okay. Thanks, that's very helpful.
Then turning to the hub itself it seems like Theres, some real positive developments, there, which is kind of.
Very interesting potentially exciting.
<unk> G. O you said that you'll have things in place to be able to do a hubs per month in the second half of the year.
That would be 48 hubs.
For the year.
I guess the first question there kind of a compound question here would just be.
Does.
Is that kind of a.
More of an expectation or just being prepared for it I mean do you think is it a fairly likely chance that you'll be delivering.
North of 2030 hubs something like that or is that just you're just gearing up to be ready and then the other part would be how do they compare from a ASP and gross margin standpoint too.
Nicholas.
Yeah don't have and thanks for your questions as G O speaking.
Nicholas: More about getting ready for those production volumes were not providing specific kind of production guidance or or total hub production for the year guidance, but we are building the production system to be able to handle those kinds of volumes that I can say that we are actively producing multiple hubs even now.
Because we're getting a ton of interest and positive feedback from customers and folks placing orders for hubs.
Dakota: I think your second part of the question was around a S. P is and I'll, Let Dakota answer.
More of the margin raise a few questions for the hubs.
Okay.
Yeah, so and in looking at the hub as from a commercial perspective, the comparable comparative solution utilizing DC fast Chargers can range anywhere from 150 to north of $250000 for an apples to apples comparison.
480 kilowatt DC fast Chargers.
We fall right into that range right into the kind of middle of that range.
And the benefits of the hub over for DC fast Chargers, you had install via conventional permanent charging infrastructure is that we are simplifying the installation by standardizing it into a single enclosure for reducing capex significantly by having one connection point instead of four connection points.
Through various different ways, we're minimizing the amount of conduit.
Minimizing the amount of cable runs trenching.
<unk> work as well as soft costs and engineering that go into site development.
And then we're also.
Adding in an additional nearly 300 kilowatt hours of energy storage.
Buying with that D C charging.
You were to scope this out for a traditional permanent D C charging infrastructure project.
Project with four DC fast Chargers, and approximately 300 kilowatt hours of energy storage it would be significantly more than what our hub costs our customers today.
And that's in a in a fixed amount of application.
One of the biggest attributes of the hubs. It's been so well received by our customers is not just a capital cost savings for permanent infrastructure deployment, but it's the flexibility of our trailer mounted hubs that it'll actually allows them flexibility in deploying vehicles either in facilities that they don't necessarily own such as our leased.
Building, our Elisa depot, or a yard or to be able to deploy them for roadside service or maintenance or in the event of resiliency, where there might be a storm or a power outage, we can deploy a hub onsite.
So it really gets fleets a tremendous amount of flexibility.
While we have talked a little bit about some of the pricing dynamics.
In the early stages of production, we're still finalizing what those those margins and gross margins will be for the product portfolio.
We're confident that they will be at the high end of our product margins potentially higher than even step van or powertrain.
And I think that's really speaks to the technology that we've put into the hub.
Core technology, which is the energy storage systems are charging power electronics and all of the software and energy management planning software that we've developed to run the overall hub.
A lot of it has been developed over the last five or six years that we've been manufacturing vehicles that we've cost reduced debt. We've made it durable we met it reliable.
And now we're taking it into another market that ultimately you can see the value significantly.
Because you know the charging market has not has established as the vehicle market has been in the last few years.
Okay, that's great.
Thank you guys.
Yeah, there is some variability and some flexibility depending on whose.
Who's buying the hub and whether they're bundling it with trucks and so of course, we originally designed the hub to help our customers with some of their infrastructure bottleneck challenges and that was the primary use case, we intended for it to do with customers buying trucks and hub at the same time, and we can be flexible on pricing and in that sense.
But we also have interest on the hub from folks that don't purchase or you step downs at all so from a different an unexpected industries.
That they are looking to use the hub to charge vehicles, but not necessarily delivery vans or walk in vans.
