Electrameccanica Vehicles (SOLO) 18 Nov 212021 Q3 Earnings call transcript

Greetings and welcome to the ElectraMeccanica Vehicles Corp. Corporate Update Conference Call. At this time, all participants are in a listen-only mode. A question-and-answer session will follow the formal presentation.

As a reminder, this conference is being recorded.

and formal made would webcast, call. to on regarding materially financial described the everyone to including those a begin forward-looking from actual future statements are results and that today's results could number we of presentation, be the uncertainties like I remind those and risks Before may prospects that subject cause industry in call differ and to refer list risks. Please the of filings Company's a for to regulatory associated Company's the information. to www.electrameccanica.com you for industry refer also would supporting website, more I I call would now over to like to hand Mr. the Kevin Pavlov, Chief Executive Officer of ElectraMeccanica. yours. Kevin, the floor is

Thank I'm history. to the you you, 's I'm good Operator, conference in first and ElectraMeccanica afternoon Bhullar. Today, pleased to call, Bal update corporate everyone. joined welcome Company's our by today's CFO,

you to team join Company's a take of In believe moment joining to first history. the this the be was had not the year, biggest of myself. who to during have to to for meet. our the like in time opportunity I September as I first CEO introduce us those what I'd I moment to For privileged

significant startup achieve and board cost deliveries government acquisitions, I commercial of with First way experience reductions Director process companies over private avoidance's that I my COO to mergers EVs. the and recently, served of of affairs, where as course career. has of covered By and Most corporations, global relevant bring worked Karma that and large background, SOLO experience automotive improvements. experience, Automotive, through

Magna of time President Joint of I at an Innovation Global in Ventures, of E-Car and Additionally, XXX most Magna's management Vice President at roles Electronics, where I've senior Services, Venture, General and within was various Company industry, serve in notably its the Executive Manager had points Group. pleasure the Magna Fortune different COO to the International,

we companies I direct Eco-Fueling at Executive Additionally, working within and Ricardo Director and was automotive By PLC. also be the experience, of prove a our development and I the will CEO resource commercial inc. for Board to accelerate at as production all stages an was Consultant critical deliveries.

key by at taking a where and We we're in respected a formed we XXXX globally discuss InterMeccanica. the out were acquired given we Company's experience delivering Now, electric for high-end manufacturing automotive it's innovative XXXX, point started. inflection moment manufacturer worth we evolution, to years XX A to experience, select in design set of sports with Leveraging over in custom this vehicles. and clientele. cars

delivery, to which of community, goal mobility. was and The shared reach revolutionize

out our and these During of this still day-to-day the time, vehicles of say to Early prototype in circulation refining are improving vehicles Vancouver our I'm facility, adopters we tested use some design. can that XX build in and proud today. prototypes

offers side zone, The capable, vehicle. as we Chen in for finalized, electric testing. rear our and torque limiting impact took Again, our front wheeled the on-road XX deployed the what called group protection, is HOV bar, a The purpose form vehicle driving of control vehicles an a with of the This now benefiting has vehicle $XX,XXX. well It comforts. features, access. validation and highway It seat the experience single as power The air lane produced crumple X to has through SOLO. engineered fully with unique Canada, roll U.S., manufactured design entertainment SOLO blends person, steering, features. innovative we single built, the partner, a accessible industrial pre other SOLO is flagship With s by Zhong China strategic advanced power -production safety and point China. final system for price conditioning, look and brakes, Bluetooth modern from

industry the early know commenced operators, only a electric ElectraMeccanica, making transformational commercial we as but reservation October for vehicle in recently milestone for holders it. not of fleet Most deliveries XXXX, we for and the future

For ramp October, production our sales, we and this delivered delivery targets and we've fleet sales. of By all reaching service as a near-term logistics, built total to and milestone, the month vehicles of customers operators. out networks we XX to support

in the I Mesa, discussed focus production for we the build-out sets a third of as take end base the ramp important and think stage cash on strong U.S. Arizona. it's of the million towards Balance to moment our of $XXX of as operations This in ramp to quarter. production, As the Sheet, growth the our highlight we position

is states XX with direct-to-customer retail grounded X spanning metropolitan by and centers Our program U.S. sales areas.

