Workhorse (WKHS) 8 Aug 232023 Q2 Earnings call transcript

Ladies and gentlemen, greetings, and welcome to the Workhorse Group's Second Quarter 2023 Investor Call.

As a reminder, this conference call is being recorded.

It’s now my pleasure to introduce your host, Workhorse Group's Vice President of Corporate Development and Communications, Stan March. Sir, you may begin.

Thank you, Kevin. to XXXX you results welcome today's us and quarter second call. morning, all joining of on Good

Before we June begin, posted press our I'd like to for release. second note the quarter ended XX, via results XXXX that we've

through from can press the an presentation website as get follow call, the of website. so in as with release tracking either Section accompanying We'll Relations please also be with find the Investor that And You the that, release, our started. well or link this in the presentation directly. along, during let's

Dauch, Joining The me on our be today's CEO; today for Bob call found CFO. are our slide X. Rick Ginnan, can on and agenda

the opening call walk your our hand guidance. the on for Rick will remarks, during who’ll strategic we our over and my wrap and operational give before our XXXX second through I'll the then we've update take will progress quarter quarter. questions. Bob cover up priorities made Rick, Following results on financial the us to you then an revised

be disclaimer slide on Our X. found can

be the subject today uncertainties. of and to will and are made certain that comments therefore risk are forward-looking are subject to Some and provisions

the the the in full in You can well filings today's with statement find periodic SEC, press our presentation. release disclaimer in as as and

with the now Dauch. call turn that, I'll Rick? And over to Rick

position quarter all long-term steps to progress the time during executing are taking the profitable second and this going in strategic Thank to for update We're for opportunity to use we this operational Thanks our you growth. Stan, to everyone. the priorities made taking good and us morning. provide the Workhorse we've morning, and on join an

to slide Turning X.

intently execution, speed moving ahead and and full execution. is team focused on is execution, Our

roadmaps creation our years taken decisive product customers. I'm at shareholders and an value Workhorse. profitable position here that two over a have past for organization, we've foundation business the Workhorse actions for and systems growth established confident We the that strong build to and

second the the quarter, and we an WXXX delivery production WX production and of of our WXXX to increased first our Launched customer. van During delivered end CC vehicles. step

continued testing ahead regular and program of production WXX the of QX. in vehicle Our start systems durability

plan customers sponsored excellent the QX. West We also WXX, DC The event the we Washington WXX reviews. our in orders deliver where on select full for on to first also the for in which at first events of dealer shows it outside to CALSTART a was received received and at display trade Coast time

certified during solid bodies with Burr, reputations We on ability was made new partnerships dealer their specific with Exchange. of cab install to the and customers Each EVC/Smyrna selected announcing and quarter Western targeted progress location, network, Truck units. regional deals expanding our and for chassis custom these

with our book. contract the we volumes addition, part build In that Tropos manufacturing our as Union as assembled to vehicles shipped of the three-year a in in XX Company continues to year half Indiana. Tropos of world-class And expect second the grow in strong were order facilities we City,

U.S. XXX,XXX Mississippi. several USDA business This by by drones and government the of we field the awarded other our for time. several of at multiple commercial crucial HALO including milestone in We farmers orders. securing of built our success purchase side new achieved support our aerospace delivery On flights and on in the conducted scanning package same successful demonstration a HorseFly, departments. grant HorseFly the our at were We a first business, simultaneous followed of drone in our demonstrations

in EV with now five initiative Class units continues us Our well, Ground deployed & Lebanon, on well are and Stalls electrifying to our FedEx serve we our to X Ohio. Stables way fleet

year ago. our up delivering we and picking expanded more were now volume are than delivery route have one We assignments and

routes future daily these We are product plans. from and marketing development continuing to to apply learned our operating our lessons

Finally, final launch of we the processing installation and future ahead These production. equipment facility paint system include in of been QX. the for making in have assembly WXX time the and in improvements necessary Union City

prototype WXXX Mason, Sharonville, operation we and done units. yeoman's Ohio full production there shop line completed program now drone team is WXX work facility. on assembly for and the to ready has our Having and in Our now are build installation, early our -- Ohio

X the foundations hardware, and completed systems. without in we capital we software two new phase Finally, of after system the high issues and and early manufacturing in production in July. place company tech investments years went equipment, test hard work are for our successfully and live ERP a implementation now Again, of

WXXXs roadmaps. Moving portfolio additional in to for second some than during easier vehicles important the quarter. on CC, on to commercial the we're slide We X, We're provide and WX less product our launching the and received vehicle months, new XX said customers orders I details across than vehicles, XX want three X XX done. progress firm Class vehicles making to delivered

with stabilized base CC, WX Starting both supply GreenPower. and our City the across have at production Union we including

QX We ready QX slots to build and have to secured customers. use complete also vehicles provide for body to our

ship We XXX units WX and to XXXX. in able more are CC than now build

candidly, four that which we Moving on tough learned, and one our we key several the for on & Stalls, five field, The another a took will touch launch to step through now of going prep another final started I'll and and WXXX is away and with have point shipments that team five lessons have at QX. it production WXXX was vehicles at Union we the customers Stables City. in ahead customer shortly. challenging to van, say I a in

during with the full to WXXX the of City Los We the opportunity the day versatility also Angeles. a infield of showcase demo have

our XXXX. from drivers fleet XX have test WXXX and small units build responses ship actively are We supportive to in received have several capacity the We quoting and now opportunities. about

of first platform, this The September to WXX, designed in the track chassis Workhorse year. production new which is on purpose-built fully and remains start

we've vehicles production. we dealer even sold Importantly, already first before initial our two have network begun to our

quality fleets production have to delivered major to expect early units demo at QX. We

