Microvast (MVST) 16 Mar 232022 Q4 Earnings call transcript

Greetings and welcome to the Microvast Holdings’ Fourth Quarter 2022 Earnings Call. [Operator Instructions] Please note this conference is being recorded. I will now turn the conference over to our host, Cassidy Fuller, Investor Relations for Microvast. Thank you.

You may begin.

thanks audience and today. joining operator you, to for the us Thank host Wu, CEO; Webster, and will and Chairman, Chief call. Kelterborn, Officer, Yang President Officer; Sascha Founder, Chief Revenue Financial today’s Craig

Microvast Ahead press Relations earnings can section issued of the which this its quarter website, year release, the and on found company’s fourth be of XXXX full Investor call, ir.microvast.com.

remarks. posted the website management’s prepared In to to presentation addition, a we slide have accompany

released call. These As light to the forward-looking please uncertainties this forward-looking actual are risks results that differ of statements In that new expectations will current management no any company’s as of of subject reflect making of materially are a cause today. from not management be events. statements and undertakes representative as any statements They to these subsequent publicly as obligation reminder, note These about upon only in and and of or on could based date. for should to future on information variety assumptions statements relied to a views revision results expectations. be revise view

For results, with discussion and refer company’s that the could Microvast of financial earlier today. on filed important X-K risks the the affect other further and filings Annual including the factors XX-K SEC, to Report please material Form

the useful as net GAAP the release. In should this to Relations webcast of section Microvast and measures reconciled GAAP have from the addition, company’s supplemental measures adjusted tables EBITDA, on also for included in including a and addition loss of of Investor during results. at measures These isolation believes end been as or substitute the profit, to today’s replay will available comparable performance. call, their most in non-GAAP website. be gross metrics adjusted call press are management the A an These may considered measures, discuss non-GAAP not of adjusted financial be non-GAAP which Microvast company

the over for call some turn I that, to opening Wu remarks. will With Mr.

to and with joining high-level you of Cassidy like overview start off all I would you, for a quarter. Thank thank us today. the

key of then over Before followed who quarter, highlights wins call some our our to who discuss more our the providing questions. XXXX, the I the Chief address detail. key financials Chief your Financial opening turn Webster, Revenue Sascha will in call by for discuss Officer, Kelterborn, up before our our to the Craig will will for Officer, will I XXXX in outlook then

recorded energy and $XXX.X backlog a record as win Slide full year. to the full by cover with We Europe. strong $XX.X We turn division, and our ended million million led $XXX.X in XXXX by for a the QX intake the X in highlights revenue large Please storage year. order of December million announced for the driven fourth from quarter a quarter commercial few $XXX.X ESS robust of XXXX I or across fourth demand of in multiple million platforms of we the vehicle and

XXXX. to looking achievements on of many the We ahead of last in year proud our opportunities forward us are are and executing

boost scale our in our this into addressable our a in gigawatt deployments achievements This most Energy and to notable in sector, gigawatt is Microvast big XXXX year reached Colorado energy X.X market in the of include Division been where for large include project annual of the offering. push expands our has our alone to utility XX.X hour U.S hour Some market. introduction last storage establishment container ESS the new and the

production and of we key the driver of our growth to a additional by e-bus continue across most quarter. business, electrical and vehicle led United expect We vehicle as partnership anticipated vehicles, we with grant light a applications, States industry ramp We our the Energy and plant XXXX in industry. our initial demand XX.X the largest the the in by million of year. for to U.S. leading began safety solution enhance expand IVECO, We amp to including vehicle high-temperature be In ESS. in buses, to $XXX our expanded Department And Europe, a for of shipments our this high hour one help in or were commercial trucks also and commercial fourth technology. introduced this to manufacturer battery commercial build as platforms deliveries begin separator selected for commercial energy advanced commercial vehicle cells our well number

a to our the targeted adding battery with in XX production new for Huzhou automated our XX.X production capacity in To at expansion and full in hour expanded facility is year. a X production meet gigawatt products. gigawatt U.S. QX module our amp Crossville, hour of mode And demand, Tennessee start X by cell of capacity this we dedicated pipeline construction this hour