Show, had industry. we of are presence recognized including the manufacturers bringing weeks the and the also call world's influential we at X where automotive globally. at ago, segment this of from hosting events, We showcasing today, shows the the event, several SEMA, trade together automotive most premier are leading L.A. widely one every buyers and industry vehicle Auto And as

we out an showcased SEMA, trends, production the revamped And current a and reflects of producing capability our campaign and now we advertisements. in that brand up to potential phase, future facility ongoing well growth through awareness electric Zhong marketing, Chen, We're strategic with building traditional now partner. OEM. we're SOLO rolling oriented at forward-thinking, dedicated have integrated While website, exciting, billboard, media digital vehicle our XX,XXX as through influencers, annually In our The as variance. performance dynamic, includes customization Company. identity options convertible

operations new our within production target geographies and we in Arizona to engineering produce an Chen the Enabling Mesa, previously grow summer adding to, technical supply In ability distribution up foundation sales, to year have ERP This we center the system to additional working The U.S. finance, address manufacturing announced rapid to which capacity, capacity, of future. growth U.S. of service anticipation further may a as an SAP. vehicles alluded migration Zhong for brings our business or integrates addition, at In vehicles to of XX,XXX assembly, per vehicles the unparalleled we and SAP XX,XXX in the delivery transformation Americans, Cloud, produce technology the we square a assembly to repairs, enable any rise XXX,XXX we completed maintenance a manage in new the to service Americans. operations. up Company's ramp, per a require. insight year the and us S/XHANA provider vehicle will This upcoming the ability with I to XXXX, foot facilitate handle Recently, market. years of are assembly complete trusted operations. as by into had for level to come leveraging needed chain, localized our

SOLO, Bosch. announced service service network a of approved network and operations Bosch pilot then agreement the throughout highly the beginning technology, rest western the Recently, the Bosch will the make leading for repair country. to U.S. with global strategic establish technicians skilled of technology and Bosch, it independent The throughout and and equipped SOLO. a innovation maintenance of 's uniquely firm car we support solutions for service commercial repair shops maintenance a by locations industrial launch the with and expanding mobility automobile

logistics, all sales and on path service focused expediting networks For now place, scaling our and production, we're and to deliveries, in marketing, profitability.

mid-XXXX. U.S. track partner production begin We our will ramp Chen continue at on production our facility to in and remain to facility at Zhong

consumers, overhead building Another by costs share focus revolutionizing power to future materials solution we are for further recouping driving operations streamlining urban our and will purpose-built lines from users buying production fleets, reducing base. the solve leveraging to and transportation increase, providing suppliers In a improve as space cost ride and be challenges. production volumes today's summary, vehicle

milestones for in. look exciting continue shareholders. Our partners answer of SOLO. the work value forward key production to the I to as smarter our sustainable, open-minded We've put flagship future create that team I'm entire perfect proud a several drive holds and drivers long-term what to is have and there to SOLO strive scale achieved our and and we incredibly EV in way for is recognize better XXXX,

and their to answer Before like we in. tireless for over would call you open their hand our the begin like our now, and Thank and calling for support. Operator team line to all our Operator. questions, shareholders to for thank for session. question the And I the dedication to efforts I'd

[Operator conducting this moment, ]. poll questions. a Kevin. question-and-answer we'll session. we Ladies Thank at while and for you, One gentlemen, be instructions time, please,

Our Please first Chan from proceed. question Stifel. Bruce with is

on for now, asking on obviously affecting question an everybody. supply-chain here. impact thank of 'XX, just will by for But the deliveries Bal, in working inventory you some could the Kevin issues? flow result the then and thoughts you call maybe start think my Maybe right the supply good they're as some I to And on think you a about both of gave then capital you afternoon, update and as phenomenal those a and Any how follow-up. those vehicles? just you chain as taking that issues of pinch do

