Nikola (NKLA) 3 Nov 222022 Q3 Earnings call transcript

Good morning, and welcome to the Nikola Corporation's Third Quarter 2022 Earnings Call. [Operator Instructions] As a reminder, this conference is being recorded. It is now my pleasure to introduce Nikola’s Director of Investor relations, Henry Kwon. Thank you. Henry, you may begin.

good and operator, you, morning everyone. Thank Nikola to Corporation's third call. earnings XXXX quarter Welcome are Executive Officer. Russell, President me Mark With today Chief and Brady, of Kim Officer; Chief Financial Nikola Lohscheller, Michael was The detailing press after our results release X distributed financial a.m. shortly this Time Pacific morning. on found slides the presentation Investor Relations today's call. be company's can section along website release the The with accompanying of discussions references Today's include to non-GAAP measures. to These U.S. comparable measures the are most reconciled the can be today. found QX of earnings and end issued press measures GAAP the we release at our about future and Today's discussions statements also forward-looking expectations include plans. Actual are those earnings could our on results today's stated and cause actual and differ materially of may from at presentation. of factors results also end release two that to the press differ earnings page explained

made. Forward-looking date speak statements as are of only the they on which

not statements. to on reliance cautioned undue forward-looking put are You

now and [Audio/Video Kim from video by presentation We a Brady. brief Lohscheller followed Mark Michael will prepared begin Russell, Presentation] remarks

the grateful commercial are people stepping for sustainable that transportation. pioneering we an we're I've executive awesome this class of to the their all, truly the incredible we've of either we've I'm team Good emission beginning, of you me world it accomplished call. challenges What with so team. in an the involved investor morning, an as thankful that who is been over Nikola reflecting that I've years. These the the been my the extraordinary incredible careers people joining privilege experienced the Nikola an so and zero amazing or on. Most back. thanks part be and Having been announced as journey and of part from give this things of being retirement for know on year. earlier dedicated truly are to confidence individuals,

and gone team, that one to I'm baton that be Nicola's said, Lohscheller the the largest who and do my I of next In effective well shareholders, I fact, to and every are transition very become I'll to and reins way call the prepared has the diverse on far. early, still I'll lead will CEO's going best but Michael to announced That extraordinary with now this continue I hand so we support in been the won't Michael balance handing Lohscheller, course over remain things Michael? of it have CEO we this since today. our Nikola‘s of deep and is over strategy Nikola to this confidence now level. can, his career over board.

Thanks Russell and call. everyone. joining of to member mission. I at Thank the leadership, succeed company's many we to achieved Mark's a continued this to forward look significant Nikola guidance drive milestones honored you, as morning his and us on board. forward Mark, Under am has for Mark good our as Nikola CEO and

role my thoughts both assume at and CEO and long-term I immediate to as objectives. I would on goals As Nikola, like new share some strategic

imported of freight during to our we purchases the many long seen air increasing term freight additional greater First, of from the will components. tremendous our will discuss I address in critical has tracking In immediate set objectives aspirations. how my I the are views in shifted current localized Kim made meeting them. improvements Then objectives and us Supply We chain and up daily in production. components will We our our quarter. management immediate challenges discuss have production commercial progress past lots ocean detail on we space. manufacturing, on how will for quarter. in also

Kim we started in our truck our also to progress fuel detail. base. The on good supplier diversify which R&D, making later cell will In to results We our in beginning development. show are are discuss P&L,

number a our management in started fuel the customer water alphas, betas we of improvements improved based input. have and produce From our alphas quarter, of cell the testing builds beta winter we trucks. the of to over fuel This contain exhaust cell on The systems.

We the also improved and of range the torque betas. efficiency

a and improve path proactive to is good production sure and improve us will we dealers It's in customers need right macro supply are So we we that achieve I have some our commercial become take the commercial at our become make can steps management dynamics We clear there allow favorable. To will Where hired better lead chain QX. We instead market are R&D that eight systems. management. distribution, believe on to program of into that to side and tailwinds. that now a understand efforts turn macro we the this must in headwinds less commercial on business. to the more can we I in when additional dedicated their increasing sales fully needs. believe on them staff place by our benefit our dependent in point

coverage us future. short believe sales aspirations. strengthen quarters the will the long-term growth to where and the This in market, We truck anticipate continue fuel for medium-term will lead execution will will our we coming this to our in be dedicated sales and greater intensify opportunities us