Officer, Revenue discuss would who wins achievements I to will the the like key over our of Sascha to in quarter. call now some our and Kelterborn, Chief turn

purchase Thank I to wins like Microvast would by the extended would to further on Kalmar mention the quarter. our through highlights some X of fourth Wu, during you, have already key that start Slide I Mr. Besides supply mentioned agreement and Wu. like their reviewing from XXXX. and Mr.

business, and global Gen technology Kalmar’s years roadmap more on proud X their journey with cooperation. forward of look to new support understanding We packs. our to deep With we heavy-duty of are many our close electrification Kalmar

highlights in X, key the Slide vehicle Please commercial turn of to market. our awards some which

late technology packs. with people now in with produced tractor electric IVECO powering Gen industrial new offers our mobility. one highlights freight to Gaussin container The vehicles a strategic major nature other XX Industrial, and Microvast agriculture transportation logistic distribution an Thanks of the deployment battery reflect starting zero the our is will for batteries has New four have capacity example, diversity will as strategic by French-based designed We XXXX. our ATM, the market. applications. up on-road emission prototype are loading the X smart to cooperation full ATM their that for centers, tons. and hubs, share that powered Group, Gaussin, It in which ongoing presence with of company, depots a to partnership Starting of and our Holland The be high-tech tractor, CNH be yard

allows is electric vehicles battery platform. can commercial Gen nonstop to Our XXX% agreement pack daily Then its for with operations X in and us solution future our innovative which hour. the charge supply battery have revolutionize REE full we skateboard Automotive, of aiming with to X

Gen pack XX.X cells. amp Our ECE The X standards, Gen Gen as such pouch The the Microvast designed requirements address fleets, REE newly is packs cross-regional contain ULXXXX. battery commercial hour X will high-energy meet Automotive, GB deployed XXXXX, vehicle and to targeting. battery of partner, which our packs is RXXX.X, X battery battery

business for with truck X segment, our new XX Trucks, with packs our amp customer very an outlook Gen the important leading the brand, China’s is Dongfeng cells truck promising. Especially play Additionally, will ongoing battery duty hour heavy hybrid for role.

transportation received vehicle very reach the a and for the of a heavy mid-mile which orders and expected medium-duty propelled will India. can the market distribution medium The MAFI overall to a is last-mile the trucks commercial seed in order of handling predicated We please e-buses airports, the QX. bus logistics displays due $XX seaports, including frontier next demand in active to German-based We India developments XXXX. energy for major our as nearly electrification the in next a light cost projections industrial in e-buses, and within transport turn is for million surging centers. leading by Indian & Now X, the with XX doubling vehicles for Similar the in fleet, TREPEL, Light sales by business. where remain to payloads, for manufacturer Slide cargo experience over years. observed of be application share of XX%

manufacturers. of our established partnerships commercial market, standing reinforce leading in To Microvast Indian the two strategic the with vehicle has

vehicle customer, as Switch as light well with are meet portfolio and to the Our the commercial the bus with well e-bus growth. positioned JBM portfolio

an application an Switch, Leyland, of During Microvast exclusive of from a excess India an million where is order $X we received fourth the supplier. in e-bus subsidiary in Ashok for quarter,

working to Group kilometers commutes. further Indian we opportunities the using charging our addition, growth fast to JBM XXX In e-bus sector, daily batteries, up for with are leverage in allowing

IVECO energy for have Crossway to pack produced we kilowatt hours, XXX uses new accelerating battery high zero supplier transition from Furthermore, The by density new our Bus. IVECO’s industry-leading its Crossway IVECO the to battery system, XXX the i-pack ranging emissions.

benefit Shell During Group, ongoing the quarter, orders also from from continued we IVECO to and Leyland, Ashok others. ZF,

won has in and IVECO expect Microvast the multiple we Group strategic expand eDaily to and IVECO solutions. Bus and announcing with it tenders the municipality available award, press for One issued partnership is to to releases beyond. won battery now already Watch has European The XXXX Our it market continues while has strengthen IVECO using

platforms are For looking with to on projects. business them these delivering other projects we to our grow ‘XX, vehicle and with addition in IVECO, across

We have vehicle multiple grow further our business in the to U.S. initiatives commercial

