Q2 2024 The Lion Electric Co Earnings Call

Good morning ladies and gentlemen, welcome to Lion Electric's second quarter 2024 results conference call.

Unknown Shareholder: 2024 Results Conference School. At this time, all participants are in a lesson-only mode. A brief question-and-answer session will follow the formal presentation.

Operator: At this time, all participants are in a listen-only mode. A brief question and answer session will follow the formal presentation. As a reminder, this conference call is being recorded. I would now like to turn the call over to Isabelle Adjahi, Vice President, Investor Relations and Sustainable Development. Please go ahead, Miss Adjahi.

Speaker Change: At this time, all participants are in a listen-only mode.

Unknown Shareholder: As a reminder, this conference school is being recorded.

Isabelle Adjahi: I would now like to turn the call over to Isabelle Adjahi, Vice President, Vest of Relations and Sustainable Development.

Isabelle Adjahi: Please go ahead and miss Adjahi. Good morning, everyone.

Isabelle Adjahi: Good morning, everyone. Welcome to Lion's second quarter 2024 results conference call. Bienvenue à la conférence téléphonique sur les résultats financiers du deuxième trimestre 2024 de l'ION. Today, I'm here with Marc Bedard, our CEO and funder, Nicolas Brunet, our president, and Richard Coulombe, our chief financial officer.

Isabelle Adjahi: Welcome to Lion's second quarter 2024 results conference school. Bienvenue à la Concerance Téléphonie, qui est sur les résultats financiers du deuxième trimestre 2024 de Lyon. Today, I'm here with Marc Bedard, our CEO, founder, Nicolas Brunet, our president, and Richard Coulombe, our Chief Financial Officer. Please note that our discussion may include estimates and other forward-looking information, and that our actual results could differ materially from those implied in any search statements. We invite you to review the cautionary language in this morning's press release and in our MDNA, which contains important information regarding various factors, assumptions, and risks that could impact our actual results.

Speaker Change: President and Richard <unk>, our Chief Financial Officer.

Isabelle Adjahi: Please note that our discussion may include estimates and other forward-looking information and that our actual results could differ materially from those implied in any such statement. We invite you to review the cautionary language in this morning's press release and in our MD&A, which contains important information regarding various factors, assumptions, and risks that could impact our actual results. With that, I will turn it over to Marc to begin.

Speaker Change: Please note that our discussion may include estimates and other forward looking information.

Speaker Change: And that our actual results could differ materially from those implied in any such statements.

Speaker Change: We invite you to review the cautionary language in this morning's press release and our MD&A.

Speaker Change: M DNA, which contains important information regarding various factors assumptions and risks that could impact actual results.

Isabelle Adjahi: With that, let me turn it over to Marc to begin.

Speaker Change: With that let me turn it over to Mark to begin.

Marc Bedard: Marc? Thank you, Isabelle.

Speaker Change: Mark.

Marc Bedard: Thank you, Isabelle. Good morning, everyone. Thank you for joining us today. The challenges that we had signaled at the beginning of the year persisted in the second quarter and continue to put pressure on the company from a cash flow management standpoint. These challenges stem from continued delays with the Canadian federal SDTF program, as well as a slowdown in deliveries under the U.S. EPA program, as expected, given that we are currently in between funding rounds.

Mark: Thank you Lisa good morning.

Marc Bedard: Good morning, everyone. Thank you for joining us today. The challenges that we had signaled at the beginning of the year persisted in the second quarter and continues to put pressure on the company from a cash flow management standpoint. These challenges stem from continued delays with the Canadian Federalist EDTF program, as well as a slowdown in deliveries in the US EPA program, as expected given that we are currently in-between founding rounds. Of course, these lower deliveries had an important impact on our revenue, profitability, and liquidity position. Management and optimization of our liquidity therefore remained our top priority, and it is critical for Lyon to have the right cost structure for today's demand environment.

Mark: Everyone. Thank you for joining us today.

Speaker Change: The challenges that we had signaled at the beginning of the year persisted in the second quarter and continues to put pressure on the company from a cash flow management standpoint.

Mark: These challenges stemming from continued delays with the Canadian Federal is that ETF program.

Mark: As well as a slowdown in deliveries in the U S. EPA program as expected given that we are currently in between funding rounds.

Mark: Of course.

Marc Bedard: These lower deliveries had an important impact on our revenue, profitability, and liquidity position. Management and optimization of our liquidity therefore remained our top priority, and it is critical for Lion to have the right cost structure for today's demand and burn.

Mark: These lower deliveries had an important impact on our revenue profitability and liquidity position.

Mark: Management and optimization of our liquidity, therefore remains our top priority.

Mark: And it is critical for allowing them to have the right cost structure for today's demand environment.

Marc Bedard: In this context, we are implementing several initiatives to streamline our operations, improve our liquidity, and position us to achieve our goal of being profitable in a foreseeable future. First, we are adjusting our approach to truck manufacturing to better align with the pace at which truck operators are transitioning to electric. Over the past years, we have built a leadership position in medium and average utility electric trucks. We are one of the few companies having deployed a critical mass of vehicles in this space. However, while the electric truck market continues to represent a very high potential opportunity for Lyon, industry volumes in the near term have been significantly lower than expected.

Mark: In this context.

Marc Bedard: We are implementing several initiatives to streamline our operation, improve our liquidity, and position us to achieve our goal of being profitable in the foreseeable future. First, we are adjusting our approach to truck manufacturing to better align with the pace at which truck operators are transitioning to electric vehicles over the past years. We have built a leadership position in medium and heavy-duty electric vehicles. We are one of the few companies having deployed a critical mass of vehicles in this. However,

Mark: We are implementing several initiatives to streamline our operations.

Mark: Our liquidity and position us to achieve our goal of being profitable in the foreseeable future.

Mark: First.

Mark: We are adjusting our approach to truck manufacturing.

Mark: To better align with the pace at which truck operators are transitioning to electric.

Mark: Over the past years.

Mark: We have built a leadership position in medium and heavy duty electric trucks.

Mark: We are one of the few companies that being deployed a critical mass of vehicles in this space. However.

Marc Bedard: While the electric truck market continues to represent a very high potential opportunity for Lion, industry volumes in the near term have been significantly lower than expected. To address this, we are instating a batch-size manufacturing approach for our electric cars, which does directly align manufacturing with our orders. This approach aims at optimizing our liquidity profile while maintaining Lion's leadership in electric trucks. We are transforming our battery operations into a product line, aiming to sell our battery packs to third parties.

Mark: While the electric truck market continues to represent a very high potential opportunity for ligand industry volumes in the near term.

Speaker Change: <unk> significantly lower than I expected.

Marc Bedard: To address this, we are instating a batch size manufacturing approach for our electric trucks. Does directly aligning manufacturing with our order book? This approach aims at optimizing our liquidity profile while maintaining Lyon's leadership in electric trucks. Second, we are transforming our battery operations into a product line, aiming to sell our battery packs to third parties. Since we believe our battery packs are well-suited for a lot of different markets. Battery sales are expected to start contributing to revenues and cash flows next year. Ultimately, better leveraging our current battery manufacturing capacity without any additional capital expenditures.

Speaker Change: To address this we are in stating our batch size manufacturing approach for our electric trucks.

Speaker Change: Directly aligning manufacturing with our order book this approach aimed at optimizing our liquidity profile, while maintaining lines leadership in electric trucks.

Second.

Speaker Change: We are transforming our battery operations into our product line.

Speaker Change: Aiming to sell our battery pack to third parties since we believe our battery packs are well suited for a lot of different markets.

Marc Bedard: Since we believe our battery packs are well suited for a lot of different applications, battery cells are expected to start contributing to revenues and cash flows next year, ultimately better leveraging our current battery manufacturing capacity without any additional capital expenditures.

Speaker Change: Battery sales are expected to start contributing to revenues and cash flows next year also.

Speaker Change: Honestly better leveraging our current battery manufacturing capacity without any additional capital expenditures.

Marc Bedard: Third, we are launching a process to maximize usage of all of our facilities since we have significantly more footprint than we need in the current market conditions. The footprint reduction also aligns with the changes to our truck manufacturing operations I just alluded to. Specifically, we are launching a process to sub-lease a significant portion of our Julia Plant. Our 900,000 square foot plant was initially designed and sized for 75% truck production and 25% school bus production. Given that all truck manufacturing will be performed in change-room for the next few years, we currently have important access footprint capacity in Julia.

Speaker Change: Third.

Marc Bedard: Third, we are launching a process to maximize usage of all of our facilities since we have significantly more footprint than we need in the current market condition. The footprint reduction also aligns with the changes to our truck manufacturing operations I just alluded to.

Speaker Change: We are launching a process to maximize usage of all of our facilities.

Speaker Change: We have significantly more footprint than we need in the current market conditions.

Speaker Change: This footprint reduction also aligns with the changes to our truck manufacturing operations I just alluded to.

Speaker Change: Specifically.

Marc Bedard: We are launching a process to sublease a significant portion of our jewelry. Our 900,000 square foot plant was initially designed and sized for 75% truck production and 25% school bus production, given that all truck manufacturing will be performed in St. Jerome for the next few years.

Speaker Change: We are launching a process to sublease, a significant portion of our Georgia plant.

Speaker Change: 900000 square foot plant was initially designed and sized for 75% on truck production and 25% School bus production.

Speaker Change: Given that all truck manufacturing will be performed in <unk> syndrome for the next few years.

Marc Bedard: We currently have important excess footprint capacity in joint. We are therefore aiming to significantly reduce the current rental expense of $5 million per year while keeping the necessary footprint to maintain our production capacity of 2,500 school buses per year at the Joliet plant. Furthermore, we are looking to sublease certain of our 12 experience centers and partner with additional service providers in specific regions, thus further reducing our rental expenses while expanding our service coverage.

Speaker Change: We currently have important excess footprint capacity enjoy it.

Marc Bedard: We are therefore aiming to significantly reduce the current rental expense of $5 million per year while keeping the necessary footprint to maintain our production capacity of 2,500 school buses per year at Julia plant. Furthermore, we are looking to sub-lease certain of our 12 experience centers and partner with additional service providers in specific regions, thus further reducing our rental expenses while expanding our service coverage.

Speaker Change: We are therefore aiming to significantly reduce the current rental expense of $5 million per year.

Speaker Change: While keeping the necessary footprint to maintain our production capacity of 2500 school buses per year, a digitally upfront.

Speaker Change: Furthermore.

Speaker Change: We are looking to sublease certain of our 12 experience centers and partner with additional service providers in specific regions. Thus further reducing our rental expenses, while expanding our service coverage.

Marc Bedard: Additionally, we will reduce our total workforce by approximately 200 people across the entire organization to align with the action plan I just mentioned. Mainly of the affected positions will be in product development, considering that the development of new platforms is now behind us. This workforce reduction should reduce our payroll cost by approximately $25 million on an annual basis. We are extremely thankful to all of our employees, and we deeply regret the impact that this measure will have on those affected. We are, of course, committed to assist them through this transition.

Speaker Change: Additionally.

Marc Bedard: We will reduce our total workforce by approximately 300 people across the entire organization. To align with the action plan, I just. Many of the affected positions will be in product development, considering that the development of new platforms is now behind. This workforce reduction should reduce our payroll costs by approximately $25 million on an annual basis. We are extremely thankful to all of our employees, and we deeply regret the impact that this measure will have on them.

Speaker Change: We will reduce our total workforce by approximately 200 people across the entire organization to align with the action plan I just mentioned.

Speaker Change: Many of the affected positions will be in product development, considering that the development of new platforms is now behind us this workforce.

Speaker Change: Cost reductions should reduce our payroll cost by approximately $25 million on an annual basis.

Speaker Change: We are extremely thankful to all of our employees and we deeply regret.

Speaker Change: Fact that this measure will have on those effect that we.

Marc Bedard: We are, of course, committed to assisting them through this transition. Finally, we are working to also significantly reduce our non-salary cost structure by decreasing our operational expenses in areas such as third-party logistics, consultants, and selling and administrative costs. Our adjusted cost structure will be well aligned to support the increasing electric school bus demand and maintain our leadership position while allowing us to keep supporting truck operators in their electric transition in Q2.

Speaker Change: We are of course committed to assist them through this transition.

Marc Bedard: Finally, we are working to also significantly reduce our non-Saturday cost structure by decreasing our operational expenses in areas such as third-party logistics, consultants, and selling and administrative cost. Our adjusted cost structure will be well aligned to support the increasing electric school bus demand and maintain our leadership position while allowing us to keep supporting truck operators and their electric transition.

Speaker Change: Finally.

Speaker Change: We are working to also significantly reduced our non salary cost structure by decreasing our operational expenses in areas, such as third party logistics consultants and selling and administrative costs.