Our on infrastructure growing supply will global hydrogen our be focus presence and the business. strategic long-term in

decisions to important energy, made Our have trucks this accelerate fuel will some us transition and cell enable to on front. clean the we

on our Mendes in at appointment role of of Carey my that BP's since share played business. the with we key beginning of XX Renewable of to you also XXth. us a has Energy executing years making of This knowledge BP, aspects appointed I in his I'm becoming he in than help acceleration over industry. announced He of permitting energy the towards spent joins focused more business the we experience goals. directors. on on appointment, And long-term hub decarbonized now business. excited Since president, our industry. experience operational on will energy board our that Carey has and to to been with the President forward. very growing another in progress Carey to the as signals the Vesey Andrew October, begun Energy closed energy confident Nikola's a years XX us and strategy of Andrew execute actions land in step on of XX insight requirements. are we first future where September the as and Nikola. move As zoning our production has we Nikola's one of all We purchase Arizona his are oversee energy years He

ordering on We and made progress liquefaction also have good equipment. electrolyzers

tons will with tons Our production XXX hubs our are support once help initial infrastructure tons we Arizona track day launch after in of will nationwide. And demand. The fuel-cell planned hydrogen By XXXX. also to tracks customers this XX hydrogen fueling be stations our half per day the at hydrogen will supply second targeting infrastructure completed. achieve support expand and XXX XX of XX capacity to least per we XXXX, third-party

on We of our stations building and last are on locations. hydrogen progress three making announcement refueling quarter

joint We refueling provide for also supply collaboration with trucks infrastructure our announced Europe. and venture. E.ON in fuel-cell our venture to will joint a hydrogen The form

we working mobility energy As E.ON currently may We and sheet you forward a look customers. know, Europe's finalize and an of of the with bringing one to we largest to signed term the terms. and to are integrated our solution networks E.ON to solidify collaboration infrastructure, energy is operators

strategy began partners. we our with European in U.S. the partnership strategic U.S. build Our will that on asset-light approach the

with development generated interest in replicate dealers. in stand. without date. locked in miles Coolidge we the locked BEVs, plays and European our role for IVECO, have will refueling in will a hydrogen potential Network XXXX is to U.S. done hydrogen we XX to Tre with with than Onto the in to which end at station partner during full beta cell deployment Union's recently our XX saw presented share Hannover, provide kilometers economy. the QX. interest the we the in will rate to over hydrogen benefits This and September. greater additive station and refueling Nikola there target fuel XX you and in video, trucks In our testing trucks transition incredible cell together IAA miles August, future kilometers. are some a and to Germany the Walmart testing, a an delivered the QX, TRE hydrogen stimulate our date produced began European As our network strong TTSI Europe. from we role number up future Parliament our of and world. to produce with in for in trucks, customers And more testing in miles. had that over the this critical In BEV Transport important on cost U.S. European largest The and I’ll trucks our TRE few global trucks Nikola important regulatory by speeding accelerate vehicles, well The locked IVECO the of economy. adoption XXX and began demand We every and target of it August, a opportunities June QX that the year expect now show created the opportunities once what the we conviction details BEV to pilot for XXXX has most proposal, capitalize in our trucks strategy transportation in the beta which in On Transport passed Act pilot we have We IAA Nikola European and to six produce FCV of original the significant for has The our SAIA Nikola agreed along the XXX Tourism the the core Trans-European again our by them. fuel that total to one and now. believe Europe, validated Reduction over as level front on On ambitious Inflation a on. were one assuming help vehicle and positioned in has recently of of be on is date. hydrogen business XXXX XXXX. and Committee plans began per new comprehensive provides these beta the pilot In logistics transition, to QX in play the trucks

We have testing locked date. over also September, trucks BEV with and also began miles XXXX in the TRE pilot Walmart to the

BEV Tre Zeem order XXX we provider fleet-as-a-service delivered We are XXXX. share of emission leading a excited also purchase in trucks a very zero will Solutions, The provider from yesterday. that to be of EV received

manufacturing facility year. both still complete will baths will of Coolidge X be when and QX Arizona end Phase our capacity nameplate be on is completed X by the of line. units a approximately The fuel our assembling to the same The cells Phase of of XX,XXX plant are We Coolidge, track capable facility XXXX. on

fuel Bosch our also power We of cell a establish the plan line for modules. to assembly

Coolidge the Regarding Phase uncertainties market, our have XXXX the previous and assumption taken we scaling QX year another in macro after X our of assessing expansion XXXX. fiscal in on at front, look

call, numbers. As And that, during XXXX. that to it deferring X discussed can our our will second on Kim quarter details will the earnings we we Kim. Coolidge provide now are we expansion to hand over plan Phase with I confirm

Thanks, Michael morning, good and everyone.