For of proven market-leading example, a we specialty partnership strategic with in the a finalizing OEM. are process

mining the Our currently support technical consortia high-power, decarbonization tremendous of opportunities announced are fit a mining Shell executing We by rate technology led for segment a recently applications. long-life is the perfect charge to and the see industry. high partnership in battery our with

charging industry. truck will modular We are expected support Production designed solutions mining provide capabilities battery deliveries for ultra-fast in the XXXX. with high-powered a being of in

medium-duty with we formal segment, global in a In works anticipated manufacturer this truck is the have to U.S. year. this a Truck customer is partnership in application expected the the commitment be Commercial exciting and summer an completed later Testing for leading the

over of remain disruptions as chain raw result As the as as worldwide noted supply elevated last prices material quarters, levels inflation. we a few at well

we Our to than unit track beginning continued year. the the across higher of at cost last significantly Board anticipated

term selling In strategies, optimization, sources increasing new wherever of the we implemented identifying prices supply including of supply contracts, and mitigation our XXXX, longer additional and/or possible. half second

key However, all raw the of to volatile way in certain lithium we XXXX possibly materials and through especially for end continue like material to the XXXX. expect be prices,

XXXX, capacity of meaningfully we the we and volume as in manufacturing order new new additional capacity in our ESS expect wins up course securing online Over Huzhou to ramp manufacturing bring our increase Clarksville.

Craig call to financial over review to the our turn will performance. I

items Sascha. financial X. will QX minutes Please turn P&L. the results. next QX mainline I our spend Thank you, Slide our from XXXX the few will I summarize discussing to

was due $XX.X of QX in in full XXXX, was QX The revenue down with dealing basis, we our a year to in order COVID up challenges a with China’s as XX-month we lockdowns abandoned, from $XXX slightly facing the and year-over-year shipment rates headwinds. in revenue XXXX. XXXX, decrease million, was policy achieved recorded We recognize $XX.X will currency period. from million from infection delayed $XXX.X along in of zero-code On prior in high that XX% continued QX which facility million China despite Huzhou million

$XX.X gross to of our in the compared We of with a QX prior in a warranty $X.X provided which a XX% year In compared loss repeated posted the profit full million QX $X.X cost against profit product, legacy On $X.X gross year. XXXX year, XXXX. improvement XXX% million prior a was for gross for in not associated profit of million QX XXXX, was higher the improvement. we prior period, million the to basis, gross

gross margin full XX%. X%, year the year, whereas was Our prior XXXX in negative for was it

$XX.X compensation in in to QX our $XX XXXX. expense, million decline were million operating $XX.X million to expenses share-based the $XX.X decrease to expenses contributor QX QX Operating The quarter in totaled was compared million XXXX. XXXX a compared in which largest the in in

in operating increase expenses net $XXX.X XXXX of $XXX.X compared year X% for previously, the million XXXX non-cash the and loss an $XX.X expenses net was to loss million to operating to Full a expenses XXXX QX million a million in was loss loss year operating GAAP As in large XXXX. share-based XXXX. mentioned year, of $XX.X prior $XXX.X were $XXX.X GAAP in to compared loss. full million million full GAAP in were net QX year increase. compared contributor net

adjusted for continuous translates gross of in cash compared profit year more year expense efforts to relates XXXX, We pleased share-based gross X.X% profit point translates an of cost an XX. This loss improvement. This material the especially adjusted percentage percentage in QX believe non-cash year margin to accurate gross QX into our of of another in XXXX. to improvement. adjusting year in operating compensation million QX in margin. XXXX. $X.X million million to for is X.X% representation XXXX as gross improvement adjusted were We $XX.X higher full and prices. $X.X gross When was it XXXX, our a same After gross as point raw of compared our the Slide This despite a loss full margin illustrated QX was settled in profit expenses XX.X% adjusted adjusted making to financial adjustments to X.X a compared our performance, in XXXX $XX.X into long-term of of sales, to operating XXXX, XXXX, a see in million negative demonstrates quarter our throughout full gross in full adjusted compared XX.X gross margin year improve X.X%