Thanks, Bruce.

suppliers areas, additional U.S. taking our parts global been a through a them as we So so said, eyes methods our that find and showing have so for role the yeah, these taken supply fighting chain. these We'll next things clear proactive I to this measures everybody, of supply can can supply extra and to hopefully and manage been we sure we on our where a help flow sure know way in is proactive we've when a to of But it Tier vehicle challenge them X back operations trying chain, way buy everybody, send we've series some our a for out Company, our handle to take will to ports production flow. our of you We've a strategies or can that logistics added we'll worked young chips integrate that affecting steps continue. continues parts are issues to at vehicles. parts Chinese it's chip out measures backlog cases chain X, to that supply keep the these shortage parts. that. Again, if Tier good global continue We're launches approach, have and keeping and them get up. our to a make they but help We've find globally and and us make couple but our to the

believe talking question I So I capital? you think about, your the second was it were

Working capital.

capital. you that touch Do want The working to on one?

Sure.

great is This one Bhullar. Bal a

you great for hear from to again First thank you joining. and

terms In we've of and in point X cash debt of near-term next working published we November what burn the enough our doing. essentially we've our got at budgeting, terms us of to got X And at We've in million. there cash that we as in the financials $XXX over take been of terms in of time over X, had capital months.

great. That's Okay.

So sounds going Balance the where if get Sheet. saying, synthesize saying, from like Bal what materially I'm anything you're expect terms you don't that you're it of to to it necessarily Kevin, in what just with worse

able even You'll if quarters, next see to full you'll things. few the think be certainly on we a whether

Yes.

we're burn, going, we investing cash our on eye close intelligently where a debt. keeping We're have X we're

So this we're planning the the acute the of making needs have about that addressed Company's exercise, on hand are is happen very very at sure watching so idea with we that Capital the years. over next couple close a

then Okay, hop just turn maybe it over And more back great. before and queue. one into I

version the some product the the Zongshen? was You done a going and of be months or at color very that and to seems a cargo as for needs product Mesa bring start and to back, capacity give debuted maybe up us until what running, fleet of wait from guideline. that's customers. tooling a which flow have that far think exciting I Is can to SOLO and the flavor couple just of to that like now Expo, you you production it on validation into as is and some Can to

have we so a Yeah, platform strategy.

have our they are been So tooled comes we derivatives The platform already from modifications Chen. Zhong create main the that for in tooled, U.S. the vehicles cargo in off

vehicles and we'll modifications a making Asian have in facility the be manufacturing the that in bring temporary So U.S. -- the updates. from in and our will a we facility the

the out of are of coming the Zhong vehicles really flow So add-on. Chen

to on we'll So the portions -- our on will meet done we side. willl the -- U.S. that customers of be delete cargo but needs,

helpful. super Thank that's queue. hop the back in Great, I'll you.

proceed. Please Andrew question with Partners. is from next Roth Our Scott Capital

Good questions. thank for taking my you afternoon, and

to first if the there? you XX speak I this or on to touched expand in satisfied know looking what the my question prepared whether are strategy, footprint So I believe across just the with are the and is you're states. locations X so, you plans remarks. Can retail current it's on you

Yes.

put to and and touch footprint process The can are your information here. a primary you our or other can web see come people a there kiosks, the seat get off firsthand. that areas really right vehicle the in the So the while centers, pieces and there's you two-step get enjoy hands-on, rear-end the can and information it

a be A that we the vehicle, your our yes, we'll expanding of test elements network to want, key of through schedule So that able people in ton be if journey. that step a the going they inside the go you're and will buying -- to customer see able would accentuate majority to how of so the or be -- experience drive.

footprint starts Coast East the we're and our on and North. So West migrating

expansion be So continued a on yes, there will that.