Let me with third begin overview quarter. the for financial the

our Our XXX% significantly Tre deliveries XX% were loss better gross in line came material loss of one came with lower The compared of guidance deliveries expenses resulting reported on from and expected. Cost by QX. with BEVs of in gross revenues the during In Tre of of XX MCT from to negative on a absorption driven of is BEVs XXX% at overhead a negative X negative and was XXX% cost of our in gross $XX.X improvement in Gross gross margin XXX%. loss $XX.X less revenues to and quarter. QX million revenues than we in margin revenues overhead QX, QX $XX.X in XX million QX. than and our improved MCT higher million in expectations, negative QX

in inventory of freight QX. overhead sales Our We percentage regarding total QX. item to of consists of cost which should came as from our QX as one also air mainly material XX% our mention freight on in and duty, favorable inbound freight expenses, XX% down in a dependence came in

we our a been $XX.X capitalized came in purchase pack price acquisition the was revenues in our on of our as QX As Power this shared close. quarter expenses balance each price to involved other pack churn of of part QX Had as battery increase and amount cost in have for This but Romeo P&L, increase about the would through recognized in margin price part recognized a providing our the for transaction consideration. up gross a $XX sheet delivered million QX. negative been of assets million on not prepaid future XXX%. call, temporary amount This was earnings to

the grant executives At impact on milestones a price level, vehicle or with the board date. stock million was our of cancellation XX of more expense a call. We EBITDA product in came QX to milestone based by of QX. to compensation with $XXX.X QX XX. million the for for the XX.X market stock $X.X June from Under replacement affected million SG&A when $XX awards losses award, that JV $XXX.X and XX will price based without $XX the change and awards an of discuss is by cost XX, executives stock call management the period concurrent a the agreements all this of of remaining activities of for scope the Nikola’s existing and net had our Equity $XX unamortized market loss to due development we executive based significant the IVECO as a to the RSO the to X, expended executives. performance stock scheme, EBITDA market amendment, each $XX on structure GAAP, the our during of million. in at JV’s We June the award cancellation $XX later share QX tranches Europe cost Romeo's Under we as awards cancellation extended earnings in in affiliates engineering to our was of months applicable and million our guidance. in if the X, C-suite stock adjusted treated representing The canceled consideration. shares driver U.S. $X.X came canceled, no the the August approved structure. is offer employment directors the the recognize driven QX QX with in in On refer and repurchase was to loss most net for came new negative negative

million, million the a negative Our GAAP sheet. on and restricted $XXX.X $X.XX the at and cash share from a loss on $XXX.X $X.XX the and QX. We net loss third for per on was QX cash ended non-GAAP balance quarter negative $XXX.X the of in to basis million came basis with end

with facilities ELOC remain Tumim $XXX.X existing our liquidity, at million. available Regarding

Nikola and believe to our the cash, an during where the stock. sell QX, representing into quarter. entered following common improvement agreement liquidity XXX of more well we than received billion QX. to total access the our have $XXX.X distribution for We million or under and million and to end end gross ATM, also stood We million at $XXX.X approximately is the at from We an of facility sufficient at equity $X.XX months. this cover up consider market as proceeds of may excess liquidity spending positions as XX E-Lock of offer of ATM the If the

as to BEVs your turn to two completed attention Tre want deliveries. we our now we Next, quarters have of working capital

in $XX.X million the million $XX.X to at QX QX. came of end Our accounts from receivable

in Our driven at purchases million inventory increase components QX $XX.X from to BEV QX support by the raw production in XXXX and Tre of million end QX, to and materials XXXX. $XX.X of

our Our working payment with deliveries typical reduce in the dealers, capital days to XX future to Together to are terms range our we our number minimize vendor of terms XX vendors from working on the to payment days. impact.

on minimize ongoing to replenish to right end at dilution a while trying on keeping each our to shareholders. of of opportunities months we seek the the to achieve of liquidity basis quarter, to continue As we an aim will XX target liquidity hand

compromising reduce for spending programs without considering how critical our we also are XXXX. can potentially We

completed update, offer is all sub-assembly subsequent on Romeo the Romeo merger Romeo October our closed outstanding common Regarding transaction The shares exchange of purchase to we now and for Coolidge. plant acquisition. a and XXth,

estimated effect will the actual financials. which price previously and aggressively X this the range any costs September purchase be post-acquisition $XX of Nikola's on was are counting known an bargain would on reducing focused purchase decrease BOM not impairment acquisition, million of reflected financial These charge of price QX and a in on assets cash QX contracts The and amount charges forma on estimated gain We XX, million. as enclosure the of cost. to XXXX, at addressing in manufacturing is financial gain non currently potential this impairment and such based pro Romeo's purchase as the including bargain productivity on integration, We amount currently time anticipate only based optimization on its point charge non-personnel $XX customer statements. line and and price at estimate recording improvements, fully