operating our adjusted XXXX. and value for non-cash XXXX. expense million in was million comparable to to these adjusted fair SBC included at $XX.X the operating million liability $XX.X expense a in in full After to metrics non-cash was full QX loss XXXX notes, XXXX. year When compared compared was those are in adjusted for million was year to SG&A, expense XXXX year $XX.X changes in the adjusting our expense $XX.X $XX.X earnings convertible million our non-GAAP million most net full $XXX QX making making same accounting table After compared year of our in the in adjustments adjustment full the net for XXXX, basis, to of SBC in million and Reconciliations compared full year million in press loss QX QX end On warrant release. XXXX GAAP of XXXX. $XX.X metrics adjusted $XX.X for

our XX year XX, XX period. XXXX, ended the of the Slide December the compared for geographic revenue shows breakdown to prior months

period our projects. in see, As XXXX to growing period, the business for XX% XX%, XX% Pacific to ended markets our due respectively, Revenue and year-over-year. the you declined customer XX-month the delayed year largest in can compared prior and China, Asia were of start mainly two European

to However, rebound we begin see expect a to these up. in sales in the region ramp strong projects XXXX as

to year-over-year XX.X technology, time good our achieve percentage that first the using especially models who volume hour of should the pleased the from electrified are are note customers We cell. backlog our launching a is for and amp improvements European

year rate Revenue in year a posted XXXX. our U.S. growth XXXX strong XXX% full full to region for compared

construction We accelerated high Energy. X.X contract, the meet for has have of and from facility. to and revenue opportunities the is The the U.S. one are in the of kind This to-date, easier those With gigawatt of our largest in megawatt U.S. to ME-XXXX expectations density, from costs, Microvast each battery XX.X solution award plan beyond project positioned XX% its energy footprint our very competitors. with X.X in growth maintenance market with allows maintain we ESS the utilizing cell, gives to hour reduced estimate That business container container the ideally U.S. amp our our XXXX installation for the deliver developed a hour the allowing and for fuel of over smaller solution faster that to project. containers fewer hours far energy. relative life of that and containers the

Additionally, our the other of outperformed far of ambition retention performance those cell suppliers.

estimated utility-scale of gigawatt shifting U.S. Given energy XXX around its be the XXXX for performance projected with for opportunity market storage it By in added our a alone, container, of the capacity ESS the the will clear benefits huge XX% U.S. being energy application. is us. in of energy hours

our exposures take metrics other I XX. now performance, and ended no position on cash Silicon We you and funding We million cash, investment. financial through will with significant cash Bank of XXXX you its the will our Valley equivalents, year and banked result a as comprised position see a short-term with of as Slide from never have collapse. of cash restricted $XXX.X a

gives of will X-gigawatt as capacity given revenue especially strong sheet execute an into potential. our come additional very $X XXXX hour of to Our us billion expansion, cash position balance which our a plan, production

million, be our very XXXX today. which Microvast. total closed is a the also that of healthy many our conviction year years start backlog underpins will highest the This of $XXX.X We with high-growth for

backlog, and XX.X see by approximately of this amp we will much XX% even and our distribution more U.S. realize of high-energy backlog, to we over compared account XXXX makes margin to XX% further our in European hour up scale for region we XXXX. improvements Our of as expect and technology. revenue its a projects

regions for approximately lease backlog, strong to $XXX and in the only our Asia million another in and XXXX, we these regions account of XX% for year business expect us XXXX. China Although Pacific currently were have

Moving our primarily used that an ESS on payments ongoing additional of predominantly and the to use the completion the expansion, be range construction container of made million Mexico that Huzhou in online $XXX.X investments will to on. of will of and plans Clarksville our We I totaled were $XX just utilized milestone $XX Capital assembly XXXX for and as estimate hub. million X-gigawatt upcoming million we to for bring capacity expenditure in hours first quarter mentioned. capital be

We more details provide QX Mexico in on project our will this update.