Speaker Change: Our adjusted cost structure will be well aligned to support the increasing electric school bus demand and maintain our leadership position, while allowing us to keep supporting truck operators and their electric transition.

Marc Bedard: In Q2, we also made a number of important operational and financial achievements, which I will now highlight. We certified our second model of battery packs, the Lion HD Battery. With all of our battery pack certifications behind us, we are now working on integrating these packs on all of our vehicles and selling our packs to third parties. We performed a commercial launch of our Lion A tractor truck, a game changer with its 127,000 pounds GCWR capacity. Equipped with our proprietary Lion HD batteries, the Lion A tractor truck is the pinnacle of heavy-duty electric vehicles. partners, tackling the largest addressable market in the truck space.

Speaker Change: In Q2.

Marc Bedard: We also made a number of important operational and financial achievements, which I will now highlight. We have certified our second model of battery packs, the Lion HD battery. With all our battery pack certifications behind us, we are now working on integrating these packs into all of our vehicles and selling our packs to third parties. We performed the commercial launch of our Lion-A tractor truck, a game-changer with its 127,000-pound GCWR capacity. Equipped with our proprietary Lion HD batteries, the Lion 8 Tractor Truck is the pinnacle of heavy-duty electric vehicles, targeting the largest addressable market in the truck.

Speaker Change: We also made a number of important operational and financial achievements, which I will now highlight.

Speaker Change: We certified our second model with battery packs, the Lion HD battery.

Speaker Change: With all of our battery pack certifications behind US we are now working on integrating these facts on all of our vehicles and selling <unk> to third parties.

Speaker Change: We performed the commercial launch of our <unk> tractor truck a game changer with its 127000 pounds.

Speaker Change: Do you see double you arent capacity.

Speaker Change: Equipped with our proprietary rely on HD batteries the.

Speaker Change: The lion they tractor truck at the pinnacle of heavy duty electric vehicles.

Speaker Change: <unk> the largest addressable market in the truck space <unk>.

Marc Bedard: Commercial production and customer deliveries are expected to take place later this year. We reached an important milestone with the EPA Clean School Bus Program, having just recently finalized the agreement allowing us to execute formal purchase orders with customers for our EPA grant of 97 units representing $38 million. Additionally, Lion clients were awarded 127 school bus rebates as part of the latest round of the EPA program.

Marc Bedard: Commercial production and customer deliveries are expected to take place later this year. We reached an important milestone with DPA Clean School Bus program, having just recently finalized the agreement allowing us to execute formal purchase orders with customers for our EPA grant of 97 units representing $38 million. Additionally, line clients were awarded 127 school bus rebates as part of the latest round of the EPA program, representing $39 million. For both of these rounds, we are actively working with customers to obtain formal purchase orders and fulfill other requirements to claim payments from the EPA. Those two rounds together represent a potential of approximately $77 million in upfront payments in the coming months.

Speaker Change: Commercial production and customer deliveries are expected to take place later this year.

Marc Bedard: Representing $39 million for both of these rounds, we are actively working with customers to obtain formal purchase orders and fulfill other requirements to claim payments from the EPA. Those two rounds together represent a potential of approximately $77 million in upfront payments in the coming months. Additionally

Speaker Change: We reached an important milestone with DPA clean School bus program, having just recently finalized the agreement, allowing us to execute formal purchase orders with customers for our EPA grant of 97 units representing $38 million.

Speaker Change: Additionally, <unk> clients were awarded a 127 school bus rebates as part of the latest round of EEP program, representing $39 million.

Speaker Change: For both of these rooms.

Speaker Change: We're actively working with customers to obtain formal purchase orders and fulfill other requirements to claim payments from the EPA.

Speaker Change: Those two rounds together represent a potential of approximately $77 million in upfront payments in the coming months.

Marc Bedard: Additionally, both rounds represent important sources of additional potential purchase orders. Since a number of school districts and contractors have been awarded directly and considering doing business with Lion, given our reputation of delivering a complete solution, including the charging and cross-charter installation in a timely manner. We also continue to execute our inventory reduction plan with a $20 million year-to-date inventory reduction as of June 30th. We reiterate our objective to reduce inventory by $50 to $75 million over 2024, and we are heading in the right direction, considering the significant decrease of $23 million above our raw material and with inventory in Q2.

Speaker Change: Additionally.

Marc Bedard: Both rounds represent important sources of additional potential purchase orders, since a number of school districts and contractors have been awarded directly and are considering doing business with Lion, given our reputation for delivering a complete solution, including the charging infrastructure installation in a timely manner. We also continue to execute our inventory reduction plan, with a $20 million year-to-date inventory reduction as of June 30th. We reiterate our objective to reduce inventory by $50 to $75 million by 2024. And we are heading in the right direction, considering the significant decrease of $23 million above our raw material and WIP inventory in Q2. Looking forward.

Speaker Change: Both rooms represent important sources of additional potential purchase orders since a number of school districts and contractors.

Speaker Change: Where's the directly and considering doing business with clients given.

Speaker Change: Given our reputation of delivering a complete solution, including the charging infrastructure installation in a timely manner.

Speaker Change: We also continued to execute our inventory reduction plan.

Speaker Change: With a $20 million a year to date inventory reduction as of June 30th.

Speaker Change: We reiterate our objective to reduce inventory by $50 million to $75 million over 2024.

Speaker Change: And we are heading in the right direction, considering the significant decrease of $23 million above our raw material in with inventory in Q2.

Marc Bedard: Looking forward, our priorities for the rest of 2024 are managing and optimizing liquidity, including through our cross-reduction action plan I described earlier, as well as opportunities to strengthen our financial position. Growing our order book and increasing deliveries, integrating Lion batteries on our vehicles, and advancing our new battery product line, and working closely with the Canadian government to increase the approval of applications under the ZDTS program.

Speaker Change: Looking forward.

Nicolas Brunet: Our priorities for the rest of 2024 are, managing and optimizing liquidities, including through our cost reduction action plan I described earlier, as well as opportunities to improve our financial position, growing our order book and increasing deliveries, integrating Lion batteries into our vehicles and advancing our new battery product line, and working closely with the Canadian government to increase the approval of applications under the ZETF. I will now turn it to Nicolas.

Speaker Change: Our priorities for the rest of 2024 are <unk>.

Speaker Change: Managing and optimizing liquidity, including through our cost reduction action plan I described earlier as.

Speaker Change: As well as the opportunities to strengthen our financial position.

Speaker Change: Growing our order book and increasing deliveries.

Speaker Change: Integrating land batteries on our vehicles and advancing our new battery product line.

Speaker Change: And working closely with the Canadian government to increase the approval applications on there does that ETF program.

Nicolas Brunet: I will now turn it to Nicholas. Thank you, Mark. Let me start by discussing deliveries, then address the order book. During the quarter, we delivered 101 vehicles, comprising 95 buses and six trucks. 84 vehicles were delivered in Canada and 17 in the US. The decline in deliveries was mostly the result of persistent delays with the ZDTS program, coupled with the timing of EPA-related deliveries as we are in between funding rounds for the program. Deliveries were also impacted by a slowdown in our production cadence as we are starting the integration of our Lion MD batteries onto our vehicles.

Speaker Change: I will now turn it to Nicolas.

Nicolas Brunet: Thank you, Marc. Let me start by discussing deliveries, then address the order. During the quarter, we delivered 101 vehicles, comprising 95 buses and six; 84 vehicles were delivered in Canada and 17 in the U.S. The decline in deliveries was mostly the result of persistent delays with the ZET ETF program, coupled with the timing of EPA-related deliveries as we are in between funding rounds for the program. Deliveries were also impacted by a slowdown in our production cadence as we are starting the integration of our Lion M.D. batteries into our vehicles.

Nicolas: Thank you Mark let me start by discussing deliveries then address the order book.

Nicolas: During the quarter, we delivered 101 vehicles, comprising 95 buses and six drugs.

Nicolas: 84 vehicles were delivered in Canada, and 17 in the U S.

Nicolas: The decline in deliveries was mostly the result of persistent delays with the debt ETF program, coupled with the timing of EPA related deliveries as we are in between funding rounds for the program.

Speaker Change: Deliveries were also impacted by a slowdown in our production cadence as we are starting the integration of our line N D batteries onto our vehicles.

Nicolas Brunet: Q2 deliveries include an additional line of buses to our customer who obtained funding approval under the ZDTS program for 200 school buses last quarter, bringing the total buses delivered to this client to 59. We expect the remaining units from this order to be delivered over the remainder of 2024 and over 2025.

Nicolas Brunet: Q2 deliveries include an additional nine buses to our customer who obtained funding approval under the ZETI-TF program for 200 school buses last quarter, bringing the total number of buses delivered to this client to $50,000. We expect the remaining units from this order to be delivered over the remainder of 2024 and in 2025. In terms of purchase orders, as of July 30, 2024, Lion's vehicle order book stood at 1,994 vehicles, consisting of 1,804 buses and 190 trucks, representing a combined total order value of approximately $475 million.

Speaker Change: Q2 deliveries include an additional nine buses to our customer who obtained funding approval under the debt ETF program for 200 school buses last quarter, bringing the total of buses delivered to this point the 59.

Speaker Change: We expect the remaining units from this order to be delivered over the remainder of 2024 and over 2025.

Nicolas Brunet: In terms of purchase orders, as of July 30, 2024, Lion's vehicle order book stood at 1,994 vehicles, consisting of 1,804 buses and 190 trucks, representing a combined total order value of approximately 475 million. The momentum in the purchase order book for the quarter was impacted by the timing of funding rounds in the EPA's Green School Bus Program. We, however, expect the purchase orders related to the EPA program to gain momentum as we have just recently finalized the agreement to be able to solicit formal purchase orders from customers for our grant of 97 units representing $38 million.

Speaker Change: Okay.

Speaker Change: In terms of purchase orders as of July 32024 lines vehicle order book stood at 1994 vehicles.

Speaker Change: <unk> of 1800 for buses and 190 trucks, representing a combined total order value of approximately $475 million.

Nicolas Brunet: The momentum in the purchase order book for the quarter was impacted by the timing of funding rounds in the EPA's Clean School Bus program. We, however, expect that purchase orders related to the EPA program to gain momentum as we have just recently finalized the agreement to be able to solicit formal purchase orders from customers for our grant of 97 units representing $38 million. Additionally, clients who filed applications through Lion in the latest round of the EPA program were awarded 127 school bus rebates, representing $39 million.

Speaker Change: The momentum in the purchase order book for the quarter was impacted by the timing of funding rounds, and the Epa's Clean School bus program.

Speaker Change: We have ever expect that purchase orders related to the EPA program to gain momentum as we have just recently finalized the agreement to be able to solicit formal purchase orders from customers for our grant of 97 units representing $38 million.

Nicolas Brunet: Additionally, clients who filed applications through Lion in the latest rounds of the EPA program were awarded a 127 school bus rebake, representing $39 million. For both rounds of the EPA program, we are working with customers to obtain formal purchase orders and plan deliveries. As of July 30th, 66 units out of the 224 awards obtained through the Lion Files applications were included in the order book. The two rounds of the program together represent the potential of approximately $77 million in upfront payments from the EPA in the coming months. We are working diligently with customers to obtain formal purchase orders and fulfill other requirements to submit payments request with the EPA.

Speaker Change: Additionally, clients, who filed applications through lion and the latest rounds of the EPA program were awarded a 127 school bus rebate representing $39 million.

Nicolas Brunet: For both rounds of the EPA program, we are working with customers to obtain formal purchase orders and plan delivery. As of July 30th, 66 units out of the 224 awards obtained through the Lion-filed applications were included in the order.

Speaker Change: For both rounds of the EPA program, we are working with customers to obtain formal purchase orders and planned deliveries.

Speaker Change: As of July 30th 66 units out of the 224 awards obtained through the Lion filed applications were included in the order book.

Nicolas Brunet: These two rounds of the program together represent the potential of approximately $77 million in upfront payments from the EPA in the coming years. We are working diligently with customers to obtain formal purchase orders and fulfill other requirements to submit payment requests with the EPA. Payment requests with the EPA relating to some of these orders have already been initiated. Important to note, both rounds of the EPA program represent important sources of potential additional purchase orders over the 224 awards from Lion filed applications, given that a number of school districts and contractors have applied and been awarded directly.

Speaker Change: These two rounds of the program together represent the potential of approximately $77 million in upfront payments from the EPA in the coming months.

Speaker Change: We are working diligently with customers to obtain formal purchase orders and fulfill other requirements to submit payments request with EPA.

Nicolas Brunet: Payment requests with the EPA relating to some of these orders have already been initiated. Important to note, both rounds of the EPA program represent important sources of potential additional purchase orders over the 224 awards from Lion Files application, given that a number of school districts and contractors have applied and been awarded directly. We expect deliveries related to these two rounds of the EPA program to start mostly towards the end of the year.