about The second performance thing to is an the kiosks how and been actually like looking we've that to what are say customer I'd -- advantage. working really these at

of vehicles introduce we'll drive A be over more any more as as want for ready test schedule we we're in and have the will next and the be customers we might customer the month. probably to learn at So and at But modifying more point. flow it more test looking we things those experience them car. inside vehicles the just drive experience how

for back kind Arizona kind expected, are versus for I tariff a you provide parter. Awesome. out more And Thanks second X before maybe on production that better a and also of that sourcing queue, the me just color of Can into color. manufacturing? Thank between for the and and cost avoidance the you timeline component also bit of of cost-effective out more hop walk improvements kind through break

Yeah, let in I this steps. me see can do X if

to different affairs a Let's government. us with that now our we elements maybe our We've activities been start current tariff number folks Right U.S. are ease working piece. now going a category. with of help the we production. have into on have government Right the significant

a our we're regarding will when This out -- we're of it schedule operations So will production that capacity starting vehicles. in side conversations ongoing. XX,XXX produced, play, with in facility of are -- prototyped the parallel get to our happen initial with working being middle come year. But that U.S. we'll be into sure they certificate come that will around and occupancy with the afterwards. of right the of make facility somewhere and We've cars in another to that all been our that of

hope to We plan XXXX of the of desire and out real facility. introduce car have that a a by great end and a a

significant cost our we're -- them improvements, call to on that base the about step some talked of You designs. really found I'll on is a working willing this. We help supply up

BAM improvement -- say, a I as a So see we significant can a would X-digit in our wise. percentage

then be we'll our more. features even that that current customers price what we means to car decide into which and are can or the So offer maintain maintain point the able put our to either

Thank you. I'll the and And ahead. queue in others let go back set

Ladies and instructions ask [Operator like a if gentlemen, would question, as a to you reminder, ].

Dionisio question is proceed. Aegis next please from Capital, Our Rommel with

Thanks afternoon. Good my taking for Yes. question.

shipping or up just at all be regards the first, supply comments, running. this been on difficulty over question. issues but delayed facility few appreciating can chain of be are it The labor in a with you and Obviously, Kevin you labor, follow-up terms your Has in something in components the you. that to our components, that's would obviously, also and liberates any the can to facing sort will you get Thank tooling And production months installation or of quarters? -- by up about just machinery thinking manufacturing or here finding next required anything?

with the So start will one. first I

supply manufacturing So chain our our getting equipment. the or of equipment

We paint in model. don't be and asset light monuments booths that other would or model equipment light plan. a have We have a the

the well supply in who the as for leveraging that. we're specialize So as people market chain

in to not there. So We're test convinced a and seeing equipment, our market. other available our lines elements transfer the the are slowdown

standard are other line our all plant delays of we any engineering have and engineering right seen well and be track, the we the our one on idea haven't center instrumenting around having so equipment manufacturing as goals. centered there. our with tests, of as the equipment, The need So it and is world-class

to all call a wouldn't our we're so The be because would in into greenfield manufacturing. any I certifications. in is best in of there right the I'll So site, it that in getting the say able started practices -- delay delays only those of we jump

we make standard under industry to that are want sure quality, pieces. certified and all we the environmental safety, So

So track. that, we're on other than

much. Thanks Great. so

side started I'll X I facilities preparation, as our of, in to in facility, We've I PDI touch our we've area have don't square Arizona. folks wanted I'll it. bringing got use labor that and inspection been people delivering, foot centers. as well Arizona We really call a say our to a of currently hiring them have about training this it, one a XX,XXX facility. -- in the early. of just do as lot around on We've is we -- the that

the same the in that We have Angeles or area. mirror of Los a center PDI

to vehicles inside is the when they in bring we both flow and process we're are Mesa people, these when PDI how putting our people, the firsthand online. So can train me of we them vehicles, the order about center, of and interview vehicles, in, nice see actually facility together. What's prepare when them

going in that's is Our the located PDI Mesa in be plant to actually manager facility center. the

not actually going So remember vehicles and world-class the that applying inspection training, and doing do to the all a when customer. world-class of but do a and of manufacturing to we're delivery, we are manufacturing we preparation, mentioned our them PDI standards it. manufacturing, only And I side manufacturing

want getting occupancy. apply able and to So I we good we're think training to first go with before start early actually we've we're the and got hey, here's response we get labor them to through requests, say, and a -- our also principles even