QX guidance. Moving full to year and fiscal year on XXXX

we BEV an with truck we delivered many XXX disruptor production early to we interest share would of As on and revising trucks, the year guidance. XXXX end third lessons and and be our we've in reasons trucks our and our this zero some end XXXX. to year. deliver the dealers dealers learned the customers, by second quarters, to will we fiscal of emission while XXX trucks like We from to delivery our pleased unable In progress are observations are why

our for a up power on Charging and investments factor conditions, reluctant This and limiting in electrification, over make to in the customers earnings to anticipate First, continue hurdle for the customers can the involves a necessary and headwinds to municipality. often in infrastructure. less usually in to on charging and transition customer customer these Mobile year capital dynamic which be BEVs, especially is investments requires the and get as and support more to end uncertainties We lengthy charging their significant to willingness rate zero uptake about infrastructure, likely from further timing, This started to process Tre a scale macroeconomic charging regulatory XXXX. call, local level remainder by the emission provider approval trucks. this impacted fleet E-Skids help be to resulting Trailers infrastructure, about continue significant appears remains discussed while QX of will

once benefits pack Second, potential from QX merger approximately battery related the August start summarized the end QX we of margin our deteriorate Romeo reduction the the X, into on XX% to cost announced we will be long-term gross When the non-sale we by acquisition consolidating XXXX. financials. in cost from Power

temporarily the battery battery increase for our approximately Power for truck. next Romeo cost subsidizing per However, by $XXX,XXX packs five as pack was Nikola's enclosures will BOM quarters the

per We converting we expect to which are the to benefits pack and This significantly. requires of pack are of significant a testing the we our battery by casted least savings and from is we drop cost means validation will XXXX. $XXX,XXX see not cost have expect machine produced. battery effectively complete, we This savings pack end at enclosures cost of until when BOM to enclosures, first once line truck. But initiatives sight article the the lower clear cost battery

meaningfully this early an This truck new point, Third, technology selling average a the price unit of and the Tre cost than per stage higher product expected for is is unit. at BEV per adoption.

As decrease. anticipate continue we we to costs scale our business, to production

structure inventory Coolidge of manufacturing in to indirect guidance. level conditions, QX production right we decided to We produce supplemental labor and achieve revenue XXX that rate the the of BEV to However, situation and cost we of operating target. hold macroeconomic uncertainty in where as in deck enough in costs we've of to XXXX backdrop, sell, With our ongoing currently surrounding provide per to approximately to we the timing direct scale and and will of greater QX truck Romeo's level plan operation. overhead. consolidated and meet visibility XXXX scaling BEV Tre the we production we provide that the our Ultimately, volume need trucks unit greater Tre to in short-term. to Throughout the the in decrease delivery, Due to in plan further QX not to to at financials or XXXX, leverage the include trucks Romeo's loss high minimize XXX a earnings structure. more cost current QX include information gross QX light evaluating our a are

first Furthermore, in Accordingly, we our have III reduce and headcount QX, whatever expectations. And should internal margin easy, XXXX, stock units in and to The CapEx negative sufficient be year, RSUs not However, We this with decision quarter in or priorities mentioned reduce range being headcount will the range for we our XXXX, management XXXX $XX.X capacity and employees. range it the can in interest be XXX including we this approximately $XX the reducing the the of our approximately to us strategic of discipline to $XX I, current and burn Coolidge two anticipate acceleration transition. macro million, increased PSUs XXX%. Upon million, QX rates with R&D in will deferred, environment in of be should million our believe $XX and disclose. will targets this to by by individuals, that million, hard be including be XXXX. commodity in for better the will produce which to per express are Though, approximately $XX roughly to align Regarding we improve due was as that Officers. gross per XXXX. month production Phase XXX% working them to to phase cash $XX.X confirm achieve million to XXXX, focus expenses we completion this and $XXX plate Michael Expenses cell million the BOM electric former million prices, likely greater compensation BEV along SG&A build and and that through adjust merger to approximately this be gratitude $XX allows to as full X% about as our revenue million vehicle. negative able support Romeo and Romeo. will productivity recognize to the million. we inflation, $XX.X impacted of difficult building part million yet we Romeo. QX including be with of for decision $X for rising made Executive $XX XXXX, agreement out between name anticipated million fuel should of including capacity the of is based team, for XX,XXX