Speaker Change: Payment request with EPA relating to some of these orders have already been initiated.

Speaker Change: Important to note both rounds of the EPA program represents important sources of potential additional purchase orders over the 224 awards from Lion filed application given that a number of school districts and contractors have applied and been awarded directly.

Nicolas Brunet: We expect deliveries related to these two rounds of the EPA program to start mostly towards the end of the year. In addition to the EPA Clean School Bus Program, under which over $2 billion dollars remain to be allocated by 2026, various other incentive programs targeting electric school buses are expected to further stimulate demand. These include programs such as the EPA Clean Heavy-Duty Vehicles Program, which allocates $932 million to replace Class 6 and 7 zero-emission vehicles, including over $650 million specifically for school buses.

Speaker Change: We expect deliveries related to these two rounds of the EPA program to start mostly towards the end of the year.

Nicolas Brunet: In addition to the EPA Clean School Bus Program, under which over $2 billion remain to be allocated by 2026, various other incentive programs targeting electric school buses are expected to further stimulate them at. These include programs such as the EPA Clean Heavy Duty Vehicles Program, which allocates $932 million to replace class 6 and 7 zero mission vehicles, including over $650 million specifically for school buses. The California Zero Mission School Buses and Infrastructure or ZFB program, which allocates $500 million for the purchase of electric school buses and charging infrastructure. The new Canada Public Transit Fund announced in July, which will allocate up to $3 billion annually, starting in 2026, to respond to local public transit needs, including $500 million per year, over 10 years, to electrify public transit and school transportation.

Speaker Change: In addition to the EPA Clean school bus program under which over $2 billion remaining to be allocated by 2026, various other incentive programs targeting electric school buses are expected to further stimulate demand.

Speaker Change: These include programs such as the EPA clean heavy duty vehicles program, which allocates $932 million to replace class six and seven zero emission vehicles, including over $650 million specifically for school buses.

Nicolas Brunet: The California Zero Emissions School Buses and Infrastructure, or ZESB program, which allocates $500 million for the purchase of electric school buses and charging infrastructure. The New Canada Public Transit Fund, announced in July, which will allocate up to $3 billion annually starting in 2026 to respond to local public transit needs, including $500 million per year over 10 years to electrify public transit and school transportation. All together, this translates into over $6 billion of funding to be available for school bus and infrastructure purchases.

Speaker Change: The California zero emission school buses and infrastructure or B program, which allocates $500 million for the purchase of electric school buses and charging infrastructure.

Speaker Change: The New Canada Public Transit fund announced in July, which will allocate up to $3 billion annually, starting in 2026 to respond to local public transit needs, including $500 million per year over 10 years to electrify public transit and school transportation.

Nicolas Brunet: Altogether, this translates into over $6 billion of funding to be available for school bus and infrastructure purchases.

Speaker Change: Altogether this translate into over $6 billion of funding to be available for school bus and infrastructure purchases.

Nicolas Brunet: On the truck side, the Line 5 and Line 8 tractor platform, which are both available for orders, continue to drive strong interest from potential customers, as demonstrated by demand for right and right and vehicle demos, which we believe positions as well to serve truck operators when the shift to easy accelerate. Last, a word on 3DTF. We are pursuing an effective dialogue with Canadian federal officials, and we are hopeful that the satisfactory resolution to allow for additional deliveries under this program can be reached.

Nicolas Brunet: On the truck side, the Line 5 and Line 8 tractor platforms, which are both available for orders, continue to drive strong interest from potential customers, as demonstrated by demand for ride-and-drives and vehicle demos, which we believe positions us well to serve truck operators when the shift to EV accelerates. Last, a word on ZETI-TF.

Speaker Change: On the truck side the line five in line eight tractor platforms, which are both available for orders continued to drive strong interest from potential customers as demonstrated by demand for ride and drives in vehicle demos, which we believe positions us well to serve truck operators when the shift the easy accelerates.

Nicolas Brunet: We are pursuing an active dialogue with Canadian federal officials, and we are hopeful that a satisfactory resolution to allow for additional deliveries under this program can be reached. Finally, our Lion Energy order book currently stands at $9 million, a significant increase from prior quarters. I will now turn it over to Richard to discuss our financial performance.

Speaker Change: Last a word on that ETF, we are pursuing an active dialogue with Canadian federal officials and we are hopeful that a satisfactory resolution to allow for additional deliveries under this program can be reached.

Richard Coulombe: Finally, our Line Energy Order Book currently stands at $9 million, a significant increase from prior. I will now turn it over to Richard to discuss our financial performance. Richard? Thank you, Nicholas.

Speaker Change: Finally, our Alliant energy order book currently stands at $9 million, a significant increase from prior quarters.

Speaker Change: I will now turn it over to Richard to discuss our financial performance Richard.

Richard Coulombe: Thank you, Nicolas. I will start by commenting on the Q2 results. I will then discuss our liquidity position and provide color for the rest of 2024. In Q2, we recorded quarterly revenues of $30 million, driven by lower unit sales due to factors already discussed by Mack and Young. These lower revenues, coupled with increased manufacturing costs, resulting both from the ramp-up of new Lion D and Lion 5 models and the integration of Lion MD batteries into our vehicles, also impacted profitability. For Q2, gross margin was negative $15 million, and it did negative $20 million.

Richard: Thank you Nicolas I will start by commenting on Q2 results I will then discuss our liquidity position and provide color for the rest of 2024.

Richard Coulombe: I will start by commenting on Q2 results. I will then discuss our liquidity position and provide color for the rest of 2024. In Q2, we recorded quarterly revenues of $30 million driven by lower unit sales due to factors already discussed by Marc and Nicholas. The lower revenues, coupled with increased manufacturing costs, resulting both from the ramp up of new Lion D and Lion 5 models and the integration of Lion MD, bad reason to our vehicles, also impacted profitability. For Q2, gross margin was negative $15 million, and it did the negative $20 million. That said, our business model continues to show attractive unit-level economics.

Richard: In Q2, we recorded quarterly revenue was up $30 million driven by lower unit sales due to factors already discussed by Marc and Nicolas These.

Richard: These lower revenues, coupled with increased manufacturing costs, resulting both from the ramp up of new lines and line five models and the integration of lie in the batteries into our vehicles also impacted profitability.

Richard: For Q2 gross margin was negative $15 million and EBITDA negative $20 million.

Richard Coulombe: That said, our business model continues to show attractive unit-level economics. Our financial performance should therefore be positively impacted by an increase in volume. Until then, we will continue to tightly manage liquidity and control costs as we are starting to see the impact of previously announced cost-cutting measures. Q2SGNA of $14.7 million was down over $1 million from the prior year.

Richard: That said our business model continues to show attractive unit level economics are financial performance should therefore be positively impacted by increase in volume.

Richard Coulombe: Our financial performance should therefore be positively impacted by increase in volume. Until then, we will continue to tightly manage liquidity and control costs, as we are starting to see the impact of previously announced cost-cutting measures. Q2 as DNA of $14.7 million was down over a million dollars from prior year. We also saw a significant reduction of CAPEX and R&D, which respectively amounted to CAPEX of $1.3 million, down approximately $18 million from last year, and R&D of $9.4 million, down approximately $8 million from last year.

Speaker Change: Until then we will continue to tightly manage liquidity and control costs. As we are starting to see the impact of previously announced cost cutting measures Q2, SG&A of $14 7 million was down over $1 million from prior year. We also saw a significant reduction of Capex and R&D, which respect.

Richard Coulombe: We also saw a significant reduction in CapEx and R&D, which respectively amounted to CapEx of $1.3 million, down approximately $18 million from last year, and R&D of $9.4 million, down approximately $8 million from last year. Now moving on to liquidity. Despite lower unit sales in Q2, we made good progress with our inventory reduction plan, decreasing inventory by $7 million in Q2 and $20 million for the first half of 2021. In just Q2, we decreased our raw material and width inventory by $23 million.

Speaker Change: <unk> amounted to capex of $1 $3 million down approximately $18 million from last year, and R&D of $9 $4 million down approximately.

Speaker Change: $8 million from last year.

Richard Coulombe: Now moving on to liquidity. Despite lower unit sales in Q2, we made good progress with our inventory reduction plan, decreasing inventory by $7 million in Q2 and $20 million for the first half of 2024. Just in Q2, we decreased our raw material and with inventory by $23 million. We therefore reiterate our objective of $50 to $75 million in inventory reduction for the year.

Speaker Change: Now moving onto liquidity, despite lower unit sales in Q2, we made good progress with our inventory reduction plan decreasing inventory by $7 million in Q2 and $20 million for the first half of 2020 for.

Speaker Change: Just in Q2, we decreased our raw material and with inventory by $23 million.

Richard Coulombe: We therefore reiterate our objective of a $50 to $75 million inventory reduction for the year. Additionally, separately, we announce on July 2nd an amendment to various loan facilities. This agreement with our lenders provides relief for certain financial covenants from June 30th until September 30th. It also provides for the capitalization of 50% of interest payments, a delay in interest payments due under the revolver, and a requirement to maintain a minimum liquidity of 15 million Canadian dollars at all times. In parallel, we entered into a new $5 million Canadian loan facility with Investissement Québec.

Speaker Change: We therefore reiterate our objective of $50 million to $75 million inventory reduction for the year.

Richard Coulombe: Separately, we announced on July 2nd an amendment to various loan facilities. This agreement with our lenders provides relief for certain financial covenants from June 30 until September 30. It also provides for the capitalization of 50% of interest payments, a delay of interest payments due under the revolver, and the requirement to maintain a minimum liquidity of $15 million Canadian dollars at all times. In parallel, we entered into a new $5 million Canadian loan facility with Invested Market Bank. As of June 30th, we had available liquidity of approximately $25 million. As we look ahead, we will continue to actively evaluate different opportunities that may enable us to improve liquidity and strengthen our financial position, which remains our key priority.

Speaker Change: Separately, we announced on July 2nd an amendment to various loan facilities.

Speaker Change: This agreement with our lenders provides relief for certain financial covenants from June 30th until September 30th. It also provides for the capitalization of 50% of interest payments a delay of interest payments due under the revolver and the requirement to maintain a minimum liquidity of $15 million Canadian dollars at all times.

Speaker Change: In parallel we entered into a new 5 million Canadian dollars loan facility with investors markovic.

Richard Coulombe: As of June 30th, we had available liquidity of approximately $25 million. As we look ahead, we will continue to actively evaluate different opportunities that may enable us to improve liquidity and strengthen our financial position, which remains our key priority. I will now pass it over to Marc for his concluding remarks. Thank you, Richard. The electric vehicle market has been challenging in many respects in the last few years for EV manufacturing, but without a doubt.

Marc Bedard: I will now pass it over to Mark for concluding remarks. Mark? Thank you, Richard. The electric vehicle market has been challenging in many regards in the last few years for EV manufacturers. But without a doubt, the EV market is here to stay. At Lyon, we are very well equipped to support the operators in their transition to electric, as demonstrated by the more than 28 million miles driven on our 2,100 vehicles on the road. Since the pace of electrifying transportation depends on manufacturers, including the timing of government programs, we believe that all the changes we have made through the last year and the ones we are making today have to be done to successfully align our business model to this reality.

Marc Bedard: The EV market is here. At Lion, we are very well equipped to support operators in their transition to electric, as demonstrated by the more than 28 million miles driven by our 2100 vehicles on the road. However, the pace of electrifying transportation depends on many factors, including the timing of government programs.

Marc Bedard: We believe that all the changes we have made in the last year and the ones we are making today have to be done to successfully align our business model to this reality. Our objective for the balance of 2024 is to materialize all the measures we announce to be fully prepared to attack 2025 with a very efficient construct. One that can position us to reach our profitability goals with our electric school bus business and can also allow us to grow our electric truck business at the same pace as the truck operators transition to electric. Thank you for your attention this morning.

Speaker Change: In reality.

Marc Bedard: Our objective for the balance of 2024 is to materialize all the measures we announce to be fully prepared to attack 2025 with a very efficient cost structure. One that can position us to reach our profitability goals with our electric school bus business and can also allow us to grow our electric truck business at the same pace as the truck operators will transition to electric.

Speaker Change: Our objective for the balance of 'twenty 'twenty four is to materialize all the measures that we announced to be fully prepared to attack 2025, with a very efficient cost structure, one that can position us to reach our profitability goals with our electric school bus business.

Speaker Change: And can also allow us to grow our electric truck business at the same pace as the truck operators will transition to electric.

Marc Bedard: Thank you for your attention this morning.

Operator: Let's now open the lines for questions. Thank you. If you would like to ask a question, please press the star followed by one on your telephone keypad. If you would like to remove your question, please press star followed by two.

Speaker Change: Thank you for your attention. This morning, let's now open the lines for questions.