PDI our question. center I moving a well. it, on [Indiscernible] been said, people about hope working applying I answered just not it's to So that actually strategic this. we approach Like on forward it's your we I XX have have are

Kevin. much again, so Thanks Yes.

Welcome.

Chan of proceed. with again Please Our next comes from the Stifel. question Bruce line

back here. me in thanks for letting Hey, hop

you been color on them to you've relatively function know order here? I there. can give and about been I delivering vehicles directionally. reservations they those Have book to of But I if and conservatism. introduced the reluctant any you've maybe been see that offer Now, the of you don't details know new started Have you've models? all stable these accelerate now can ask

as address our I plan you have But and stepping first might to going now, one get is this it these. as of negotiating, we making been piece of Yes, well right is that even mentioned flow tell we've earlier, said as just on then logistics what. issues I'll that I correct. was side ramp and up the sure like we supply-chain important. I'll Bal And a the

So as we for do ramp a it. up are doing these, linear and basic we're on we for track

loaded long chain we see can we're problem. As as vehicles, running supply the our slow I in don't and keep a

month-over-month on every We continuous day. mechanisms improvements flow to do our our being are and delivery are track improved these in

We journey our they're going systems to direct very really have appreciative. that We is delivery customers that our important. -- and are

So should our commitments we're we're if eye Bal, want we that? see those add forward, just scaling you on trying ball as to increases. on to month-by-month anything that keep do a and this to our you meet

Sure.

than month saying month we're as to be increase The was month same that. journey so of terms focused deliveries The really we we than extremely at journey, of vehicles. the be we starts in we internal of as know you And XX Kevin learning higher are set stated in November the As will if basically December delivered important higher on month target X the time, will that. go. of to of we've as the number and the us, customer October, month-over-month,

time, the up ramping at we're So back of got a same orders but gradually the sale. we've conservative the on

reservation. The

fleet interest also -- of a the vehicles, as a the in perspective BXB. reservation, from well. well immense perspective, amount from as as consumer and Both an

seen continuing And curve? super translate are that been demand progress production or on curious, That's I'm in have increased just for on you pretty ramps, they making these helpful reservations you steady the as the Have Okay. kind color. deliveries of and you've seen into vehicles? those

Yes.

started in for purchase deliver into the and there right to So also that has and people a customers. LA many level city, example, since to coming demand in We've and studio got the we've away. interest to wanting coming they're are increased vehicle

from rates since substantially conversion increased order, to Our has started reservation also we deliveries.

So going in all trend right direction a forward. the positive it's

any had of orders, you our our guidance So production kind rates. outpacing, our

easy our the that is part improving production So just rates. problem of

you the them the last Okay. That's helpful. here. sale strategy some BXB fleet the have some I one us made strategy? talked key you efforts, of in Though moves mentioned sales terms know on updates about in Kevin, stand on fleet there terms you Can give And just then just the of you where earlier. of you all some hires.

strategy, small team In manager got are they're terms are talks a a do that we following we've on businesses in are a of and then have that other of of we up. the the magnitude, whether larger number fleet with tease that or fleet, individuals up, that fleet