DC. the vehicle X As June are attend also in permitted only to vehicle, -- showcase the Future, Xth on about Washington X members earlier, and Congress I mentioned interactive market electric learn and event available our commercial technology readiness of in we Driving event at more an ready WXX accelerate now showcased transition advanced This the vehicle the EVs. allowed to to EV or to the Class the

last tough hard, touch work. launch but world real PowerPoint couple a executing on we through new I slide, were the quarters, easy vehicle want of of have why on to reminders is the worked they since OEM the experiences grinding, is simply creating

of an team across several incredibly functions. assembled experienced automotive talented professionals have We

The countless must As part they ensure as critical ours be early and complete hours both frozen final that worked discipline our software programs, a have selection in are and vehicles. production have multiple to full documentation is They ensure readiness team, to completed pilot bill as compatible absolutely suppliers’ fail and management engineering, for accurate. and be put and and electric of and supplier in to possible must time both, ensure builds. sourcing materials safe, on change

gets these tasks. team Our

or document manufacturing teams throws not behind and supply get a engineers properly it the for loop. changes, chain design If do the

WXXX as the production got a system, launching well. as when line. and learning challenging These into team also experienced learned the down production the ERP test a moves have a a process. vehicle to this ingredients and tough, we We new really first it but successfully We while lot the put are grew was

team's Not in then here new automotive at next vehicle The muscle and vehicles and start Workhorse not month. over good engineering, market. positioned we the past which launching better extremely on work developed dedication that XX of point, WXX hard designing, in grateful and incredibly and we production have on and teams, the work is launch budget. one and news industry have depth assembly process launched but a to the WXXX and and we experience, new but of months manufacturing testing, the to proud I'm is hard parts, three to bringing time it takes get when our chain through vehicle memory be sourcing supply for will belabor

subject, a truck while field EV amongst thought this the track the as ready I mean in I vehicle XX balance South for Northern really through WXXX and rigor, will our on bone-rattling, WXXX went is a going vehicles service tough, our is test I successfully praise XX Both other that vehicles completes durability in you received personally tell final best the Indiana Bend, in to challenging on WXX in from cycle up the this the both class Indiana. tough, test. and vans, for A step high to the years. this it and drivers to ride test test. in test third-party WXX When

need targeting developing in is customer X, a across meet dealer as have addition I the states, secured being those spoken get XX in CARB needs have we several important United will or Turning the XXXX license XXXX. ship states, and recent standards the are to in California. areas network effect most authorized mentioned take Workhorse past, States, and licensed now to to where to in end we certified our about manufacturing to to slide

Exchange adding state of our expanded dealership Truck our And Truck as expanded in certified a and certified mentioned service as Workhorse and also in the certified we earlier, EV Sales, the by Trailer Workhorse presence, week New and Georgia. Truck EVC/Smyrna our first in I just northeast. Burr our is dealer the builder dealer Western first distribution announced adding We network, partner California initial dealer. York body last

Southern most Truck in favorable a grow through in Western the critical country. of market, end government Adding some network dealer to has trusted which our incentives the allows the us operator California

plan and is shows out on regions I-X forward map expansion on dealers I-XX move onboard XXXX. our along West, Eastern Southwest to United planning of the Seaboard, six the in are Most new States. slide corridor to to the as crucial as Southeast the The eight well we the our with

QX trucks industries the have strong customer components, requesting foodservice demonstrations. companies field to we demonstrations level and Several last-mile baking, large production in interest quality supply WXX delivery and in QX. getting forward in in and look WXX are the industrial hands their trials for goods, field and packaged Finally,

Our 'XX, intent to secure year-end. those QX and is by 'XX POs perform and for firm to then 'XX demos

assignments by WXXXs, execute Workhorse delivery package expanded Based our operating in units half routes slide Moving stables about fleet EV a now XX%. box the to have four we This X and CC of by have we route our WX performance, delivery fleet. FedEx for five about continue field on We truck. our on Class WX, on represents X, Ground. to our

to are We fleet to the add quarter. WXX in track the vehicles on fourth

additional white will small EV fleet insight With in valuable EVs on gain service, for paper our we these transition.

an a to for Stables location are operations options second We state. continuing review also supported in incentive

they as EVs. fleets are real serve tremendous experience summary, In gaining contractor the we transition to make to world better independent

On slide been X, our of Aerospace the active year. very beginning since has the team