Great. Okay. Thank you I'll hop back in the queue. Thanks, guys.
Thank you. The next question is from Mike Sulewski with D. A Davidson. Please go ahead.
Hi, good afternoon, and thanks for taking my questions.
Wanted to talk with you on some of your comments you've made on gross margin.
If you take out the one time items.
And I'm still going through the press release it looks like you were around the low teens gross margin in the first quarter.
Do you think thats, a reasonable sustainable level, you can get taken out all the onetime items and gains and losses et cetera.
The rest of the year.
Or there's a little more volume, which you'll be getting later in the year to get you a little bit higher towards the mid to high teens.
My first question.
Yeah. Thanks for the question Mike. So we are confident in those gross margins continuing to stabilize and grow even further.
We are now almost completely through some of that legacy inventory that was lower or negative gross margin. We're moving into our 2020 for model year vehicles, which are in the high teens and even into the low twenties range, there's always going to be some variability based upon product mix.
Customer incentives that we might do with various customers or specific markets that we're going after.
But we are confident that that will continue to improve.
At the product level.
Then when it comes to kind of.
Contribution margin beyond that and in some of the onetime transaction costs I'll, let me honest speak a little bit more to that and what our margin profiles look like beyond beyond Q1.
Yeah, I didn't want to with respect to the one time transaction costs and those have been normalized three took additional capitalized freight costs as a result of that change in the methodology in the fourth quarter and those have been normalized and reflect that in our in our results and we are also seeing just overall lower inventory reserves based on just our overall.
Al impairment in our inventory processes that we expect to sustain so all of that is it gets us in a positive direction that we feel confident and in the outlook of our margins going forward.
Yeah.
Great Super Thanks for that commentary.
And then turning to operating expenses, you cut that and year over year by almost a third.
Do you think that's about 13 million a quarter.
He is a reasonable way to go in.
You'd probably see you I'm trying to figure out when you get to EBITDA positive here, but is on the operating margin side $13 million.
Right now.
Yeah, maybe I think just to highlight a couple of two important factors on the operating expenses for this quarter I know a lot of them.
The acquisition related transaction costs have been capitalized based on accounting rules. We did a record of about 2 million of severance related costs, that's where I played it reflected in operating expenses.
As far as kind of the normal cadence on what we expect moving forward, while we don't necessarily guide to that but directionally, yeah, we might see some increase in operating expenses into future quarters. As we continue to wind down the M. B operations in some of the.
Operating costs, we assumed that related to the mainly to the two leases that were actively suddenly thing, but I think just overall, we have significantly cut our operating costs and we continue.
Where do you feel comfortable that we'll maintain that cadence to help us get to the cash flow positivity.
Great.
Also wanted to get a little more information on the EV bus and Winnebago.
Customers.
Judy do you or does your deliveries that you've done so far this year do those were those actually part of sales or were they more demos and.
And do you think those will be a material amount of the revenues this year.
Love to hear a little bit.
The commentary on what might be in the cards for 2025 from those relationships.
Speaker Change: Yeah, absolutely so I'll speak to our powertrain business in general and not speak to specific units or our customers, but we did deliver some powertrain units in Q1. It was a relatively small number compared to the total overall deliveries.
But we do anticipate those will grow pretty significantly in Q4, and well into Q2 into Q1 of 2025.
Those sectors, both the on highway commercial vehicle that we're building with Winnebago as well as some of the bus applications and even the off highway powertrains are growing and we're seeing the demand for those products.
Increased since we've made some of those announcements earlier this year with Winnebago and we have forthcoming announcements this quarter with some of our other partners.
So we do anticipate that being a a bigger mix of overall deliveries this year.
That being said, it's still a one of our secondary business units and we anticipate trucks will be the the majority of the volume that we're delivering this year.
Okay, Let me just squeeze one more in.
Average price in the quarter look pretty pretty solid.
100000, or just about any revenues backed by units there is some mixed in there but.
Is that a good assumption going forward to be above 200.