Unknown Shareholder: Let's now open the lines for questions. Thank you. If you would like to ask a question, please press star, followed by one on the telephone keypad. If you would like to remove your question, please press star, fill it by two. Remember pen to ask a question, please answer; your phone is muted locally.

Speaker Change: Thank you if you would like to ask a question. Please press star followed by one on your telephone keypad.

Speaker Change: If you would like to remove your question Philippe.

Speaker Change: Philip I T.

Operator: When prepared to ask your question, please ensure your phone is unmuted locally. Our first question goes to Mike Shlisky of DA Davidson. Mike, please go ahead.

Pedro: On the pension question Pedro <unk> nicely.

Michael Shlisky: Our first question goes to Mike Chilisky or DA Davidson. Mike, please go ahead. Good morning, and thanks for taking my question.

Pedro: Our first question I guess, you Mike Schmidtke of D. A Davidson Mike. Please go ahead.

Michael Shlisky: Good morning, and thanks for taking my question. I wanted to ask about your plans to sell batteries. Just a little more detail there, I guess. What types of batteries will you be selling as far as sizes?

Mike Schmidtke: Good morning, and thanks for taking my question.

Marc Bedard: I want to ask about your plan to sell batteries through the new division. Just a little more detail there. I guess what types of batteries will you be selling as far as sizes, as you're only going to be a thing that you already sell, but you have the ability to make for stolen vehicles or other sizes. And do you intend to sell the BMS software as part of that package? And is there any kind of subscription type of sale to cash to that?

Speaker Change: I wanted to ask about your.

Speaker Change: Plans to sell batteries.

Speaker Change: Through the New Division.

Speaker Change: Just a little more detail there I guess what types of batteries will you be selling as far as size is only going to be I think that you already sell but do you have the ability to make or selling vehicles or other sizes and then do you intend to sell.

Speaker Change: The BMS software as part of that package.

Speaker Change: Subscription.

Speaker Change: Oh sales attached to that.

Marc Bedard: Good morning, Mike. This is Mark. We have two packs via the MD pack and the HD pack. One is a 70 kWh. The other one is a 105 kWh. The chemistry is an NMC chemistry, and it's coming with our own BMS, and also the BMS will be also available. We feel you know that it could be used in many different markets, including aerospace. Like the HD pack, it is a very good kit for a lot of those users, for example.

Michael Shlisky: Is it only going to be a thing that you already sell, or do you have the ability to make it for smaller vehicles or other sizes? And then, do you intend to sell the BMS software as part of that package? And is there any kind of subscription-type sale attached to that? Good morning, Mike. This is Marc.

Speaker Change: Hey, Good morning, Mike This is mark.

Mike: We have <unk>.

Speaker Change: <unk> HD pack one is.

Marc Bedard: We have two packs. We have the MD pack and the HD pack. One is 70 kilowatt hours.

Speaker Change: The other one is just wanted to know in AMR.

Speaker Change: The chemistry is.

Speaker Change: And NMC chemistry, and it's coming with our with our own with our own BMS and also the Bts will be also available we.

Marc Bedard: The other one is 105 kilowatt hours. The chemistry is an NMC chemistry, and it's coming with our own BMS, and also the BTMS will be available. We feel that it could be used in many different markets, including aerospace. The HD pack is a very good fit for a lot of those uses, for example.

Speaker Change: We feel that it could be used in many different markets include.

Speaker Change: Including aerospace.

Speaker Change: Like the HD pack is a very good fit for a lot of those.

Speaker Change: Those users for example.

Nicolas Brunet: Got it. My other question was, does there a tax benefit or any kind of associated that you received and Juliet that would change or be owed back if you reduce or didn't you print it there?

Speaker Change: Got it.

Michael Shlisky: Got it. My other question was, does the tax, benefit, or any kind of subsidy that you received at Joliet that would change or be owed back if you reduced or ended your presence there? Mike Nick here. No, there is no subsidy that would require a penalty.

Speaker Change: The other question was does the terror attacks.

Speaker Change: Benefit or any kind of associated that you received at Joliet that would be.

Speaker Change: That would change or be owed back if you reduce your presence there.

Nicolas Brunet: In fact, all the subsidies are in the form of tax credits related to the number of employees that we have there, and we haven't tapped into those at all. Okay. Thanks so much.

Michael Shlisky: Mike Nick here. No, there's no such subsidy that would require a penalty; in fact, all the subsidies are in the form of tax credits related to the number of employees we have there, and we have been tapped into those out. Okay, got it. Thanks so much. I'll pass it along.

Speaker Change: Hey, Matt like next year no. There is no such subsidy that would require a penalty in fact, all the subsidies are in the form of <unk>.

Speaker Change: <unk> credits.

Speaker Change: <unk> two.

Speaker Change: The number of employees that we have there and we haven't tapped into those at all.

Speaker Change: Yeah.

Speaker Change: Oh, Okay got it thanks, so much I'll pass it along.

Unknown Shareholder: Thank you, Mike.

Mike: Thank you Mike.

Speaker Change: Yeah.

Kevin Chiang: Thank you. The next question. Go to Kevin Chiang of CIBC. Kevin, please go ahead. Good morning, everyone. Thanks for taking my question.

Michael Shlisky: I'll pass it along. Thank you. The next question goes to Kevin Chiang of CIBC. Kevin, please go ahead.

Speaker Change: Thank you. The next question go to Kevin Chiang of CIBC, Kevin. Please go ahead.

Kevin Chiang: Good morning, everyone. Thanks for taking my question. I'm just wondering, I understand, and it's been a few quarters now. You've talked about some of the challenges in converting the large market opportunity into your order book, and you've spoken about some of the delays around these government programs, but, I just wondered, do you think you need to change your sales tactics here? Or maybe you have, and you can speak to that. You know, is there anything you can do to accelerate that conversion rate versus just being dependent on the pace in which the government rolls out, you know, some of these subsidy programs?

Kevin Chiang: Good morning, everyone. Thanks for thanks for taking my question.

Marc Bedard: I'm just wondering, I understand, and it's been a few quarters now, you've talked about some of the challenges in converting, you know, the large market opportunity into your, into your order of bulk, and you've spoken about some of the delays around these governance programs, but I just wanted it, you think you have to change your sales characteristics here, or maybe you have and speak to that just, you know, as you can do to accelerate that conversion rate versus just being dependent on the pace in which the government rolls out, you know, some of these subsidy programs, because it does seem to, you know, a lot, it creates long-term demand, it seems like it's definitely been a short-term headwind for you, and just one of the things that you can do to kind of, you know, hedge against this risk moving forward.

Speaker Change: I'm just wondering.

Speaker Change: I understand it's been a few quarters now you've talked about some of the challenges.

Speaker Change: <unk>.

Speaker Change: The large market opportunity into your into your order book and you've spoken about some of the delays around these government programs, but.

Speaker Change: Just wondering.

Speaker Change: Do you think you have to change your sales tactics here or maybe you have and you can speak to that.

Kevin Chiang: Because it does seem to, you know, while it creates long-term demand, it seems like it's definitely been a short-term headwind for you. And just wondering if there's anything you can do to kind of mitigate this risk moving forward. Yeah, I'll take that one.

Speaker Change: You can do to accelerate that conversion rate versus just being dependent on the pace in which the government will do some of the subsidy programs because it does seem to.

Speaker Change: While it creates long term demand.

Speaker Change: It seems like it's definitely been a short term headwind for you and just wondering if there's anything you can do to kind of.

Speaker Change:

Speaker Change: Hedge against this risk moving forward.

Marc Bedard: Yeah, I'll take that one. Look, right now the demand in the school bus sector is very much driven by the programs that are being put in place. In some jurisdictions, it's through regulation as well, but obviously when there's significant subsidy opportunities out there, as expected, the buyers of the product will wait to get those subsidies before purchasing the product. The challenge for us has been related at just the timing of the requirements; it's a lot of dollars out there, but it takes time for them to ultimately translate into purchase orders. We've been in between rounds for the EPA programs, been from attractive announcements, including 234 units that were filed directly by Lyam, and a lot of three agents around those programs. Right now, it's the grant round that we're starting to see the dollars being deployed, and the latest rebate round.

Nicolas Brunet: Look, right now, the demand in the school bus sector is very much driven by the programs that are being put in place in some jurisdictions. It's through regulation as well. But obviously, when there are significant subsidy opportunities out there, as expected, the buyers of the product will wait to get those subsidies before purchasing the product. The challenge for us has been related to just the timing of the deployments. There are a lot of dollars out there, but it takes time for them to ultimately translate into purchase orders.

Nicolas Brunet: We've been in between rounds for the EPA program. There's been some attractive announcements, including 234 units that were filed directly by Lion, and a lot of free agents around those programs right now. It's the grant round where we're starting to see the dollars being deployed, and the latest rebate round. So we have a dynamic sales approach; we sell directly, but ultimately, it is the timing of those programs that dictates the timing of purchases, and we're very focused on not only converting the Lion applications into purchase orders, which we just had the approval from the EPA to start doing in mid-July, but also converting on the latest rebate round.

Marc Bedard: And so, we, you know, we have a dynamic sale approach, we sell directly, but ultimately it is the timing of those programs that dictate the timing of purchases, and we're very focused on not only converting the line applications into purchase orders, which we just had the approval from the EPA to start doing in mid July, and as well as converting on the latest rebate round. For both, we have line filed applications; again, that's 234 units, but we also have a lot of three agents, so that's the focus right now. Unfortunately, the timing is what it is, but the good news is, since the last quarter, again, we've had the approval to go and solicit formal purchase orders for the grant round, and a lot of parties that apply directly also got that approval.

Nicolas Brunet: For both, we have Lion filed applications, again that's 234 units, but we also have a lot of free agents. So that's the focus right now. Unfortunately, the timing is what it is, but the good news is that since the last quarter, we've had the approval to go and solicit formal purchase orders for the grant round, and a lot of parties that applied directly also got that approval.

Speaker Change: But the good news is since the last quarter again, we've had the approval to go and solicit formal purchase orders for the Grand round when a lot of parties that apply directly also got that approval and.

Marc Bedard: And then as well, there's the rebate round where there's not only the line applicants, but the number behind number of three agents that we can solicit.

Kevin Chiang: And then, as well, there's the rebate round, where there are not only the Lion applicants but a high number of free agents that we can solicit. So right now, we do feel, Kevin, that this is really the bulk of the demand in the market, and this is our priority. Okay, that's, that's a great color there. And maybe my second question, just wondering, you know, when you talk to customers, how a potential change in administration might impact their near-term demand intentions, like a potential change to a Trump administration, which some might view as being less supportive of electric vehicles, or that, you know, that is impeding some people's willingness to order trucks, or even concerns around or questions around what the Chevron ruling might mean in terms of the EPA's Yeah, Kevin, it's a different story on the school bus and in the truck space.

Speaker Change: Then as well, there's the rebate round with where they are.

Kevin: Not only the lion applicant, but a number the high number of free agents that we can still look at so right now we do feel Kevin. This is really the bulk of the demand in the market and this is our focus.

Marc Bedard: So right now, we do feel, Kevin, that this is really the bulk of the demand in the market, and this is our focus.

Kevin Chiang: Okay, that's, so that's great color there. And just maybe my second question, just wondering, you know, when you talk to customers, how potential changing administration might impact their. Their near term, demanding tensions like the potential change to a company administration, which I guess some might be was being less supportive of electric vehicles, does that, you know, that is that is that impeding some people's willingness to order trucks, or even concerned around questions around with a Chevron ruling might mean in terms of the EPA's own legislation related to a regulations related to the adoption. Just, just wondering if customers are holding back here, just on maybe those two question marks that are up in the area.

Speaker Change: Okay.

Speaker Change: Great color there.

Speaker Change: And just maybe a second question just wondering if when you talk to customers.

Speaker Change: How potential changes in administration might impact there.

Speaker Change: The near term.

Speaker Change: <unk> intentions.

Speaker Change: A potential.

Speaker Change: The change to a Trump administration.

Speaker Change: I guess somewhat.

Speaker Change: Less supportive of electric vehicles of that.

Speaker Change: Is that is that impeding some people's willingness to order trucks.

Speaker Change: Or even concerns around or questions.

Speaker Change: Questions around what the Chevron ruling might mean in terms of the epa's own legislation related to our regulations related to EV adoption. Just just wondering what is the key.

Speaker Change: Customers are holding back here just on maybe those two question marks that are up in the year right now.

Unknown Shareholder: Sarah.

Marc Bedard: Yeah, Kevin, it's a different story in the school bus and in the truck space. In the school bus space, I just talked about where the demand is coming from, and that's five billion dollar package from the EPA is approved by law today. There's over two billion that remain to be deployed, and on top of that, there's a number of program at the state level by thinking at California, New York, Texas, Illinois, Colorado, and a number of other ones. So we're not seeing that significantly, at least in the school bus space.