As quality able the we a orders and our have for result of five product the to technical developmental validate our purchase technical These drone aerospace our of made this our investments of commercial operational a earn been testament and orders capabilities purchase and of prowess years nearly leading first in to product. team. HorseFly work have the industry we progress, products, the

grants Mississippi We USDA Arkansas and third in initial in the in have success areas. Due completed $XXX,XXX multiple underserved ranchers farmers support received Mississippi efforts, this a grant flights quarter these year. scanning those commencing in of we and to the have operations support to our of with new in

performed which HALO days, was Our government and demonstrations Logistics entities. developed with multiple in U.S. Humanitarian Aid aircraft, XXX and U.S. military or other Operations

tested We working initial HALO are successfully have HALO the the internationally our this aircraft to hard field for secure year. and also orders

believe about and we're made advances to with value excited shareholder we've unit. opportunities front very business capture us the well the in and this in the our market are of business many We positioned in of create Aerospace

finance Bob our With now results. over the that, to turn I'll call to discuss

Rick. Thanks,

Let's slide results. discuss quarter second to turn our XX to financial

Our discipline. execution second the team's operational financial reflect results and focus quarter on

taking up cash effectively. steps We which At throughout rest our time, strong will burn production efficient and same year, the delivery results. of to that to continue drive and manage we become to and organization this more expect the continue of ramp are our vehicles

million now XXXX sales Sales, recorded were of finalizes at $X.X to allowances quarter Turning voucher and Gross eligibility. potential to of in compared Workhorse’s period quarter returns results. for of were the HVIP $X.X net of year. primarily impact our million the while second HVIP less million zero in to of allowance for current an the due sales vehicle CC same increase last the the XXXX $X The second in volume for period. is car sales WX

we status, but outside HVIP resolution at GreenPower voucher comments of the our holding the are XX CCs finalizes the control outcome, we CARB We several the Just a impact. sold. favorable on are the dependent a Until anticipate of an couple voucher of our on on moment. allowance WX factors

to million costs increased $X and and cost million related sales The million year. increase in period employee from was Cost expenses. same $X.X of to of in increase due increase primarily in to million related a sales $X.X in sales vehicle the a compensation last $X.X

in expenses to $X.X and million million year. and related offset was increased compensation expenses. in administrative in a the increase period $X.X increase million general was increase same increase expenses. increase including million The a services, non-cash stock-based million employee in partially legal $X.X compensation $XX by Selling, other professional expense, from a The primarily $X.X and $XX by driven a decrease million operational in expenses, last

stayed XXXX expenses development and million, respectively. $X.X at and XXXX million three the June during months and ended XX, consistent $X Research

$X.X same in Net was interest was interest Company’s current million the Net earned market of year. cash period account. period in $X.X year million investment interest the money to in interest last the compared driven on expense income income by

XX, the same $XX.X the the of ended million $XX.X million from net June last quarter was in year. million to same $XX.X loss Loss to compared quarter loss the $XX XXXX for year. was for last Net in operations quarter quarter million second compared

XX our sheet. slide to to Turning discuss balance

debt-free. continue enjoy First to of all, we being

As and we approximately of have $XX.X June cash equivalents. million XX, in cash XXXX,

quarter, of was required the despite overall to used R&D cash the next While launch GreenPower to for increased the our month. activities. a The capital significant cash XXXX, WXX it for decrease working rest the also both expect flow materials the and rate throughout of bulk capital, ensure the requirements has during burn smooth been we chassis, for but working

$XX.X inventory million can by As see, you increase we had year-over-year.

our CapEx million necessary through systems, tooling year, on $XX.X and of we testing select suppliers. first manufacturing the install to this half and and Additionally, at have control the production sites spent quality equipment,

cash have we fund To these at-the-market place. needs, in program our

under for the second quarter, million, shares stock million shares the of net the to During ATM million ATM available under we up program. $XXX.X leaving through $XX.X issuance the common XX.X issued proceeds of of program

steps to fund to Along phase a path to with goals. have our advancing product taking and the our of financial best are evaluating a range production roadmap, ensure From of we we achieve to we're position of options determine resources next the forward growth. strength, our

These us efforts, these As we transactions available part will the contemplating equity-linked stock. common we flexibility only securities, stock to issue or shares involving our of are of have issuance including options if of to a convertible be debt. more

value at asking voting Workhorse help long-term Stock bridge proposal authorized at are financial and to the to shares meeting. us continued increase build upcoming to stockholders number Common the We stockholder by the a special Company's growth of “FOR”

July capital meeting. regarding operations a details very and fund the definitive outlines the are straightforward, expenditures. proxy statement, and the operating required, plans expenses, On as of to which capital proposal specifically Our additional to we special XXth, raise Company, working capital, any filed use

XX, XXXX year. the vehicles. to revising to million guidance, Turning slide in lack availability been One for recalibration has HVIP our of $XX revenue are in this expecting now million between and the generate driver we of chassis GreenPower this of vouchers California $XX

A date. revenue lag has sales certification will be We XX administrative issue about resolved quickly, impacted a WXX second to it our negatively is guidance the of days. expect but this driver of

first WXX our years to we in launch product we roadmap two When established ago, occur plan August. anticipated

of launch in purchase August, launch customers getting the prerequisite to on gating step event to track This demos end a is production as into are orders. September. van the is hands quality at the these a of the We chassis

the EV vehicles powered add California in I force will funded new government customers opportunities, clean quicker dealers from near fleets towards country. an that likely see across entities California The challenges effect XXXX, states especially infrastructure adoption the mostly across We other take the is through, and move around working industry a increased EV that also there car training. regulations, and future. which sales in fleet and are in in bit mandated will quoting technician to

I In thinking are on City of a the volumes that minute in the vehicle Union how importance balance plant want spend of vein, to also year. the we for about

of fixed said I've the As plant before, our low. costs are

generate positive or year near-term margin each our objectives, XXX addition, for contribution XXXX. this Company. early key in that in Reaching imperatives for volumes EV margin either the we with is means of the that a In our gross is quarterly terms sell. to we later vehicle expect about trucks, in this is one What threshold practical positive of

final will with August the on XXth. One call note, turn I'll Monday, filed And Rick. now quarter that, to XX-Q second our be back

making a be that OEM would said from No me you Bob. full startup tell becoming to Thanks, the not. one and that let easy, services transition technology it's