As customers. expect to should IRA as beneficiary of also fully we XX domestic qualify content be we mentioned a for Clarksville It Section previously, all credit. of direct U.S. our

ahead, which year, made demonstrate years. initiatives results material prior capital tangible able standout in we a R&D and Looking in and we see XXXX investments be we to the as will

that, will Wu to to With outlook. review it turn I back Mr. over our

Thanks, XX. our of our in achieve expect from the position, total $XXX forward in we XX%, strong along with visibility markets, to Craig. XXXX year-over-year of tailwinds million industry revenue Slide Please pushing XX% range very our positive revenue in Based growth to strong to to key on $XXX turn million. backlog electrification

hour Europe. backlog multiple hour our composed the in the is is and high-energy ESS of orders [indiscernible] and cell. project X.X-gigawatt from customers introduction States mentioned, projects by in our in amp of driven just commercial vehicle Craig As United announced and mostly of Europe XX.X ramp-up

expect running of and in Huzhou. In QX, fully XX.X-amp up ESS to amp additional automatic fully on XX.X to assembly hour to X-gigawatt an capacity anticipate of the containers our plant In from starting quarter, our hour, deliveries at our the new lines the year, the we line Mexico plant. begin cell hour we And have half second of our our Clarksville we the deliveries expect automated first dedicated from production in cell.

As our including new to XX.X a with capacity, anticipate out dedicated amp high-energy result, X-gigawatt hour we hour cell. X-gigawatt production of closing total the manufacture hour XXXX

On We expect Once ESS expansion we from to that modules of up will million orders our production, our of credits. running, the IRA X-gigawatt which $XX begin and cells and and to $XX of a hour year hour X-gigawatt course on equated IRA, benefits produced. potential commercial XXXX in customers. hour add per is the of all a significant per realize Clarksville kilowatt over track to the vehicles has with

We will XXXX, XXXX. also million by of be working starting full-scale for States will end In the this in square our having in we a progress our its and in line business meter separator XX production operation. year, towards polyaramid separator United the operation also parallel, anticipated

will All in enable of position strong we which to coming those to us next over well years. X achieve us initiatives the growth X believe continued for revenue years, profitability the

to the multiyear initiate enter our high to I’d in. a this be we of us that caught technologies. demand, very Customers and company orders to like the our We XXXX, year. see by up XXXX, strongest year. receive phase. technologies, have finally as growth capital my that multiyear of our large-scale the start been started that later saying our hour competitive finish those We which has in industrialization with XX.X then position amp the puts to position since market has are this place the meet at is believe and we now will the strong the cells in been testing finished foundations that started All to investments

call provide turn please With to now Q&A to the your like that, instructions would for Operator, I the questions. session. over

state Instructions] Rusch Please question. [Operator first Colin comes from Our your with Oppenheimer. Thank question you.

Thanks much, guys. so

start being of are why got Just on questions. But with so is specific just met XX.X amp customer what we with a giving – the insight I’ve and can with strong us some cell that handful hour product? demand needs

is Wu. to vehicles. well is and hour Yang primarily deliver XX.X answer long capability, vehicle your To is this for be charging the the amp life commercial and commercial This and to Colin. to the question, going especially question, balanced for the products fast our designing Good

takes vehicle going And coming XX,XXX an performance, using X, much spreadsheet, XX,XXX For us number long put that. X-hour we container that platform applications to a you’re we it these are cycles. maintain And XX% life, the high giving very to testing we We products. and X this in a and much is Energy and We life years. see the energy in have less and X,XXX same category. long density. much is data example, is is than cycles that field. you testing we cycles, going still the which in X,XXX we to testing like XX% see install right the storage is the to never customer – years will on the reached rates density X.XXc higher this life. but the X.XXc, higher if – and use have which install, longer. going choose group, most And and our much, welcome moved ESS tested of amazing. than application. product we much why now, the much density discharge the going the energy they containers simulate under to for charge is to actual product The This ESS very longer like battery over competitors lifespan container relatively simulated is this for This – That’s the the long this – with storage, it. energy market system, batteries product life the is Since driven only we of give

to Thanks towards the the those that just sales? move ESS the can you and And pipeline already? to sales how sales for so expect Perfect. opportunities the scope – seeing you’re you speak pipeline And much that of through on scale the closing side, that. guys

couldn’t supply. We for is of lineup be lot our the our to now, ESS, right products. need waiting we we we enough money have factory. to pipeline situation. factory a expand capacity And a projects contracts, of sales do our that’s For And honest, the and sign not more to bunch have

helpful. Got it. That’s super

your So CapEx how in talk that for conversations the of options asset-backed the U.S.? for finance around equipment of about particularly are potential speaking just expansion, much or funding, other you can financing

answer you can Craig, that question?