Speaker Change: Yes, Kevin it's a different story in the school bus and in the truck space in the school bus space.

Nicolas Brunet: In the school bus space, I just talked about where the demand is coming from, and that $5 billion package from the EPA is approved by law today. There's over $2 billion that remains to be deployed, and on top of that, there are a number of programs at the state level, like California, New York, Texas, Illinois, Colorado, and a number of other ones. So, we're not seeing that significantly, at least in the school bus space.

Speaker Change: Talk about where the demand is coming from and that's $5 billion package from the EPA.

Speaker Change: By law today.

Speaker Change: There is over 2 billion that remains to be deployed and on top of that there is a number of programs at the state level like thinking of California, New York, Texas, Illinois, Colorado, and a number of other ones and so we're not seeing that.

Speaker Change: Significantly at least in the school by faith in the truck space of course, the truck space.

Nicolas Brunet: In the truck space, of course, the truck space, Marc talked about it in his prepared remarks, electric truck demand has been slower than anticipated. The acceleration going forward is, in great part, related to regulation and incentive programs, and certainly there's... [inaudible] Perfect. That's it for me.

Marc Bedard: In the truck space, of course, the truck space, Marc talked about it is prepared to mark their truck demand. Electric truck demand has been slower than anticipated. The acceleration going forward is in great part related to regulation and incentive program, and certainly there's the potential change in the industry. The acceleration, as you said, can have an impact on that demand. There's in some some places more way than see a growth. We do feel that in the long term because of the TCO, the favorable TCO, the product that it say it's a when not if but for for there's more impact on the truck.

Speaker Change: Mark talked about it in his prepared remarks.

Speaker Change: Sure.

Mark: The truck demand electric truck demand has been slower than anticipated.

Speaker Change: <unk> acceleration going forward.

Speaker Change: Great part related to regulation and incentive program and certainly there is.

Speaker Change: There is.

Speaker Change: Potential change in administration as you said.

Speaker Change: Can have an impact on that demand.

Speaker Change: Some places are more wait and see approach, we do feel that in the long term because of the tcl.

Speaker Change: The favorable PC all the product that I'd say, it's a when not if but for sure there is more impact on the truck side.

Unknown Shareholder: Perfect.

Unknown Shareholder: That's it.

Speaker Change: Perfect. Thank you for taking my questions.

Unknown Shareholder: Thank you.

Speaker Change: Thank you.

Kevin Chiang: Thank you very much. Thank you. The next question goes to Craig Irwin of Roth Capital Partners. Craig, please go ahead. Good morning.

Speaker Change #105: Thank you. The next question Gucci, Craig Irwin of Roth Capital Partners.

Craig Irwin: The next question goes to Craig Irwin, or what's the capital partners. Craig, please go ahead. Good morning. Thank you for taking my questions. So I was hoping you might be able to help us quantify the estimated savings from your different initiatives that you put in place. It's the ones that they jump out to me, and I'll have to review the call, right? But the ones that jump out are obviously the reduction in force and the subleasing of the two different facilities or floor space at the two different facilities. Can you maybe describe, you know, approximately what we should expect as far as savings from these different initiatives over the next couple of quarters?

Speaker Change: Please go ahead.

Craig Edward Irwin: Thank you for taking my question. I was hoping you might be able to help us quantify the estimated savings from the different initiatives that you put in place. The ones that jump out to me, and I'll have to review the call, right, but the ones that jump out are obviously the reduction in force and the subleasing of the two different facilities or the floor space of the two different facilities. Can you maybe describe, you know, approximately what we should expect as far as savings from these different initiatives over the next couple of quarters? I'll take that one.

Craig Edward Irwin: Hi, Good morning, Thank you for taking my questions.

Craig Edward Irwin: So I was hoping you might be able to help us quantify the estimated savings from your <unk>.

Speaker Change: The current initiatives that you've put in place the ones that jump out to me.

Speaker Change: And I'll have to review the call right, but the ones that jump out obviously.

Speaker Change: The reduction in force.

Speaker Change: And some leasing.

Speaker Change: The two different facilities or floor space at the two different facilities.

Speaker Change: Can you maybe describe you know.

Speaker Change: Similarly, what we should expect as far as savings from these different initiatives over the next couple of quarters.

Richard Coulombe: I'll take that one.

Richard Coulombe: Thank you for the question, Craig. Prior to today's call, we had several rounds of cost reduction measures that added up to $40 million in savings. And we were starting to see, let's say, the impact of all these measures this quarter. So let's call it $10 million of recurring savings this quarter. So this is for what was done prior. This morning, the announcement we made of the $25 million, call it like $6 million a quarter or so. We will start seeing the impact of that practically immediately. Most of the changes will be made on a temporary basis.

Speaker Change: I'll take that one thank you for the question Craig.

Richard Coulombe: Thank you for the question, Craig. Prior, previously to today's call, we had several rounds of cost reduction measures that added up to $40 million of savings. And we're, you know, we were starting to see, let's say, the impact of all these measures this quarter. So this call is 10 million of recurring savings starting this quarter. So, so this is for what was done prior. This morning, the announcement we made of the 25 million call it by 6 million a quarter or so. This will start seeing the impact of that practically immediately. Most of the layout will be made on a temporary basis.

Speaker Change: Previously to today's call we had several.

Speaker Change: Several round the cost reduction measures that added up to $40 million of savings and we are.

Speaker Change: We were starting to see.

Speaker Change: Let's say the impact of all these measures this quarter, so let's call it $10 million.

Speaker Change: Recurring savings starting this quarter. So this is a.

Speaker Change: For what was done prior.

Speaker Change: This morning, we announced that we've made obviously 25 million call it like $6 million a quarter or so that we'll start seeing the impact of that.

Speaker Change: They can immediately most of the layoffs will be made on a temporary basis. So we will see the full impact of that.

Richard Coulombe: So we will see the full impact of that starting today. So we're looking at $16 million in combined savings that we would see from a baseline of 2022. Okay, excellent. Well, I should say, congratulations.

Richard Coulombe: Also, we will see the full impact of that time of time today. So, so we're looking at 16 million combined savings that we would see from a baseline of 2023.

Speaker Change: Starting today, so we're looking at $16 million combined savings that we would see from a from a baseline of 2023.

Richard Coulombe: Okay, excellent. Well, I should say congratulations. And maybe just to add, maybe this excludes the, you know, the old tech savings when we talked about the Julia facility and so on. Obviously, this could potentially be the additional savings right now that are not, you know, we're not as quantified so far. Obviously, we talked about their rent of five million for Julia. So we're talking about several million of additional opportunities that we'll be working on in the next few weeks.

Speaker Change: Okay excellent well I should say congratulate and then maybe just to add maybe just exclude the.

Richard Coulombe: And maybe just to add, maybe this excludes the, you know, the OPEC savings when we talked about the Joliet facility and so on. Obviously, this could potentially be, obviously, additional savings right now that are not, you know, we're not, have not been quantified so far. Obviously, we talked about the rent of $5 million for Joliet.

Speaker Change: The Opex savings.

Speaker Change: We talked about the you'll get facility and so on obviously this could potentially be obviously additional savings right now that are not we're not that big.

Speaker Change: Been quantified so far obviously, we talked about the rents at a five 5 million for Joel. Yes, also we're talking several million dollars of additional opportunities that we'll be working on in the next few weeks.

Richard Coulombe: So we're talking, you know, several million additional opportunities that we'll be working on in the next few weeks. Excellent. Excellent. My follow-up, I guess I should start by saying congratulations on the reduction in working capital. I know that that's never easy, particularly when you're dealing with delivery volatility. So that's a big positive.

Unknown Shareholder: Excellent.

Speaker Change: Excellent excellent so my follow up.

Unknown Shareholder: So, my follow-up, I guess I should start by saying congratulations on the reduction in working capital. I know that that's never easy, particularly when you're dealing with, you know, deliveries volatility. So, that's a big positive.

Speaker Change: I guess I should start by saying congratulations on the reduction of working capital I know that that's never easy, particularly when youre dealing with.

Speaker Change: Deliveries volatility so.

Speaker Change: That's a big positive.

Craig Irwin: Can you maybe help us understand what the commitments are for CAPEX over the next couple of quarters? And, you know, you've been able to defer or restructure some of your interests. But, you know, what are the other means or puts and tastes on the liquidity front through the end of the year? This is from a CAPEX standpoint; the total span for the first half of the year, we're talking about 1.7 million. You know, compared to 42 million last year, I see a lot of, like we mentioned, the biggest goals are strategic CAPEX is all behind us.

Speaker Change: Can you can you maybe help us understand what the commitments are for Capex over the next couple of quarters and you've.

Craig Edward Irwin: Can you maybe help us understand what the commitments are for CapEx over the next couple of quarters? And you've been able to defer or restructure some of your interest. But, you know, what are the other major puts and takes on the liquidity front through the end of the year?

Speaker Change: <unk> been able to.

Speaker Change: Defer or restructure.

Speaker Change: If you're interested but.

Speaker Change: What are the other major puts and takes on the liquidity crunch.

Speaker Change: Through the end of the year.

Richard Coulombe: This is from a CAPEX standpoint, the total spend for the first half of the year, we're talking about 1.7 million compared to 42 million last year. Obviously, a lot of, like we mentioned in previous calls, our strategic CAPEX is all behind us, so we expect CAPEX for the year to be probably 5 million, so it should be in that range. R&D, we know we had communicated previously that we're looking at a 30% reduction.

Speaker Change: This is from a capex standpoint.

Speaker Change: Total spend for the first half of the year, we're talking about $1 7 million.

Richard Coulombe: So, we expect CAPEX for the year to be, you know, probably 5 million. Well, so it should be in that range. R&D, we know we have communicated previously that we're looking at a 30% reduction. We're well on track to, you know, to meet that commitment of 30%, and with today's announcements, you know, I would expect the savings on the R&D front to be higher than 30%. So, those are the two, let's say, elements outside of our earnings that are, you know, cash, cash elements. On the inventory draft, you know, you mentioned, yes, we did some, you know, good progress, despite the overall context.

Richard Coulombe: We're well on track to meet that commitment of 30%, and with today's announcement, I would expect the savings on the R&D front to be higher than 30%. Those are the two elements outside of our earnings that are cash elements.

Richard Coulombe: On the inventory front, you mentioned we made some good progress despite the overall context. We achieved 20 million in savings for the first half from our inventory reduction plan. We had committed to 50 to 75 million, and I believe we're well on track to hit those numbers. When you look at one leading indicator, for me, it's really the raw material and width.

Richard Coulombe: We've achieved 20 million of savings for the first half from our inventory. In the inventory reduction plan, we had committed to, you know, 50 to 75 million. I believe we're well on track to hit those numbers. When you look at one meeting indicator for me, it's really the raw material. And with just this quarter alone, we saw the raw material and with go down by 23 million. Obviously, we have an offset in the finished goods, and we are carrying a bit more finished goods than what we would like to. And this is directly linked to the lower volume of deliveries this quarter.

Richard Coulombe: Just this quarter alone, we saw the raw material and width go down by 23 million. Obviously, we have an offset in the finished goods, so we are carrying a bit more finished goods than we would like to, and this is directly linked to the lower volume of deliveries this quarter. For me, all the indicators are trending in the right direction, and we're really focused on continuing to achieve those objectives. Okay, fantastic.

Richard Coulombe: But for me, all the indicators are trending in the right direction. And we're really focused on the tuning to achieve those objectives.

Unknown Shareholder: Okay, fantastic.

Richard Coulombe: And then last question, if I may, related to the subsidies and vouchers that EPA has handed out to date. So we're hearing that a lot of school districts out there that receive funding are actually having a very hard time arranging the necessary charging infrastructure to take delivery of the buses.

Craig Irwin: And then last question, if I may relate it to the subsidies and vouchers that EPA has handed out to date. So we're hearing that a lot of the school districts out there that received funding are actually having a very hard time arranging necessary charging infrastructure to take delivery of the buses. Do you see potential for some of those funding vouchers to maybe be reallocated, or for this to maybe present an incremental opportunity as those vouchers and subsidies are handed off to potentially different school districts. Craig, I'll take this. We haven't seen this happen, not the infrastructure challenge, but the reallocation of funding.

Speaker Change: Took delivery of the buses.

Craig Edward Irwin: Do you see potential for some of those funding vouchers to maybe be reallocated or for this to maybe present an incremental opportunity as those vouchers and subsidies are handed off to potentially different school districts? Craig, thank you. I'll take this.

Speaker Change: Do you see potential for some of the funding.

Speaker Change: Funding vouchers to maybe be reallocated or.

Speaker Change: For this to maybe present an incremental opportunity.

Speaker Change #102: Those those.

Speaker Change #114: Vouchers and subsidies or hand, it off to potentially different school districts.