Workhorse, of two-plus our the we at Workhorse our years challenging capable successfully hours, After time transition. starting through in business Here get done. patience It technology line duty, significant safe, long job we resources, and our this to products getting teamwork, great reliable, the business on capital able and Commercial startups, build are ship precipice incredibly taking to Aerospace are of to two customers. terms takes and the Vehicles of to tough being

regulations poised are the the capture continue from to driving as We powered technology. combination to demand ICE consumer government transition of and EV

priorities, on plan. which advancing me briefly outlined our slide discuss roadmaps Let on product remain according focused We to XX. QX are our laser

as process City well the Union to at testing, This production in of completing WXXX durability month. strip installing body QX. cab means WXX WXX the the step We for of while chassis production equipment start also next of ramp van as continue and up preparing simultaneously

accelerated those production month vehicles. Tropos demand meet ramp for units to QX in to XX plan also to a We

EP means the of for necessary. CV This properly grow of vouchers We secure and Aero. is for vehicles. HVIP dealer as secure both must our organization sales. our also the build certified WXX our completing our must Expanding and We as sales CV network out CARB well all for certification

demonstrations through showcase and and continue QX the demo will high-quality vehicles to customers 'XX in fleet and of to We orders. secure dealers fleet hands electric and our innovative, select get XXXX drives test trucks

additional focus relation and to additional Aerospace securing orders government our our receiving earning on grants. funding remains and In business, purchase

industry in in flight assembly drone will officials partners We for government to coming out carry demonstrations QX. low field move expect quarters testing volume into and continue to and and the

execute and will of exercise across we manufacturing our move as Finally, our X production by LEAN phase operations year-end. systems to ERP into and mode system begin supply the we chain full

fix, to Since we want slide Workhorse the clear I significantly discusses commercial have CEO mentioned. turn call business, over of as EV XXXX, ultimately August Q&A, special which we XX, that shareholder to grow meeting -- in stabilize, I Bob touch viable into a Before OEM. transformed and executing to on shareholder Workhorse the strategy a the joined

We financial have the strengthened Company's position.

issues us products, our efforts to our our We the legal resolved people, with have actions turnaround and addressed balance flexibility in sheet processes. invest plants, date financial our provided issues. and legacy These to in our

commercial put survivor, as As success. both I in the and already We efforts as air. the have our the EV to but a on in precipice a leader mentioned, only not on the focused of powered ground systems, transition us emerged

and to transition. have ahead, complete the necessary ensure resources need That we to financial our flexibility said, we as we look

use business, additional our that put, new next of to use are end equity. profitable I issue the obtain about and phase fund we story. this we want said, Bob the be fund will means for of to looking period, production clear why are to a financing Simply range equity we growth. authority to will we options additional evaluating our what As and of to

more strategic been up have in balance sheet The have looking require cleaned our We to shares. that finance how and issue our we efforts at options are today. very we financing us

for shareholder all shareholders stock. the on a need shares we build reasonable us is to and of the We our and order and protect this our to vote common In Workhorse value journey, issue a goal for to proposal shareholders are to our long-term increase number in looking successfully bridge continue authorized our shares, growth to of of creation. amount

We meeting have shareholders launched a website, the additional how special www.VoteWKHS.com, vote. and for regarding which to information provides

and hard is of a to proud doing commercial being successful. pioneer to all we're making closing, our here have Workhorse. takes in work. progress In the our profitability, luck the be and forward I of in the EV And I'm task. value. path at easy the some work, stockholder incredibly proud no space utmost hard team confidence I'm courage, deliver It incredibly growth,

morning our ready prepared for appropriate you your Kevin, the for Thank please support. questions. We're provide open this now concludes and to instruction. time again remarks. the your call That your

session. first from We'll Colin [Operator be a is from question-and-answer conducting now question Certainly. Oppenheimer. Instructions] Our Rusch coming

the bit a in talk availability. anything and can there's the sort Certainly for deals given terms guys about of elements out closing vehicle the little talk and some a and charging delay -- dynamics closing you the subsidies, in a about little delivery? with of number including you customers taking Can local deal a deals? the any of of any But that's folks as bit you here standing infrastructure

Sure.

the them, want their and foremost, a First to PowerPoint operate slide. on trucks look not just and actually hands people at get

had have or go our put out with dealers. three the demos to is out we of secure We to product back in now of WXXX at WX trucks. critical. sales those build a CC, four field getting boxes on slots and So doing the to team

addressed. right ready, weren't one had one while the West Washington done WXX, in production prototypes have in the And now. issues field, DC, of quality they being right? still We couple out that some we had and needed to a They some in we've Coast, get Washington

Okay?

testing. to orders. two who the products Class to place the of Xthrough with and we're quality, production of interested told, we're this weeks weeks, basically fleets, finished off segment are then products, X, that anywhere tooling, get very from production big demos market, prepared ones really us your four they the drive So want We in do

through and one, products through that's production. testing number So, real getting

do say, That in years a to to the their have putting the includes they're systems plan the substations electrify the Whether been all of fleets biggest in have ICE with in cadence X guys. connecting of and plan companies, pretty what will to going I'll their a next or think going it's fleets. -- getting solid moving or from electrical become those Two, discussions UPS and the over then forward, very and to FedEx to customers a They we've clear grid and big DHL, XX I that our EV. charging the right? clear