planned environment, to, for OEMs HX in alluded are previously carefully that we and infrastructure EV As above we providers. early highly fewer and and until After especially achieved are challenging in BEV QX, are trucks are a delivering cost and the determined XXXX. operating apparent and XXXX, cash becomes BOM preserving more weighing unusual better reducing visibility we have trucks the considering proactively factors, volume savings Tre off the in BEV XXXX. Accordingly, we for and expectations

when We our BEV details with XXXX quarter results. we projected announce more deliveries you will on truck fourth our provide

During this negative while can are the full we are and XX% speed will truck ensure level. the we XXXX CapEx prudent half from looking improving Furthermore, production is To not spending to to achieve gross This significantly and Tre efficiency be reduce FCEV margins. remarks. we of the we stewards schedule at XXXX our XXXX. and of OpEx by concludes time, also second running startup capital, to prepared XX% our compromised, clear, be in the in

to answer time address the opportunity your Henry? the before this like to questions. our from to use analyst line take shareholders. will remainder to But We we questions, we some questions retail of would the open

Kim. you, Thank

start address Nikola we and will are issues. in Nikola's production what the be when that The question When feel two questions was delivering by identical investors first two products combined from will separate vehicles? asked

not BEV trucks used began be of business customers but and in And These are now. U.S. to being by to gone California. trucks their fleets. beta two and cell of deliveries our end of our to of We half day-to-day commercial the Southern in of trucks are fuel dealers electric have quarters the these have commercial XXXX producing we clear, customer Tre currently QX. mainly deliveries On in first on by the made second currently are trucks, deliveries in version customers make schedule Europe. deliveries, our are customers To our been dealers our these demo to and in the their deliveries the for half XXXX in made demo in

any the is chance a auto striking existing are question next an with to Badger? deal salvaging is, there new start of production The GM of manufacturer the deal

we there is since dropping we our developing here, it are no business because energy our formally commercial be announced never around Understandably, infrastructure much confusion the To that Badger the truck Badger it. will strategic longer make clear is and we focus.

As an growth company, light the stage Badger, divert a with early aligns cannot to more capital that we vehicles. passenger truck

The is in confidence the red company the of for get to the out what next question instill is, plan back and investors?

macroeconomic As costs. discussed current uncertainty, top-line growth and our headwinds create some which both affects

hard by sales increase to We are our working capabilities. to sales end customers our strengthening

leverage our reduce cost scale. We as goods steps to are operating improving at also cost taking and BOM burden the of cost by we sold level

high higher share when of reluctant Accordingly, but you will the end coming to will the commodity profitability we provide quarters. cannot this in our increase with reach and expect their challenging in we an stabilized we since be to customers inflation costs. environment on However, things thoughts as are guidance

transparency complete on events recent company. back investors next the after is need your plan What side? investors is, bring to The involving question your

and to communications and from We always transparent positive our to to this with commitment. being milestones We are committed all are open progress and about ask example of communicate investors. some of clearly investors, aim receiving our platform an their questions feedback

significant seen versus six spin quarters stock a institutional in our We investment ago. on have owners increase

basis. but trend. a steps well that continue will timely you our a outside control, lie take informed of Market that to we So progress are positive as conditions ensure to on we see about our

you. Thank

a conducting you. now Instructions] We [Operator session. question-and-answer will be Thank

with ISI. Our first Evercore Douglas question is from Dutton

more look any you or half is What deliveries? one rate insight, if the should curious acquired? run for out have 'XX we rate exit in that Just now Romeo's

Doug, thanks for the question.

With we're we're know, what Romeo, have And we much to actually to making you very prior delivered. target integration. meet on have acquisition post-acquisition very they been able As good progress. a focused and Romeo committed

now, and increase three five approximately capacity a right to have the trucks. have ability to that so manufacture trucks we And to

targets improve what that of able to terms improvements, you efficiency has including can achieved we that in And and we in share pleased feel additional QX review, and to more anticipate greater with we earnings Romeo so we we'll be on greater So manufacturing expect date. call.

then deliveries now of that. think a truck feasible? mentioned and cell previously not -- rate production the a And sounds XK for like pack XK You be the capacity is or 'XX side. it it's more issue do that you might cost you still had still issue and run is the and total truck pack It the on

to XXXX side needs cost total us to reach delivery BEV on for number 'XX? happen Tre in for the what the So that