Our mind missing something on your topline.
So great question so.
This quarter, we saw a lot more long range vehicles being delivered with that higher range battery pack.
That's really why the higher asps were reflected in the quarter.
We don't anticipate that sustaining into the rest of the year, we will have quite a bit of deliveries with those those longer range battery packs, but it'll be a more even mix of short range and long range options.
We do anticipate it will it will grow slightly from last year.
But not to the extent that we saw in Q1, where we saw significant volume of deliveries of those 200 mile range of vehicles.
Okay got it. Thank you so much I'll jump back in queue.
Thanks, Mike.
Thank you. The next question is from Steven Goulden Garrow with Stifel. Please go ahead.
Oh, Thanks, good morning, good afternoon, everybody.
Chicken should meet the first could you just remind us.
Speaker Change: The impact that mix has on margins and how we should think about that going forward.
Speaker Change: Yeah happy to and thanks for the question Steven So when we're looking at product mix today, a typical step vans on our short range 100 mile configuration generally going to be in the low teens range of gross contribution margin.
When we're looking at some of our longer range vehicles with <unk>.
Speaker Change: T configurations, whether it be lift gates or power export or specialty bodies.
Those can get into the mid twenties range.
So it varies again quarter to quarter, depending upon whats in our customer delivery schedule and what's in the pipeline.
But ultimately we've we've really thought about a.
Speaker Change: Two thirds to one third ratio with two thirds being that 100 mile short range vehicle and.
And a third being the longer range vehicle with some of those specialty upsets her configurations on them.
And then when we're looking at powertrains and some of our other ancillary businesses such as excess energy solutions. Those are generally in the in the higher range. So when we're looking at services anywhere from 20% to 30% gross margin range.
And then on the powertrain side.
Anywhere from the mid teens into the high 20% gross margin range on those product mixes, but both of those businesses make up less than 10% of revenues today.
Great. Thank you for the details.
Speaker Change: Do you have a question just just.
Just from a market perspective.
What have you guys seen in the market from from a demand perspective, and inquiries and how does that what kind of confidence does that give you as you look at the rest of this year your guidance and even into next year.
Yeah, that's a really great question. So I think there's been a tone across the industry, that's been particularly set by the passenger car sector.
Around gross potentially waning or.
The market slowing down we have not seen that whatsoever.
In Q1, our sales for Q1 this year versus last year were up significantly and as we're tracking today fills a sales order sign for Q2 is tracking very similar to Q1, we're continuing to see strong interest driven by a few key tail wins, one of which is.
Still the California, ACF for advanced clean fleet regulation, that's prompting a lot of fleets to really be proactive about their transition to evs and.
Another is the cost of fuel still remains quite high in a lot of our key metro markets and so customers are really looking for some of the fuel savings that are afforded by our vehicles.
And then again the third factor as we look at deployments as customers who are have already deployed a lot of excess vehicles are placing recurring orders because they are seeing maintenance costs come down and theyre, taking advantages of a lot of the incentives that exists within the market today. So there are both the.
Speaker Change: State level incentives and municipal incentives that exist in places like New York, and Texas, Oregon.
As well as a lot of the federal incentives that were afforded to the industry by the IRA.
So there's there's tremendous tailwind in the commercial sector right now.
And we have not seen growth slow down.
Obviously going from a converted sales order to a delivery and recognizing revenue and getting that truck on the road is still a process and we're trying to streamline that and improve our infrastructure deliveries to make that happen quicker.
But there has been no shortage of demand for the products this year.
Great. Thank you for the details.
Thank you.
Thank you. The next question is a follow up Kevin Donovan Schafer with Northland security market.
Please go ahead.
Hey, guys.
Okay. So.
Two real quick on just.
Going back to the delay just trying to understand your capability of handling that type of stuff internally.
You took in the facility in Bridgetown.
You took that over yourselves from I think Fitzgerald.
And so.