The smaller fleets liability bit voucher wariness, the range Jersey. are don't New say. through warranty have about whether They issues. little have California, that's work They issues, the moving to or with They've I'll their got EV. New in cetera. anxiety systems, way a They convinced issues, of like not York, costs. They're battery et

why year, XX them are early little document show crappy to or they we have XXX,XXX part rich convince, we to now that be a us. can trucks, to shows and and day. a XX% is trucks, We on to out of we those in talked given of fleets, trucks took own always large down go by environment the raggedy, miles That their over one should do of So, old, small any We next for harder that XXX that Stables target repair. down that's run that our here. fleet, are

sales funded And to state and electrifying and with government the government at to The help federal the And an well. and whether think both level, the level, we're the And police fleet, the it's departments, level, -- stronger Colin? North city governments, world. they've government the county that's Where it XX in gets acquisitions government I'll we fleets, states building tasked salesperson is is of experienced that month the federal going both to these down been state the as money from flowing in help, their over seeing years our to us entities. added say at we've Does systems. across to that's school interest almost, selling every to the level. start team, here America

been with terms the the incredibly need all detail. in there's looking vehicles some It's little and And where testing tinkering? you some upside of elements then may I that helpful. the Yes. could you've the at appreciate process incremental a about just to the talk vehicles, where bit of performance the surprised

Well, first we couple brackets few of had testing, a break. weeks, WXX

And had failure. report, so weekly daily sometimes if a a that -- I report get a we've

decided after go myself, at and you, I lot next of bulging, a because roads, walk loop gravel track barely of like one I've days -- over up tracks roads, so cobblestones, a track's had test It's few to the programs on brace rumble telling my to concrete, strips concrete, a rough. dirt down. It could the up about I've the rubble X.X-mile of I long getting broken was never hell I'm a test. a myself. maybe older, our test to use test I but been I'm So, in that. been career.

understood bracket systems. of on door. on one a rear why We had We a we break. our had thermal our Now I container brackets had bracket break some break management

We're exceed I you, get range tell our even week. may final We next I think. what of targets. report range marvelously. Here's getting performing powertrain we some the is the the

well. running to Our more you the to you load first no partial done the system had at fully once few very truck. the way, chassis and We've in along pounds loaded. has its from load now things learn load at go final truck XX,XXX stages a we're Obviously in put

Nothing surprising to me.

I'm In happy. fact, very

the we're were of I they been on now, they And who have had testing trucks our two I right know its there. to comments, for XX won't couldn't Two I As four what And competitors' they probably down said performed very but well. One our them weeks. of who are. behind schedule. comment or five through saw charging were, up down, or days way retain my were our systems, so XX% about trucks of

a we testing weeks head take And finish track September, little as tough. one on had we care that incident is into First we're then to couple but we had so. of to of,

Souther Riley is today Chris coming question Next Securities. from B. from

certification was and anticipated us sales of under HVIP path Can California and this any holdup resolution sense Maybe of the sense just on that were of a little anticipated more that kind what in give just year the the there. mix of there color a you timing program? to

Yes. Good question, Chris.

CC That's orders. from WX CARB And EV Star chassis that GreenPower buy the built EV the our the on executive is Star. off the Our called and we overseas. are WXXX

Our WX and WXXX CC are not.

in get an both now -- Right around that to California, our out with right? entities, the GreenPower. we those administrative assets We middle. quarter. we're issue to and dozen are second It an we're resolved resolve CARB we in not, early issue caught in that issues It's So, of need us through dealerships kind we orders And some with and working get few those think resolved. there to hard hope got our two a costs to probably technical September. that August, there's vouchers We critical two it's shipments in here to success. and working legal if the GreenPower resolved, get in

own GreenPower, we in our got our get Obviously, from executive California, across to vehicles. and we mandate else get to we're in, in California see We supposed anything on One, to paths. CARB. get or Southern two So, order need working vouchers we that allotment this up get done. Northern everywhere as January, cover the from on electric we're and starting are Bob, we done that? fleet RFQs to kicks should and for we

covers No, it. that

of kind it you sounds additional faster customer on sense. fleets guidance? area on year just like are which of maybe an kind visibility color owned walk maybe fleets, full smaller about. -- like fleets particularly through, you're then large stands makes called as the where that excited But can than And side, out And then the today overall the you just moving government’s around

sense the any public fleets there think as and private to what this you of Just is for kind mix between year?

end being I'll and to able to the are we be the of in and go the can first the slots bigger step build one that of see fourth And is and for opportunities on what get predicated then to delivered there. big outlook that. quarter of driver fleets It's some Chris. ahead in vans One WXX the customers those really And we on start side. WX the to sales general, And the sure and getting making progress end upfit launch of the two CCs, on out those the things. then and drivers in on is customers. kind course those see demos is and the

terms fleets, and then we've in fleets as In just those of opportunities. started we've now dealers the breakdown a in now government focus focus adding to our first, moving seen with

start to quickly, some probably side, year movements now on fleet right the side more So, because government hopefully fast. it's dealer weighted turn to those of think the I make we for rest here vehicles and the the but this could very