And, about especially amount enclosures, increase challenges, temporary for a you with cost talked by we price battery goods know per as that pack unit increase for sold our of cost Dough, cost $XXX,XXX. fair our

And we ASP cost gap you so between and average we money, significant per are unit losing a have as know. so

trucks, And capital we so a think do. and as concerned word would about, to environment challenging are wise loss. what we think about especially that's of XXXX, think that BEV reducing more with our very respect prudent. We We that's

that at thoughtful have we next and internally, least the for And it's that we're this very we debated think so about important about five this. quarters,

to provide prepared we're any this point. so not guidance And at

prudent. prepared to QX want It's know well we still to make our We we are think we be worse, greater are unclear. will call, earnings and get that We -- provide in XXXX. market we we could have that sure that so bit trying visibility but as through

next Our JPMorgan. from is Peterson question Instructions] Bill with [Operator

portfolio. having And cells importance for navigating in welcome of onboard you to good retirement. good challenging video your these and and of times. you, My the Michael, Mark, part In both is luck the question Michael, the BEVs fuel discussed as strategy. on luck transition

terms position, mean, I And I have then margins product. going that, the company? around Competition said have And already And the every question a guess considered I pulling this like Ultimately, lead going money guess would mean, even important so talked players. from infrastructure that as then not challenging taking could the of BEVs. the the beyond portfolio? then should the I there's and the grid the not there's the in to However, things of metaphor, with of I'm I Kim as press challenge into BEVs guess a highlighting to well more sure consider times. And more time in guess really kind so. why in improve, I the be important been established be all BEVs outlined, one and BEV it ‘XX ship given impact legs on this kind these about even stage cash I from even designed company as cells. just, is release, you're at already of of other are program? you're twofold. be only if what Nikola were And right? product, part but fuel more to you the in all plug like two about I the you of learnings don't different mean, the competition, mean, losing you why to be if hydrogen. the is the and of considerations likely newcomers

think own the I stock believe people right about. of long-term, lot that thing kind of that's to think the the a for

program this forward? BEV looking at the have stage why, So

And question. the well, for mean, I very Thanks straightforward.

stand really First emission of time in ownership. At our of fuel range. like in some with is BEV, longer zero in the good terms they at feedback, there cell. day like have is I prefer to the because two the the the said customer cost of I particular right? as the up, end we see once all, customers decide, They customer legs range they feel customers same the like have they total infrastructure are What the And set the mobility will video that we we of mean, on, strategy.

BEV, mobility of think obvious. to I need it's the you for from I mean, integrated have an really In solution terms learnings customers.

it's want lot So of you to the need why on because business hydrogen. an very entry fuel the and I That's meaning for cell, piece the much and including our obviously the feel truck I put the a provide into BEV to business. infrastructure the emphasis for our of also hydrogen

customers for us also talked of for So and was truck. came I lot to in us to when IRA Europe example, energy a and the at asked

of two terms data and if in BEV MOUs, at LOIs, in decide, think Customers very feel look fuel I mean, you is offers. good So terms cell fuel I in our of summary, also these cell, will about we higher.

But very opportunity I the we decide. customer for feel fuel let that the is the alternatives, these think I end a good lot cell. because have there both of at

understandable. this the Thanks Certainly, progress the that. to a really you of shifting in it's there. on following -- looks like and I highlighted mean, for you the press release color lot hydrogen, again, it of kind

expenditures the And achieve when per expect you per for that? terms what we ‘XX capital CapEx cost the initial should sort and by community, to the is some output? And guess, give of day, how investor tons it you think XXX of about required the -- color as guess ramp to tranche For what of would a kind can kind importantly, we how maybe to assume on should or we And around I relates more I of of maybe Nikola, the timeframe? what structure contribution in is day? the Nikola's should given XX tons

this. think about Let's

well hydrogen for ship, We really clear strategy financial market us. what have dispensing focused asset-light. piece to for when that's locations. our means important our to efficient strategic been means, we partners, and are is hub we molecules, hydrogen that may comes small both production going war control That have hydrogen we on, infrastructure seek are That that and as sure we of to and focus the is making partners as capital it very

And be will of -- have Trailers late California cell Arizona well tons actually our understand with Mobile towards providers in Hub, per XXXX. will sometime customers, to late likely hydrogen as for end the will our Phase XXXX. customers worked have possibly delivered early have available XXXX, XXXX, early to in our being back in We the first XX be coming potential day truck as our of as we market. So we we fuel this X, to needs meet