When you're in the case like this where there are some delays in terms of customers taking deliveries are you able to keep running that facility at the same <unk>.
<unk> or do you run into sort of storage or warehousing.
Capacity issues and just trying to think if you get like a lumpiness through something like this but then it gets unstuck the way Dakota you seem to have like described it like the deliveries already happened. This quarter does that does that allow you to just run into more normalized.
<unk> operating rate, even if from like a GAAP accounting revenue recognition whatever.
Somehow look lumpy, but are you able to just keep coming along is that you're able to do that how does that work.
Could elaborate that'd be great.
Hey, Jonathan This is Joe again, yes, we're able to keep humming along.
This was one of the main design goals when we switch over from the previous version of the step vans or the one that we're building today a lot of the step van is built in sub assemblies and so if we have a blockage in one of the areas. We can continue to build it head on sub assemblies, so that when that bottleneck gets unlocked.
We can continue building trucks, but we've not been we've not had to send people home or or had massive lumpiness due to some of these issues. We've been able to keep building consistently and now we are adding a.
Another product here, we've added another product to the same facility, which is the hub and so we were also able to.
Cross train folks on building.
Stfan chassis as well as hubs.
Okay that makes sense.
And then so the hubs so I think the standard configuration I believe is four four.
<unk> Chargers.
You can charge for vehicles at once from the hub is that.
Is it safe to take that as kind of like the rule of thumb I'm getting at the bundling here. So when you bundle and I understand you know some vehicles or long range. Some are shorter range, so on and so forth, but I.
Historically, if we were modeling or looking forward and suppose the bundling became a more regular thing or you know maybe.
Yes, it's 20% or something of vehicles are powerful part of like bundling.
Then is it is it kind of a four to one ratio generally or does that sizing.
In terms of just the capacity for the vehicles versus the capacity of the hub.
Hub it may actually be better to size like three to one there's something is there kind of a rule of thumb ratio, where do you plan to.
Yeah, It's a great question and getting into a lot of the nuance with deploying the hubs, it's actually kind of works the other way in in our favor so with most of our shorter range vehicles. Our customers are driving an average of 50 to 80 miles a day utilizing in the range of kind of 40.
Speaker Change: 280 kilowatt hours per day.
Speaker Change: And so what we see is that you can actually support quite a few more vehicles.
And run a dual charged cycle per day with the hub, so that actually will allow customers to be able to run up to eight trucks per hub.
In a in a bundled environment.
It really makes a lot of sense for them.
As you're thinking about their operations.
If you can charge.
Eight of these vehicles quickly and get them back onto the package line or the delivery dock to be loaded for the next morning.
It's really not disruptive to their operations in.
And then loyalty ultimately allows them to.
Deploy charging infrastructure incredibly quickly without waiting for that that site infrastructure power upgrade that a lot of times four or even eight chargers would necessitate.
Wow, that's actually pretty impressive so it's.
In that case, you know if you can sort of.
If you can throw at enable or facilitate the delivery of vehicles is that something where you would look at offering to hub like a cost for that type of.
Situation there part of bundling it or would you just go for like a lower margin or just trying to think about how to think about what that would how you would look at that.
Yeah, we have a range of different customer incentives it really depends on the customer profile and our lifetime value of that customer.
But ultimately we're going to try and expedite and deploy as many trucks as possible in a sustainable manner with our customers.
Some customers will require different loading configurations, or they need more energy storage or less if theyre running now.
The higher longer range vehicles, they might only be able to get for charged cycles off of a single hub.
It's really nuanced and dependent upon the customer, but we are really focused on getting as many trucks out there as possible and if the hub can support quicker deliveries, where we're going to we're going to deliver them.
That's awesome, okay, well, thanks, guys. Thanks for taking all the questions I'll leave it there.
Speaker Change: Thank you.
Thank you very much. This concludes our question and answer session and the conference is now concluded.
Thank you for attending today's presentation. You may now disconnect your lines and have a great day.
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