builders body or of I'll the we path, think, kind takes and and were. about of say started to bodybuilding the who custom guys how quarter this in-house sold when that affiliated have long pivoted how we segment out in were either those their identify I novices and second originally those in We down region. upfitting custom purposely dealers some

see X, moving you us to so more truck away from type X work-type these dealerships. over dealerships Class And

how are Also, us since build been They've supportive yeoman's vehicles helping We us of concern the here, about who to say I'd and very have right? happen got family I are day little There's that Pritchard the gun-shy, the will I EV and that transition other bit identify thing for work much. secure the in fast industry. actually is the dealers some a build slots. the a very appreciate done there who've

and mandate the north. California in industry, I I-X moves And corridor going lot standpoint us really also up for demand from it the year -- and made Clean there's game to out read passed supply this that there's the think I CARB it. change -- haven't California, the a it then a think that Fleet EVs of as is earlier been

that there's going we have be for about EV assets get can across positive. path clear so, are concern a to out a a reasons cost lot service truck of And truck clean right? forward your you structure make And here we're one this trucks company going issuance, built to the financial we said, share -- we That's your And margin our continue as warranty gross customers sure production? tell to gross fixed -- positive this -- of companies, the of doesn't so and we to the from take -- Bob can the margins viability. viability and

So, to some cash have flow we to next here, the but because free structure cost do XX work right. all positive We that got full get an overhead we'll months. address over

coming from TD Jeff Osborne is Cowen. question from Next

end. Just a couple questions of my on

hoping cash and about breakeven? would XXX folks get the QX. you needed think to to QX, positive be get gross in flow Can units what margin mentioned to to talk volumes you get there to I

that's our of gross it in and Well, Obviously, we assuming But dependent is all with this Jeff, margin cost contribution as on, think That's vehicles, mix multiple mix, dependent starting we're normal move number what why we have XXX average we things. anticipate. we're and margin. confident structure is we forward. the a those here on with kind

an said, Little expense get to operating we out bit total, to further cover. Rick to have structure as cost

and gone we'll far margin. that the talk we the positive next always the haven't now and We're step gross actually about. gross just terms positive yet. to about we first margin, in is so positive So, step contribution step has there, really margin. Well, ready out then of keep was been talk going what first that But

Yes. Jeff. We've some math, done

and to talk about will We this that later you year next year.

Look Okay. that. to forward

take. was as and program Wall the have as or or has guidance XX mix? a consensus bill quick Do a Just the trying would've perspective that next HVIP give sense I So, nationwide it for to think credit the smaller? for looking as to California to or been you you half half 'XX? months. 'XX, I'm anticipate, revised over from What for I of of I'm do just sales thought with you ones. Street anticipate but two having level endorse Is around other IRA California? that the or not million, XXX you sort to out of the bigger impactful mix the being get just wouldn't look XX you

there I the part think are Jeff only story. incentives is key the of the

while you fact, York, rules urgency some I example, in in you at you look of greater, New they think what's California's effect exist XXXX. and then this, incentives, by legs are And take -- for you adoption, in incentives urgency. new really got got driving three that of if driving the the got the

So, the we that's is think much Therefore, urgency there. where opportunities greater the preponderance the of exists.

really of it's percentage, calculated it, haven't terms but we In significant.

the all Penske, Whether X% Cintas, to FedEx, it of fleets Fleet after California UPS, electric to think in need I vehicles purchases that rule says that that. electric. going a vehicle year PepsiCo, next you're your Yes, be are those Ryder, penetration DHL, and up Clean new X% see of ramps

York California of expect carry do the around New pretty and but aggressive adoption, the programs EV and I the bulk with governments of area some Florida across down in seeing So the we're some in early systems. to the school City state

Tropos behind there One We're good right footprint of to some vehicles. the learned is Arizona out of where to our the University adopting we of their things systems success the school they've following are the from market. System, System, School trucks California had schools University West, electric at bring School the of

that essentially or revised resolution you the on Chris And the mandate guidance that a in if the month, on don't Souther's see just question one HVIP risk August, resolve that last what… we program. a what's follow-up this Does

it's sooner the say, -- we sooner the resolve can is I'd better. Yes.

can told a second inquires made trucks he the now XX a LA HVIP Western waiting thinks has one Right he the for We XX. he a in yet, sell for has, just He he only County get to area the on sure. demand have there We us, based -- out customer one to month. because vouchers. There's Truck. is signed hasn't up lot of the order he XX the dealer who's

I'd something wait for radar Once pretty something that's be get that'll something we be out earnings. us. on screen and that's that'll that say resolved, won't quarterly our there, critical for get we So a it's we so.

don't, But could just would low trying range. the and hit sorry, high end the if understand $XX guidance million do, you you of then end to hit the you end. if the high I'm or you --

us So, people, guidance. that. office, guidance. we some the and it's executive there's do in if -- is a is people And number say top one get end whiteboard a How's helping low on to shot it, I’d couple better If some or get it, of risk say my the get the don't we CARB think probably there -- vouchers. then including we my three four have us in order number one the the of might we that? in have the at end I outside I'd

than move through work business will. So, for you'd as government in the things you being you slower sometimes little that when nice? organizations, know, a like How's

in luck Good Rick. Sacramento. Understand,

Yes, on weeks here. the in way there

sure, for so. So

Lewis Next from question is coming BTIG. Greg from

to thinking vehicles, think we buckets, there think how to want I of revenue get about think and that. or be. think want just I kind how you about & more to contributions? we could you're a Maybe, was know call think guidance you hoping about about Stables Is color if we however to the little any vehicles way Stalls -- Tropos drones. the it your versus and other, and year But granular about don't this about let's as

to low trying of be? the drivers a to get the the end revenue high-end and just they're those where going for and So, better sense