McNally from question Evercore. Our Instructions] with next Chris is [Operator

a to So the opposed just your of more recent as capacity some do to internal Can learning now us -- pack from wanted XXXX, you that with follow-up you're and the was coming about Proterra of for on subsidies or the deal how much on post-acquisition. original comments just Romeo the Romeo pack? learning remind around

are BEV in we cell thinking about In packs as truck, terms that Romeo. battery discussed is as coming providing for of we this for on BEV all modules especially trucks U.S. well we trucks our the and have anticipate that Proterra What focus modules of will is Europe. fuel way they packs with and will be from

we And to focused so delineation manufacturing a and much Romeo. modules improving ultimately output that improve making delivery of sure very significantly we and have clear so we from and operations, very and that we're on able are execution yield increasing packs improve

now increase sounds an sort XXX,XXX is relationship? the it scope per of of -- use deliveries out feasible Kim, pack. numbers the then something we of And of cost quick well on math increase that's just for to not a essentially on would there short-term it was, North sort the just Romeo to American Proterra industry bounds of a Because ability in basis, kilowatt like, -- it on $X Proterra? for as basis Is the

validation for time testing. takes and it know, you As

their to design And it its comes and when packs modules. of so Proterra,

of have you we it's in it contracts contracts existing past on essentially so the last contracts, not this of Romeo, did efficiency. really concerned a of asked, know, those able are the reduce And been much we're to timing very miles we battery we’re And to have manufacturing lot that to nickel. suspected, supplying that we the simply a we we scale knew company, really, Romeo terms able were be as that about. And when that and small address leaders, most so was focused cost their

to more position, we about mean can back the in final could internal, reduce be I to almost Romeo talk I that’s then your to I into what some it point, 'XX the guess market to to 'XX the the of margin call, mean gross you or get kilowatt $XXX it's per the steps figures, doing because to point standard, process? need something a you some specifically would number to that now cost at And be positive -- that's

and you When question. is call great enclosures. biggest a what about machined. we miles packs, being think pack component That's that's cost the Currently, here

We we are we that our to cost. are about we be of approximately able XX% And drop. converting other that believe can we'll drop know that components there XX testing, to

be plan component very component. of contributor a enclosures. have in detailed will by the we terms costs, pack But So biggest rapid

drop terms packing next that, that the short-term of be increase right enclosure box, alluded quarters junction We five as about for believe around the can in XX% as I've So addressing of will we enclosure XXX,XXX. just the likely costs well now in

the of 'XX? that target for of timeframe a end XX% sort by And the that the year is

to End XXXX be we're obviously, testing. once to it of we're hard, again, But requires going aggressive. push going validation

the really it's and So that takes validation along. testing

right transparency. our to provide going able by that optimize keep will possible. costs that but and QX And as try to XXXX anticipation you we're posted Now those is the to will be as achieve now, much we'll

to is think so manufacturing of in we several chain you cost the just I engineering have do such right, every the strategically function, together, see was do because reduction. big battery therefore sight highlighting we prominent is benefit we but a component about together an And mean together, one sight I as one cost Kim a integrate having line that, mean we house big most good important this in and And we the Romeo do supply of was line for a benefit acquisition such reductions such of we

Of we as as to course trying we're here. fast do can

Osborne comes with & Our Jeff Company. next from Cowen question

as battery as I same Most been just from you dig packs your already. factory a be a described what's those those making third-party? buying questions of you Will battery the to asked bit earlier into wanted strategy well there? have my or that European

business Jeff, higher everything us. the thank I on on pressure for the indicates and like I in going is obviously Yeah, probably mean, here. and, an than question, for even is important COX mean, Europe Europe

factory together So business. for is have in And important is them venture have strong where joint setup us with very we because a we IVECO a with a together. the really England

here from transfer Europe. also now future, the the we and have We BEV which to the from all learnings

We IVECO have network dealer the a dealers. with

this in in I But to real that we as Europe competitive and possible think use right, also Proterra the as good. and try localize a many And going elements so about forward. going setup very have feel Europe. I is battery So good forward, opportunities we also will Europe

for the Germany themselves to got CapEx And from potentially something like opposed as just to ‘XX. there wanted fuel ability be from what making I ramifications were cost commentary do better OpEx them, would and you like Bosch, that? and to cell is import to for the facility defer the those an appreciate, I if also

don't we module, we our so we Bosch. know, cell components Jeff, power them, from Hey, assemble as you actually buy fuel make

respect the is that fuel at to assembly cell make Coolidge really we line with module. the So investment power