Nicolas Brunet: Look, I mean, we haven't seen this happen, not the infrastructure challenge, but the reallocation of funding. There was, as you may know, in the first round, a pretty significant amount of funding that was returned, and we're certainly encouraging the EPA to redistribute those vouchers. We are equipped to deliver the vehicles and, of course, to plan the infrastructure. So it's definitely an opportunity for us that something was to happen, but we haven't seen it happen.

Greg: Greg I'll take that.

Greg: Look I mean.

Greg: We haven't seen that happen not the infrastructure challenge.

Speaker Change: The reallocation of funding there has been as you may know in the first round of a pretty significant amount of funding that was returned and were certainly encouraging the EPA.

Marc Bedard: There has been, as you may know, in the first round, a pretty significant amount of funding that was returned and we’re certainly encouraging the EPA to redistribute those vouchers. We are equipped to deliver the vehicles and, of course, to plan the infrastructure. So definitely an opportunity for us to happen, but haven't seen it happen. and so forth.

Speaker Change: To redistribute those vouchers we.

Speaker Change: Are equipped to deliver the vehicles and and of course, the plant and the infrastructure.

Speaker Change: Definitely an opportunity for us if it was to happen that haven't seen it happened so far.

Unknown Shareholder: Understood.

Craig Edward Irwin: Understood. Well, hey, congratulations on the progress. I'll hop back in the queue.

Speaker Change: Understood.

Unknown Shareholder: Well, hey, congratulations on the progress. I'll hop back in the queue. Thank you.

Speaker Change #104: Congratulations on the progress I'll hop back into queue. Thank you.

Speaker Change: Thank you.

Operator: Thank you. Thank you. The next question goes to George Gianarikas of Canaccord. George, please go ahead.

Jessie George: Thank you. The next question Jessie George Gnr case of Canaccord George Please go ahead.

George Gianarikas: The next question is George Gianarikas of Canacold. George, please go ahead. Hi, good morning. So I know we've gone over this a couple of times, but I just like to sort of understand the liquidity ladder between now and the end of the year. You know, you mentioned in your presentation that you have 25 million of available immediate liquidity. You also talk about your progress around working capital reduction in that looks like you have around 50 million left. So can you just kind of walk us between June 30th and December 30th and what your approaches to maintaining cash and the balance sheet.

George Gianarikas: Hi, good morning. So I know we've gone over this a couple of times, but I just want to sort of understand the liquidity ladder between now and the end of the year. You mentioned in your presentation that you have 25 million of available immediate liquidity. You also talk about your progress around working capital reduction, and it looks like you have around 50 million left.

Jessie George: Hi, good morning, So I know.

Jessie George: Gone over this a couple of times, but I, just like to sort of understand.

Speaker Change: Liquidity ladder between now and the end of the year you know you mentioned in your in your business.

Speaker Change: Presentation that you have $25 million available immediate liquidity.

Speaker Change: You also talk about your.

Speaker Change: Gross around working capital reduction.

George Gianarikas: So can you just kind of walk us through, you know, June 30, and December 30, and what your approach is to maintaining, you know, cash in the balance sheet? I understand the cost reductions, but I'm assuming there'll be some severance involved in that as well. So just kind of step by step on how you plan to sort of continue operations between now and the end of the year. Thank you. Thanks for the question, George.

Speaker Change #101: And it looks like you have around $50 million. So can you just kind of walk us between.

Speaker Change: June 30th and December 30th and what your approach is to maintaining cash on the balance sheet I understand the cost reductions, but I'm, assuming there'll be some severance involved in that as well. So just just kind of step by step on how you plan.

Richard Coulombe: I understand the cost reduction, but I'm assuming there'll be some severance involved as well. So just kind of step by step on how you plan to sort of continue in operations between now and the end of the year. Thank you.

Speaker Change: To.

Speaker Change: Just sort of continue in operations between now and the end of the year. Thank you.

Richard Coulombe: Thanks for the question, George. Obviously, we're highly focused right now on our cost structure with the announcements this morning. You know, we will see some savings roughly, you know, $2 million a month. Starting right away because I said earlier, most of these layouts are temporary. So we will see the impact immediately. We continue to be very focused, as I mentioned earlier. The inventory story for us, you know, is a good one. We've actually 20 million of savings so far, and there's like 30 to 50 million to go. And again, I believe we have all the right processes in place to achieve those reductions.

Richard Coulombe: Obviously, we're highly focused right now on our cost structure with the announcement this morning. We will see some savings of roughly $2 million a month, starting right away because, as I said earlier, most of these layoffs are temporary. So, we will see the impact immediately. We continue to be very focused; as I mentioned earlier, the inventory story for us is a good one. We've achieved $20 million of savings so far, and there are like $30 to $50 million to go.

Speaker Change #100: Okay. Thanks for the question George.

Speaker Change: Obviously, we're highly focused right now on our on our cost structure with the announcement of this morning, we will see some savings of roughly $2 million a month.

Speaker Change #117: Right away to a as I said earlier most of these are are.

Speaker Change: And they also are temporary so we will see the impact immediately we continue to be very focused as I mentioned earlier the inventory story for us. It's a good one that we've achieved 20 million of savings so far and there's like 30% to $50 million to go in and again I believe we have all the right processes in place to achieve.

Richard Coulombe: And again, I believe we have all the right processes in place to achieve those reductions. Collection remains an opportunity for us. We still have quite a few, let's say, amounts to collect, and several of these receivables are coming from governments that are taking a bit more time to collect.

Speaker Change: Those reduction collection remains an opportunity for us we still have quite a few.

Richard Coulombe: Collections remain still an opportunity for us. We still have quite a few, let's say, amounts to collect, and several of these visible are coming from governments are taking a bit more time to collect. So we're very focused on that as well. And, as mentioned earlier, the EPA program, you know, we talked about the potential of 77 million. So, so we expect to start seeing money flowing our way with those, with those pills that have been placed. And obviously, you know, it takes probably 60 days before we start seeing the money flowing, but this will be definitely a contributor in the second half of the year.

Speaker Change: Let's say amounts to collect and several of these receivables are coming from governments that are thinking a bit more time to collect so we're very focused on that as well and as mentioned earlier.

Richard Coulombe: So, we're very focused on that as well. And as I mentioned earlier, the EPA program, we talked about the potential of $77 million. So, we expect to start seeing money flowing our way with those appeals that have been placed. And obviously, it takes probably 60 days before we start seeing the money flowing, but this will definitely be a contributor in the second half of the year. Obviously, as we mentioned as well, in the meantime, we are looking at various financing opportunities.

Speaker Change #111: K program, we don't we talked about the potential of $77 million.

Speaker Change: So we expect to start seeing might be flowing our way with those.

Speaker Change: Appeals that are had been placed and obviously it takes probably 60 days before we start seeing the money flowing but it will be definitely a contributor in the second half of the year.

Richard Coulombe: Obviously, we mentioned as well, you know, in the meantime, we are looking at various financing opportunities as well as around sheets. Also, we're actively, obviously focused on that in parallel. So I would say, you know, these are the two streams right now, the three streams are across focus that we're pursuing, you know, to, to, so as not to address our cash situation.

Speaker Change: Obviously, we mentioned as well in the meantime, we are looking at various financing opportunities to bolster our balance sheets also we're actively.

Richard Coulombe: Those are our balance sheets, so we're actively focused on that in parallel. So, I would say, these are the two streams right now, or the three streams that are cross-focused that we're pursuing to address our cash flow.

Speaker Change: Obviously focus on that.

Speaker Change: In parallel.

Speaker Change: I would say.

Speaker Change #110: These are the two trends right now are the three screens are there cross.

Speaker Change: Our focus that we're pursuing.

Speaker Change: Yeah.

Speaker Change #123: So as not to address our cash situation.

Marc Bedard: Maybe just to change the topic for me, you mentioned, obviously, this opportunity to sell battery packs modules on the merchant market. Can you please help us understand what the any initial indications of interest there. And whether or not that those indications of interest could, should, will lead to sort of larger strategic discussions, meaning strategic investments into the company, et cetera. Thank you. George, this market we feel is huge, and there are very few that are providing a complete solution with the BMS and also with the BTNS. We've received many phone calls, many requests from potential buyers.

George Gianarikas: Maybe just to change the topic for a minute, you obviously mentioned this opportunity to sell battery pack modules on the merchant market. Can you please help us understand what the initial indications of interest there are? and whether or not those indications of interest could lead to sort of larger strategic discussions, meaning strategic investments into the company, etc. Thank you. George, this market is huge, and there are very few battery OEMs out there that are providing a complete solution with the BMS and also with the BTMS.

Speaker Change #107: Maybe just to change the topic familiar bench.

Speaker Change: Pension, obviously this opportunity to sell.

Speaker Change: Battery packs modules on the merchant market can.

Speaker Change #109: Can you please help us understand what the.

Speaker Change #106: Any initial indications of interest there.

Speaker Change #121: And whether or not that those indications of interest could should will lead to sort of larger strategic discussions.

Speaker Change #106: Meaning strategic investments into the company et cetera. Thank you.

George: Yes George.

Speaker Change #108: This market we feel.

Speaker Change #108: <unk> is huge and there are very few Oems.

Speaker Change #108: Out there that are providing a complete solution with the BMS and also with the Bts.

Marc Bedard: We've received many phone calls, and many requests from potential buyers. In this regard, we feel this could become a pretty significant market, and we will start selling those batteries sometime in 2025. We're in discussions right now, so there will be no short-term result on this, but obviously, we're setting the foundation for this commercial success. We feel that we are also becoming a strategic partner for many of those suppliers in achieving their goals. Could that lead to anything else?

Speaker Change #126: We've received many phone calls.

Speaker Change #108: Any requests from potential potential buyers in this regard so we feel this could become a pretty significant.

Marc Bedard: In this regard, we feel this could become a pretty significant market, and we will start selling those batteries sometime in 2025. So we're in the discussion right now, so there will be no short-term result on this, but obviously we're setting the foundation for this commercial success. We feel that also we are becoming like a strategic partner for many of those suppliers and for them in achieving their goals. So put that lead to anything else I don't know, but I feel very strongly that we're offering a very state-of-the-art solution right now for those companies, and many of them are very big companies, to achieve their goals.

Speaker Change #108: Market and.

Speaker Change #108: We will start selling those batteries, sometimes in 2025. So we are in discussion right now so there will be short no short term.

Speaker Change #108: On this but obviously we are setting the foundation.

Speaker Change #108: Toward this commercial success, we feel that.

Speaker Change #108: We are becoming like a strategic partner for many of those suppliers in.

Speaker Change #108: With them achieving their goals so could that lead to anything else I don't know.

Marc Bedard: I don't know, but I feel very strongly that we're offering a very state-of-the-art solution right now for those companies, and many of them are very big companies to achieve their goals. Most of them are not looking to do full vertical integration of those technologies but, obviously, looking for a very strong technology and a very good partner in line. That's what we're shooting for. Thank you, George.

Speaker Change #108: But I feel very strongly that we're offering a very state of the art solution right now for those companies and many of them are very big companies to achieve their goals. Most of them are not looking to do full vertical integration of those technologies, but obviously looking for a very strong.

Marc Bedard: Most of them are not looking to do full vertical integration of those technologies, but obviously looking for a very strong technology and a very good partner in mind, and that's what we're shooting for.

Speaker Change #108: Technology and a very good partner in line and that's what we're shooting for.

Speaker Change #108: Yes.

Unknown Shareholder: Thank you. Thank you, George. Thank you.

Speaker Change #116: Thank you.

Speaker Change #116: Thank you George Thank you the next question.

Daniel: The next question goes to Daniel. Oh, please, Daniel, please go ahead.

Operator: Thank you. The next question goes to Daniel Aylor of Barclays. Daniel, please go ahead.

John: Okay John.

Daniel: Daniel Please go ahead.

John: Yeah.

Richard Coulombe: Hi, this is Daniel on for Dan. Thanks for taking the question. Could you unpack your growth margin and cost dynamics in the quarter? I know you mentioned in the past that we should expect some market volatility in the near term, but how should we think about your cost trajectory in the coming quarter? It's given that they're still the ramp with their batteries and your Lion DS5 models. Thank you.

Daniel Aylor: Hi, this is Daniel on. Could you please unpack your growth margin and cost dynamics for the quarter? I know you've mentioned in the past that I expect some margin volatility in the near term, but how should we think about your cost trajectory in the coming quarters, given that there's still the ramp with the batteries and Lion DN5.

Daniel: Hi, This is Daniel.

Dan: Dan Thanks for asking.

Dan: So could.

Speaker Change #118: Could you unpack your gross margin that cost item in the quarter I know you've mentioned in the past.

Speaker Change #119: We should expect the market volatility in the near term.

Speaker Change #124: Should we think about your cost trajectory in the coming quarters, given that there's until the wrap with their batteries.