want Colin, summary we’ve Do you. to good Yes, sort cash, down, from you what hear top absolutely. want on I got? to a you this CapEx-wise, available from do the mean year? CapEx like whole of way

Yes, interments debt I think your of that’s offset sort some I’m that is asset-backed thinking what pressure pretty of here on Mostly, at or looking guys clear. balance. to are you any some year that of cash or about CapEx this to the support

we don’t I in mentioned have sure. Yes, Indeed, right. think before. the that we balance. on what pressure that cash Huzhou, And got it’s we much did

So, can that got then we look to the you and in banks we gone will show phase cash flows, to construction want it’s and conservative have put we financing. through de-risked, contracted really

was for So capacity. interest Huzhou closed That we a year, line rate. – out X.X% XXX later financing we the last

hearing clearly? am the echo I on you – me the Can So, hear some line.

can. Yes, we sure

just I they if else, somebody heard mute, please. can go

the it’s right. we more on challenge, still amount Huzhou. production just So, left seeing to funds of $XX have we and capacity remaining is fully to gone alluded million that, a that what on Wu-san Then draw now are Clarksville, got what

have hours like backlog for are that’s already, bringing year cells. Clarksville. we So, that The in of XXX. we up Most it’s we X the said XX.X amp gigawatt this hour

already capacity the Clarksville. this will U.S. is have, energy ‘XX, full into market because and in fast in have seen available we projections growing be the customers, the data the you seen storage in you And in at going I vehicle Huzhou the commercial ESS ‘XX, given when we – from so it’s have you, particular have we in contracts look So,

that, case, looking senior are financing it’s Financing we flows in be is, cost then place And real that the with getting it’s equipment gets year X Wu-san to customers. cost of already, your can from had that the easy have to is are mentioned, a terms that where structurized. worst got there flows, is mentioned, first IRA second – I added That will credits, that cost you gigawatt X you hours million paying I as are phase some on X we gigawatt IRA equipment $XX hours in you in equipment, in what credits. this payback Then And put just hours. X And is the on might which add the phase. gigawatt we secured no then add the a further incentivizing sector your what all make do And us kicker right. There we just capacity, $XXX years. got have are to cash equipment. million. But doing back construction, that’s it is is really, proving, are then customers, do some IRA So that, you what you cash shortened. additional it’s to sure in think periods this we for capacity, your

gross of last the are it’s how bit and impacting talk of where raw just you some XXXX? can the it that the move then margin at of of balance year margin, improvement we in terms one, And those of in guys. inputs some your ability to of That’s pass-through me. the on cadence about we helpful, saw and into you late as the terms last and material super That’s higher price a little Perfect. pass for prices gross

Sascha, do improvement bit margin And to can customer end, of the about alright? then a that’s gross engagement more at on that? talk talk I you want if

that. will onboard do nice to sure. Yes, have here. I you Colin,

that ground all, first that. finding ahead about clauses material not our in projects we place, knows with prices moving is of up, we at it’s everybody and like that. raw to end lot with normal more question, so back went it of level. front level generally have common So then And us. we knows price Everybody and that And day, the speaking, strategic the of the material of of about situation the raw about a do have customers, raise will in speaking can most prices, the a it’s

end So, day. partners. And we at pricing always the partners, with strategic strategic the of strategic have we have

like not line, at it’s in So, intensive on we – are the we we positive the a raw end. forward discussion. also But increases We it’s that on look with day, the at an these not It’s very – a of cannot customers. same the end material pass end all way. our

Okay. Thanks so guys. much

different that it’s we adjusted costs not get will margins, this SBC X.X%. Colin, relevant. did we to pretty add mean adjust We that cells sorry, that, little bit true production the a fair. gross it’s production. I year, expense now. It’s made nine I adjusted to To X.X%, just from out and really because this on do non-cash year

is a on we are amp the backlog is real XX% hour. this good over of Now, that the backlog XX.X highlighting like thing

margin improvement And pointing and towards scale and what we that give as hope is is assumption, you of we come to forecast. cell you gross make the as are from can we then right? let’s going assume the the you So, introduction will it, the