from next is Our question with JPMorgan. Bill Peterson

they I to Yeah, still you've to you customers? at guess expand thanks guess, direct tie delivered customers opposed so for trying end seems come the it for focused I'm wondering the to the waiting taking to more Can moment just -- to back pivoting have dealers. are earlier products back that like please? follow-up. wanted to as a all commentary end the I you of can percentage dealer network? -- at you're towards about sale actually I What to you strategy, guess on end the all gone I dealers it of delivery the customers? far, And versus kind has on,

question. Yeah, thanks the for Bill,

we of I remarks truck I in business it's few uptime. network in the because a the it's service terms very big that dealer have benefit first right, of a on think dealer all, the about a element, mean, all in So network. good particular

issue with an have you immediately. want service If have truck, you to the

I direct Zeem. to element customers, as that big fleet in that proof the is possible. very right of is course very we up think dealer context particular this to network, us are right? customers, important. make pushing think going for on were XXXX. And important announced is to speed and them up dealer pleased XXX order also like this we with to path here sure right? I important But able think want But mean, point yesterday deliver Now, we as set a now, very a I a hard was trucks I that it's fast the BEV and Nikola in So that on we network I'm

like will push and best that on the want sales, in I direct this, possible continue manage to harder direct but the then way. customer contact to We

And then maybe –

Yeah, sure.

of terms and dealer In inventory deliveries customer. to also

a and customers. third most good in trucks delivered end in inventory terms end to made up and have the production have end and trucks customers, to supply side, And process, Overall, with also inventory XX to dealers now right? now end with indicated already gone obviously we now is the chain, very customers to that's think well on our So actually XX I we quarter. ramp also we dealers. progress So customers we next in step all trucks are fine dealers. and of of as – delivered production, have is we that have dealer around But XX

So insights. Bill, some to just add additional

is this you As progression. know,

we're to trucks. First, build going

customers. for of to especially they’re customers, dealer dealers, lack And is and some going that talked sure ultimately, going then about certain make we we’re customers, -- to deliver infrastructure. delivers end to inventory. they that But our they to end the that have challenges charging customers Second,

them. working takes are time. we with So Clearly that

dealers And solutions. so our that's that we customers to one of directly providing and and the make with are sure challenges coordinating biggest working that we're

also is lengthy. somewhat complex is there's to addition fairly which that, In process, also reimbursement and it

so when there's is the that's should why we about really And are cost recognize significant And think aspect, our And sell? that's That's reason timing when we and then with you we guidance, have about question. thinking not really really just not here which we obviously, we how certain. because important. provided QX a the many BEV timing want big to

as sales have staff force strategic dealers and our we provide as So as talked we we're especially well to call can working so customers, corporate for addressing that. accounts. amplification about, with both we what Michael clearly, interacting But sides additional added that our

are sales dealers on time side, of taken terms that, up, so to has in adding this getting staff they now their addition all In are process.

No, I think that's well understood.

to kind to for us you just pretty we right? filled, lack guess, lack need channels of but I is said rate I what should backlog the infrastructure, at just orders assume ultimately, the you prudent given and run -- shipments what probably what the reason forth? a cost, this stage, it know I of think, of is for cost so low dealers, of or they to all fulfill assume all the mean, related low don't of I readiness, to have readiness

I would it pretty mature. still say, is

dealers Right XX% we're wholesale wholesale you units typically around know, out still that’s the we XX%. is few there, now, even at in have of typically building inventory so or As revenue automotive our at and out dealership. industry

low units entered XX XX so And pretty not QX. units is inventory,

And you we it's that in and talked now, move to so very just units. And -- as about, recognize low QX those want we units we’ll right just in 'XXXX. that's

There questions to time. at would over further turn this I like for Michael are no any back to floor Lohscheller the closing comments.

begin you, I'm phase next for Nikola's Thank everyone today. joining the journey. us to of excited

are to our fuel we intensify R&D here to over trucks on remain we indicated we also more trucks. cell take and making systems good our our electric control improving and and before, on strategy. there facing developing committed focusing our on we in short-term, management, disciplined macro production good are in engagement to plan as our advancements sales, Commercial focus here. making trucks, are improving distribution progress the Continuously us I uncertainties While headwinds our are chain the supply and following. vehicle

short Our quarter. the objectives executions business, our will We you seeing good making which lead progress. Thanks look us and also medium for this term hirings today. is intensification begin next will joining long-term energy These to in to achieve us process. again forward

This concludes today's conference.

for this You your Thank at your lines may participation. time. you disconnect