Speaker Change #128: Your line.

Speaker Change #115: Thank you.

Daniel: Okay.

Richard Coulombe: Good morning, Daniel. So salty down one. Listen, for sure, you know, the interference, you know, volume level that we had in the quarter. I would say I had something back on our margin. We had indicated previously that the introduction of our Lion 5, our R&D, the incorporation of our own batteries into our different platforms, with the kind of a headwind from a margin standpoint. So this is what the experience added to the low volume, where we had some on-their resources issues in the quarter with lower volume like that. So obviously, we don't expect these kind of margins to be, you know, to repeat itself in the future as we see our platform maturing from a cost standpoint. As we continue to say, evolving these ideas are a learning curve for those new platforms. So we believe, you know, on a unit basis, you know, we do have some good economics that we showed in the past that with the maturity of our platforms, with the volume that we can get these margins.

Richard Coulombe: Good morning, Daniel. So I'll take that one. Listen, for sure, you know, at the current volume level that we had in the quarter, obviously, that had some impact on our margin. We had indicated previously that the introduction of our Lion 5, our R&D, and the incorporation of our own batteries into our different platforms would be kind of a headwind from a margin standpoint. So this is what we've experienced added to the low volume when we had some under-absorption issues in the quarter with lower volume like that.

Speaker Change #125: Good morning, David answer so I'll take that one listen for sure different.

Speaker Change #127: All of that volume.

Speaker Change #132: A level that we had in the quarter or two that had some impact on our margin. We had indicated previously that the introduction of our line five in R&D, the incorporation of our own batteries into our different platforms would be kind of a headwind from a margin standpoint. So this is what we've experienced added to the low volume what do we have.

Richard Coulombe: So obviously, we don't expect these kind of margins to be, you know, to be, We believe that in the future, as we see our platform maturing from a cost standpoint, as we continue evolving vis-à-vis our learning curve for those new platforms, so we believe on a unit basis, we do have some good economics that we showed in the past that with the maturity of our platforms, with volume, that we can get decent margins, so we expect to go back to profitable margins in the foreseeable future, so that's what we're focused on, we're very focused on cost reduction and the initiatives that we announced this morning will also contribute to better margins going forward. Great. Thank you. That's my one.

Speaker Change #127: From the under absorption.

Daniel: Issues in the quarter liquids with lower volume like that so obviously, we don't expect.

Daniel: These kind of margins to be.

Daniel: So if you can.

Daniel: <unk> itself in the future as we see our Ed platform maturity from a cost standpoint, as we continue.

Daniel: Continue.

Daniel: Building.

Daniel: Our our learning curve for those new platforms. So we believe on a unit.

Daniel: Unit basis, we do have some good economics that we sold in the past that.

Daniel: The maturity of our platforms with the volume that we can get decent margins. So we expect to go back to margin profitable margin.

Richard Coulombe: So we expect to go back to market, profitable margin in the foreseeable future. So that's what we're focused on.

Daniel: In the foreseeable future. So that's what we.

Richard Coulombe: We're very focused on cost reduction, and the initiative that we announced this morning will also contribute to better margin going forward.

Daniel: We're focused on we're very focused on cost reduction and the initiatives that we announced this morning will also contribute to better margins going forward.

Speaker Change #133: Great. Thank you that's my one.

Unknown Shareholder: Thank you, and as a reminder, if you would like to ask a question, please press star, followed by one on your telephone keypad.

Daniel Aylor: Thank you, and as a reminder, if you would like to ask a question, please press star followed by one on your telephone keypad. And the next question goes to Rupert Merer of National Bank. Rupert, please go ahead. Hi, good morning, everyone.

Speaker Change #135: Thank you and as a reminder, if you'd like to ask a question. Please press star followed by one on the telephony.

Daniel: Pat.

Rupert Merer: And the next question goes to Rupert Merer or National Bank.

Speaker Change #144: And the next question guys you would pick layout of National Bank. Please go ahead.

Rupert Merer: Rupert, please go ahead. Hi, good morning everyone. I'd like to ask a little about the Lion8 tractor. Can you give us a little more color on the roll out of that product, when you expect the first sales, and who are the customers that are anticipating?

Rupert M. Merer: I'd like to ask a little about the Lion 8 tractor. Can you give us a little more color on the rollout of that product, when you expect the first sales? And who are the customers that you're anticipating? Good morning, Rupert.

Pat: Hi, good morning, everyone I'd like to ask a little about the lion a tractor or can you give us a little more color on the rollout of that product when do you expect the first sales.

Speaker Change #129: And who is who are the customers that you are anticipating.

Marc Bedard: Good morning, Rupert. Yeah, it's going well. It's going well. We will start selling the Lion8 tractor before the end of the year. You know, when we were at the actual, we did the launch of the customers. Very good feedback. We are receiving so far. We don't disclose the names of the customers. We have the good order book, you know, for the Lion8 tractor right now. And you know, we're discussing with the customers right now to make sure, you know, they have the right charging infrastructure in time, depending on obviously what's their own duty cycle. And as you know, each case is very different, and we're very well equipped with Lion to take care of all that.

Marc Bedard: Yeah, it's going well. It's going well. We will start selling the Lion A tractor before the end of the year.

Rupert: Good morning Rupert.

Rupert: Doing well doing well.

Speaker Change #138: We will start selling <unk>.

Marc Bedard: You know, when we were at the Act Show, we did the launch of this tractor, and we're doing a lot of ride-and-drive with the customers. Very good feedback we are receiving so far. We don't disclose the names of the customers.

Speaker Change #157: <unk> before the end of the year.

Speaker Change #130: As you know we were at the actual we did the launch of the Stryker and we're doing a lot of Raymond <unk> with.

Speaker Change #130: The customers very good feedback.

Speaker Change #130: We are receiving so far we don't disclose the names.

Speaker Change #130: The customers we have the good order book for the volume.

Rupert M. Merer: We have a good order book for the Lion A tractor right now, and, you know, we're discussing with the customers right now to make sure they have the right charging infrastructure in time, depending on, obviously, what their own duty cycle is. And as you know, each case is very different, and we're very well equipped at Lion to take care of all that. But all in all, it's going well. Great. And then, on the competition, how are you finding that the Lion 8 competes with other offerings?

Speaker Change #130: <unk> right now and.

Speaker Change #130: We're discussing with the customers right now to make sure that they are.

Speaker Change #130: Right.

Speaker Change #130: Charging infrastructure in time, depending on obviously what.

Speaker Change #143: You're there.

Speaker Change #143: Duty cycle and as you know each case is very different and we're very well equipped for clients.

Speaker Change #143: To take care of all of that but all in all its going well.

Marc Bedard: But all in all, is going well.

Nicolas Brunet: Great. And then on the competition, how am I finding that the Lion8 competes with other offerings? And maybe if you could comment on the competitive environment, how it's evolving. And how are your discussions with potential customers? And when you, when you lose a customer, are you losing to other ED manufacturers? Or are you finding that you're losing to do a deep little truck manufacturers, for example?

Speaker Change #174: Great and then on the competition.

Speaker Change #142: How are you finding that the lion competes with other offerings and maybe if you could comment on the competitive environment, how it's evolving.

Nicolas Brunet: And maybe if you could comment on the competitive environment, how it's evolving, and how your discussions with potential customers are going, and when you lose a customer, are you losing to other EV manufacturers, or are you finding that you're losing to diesel truck manufacturers, for example? Hey, Rupert, Nick here.

Speaker Change #159: And how are your discussions with potential customers and when you when you lose.

Speaker Change #175: Our customer are you losing to other EV manufacturers or are you finding that are that you are losing two to diesel truck manufacturers for example.

Nicolas Brunet: Hey, Rupert. Nick here.

Nicolas Brunet: Look, to address the first part of your question, we feel the product compares very well from a GCWR standpoint, from the finish, and, most importantly, from a powertrain integration standpoint. This goes to the good feedback that we've had from the customers that Marc alluded to. Now, to your second point, I think it's an important one, when we lose, in the vast majority of cases, we lose the status, which goes again to the electric truck volumes not being aware thought they would be, and frankly, the industry thought they would be, a few years ago.

Nick: Hey, Robert Nick here.

Nicolas Brunet: I looked at address the, well, the first part of your question. We feel the product compares very well from a GCWR standpoint, from the finishing, and most importantly, from a powertrain integration standpoint. This goes to the good feedback that we've had from the customers that Mark alluded to.

Robert: Look to address the well, let's say the first part of your question.

Nick: Feel the product compares very well from a GC WR standpoint from the.

Speaker Change #134: Finishing and most importantly from a powertrain integration standpoint. This is it goes to the feedback that we've had.

Speaker Change #136: From the customers that Mark alluded to now to your second point I think it's an important one when we lose it.

Nicolas Brunet: Now, to your second point, I think it's an important one. When we lose, we, in the vast majority of cases, we lose the status quo. And this goes, again, to the electric truck Volumos, not being where we thought there would be and where friendly the industry thought they would be a few years ago. That said, of all the products, who would entrust the Lion8 tractor, or look, I should say the classic, the biggest class of the mall has, I'm sure you know, the biggest market opportunity. And it's also where we see the most demand within the product suits for our Lion8 electric trucks.

Speaker Change #134: And the vast majority of cases, we lose the status quo and this goes again into the electric.

Speaker Change #134: The electric truck volumes not.

Speaker Change #134: Not being where.

Speaker Change #134: Thought they would be and where frankly the industry update would be a few years ago that said evolve our product suite.

Nicolas Brunet: That said, of all the product suits within trucks, the Lion 8 tractor, or I should say the Class 8 is the biggest class of them all, as I'm sure you know, the biggest market opportunity, and it's also where we see the most demand within the product suit for our Lion Electric trucks.

Speaker Change #146: Within trucks, the the buying a tractor or I should say the class eight that the biggest class of the mall as I'm sure you know the biggest market opportunity and it's also where we see the most demand within the product suite for our Lion electric trucks.

Nicolas Brunet: So we're obviously very excited for the launch of this model.

Rupert M. Merer: So we're obviously very excited for the launch. Are you seeing any change in your potential customers or prospective customers? And how many of them are absolutely looking for an electric vehicle? And how many are you think testing the market and still trying to determine when they're going to make that shift? Well, I think the word when is the important one in your question here.

Speaker Change #134: We're obviously very excited for the launch of Islam.

Nicolas Brunet: Are you seeing any change in your potential customers or prospective customers? And how many of them are absolutely looking for an electric vehicle? And how many are you think testing the market and still trying to determine when they're going to make that? Well, I think the word "when" is the important one in your question here. We are seeing a number of customers that know that they will have to make the shift. They are not looking to make it tomorrow, but they want a plan to do it right in the means of long-term. This has really resulted in us shifting our sales attention to those larger fleets that are well equipped to go through this transition, that are serious about it, and that are looking now.

Speaker Change #141: Are you seeing any any change in your potential customers or prospective customers and how many of them are.

Speaker Change #153: Absolutely looking for an electric vehicle and how many are you.

Speaker Change #160: Think testing the market and still trying to determine when they're going to make that shift.

Speaker Change #139: You're welcome.

Speaker Change #140: I think the word when is the important one in your in your question here.

Nicolas Brunet: We are seeing a number of customers that know that they will have to make this shift. They are not looking to make it tomorrow, but they want to plan to do it right in the medium to long term. This has really resulted in us shifting our sales attention to those larger fleets that are well equipped to go through this transition, that are serious about it, and that are looking now, yes, at smaller volumes in the short term, but that represent very high potential in the longer term. All right, great. Thank you. I'll leave it there. Thank you. The next question goes to Etienne Rolandin of Desjardins.

Speaker Change #145: We are seeing a number of customers that are and know that they will have to make that shift they are not looking to make it tomorrow, but they want a plan to do it right and let's call. It the medium to long term.

Speaker Change #155: <unk> has really resulted in us shifting our sales attention to those larger fleets that are well equipped to go through this transition that are serious about it and that are looking now at smaller volumes in the short term, but that represents a very high potential in the longer term.

Nicolas Brunet: Yes, at smaller volumes in the short term, but that represents a very high potential in the longer term.

Unknown Shareholder: All right, great. Thank you all.

Speaker Change #145: Alright, great. Thank you I'll leave it there.

Unknown Shareholder: Leave it there. Thank you.

Speaker Change #150: Thank you.

Etienne: Thank you. The next question. Guess you, Etienne of Deschardins. Etienne, please go ahead. Yes, good morning, and thank you for taking my question. My first one is on track demand. Dimension, seeing a lower than usually expected market demand for electric trucks in the press release. And also looking at the results, we calculated that the implied truck bootings were minus 15 units.