So delivery, with to. companies as we talking parcel companies delivery small are talks we're utility delivery, companies. in governments, that we're in with talks other as There's food well

all our can vehicle look for going how How need So -- what are the whether version. the right looking they is are or want just amount variety over costs? we dollars perspective there get and electric we increased they shorter because serve been for the now earlier, doing these of have we're cents, dated version companies are distances. to that's their is a be previously? So of the built minimize at able this we and actually there see fleet doing it, interested, But is vehicle Kevin to what a the and from needs regular them, a better had significant huge to as an way purpose cargo it's fleet can type of a to margin best that

little But a fleet those first their just to diner are definitely that'll quickly sure response Xth. the lot delivered stones. in we'll if phenomenally up, quickly, that. that We've Faction. and these is ramp X Ruby's fleet can X October good on up interesting decide The into really color yogurt, I'm then, vehicles put put those We customers of choice. let pop could I know. to had be Cyber from they more Skechers Maybe a come everybody owners, part stepping Since when and vehicles the and

So trend a a they could that's background vehicles follow start where They conversations could of The function start when investigating they kind current they And group those are the things. follow with our vehicle. when occur. of step remember conversations. same the

utility So do I more SOLO. it more part continues think they what capacities I side the more very they important It's of with that of that to and in that series more and choices these choose unfold have it. to the right? Since addressed the they we is of different of customers can have X from, a want and think have back, actually if So ideas it.

piece there is I help on the net can with you we -- Bruce? think some other that

for time congratulations on the No. and both Thank progress. That's you the great. all

Thank you.

Thank you.

Our from follow-up Scott Please with will line last proceed. a of the Roth be Andrew question Partners. Capital

Hey. Thanks again.

tempo can the First for you plans expansion in on all throughout XXXX. that just with we color some me kind the in May here, provide expect CapEx these term year? near one of the

is think good you I a for to is okay? that one fill, there

Hey, Andrew.

that of reducing larger other facility the the that at we'll typically and overheads assembly an of asset-light has into capital the so of would CapEx any In assembly, out or some see there. that from to We're already, looking expenditures actually EV be we're means companies as of our that an you terms are not we're putting heavy be facility. which means mentioned going assets Kevin an model,

is to that So be significantly that we're lower traditional. the at than going looking say CapEx I the would

putting functional line, in trying to again, more be a looking flex that of derivatives SOLO of we're up looking terms address other that in been with that your that what to cash do and at. line We outside? in terms other of we're it's will answer any the a the going But line models at. the be vehicle is very we've Does

very forward-looking. of then me more Can Trofino little see just timeline? and - And X just where kind thoughts the the for last Roadster, and fitting E the of here, you guys you Thank bit more them much. provide on in within you long-term a kind

our designed others Vehicles Roadster, the the that we've Vehicles. was the the power to And in individualized take the systems, SOLO, those put under The put Group. that power, Group the and into may electrical our Specialty Sure. Trofino, fit or and train those category Specialty the be customized Vehicles that vehicles into the and backbone, the ideas Specialty benefits

each if people car of X the them vehicle, there's the or of that one a around feels in So X purpose-built them. enjoyment

probably leave frame the around there's is I asking Tofino but on like that not also the the So the you'll also. would in side heels. 'XX future we'll see in the works. for we reader, say I'll that eRoadster time up I'd the the you're that this, It's our is to say the timeline of And another platform quarter and that's see vehicle 'XX it on to have far 'XX platform, likely very SOLO that in category that in definitely a works -- the timeframe. which

and progress. been for there, the saying else has what just and color everyone to thanks the Awesome, echo on congrats

you. Thank

Thanks everyone.

closing to and have to Thank would for the the like back you. Ladies and question-and-answer turn the any Pavlov end call of Kevin remarks. session, reached I gentlemen, we

your joining Operator. for everyone. our MZ progress Thanks assist growth. we Thank more out continuing to you. ongoing unable happy of thank each of be to Group, you, look in questions our firm, I'd than would call. conference like you forward you IR reach to answer any If please on we to to are We update our to

you teleconference. today's does this Ladies for and conclude participation. you gentlemen, Thank

disconnect day. your and time at You have may wonderful lines a this