Sure.

bottom start let's kind So, at up the work here. and of

we Tropos them the very get them the quarter, is the it supply been versus expect it's where point changing to and get can challenge quarter but the on in ramp not it versus revenue. them getting and side, on We we the second On we fourth out or to do game them. a door. once quarter kits turn the That's around turn the can them, so the up third chain, the quickly finish in, around --

because of one one assembling them, is of our different dramatically trucks. to trucks, Remember, convert we're these -- it's revenue compared

huge there. But growth dollars terms do in there. not we continued modeling out, expect So, it's of

we've be not contributor up really scale, while this is, list your to year, Next sales, but getting big on I it'll those think it's significant a broken our through progress the to revenue model. first drone

to in van van Now step on, it Class, versions X, X, step focused into strip And think be as Class WXX cetera, then be a et credits, and if van linchpin. the Class slots really available we're the chassis the cab then, in us start cab chassis, on the we the about of significant the that there, as X, chassis, the and turn you X. contributor. build to the the Class you've X, is the the the four expect got X, X, to trucks course, And X, gets become and real four, we and step

keys, not two XXX vehicles, two So, then important, important chassis those those as but the strip two. be as the and the will other are and the

Yes.

get and in We build facility. more up WXXX. work up Greg, chassis to CCs we WX my XXX color XX we'll next a more in numbers, start -- I certification the line. part a all start there, ship A talked a advance more in So if manufacturing pieces about testing That's year, complex equipment to month this XX yet the month, about two throw can the and running remarks our at of and assuming due we WXX, lot I chassis think some much of product. lot the we this got down we'll couple and weeks, final the there. rolling next through

got basically, about our their XX the for in every kit a month Stalls company. they butter until little together. to for to for They new got ramping a this money. with day, took us pause a were Tropos, gone said, kits suppliers. So, July. bread in, makes XX% and versus We're bit actually of XX and we've building about weeks act as almost XX% profitable the probably pace. six from before. on is We the pains, money through Stables XX vehicles & accurate We growing accurate those Bob

HALO environments, so. year, announce a a of later for to in a cusp which scanning, drones at we're very of the gets which up is is that of should for But it after opportunity. should orders is do the as big of drones sales, think tough the we some still about situations, it’s more can combination delivery. this early drones And In tests a the we a service pick mostly for couple Aero, I few we say, drone

Our Instructions] next Shlisky [Operator Mike Davidson. from D.A. question is coming from

space. EV off we today with start could some other news in happened If that the

get Workhorse up you. to in kind just for current you get to here? case a whenever in hard -- have battery there. any for secondly, plan been have adjacencies it the your quite to sense using their certified company. Can truck And you Workhorse EV battery of or some any the then first, one supply could plan, One not [ph] any get it would expert chain? makers you supply of announced is your backup to Thank I To guess, confirm that time Rick, models. providers large can't been out. of have It's kind the deliver, of you that the time. figure knowledge Do production wrapped space about in for you you've is color my talking do just bankruptcy. how an I chain appreciate as

I Yes, we driving exposure don't last got that from dealer was a customer event Chapter standpoint. home when have night. XX I Proterra notice a from any to

they're factory got supplies building largest -- And of coming our have from his supplier's we at and current there. North guarantee manufacturer think. about confident have here taken today, we that exposure a no North look line the 'XX, year, this And in other battery some in we are in our the have 'XX, along next sources, have the America. I in America talking so other our ones. We're And current own supplier. Supply we year we battery chain, for world written

of where one chain best on some costs in and get could we kilowatt can for what per we now price the right out have outlook versus the looking different And is -- do. future. options have detailed a or at So, and we we batteries our team a has hour. our the battery very think competitors, competitive peers of we have We we're supply

it's on the for feel you've two-part question. rollout guess, of the and brief in in some the some guidance get to here delay got I want of also kind change WXX. I

you million fleet from the the of when is CapEx speaking, to broader is call the a quarter as the of I'm -- Rick, call now? space And that the in next can of we issue spot thoughts you in hesitant should just been difference second fleets $XX midpoint, getting just in also us, [ph] you've the quarter what from share from And anything beyond next right a year? for just curious more do the but you're it it's quarter infrastructure, does it some First, I'm the think with charging invest some just year? shift with that the e-commerce hearing and nowadays. this to push, of to tougher first first broadly revenue then into time quite

industry, peel there's Heavy Bob -- go I'll was from let at first. the experiences about when volumes I recession some down the start I'll talk do onion backwards. experience think Accuride. go seeing the They my truck guidance, I I'll heavy movement. but -- truck and here's freight

friends trucks, forward. operators I caution fleet of how stop they of So stop talked the ordering industry trailers. be to some do the they ordering going much outlay that starting to there's in capital see, some and they're I've to on my going

XX,XXX the That'll saw notice jobs You Chapter week, industry. XX, Freight the ripple big Yellow lost. across went down, last

chain, Big bankrupt. taking There's UAW the and back about and ripple when Talking up Three the the going tough supply right? to Chrysler went that's about how industry on years Detroit and automotive GM in demands the the concerns across putting XX very the industry

at don't they end of got day, say, So, time. guess to the I the interesting know. what again. careful I I want it's I I guess. bankrupt to But be