Etienne A. Larochelle: Etienne, please go ahead. Yes, good morning, and thank you for taking my question. My first question is on truck demand. You mentioned seeing a lower than initially expected market demand for electric trucks in the press release. And also, looking at the results, we calculate that the implied truck bookings were minus 15 units this quarter.

Speaker Change #147: Thank you the next question.

Speaker Change #147: 19 of best Jonathan Atkin. Please go ahead.

Jonathan Atkin: Yes, good morning, and thank you for taking my question.

Jonathan Atkin: My first one is on shrugged them dimensions being lower than initially expected market demand for electric trucks electric trucks in the press release.

Speaker Change #154: Somebody King of the results, we calculate the implied bookings were at minus 15 units this quarter and.

Nicolas Brunet: What explains the negative booking in 2Q, and what do you see going forward on market demand for trucks? Yeah, so we have had some cancellations in the order book, mostly related to trucks, specifically, mostly related to the timing of the platform. But I would say we still continue to see strong interest in ride and drive, customer demos, learning more about the product, the infrastructure, and the transition to electric from large fleet owners.

Marc Bedard: What explains the negative booking into two and what do you see going forward on market demand for trucks? Yes, so we have had some calculations in your book, mostly related to trucks, specifically mostly related to the timing of the platform. But I would say we still continue to see strong interest in ride and ride, customer demo, learning more about the product, the infrastructure, the transition to electric from large fleet owners. Obviously, Etienne, we've announced some changes to how we're manufacturing trucks to the better line with demand, because we see that the demand in the short term is not where we thought it would be, and that's industry-wide.

Speaker Change #151: What explains that he got a booking.

Speaker Change #165: And what do you see going forward on market demand for choice.

Speaker Change #164: Yes. So we have had some cancellations in the order book, mostly related for trucks, specifically, mostly related to the timing of the platform.

Speaker Change #151: Aye.

Speaker Change #158: I would say, we still continue to see.

Speaker Change #158: Strong interest in ride and drive customer demos and know more about the product infrastructure of the transition to electric from large fleet owners.

Nicolas Brunet: Obviously, again, we've announced some changes to how we're manufacturing trucks to better align with demand, because we see that the demand in the short term is not where we thought it would be, and that's industry-wide. But as I just mentioned, our focus is to really work with the larger fleet owners, those that are serious about the transition to electric and have the means and the resources to go through it properly. And so we still think that this has very big market potential. As I said before, it's a when, not an if.

Speaker Change #158: Obviously again, we've announced some changes to how we were manufacturing trucks too.

Speaker Change #158: The better aligned with demand because we see that the demand in the short term, it's not where we thought it would be and that's industry wide, but as I just mentioned our focus is to really.

Marc Bedard: But as I just mentioned, our focus is to really work with the larger fleet owners, those that are serious about the transition to electric and have the means and the resources to go through it properly. And so we still think that this is a very big market potential. As I said before, it's of when, not an if, and the objective is for us to be there alongside large fleet owners as they go through this transition at the same time, minimize the cost and working capital impact of the truck manager. God, thank you.

Speaker Change #151: Work with the larger fleet owners those that are serious about the transition electric and.

Speaker Change #151: And have the means and the resources to go through it properly and so we still think that this is a very big market potential as I said before it's a when not if and the objective is for us to be to be there alongside large fleet owners as they go through this transition at the same time.

Nicolas Brunet: And the objective is for us to be there alongside large fleet owners as they go through this transition and, at the same time, minimize the cost and working capital impact of the truck manufacturer. Thank you. And maybe as a follow-up, you also announced as part of your action plan that you're in the process of optimizing the usage of facilities. I'm just curious about your views on this. Are you having discussions already? And maybe how quickly could this materialize?

Speaker Change #151: Minimized.

Speaker Change #151: The cost and working capital impact.

Speaker Change #151: The drop that factor.

Speaker Change #162: Got it. Thank you and then maybe as a follow up but you announced the third.

Marc Bedard: And maybe as a follow-up, you announced also as part of your action plan that you're in the process to optimize your safety. I'm just curious on what are your views on this. Are you having discussions already? And maybe how quickly could this materialize? I'm sorry, and we didn't get the question to optimize on what. Yeah, so basically you're in the process to optimize the usage of your facility, so basically by listing your jolly at the facility. I'm just curious what are your views on this. Are you having discussions already with people, and maybe how quickly could this materialize?

Speaker Change #186: Have you actually assume that during the process to optimize these days.

Speaker Change #188: I'm just curious on your what are your views on this are you having discussions already.

Speaker Change #182: Maybe how quickly could do materialize.

Etienne A. Larochelle: Sorry, we didn't understand the question, so I'll optimize on one. Yes, so basically, you're in the process of optimizing the usage of your facility. So basically, by listing your Joliet facility, I'm just curious, what are your views on this? Are you having discussions already with people, and maybe how quickly could this materialize?

Speaker Change #172: I'm, sorry, Tim that we didn't get the question to optimize one one.

Speaker Change #152: Yes, so basically you are in the process.

Tim: The age of your facilities.

Jody: By lifting your are you Jody.

Speaker Change #156: I'm just curious what are your views on Youtube.

Speaker Change #170: In discussions already with the people and maybe how quickly could materialize.

Marc Bedard: Thank you, Sam. Yes, we're having discussions. As you know, the jolly at the plant is 900,000 square feet, and 75% of that was for truck manufacturing and 25% for school bus manufacturing. So we're leaving the 25% for school bus manufacturing, but because of everything we discussed earlier, we are basically delaying the truck manufacturing in Jolly at because we have a lot of truck capacity in Gingerroom. And see the So, basically, the efficiency of the square footage, I mean, it cost us about, you know, $5 million a year right now, and basically we're intending, you know, of recouping this amount or a lot of this amount on a short-term basis.

Etienne A. Larochelle: Thank you, Etienne. Yes, we're having discussions. As you know, the Joliet plant is 900,000 square feet, and 75% of that is for truck manufacturing and 25% for school bus manufacturing.

Speaker Change #179: Thank you again.

Speaker Change #156: Yes.

Speaker Change #168: We're having discussions.

Speaker Change #169: As you know the Joliet plant is 900000 square feet.

Speaker Change #156: 75% of that was.

Speaker Change #156: With four truck manufacturing and 25% for school bus manufacturing, so we're leaving the 25% school bus manufacturing.

Richard Coulombe: So we're leaving the 25% for school bus manufacturing. But because of everything we've discussed earlier, we are basically delaying the truck manufacturing in Joliet because we have a lot of manufacturing capacity in St. Jerome. So basically, the efficiency of the square footage, I mean, it costs us about, you know, $5 million a year right now.

Speaker Change #156: But because of everything we've discussed earlier.

Speaker Change #156: We are basically designed.

Speaker Change #156: B.

Speaker Change #156: Truck manufacturing in and joining us because we have a lot of manufacturing capacity in <unk> syndrome and.

Speaker Change #156: The.

Speaker Change #156: So basically the.

Speaker Change #156: The efficiency of the square footage I mean, it cost us about 5 million.

Richard Coulombe: And basically, we're intending, you know, to recoup this amount or a lot of this amount on a short-term basis. So the goal is to make this happen before the end of the year. But obviously, we need to find the right partner to do that and join us. Sounds good. Thank you for your time. Thank you. Our final question goes to Ryan Finkst of Be Riley. Ryan, please go ahead. Hey, good morning. Thanks for taking my questions. Just one for me, actually, understanding there's a lot of uncertainty around timing.

Speaker Change #161: The others.

Speaker Change #161: Now and basically we're intending recouping this.

Speaker Change #161: This amount or a lot of discipline.

Julian: On the on our short term on the short term basis. So the goal is to make this happen before the end of the year, but obviously need to find the right partner to do that Julian.

Unknown Shareholder: So, the goal is to make this happen before the end of the year, but obviously, you need to find the right partner to do that and join it. Sounds good. Thank you for the customer.

Speaker Change #171: Sounds good thank you so much.

Ryan: Thank you. Our final question.

Ryan: Thank you Al final question got you Ryan <unk> of B Riley Wang Please go ahead.

Ryan: Go to Ryan. Thanks to Steve Riley. Ryan, please go ahead. Thank you, one of those for taking my questions. Just one for me, actually, understanding there's a lot of uncertainty around timing.

Ryan: Hey, good morning, Thanks for that.

Ryan: Taking my questions.

Ryan: Just one for me actually understanding Theres, a lot of uncertainty around timing.

Marc Bedard: Could you just remind us what needs to happen, you know, maybe what are the steps between installing, charging infrastructure and other pieces ahead of receiving the expected $77 million in upfront payments from the EPA programs? Yeah, I think, Ryan, next year. So, the payment method from EPA, upfront payment, it varies between the grant round and the rebate round. We're calling; we have 97 direct use or line file applications that were awarded in the grant round and 127 in the rebate round. The big pacer there was the agreement with the EPA that allowed us to go and solicit formal purchase orders.

Ryan Finkst: Could you just remind us what needs to happen? You know, maybe what are the steps between installing charging infrastructure and other pieces ahead of receiving the expected $77 million in upfront payments from the EPA program? Yeah, hey, Ryan Nix here.

Ryan: Could you just remind us what needs to happen, maybe what are the steps between installing charging infrastructure and all the pieces ahead of receiving the expected $77 million in upfront payments from the EPA programs.

Ryan: Yes.

Nicolas Brunet: So the payment method from the EPA's upfront payment varies between the grant round and the rebate round. Recall, we have 97 direct use or line file applications that were awarded in the grant round, and 127 in the rebate round. In the grant round, I mean, the big taster there was the agreement with the EPA that allowed us to go and solicit formal purchase orders. That is now behind us, and so we're working to solicit those to finalize those purchase orders with the awardees under the program, and then we will request payment.

Ryan: Yes.

Speaker Change #167: Next year.

Speaker Change #167: <unk>.

Speaker Change #167: The payment method from EPA.

Speaker Change #167: Prompt payment.

Speaker Change #184: Bearings between the graph round in the the Rebase them recall, we have 97 or.

Ryan: Our wildfire about that application to orbit in Atlanta, Brown, and 127, and the rebate Brown in the grant Brown.

Ryan: The Big Pacer, there was the agreement with the EPA that allowed us to.

Speaker Change #183: So, let's take a formal purchase orders.

Marc Bedard: That is now behind us. So, we're working to solicit those to just finalize those purchase orders with the awardees under the program, and then we will request the payment in terms of the voucher round. It's a little more an inventory process, but it requires purchase orders and other aspects of the project that quotes from contractors and planning for the charging infrastructure or purchase orders. But it's the way the EPA works: is that the payments occur prior to the charging installation. So, you know, there's no link between the installation itself and the time in the payment.

Ryan: That is now behind us and so we're working to.

Ryan: To finalize those purchase purchase orders with the.

Ryan: The awarded under the program and then we.

Ryan: We will request the payments in terms of the voucher around.

Nicolas Brunet: In terms of the voucher round, it's a little more of an administrative process, but it requires purchase orders and other aspects of the project, like quotes from contractors, for the charging infrastructure or purchase order. But the way the EPA works is that these payments occur prior to the charging infrastructure installation.

Ryan: It's it's it's a it's a little.

Ryan: A little more of an administrative process, but it requires purchase orders and other aspects of the project quotes from our contractors.

Ryan: And.

Ryan: Planning for the charging infrastructure or purchase order, but it.

Ryan Finkst: There's no link between the installation itself and the term. I'll also point out that those payment requests have started, and obviously, we're working to accelerate them. Great. Thank you. Thank you. We have no further questions. I'll hand it back to Isabelle for any closing comments.

Ryan: The way the EPA work with these payments occur prior to.

Ryan: The charging and collecting the charging infrastructure installation so.

Speaker Change #181: There is no link between the installation itself and the timing of the payments.

Marc Bedard: I also point out that those payment requests have started, and obviously we're working to accelerate them in the near future.

Speaker Change #177: I'll also point out that those payment requests have started and obviously, we're working to accelerate them.

Speaker Change #177: In the near future.

Unknown Shareholder: Great. Thank you.

Speaker Change #185: Great. Thank you.

Isabelle Adjahi: We have no further questions or hand back to Isabelle for any closing comments. But this concludes the call for today. Thanks to all for joining, and we wish you all a nice day. Thank you. This now concludes today's call. Thank you for joining. You may now take your lines.

Isabel: Thank you we have no further questions I'll hand back Isabel for any closing comments.

Isabelle Adjahi: This concludes the call for today. Thanks to all for joining, and we wish you a nice day. Thank you. This now concludes today's call. Thank you for joining. You may now disconnect your line.

Isabel: This concludes.

Speaker Change #187: Good for today.

Isabel: He will join me and we wish you a nice day. Thank you.

Ryan: Okay.

Speaker Change #176: Thank you. This now concludes today's call. Thank you all for joining you may now disconnect your lines.

Ryan: Yeah.

Ryan: No.