I've think, pitch that's plants dealers, doesn't to fleets, come to companies how build, that to for, they trucks -- build, had deliver right? multiple I've then EV have whoever, EV show company and they're multiple whether talked many now them, nothing on many I going talked they've to multiple going and to promises, they're how their

people, want, hands start down or in get the sales. that think then the of at EV We're in of there, one the class We production space the running We're we got the volumes that it'll EV products and few to commercial companies going. the factory. world of the the trucks the few companies not down end dealer line, the has the a one has I network button not

Okay?

want, Everybody the We got very going to to here, EV foundations, turn believes transition is multi-decade from slow, some test than a going of to EVs. building want that's slower our We're this very a going are here days, the slower world's we probably overnight. the methodical, building company said solid investors day but I we're than the time. be rock we stand to

want talk guidance? about you to So,

that. a talk about I'll little Yes, bit

roughly get about things We So XX vouchers Mike, flowing to a through look delay we delay, we the basically all suggest we look when demand combined somewhat things as timing adoption don't at look correctly. and then reduction infrastructure in We also got this whether demand. somewhat look at and talked or you've it's change. this But as at timing that versus a those all out well. those process worked as internal. the this, at our WXX And as the internal, external, HVIP the

to simplify your of at look kind that down more to a question, we push than So, far a as reduction.

the We ball Eventually quality battle, delivery zone. So, As had had an learning The through at the issues, what a we one in test had issues, tougher across field. move we time, know fighting tooling battle, thought. right? a end battlefield's we than ex-military We're had into our we little issues. as objective is. issues, logistics get import zone we there, them down the had guy, the working we issues. we'll the moving we engineering the fighting lessons We're

issue. $X took million, a So the CARB Okay? We year. year, this zero sales of last reserve because

then job. we'll - on get trucks name We get Now have issue. WXX, reliable, safe, put we our the can CARB I got do resolve we've that the go behind resolved, capable products that it, we that

years for customers our carry pounds, here can't of is that and buying is ago, at and center viable it won't to more proud we're of It your really That last this years. life the friends anywhere prototype our got two and a was close I payload XX,XXX When out about I have than same one our that. morning. customer years us said, carry of XX in trucks have two to XX now and you not truck being with discussed us.

and out XX think XX e-gens old still some vehicles retrofitted, WXXXs, CXXXX, there. I the there's CCs, WX old a couple we're being of of the learned up taking or WXX, there. lessons

out guys wiring like there. It's bees’ a there, out of are engineers activity are Software there. out nest

Irwin Next from question is Craig from ROTH coming MKM.

scheduled are you hand at platforms? on vehicles? amount Do your grow get I the have time demonstration quarters? far is already was hoping vehicle the more give But of you as going little bit now fleets important play demonstrations could half most 'XX. raising next to and in different feel the the something an on obviously So, on a how for things addressed. for comes maybe been us their Rick, over the appropriate together couple an do and wanted the to fleet there's you demonstration that's that opportunity to And of second to color calendar. I ask moment of need then you as role How This come

vehicles. started in debate We program program Great with like had question. or reviews. We've biweekly maybe that three our five

of part I up XX. to terms think down to in now That launching. X to comes availability, we're

think, I've settled have our to schedule. add think few think review I right a in I program X that build between now got a to week, we'll XX. to to we're we button got I do next more down. --

wants with chassis somebody the our is we two he with uses today. who He wants on strip our wants build trucks. demands, body one which Then van strip different his have chassis than to in he what field. customer configured else's We that a currently

right? talking the is slightly a FedEx big guys, got about Ground and is the diverse Their pieces the of we truck. than FedEx talking So, fleet different lot Express We're FedEx very moving about a vehicles. FedEx UPS. there. between truck We're

on owned, contractors. for large a right one back. demand. trucks. Some to backing WXXX different CC WX working between has retail companies with the a a We're some of a a are decide on a now are order XXX, trying with XXX by the DHL owned They're or different

You have trials both two for those vehicles going to XXth. about week a August customer that

One it before down So, a we're customer trial right? customer. of a basically plops managing customer by investments, bunch six-month wants

CC, that's we we got difficult to. the much I So like I'll was, very of plant. a say, WX the than design self-inflicted vehicles. late the in GreenPower the where more WXXX learned lessons changes. I'm expected we we when confident little kind wounds some what on shifted some on --

to That's you're from mix. production first hell pilot of a the in lot can't build. our unless dealt almost engineering design chain appreciate XXX WXX. And a work, of the I with think of a work now build lot actually people our hell first of really supply we changes a that

are in first dealers the and trucks. go we're up and lined lock sales here at for kind team Workhorse. go I'm of now to confident So, by sell up That's production the and it's running vouchers some where quarter our job we get

closing reached of We’ve like comments. question-and-answer the I'd back to any over end turn or floor our to session. the management further for

to say Workhorse. want for just in your interest again I thanks

your the shareholder “FOR” need listening, shareholders we vote proposal. For those do

as effectively use shares those possible. us You to wisely can as and trust

company we'll a shareholder create for to can few they the and over the proud of forward next somewhere. is interest, see here create goal you road years. on Our your going you'll be and value Thanks great

webcast. today's That conclude Thank does you. teleconference

You at this have disconnect your line participation day. may for your time you thank and wonderful a We today.