We backlog. will the give you

Asia what in you China told have not that of We backlog. and Pacific was, business is the much and

I that confident we we think So, are ‘XX. telling you are on really

we think XX.X. we We Let’s year, do start $X profitability in to end billion of the through revenue get have in ‘XX. to how potential

have a created being XXX% high but by Now, and going going utilization good ‘XX, not be is. it’s to the utilization that’s that in it’s to of technology because saying demand how I we am be at demand

on to get So, in That’s XX% can hour we let’s just million alone. ‘XX. amp say utilization $XXX XX.X

$XXX we like our like then job can capacity think management team are is, million cash as a we how demand profit. about where with like make manage I so through gross – our time. high like and to that should Given we expenses is tower operating And

at ‘XX. that high-growth realistically, to phase. iron $XXX I breakeven, million they numbers that think to Now, got manage you point, And because even to can didn’t in getting grow put are about we are we any a them have in I and But ‘XX. into

Colin, most the the us big control with suppliers. Since volume, Yes. cost cost raw our negotiation for side, lot of have single product we come with power this gained one from of materials. a

volume. all had products from with contract of supply we and lithium profitability. this supplies. And we Right before very now now, We index. have used index, which lots small different never the That’s So, long-term discounted one to up firm a the have one have fluctuated good. our source this we product, because and guarantee single we

much so Perfect. Thanks guys.

[Operator state comes your question. George Instructions] next with Gianarikas Our Please from Genuity. question Canaccord

able my the Hey. market. the as would to Good the you and quickly. taking storage are question. start Thank for like Thanks put how to together to I Curious you. afternoon turn pieces so around all energy everyone. with products

sell well. Good Container is actually, testing. a Thanks. moved. Vehicle the is like as testing we the is container. vehicle the a battery put already vehicle cell different on is And a I and product years for long ask contingency. never about in difficult much, And X container. technology question. moving myself the constantly And time, than the And vibrating, much you application the battery in

to of is the of close level very cost in to to a setting United the modules similar experience have fields, a we we of take most put is make if the on which of States. it up advantage set the more have Southwest container. low We in also. at Mexico to vehicle. the application out and the ESS Thank pretty competitive why easy It’s you. And manufacturing Mexicali, Mexico, That’s in border

And maybe businesses help as Great. follow-up, a geographies? between and understand kind other of difference us you margin the U.S. can potential the

to that me want you do Wu-san, one? take

Yes.

really unless Yes. cloud modules. EU on a we to cloud What lot is similar. are sell production, getting And George, the IRA would I comes down of both say, something our the it of does benefits, announced

XX-point margin. a hour. what capital X-year investment. cash to of uplift of is other in payback how So, And flows, And we what because is, incremental the it translate $XX your your probably on is part maybe the that assured are see you getting just XX-point is gross we a through kilowatt a it then

cash So, that. flow you got after essentially free

Great. you questions. taking for everyone Thank my

George. Thanks.

Monica is web, and We Investor ask Relations this those now. few And do we questions Gould, like would for Microvast. that to the through came in a have

capacity spoken So already? first, is for your Clarksville

You Monica. bit just up little broke the a end, at

And – equipment qualified. all on I The laying and the the we it’s ready speed after saw now, I in last actually, for are question week. factory China. floor the fast year saw factory testing. testing, there of And scheduled. on I went at Clarksville. construction. Right the in SAT fabricating it’s the the is will Clarksville the equivalently, factory And those for be this end

this install the and the going We to to are is in of produce U.S. to expectation battery. ship going year be U.S. end The to

not the investor am I if And spoken but is am heard for sorry, you me the enough, capacity Okay. asking if I sure clearly was already.

Yes. it’s Getting already actual that, already on based very X contracts. X do close spoken for planning to we an additional And gigawatts. to to gigawatt And hours. are add when we

Okay. Great.

about about the could came if grant, status talk that question of is you So, another the current DOE that. in

That’s We to grants engage that have very negotiation, results. with deal, the stage. of are the on in the a will we Yes. contract close contract a now, first close need DOE. you seen we negotiating batch see DOE and – and we the working right it’s are still to

Great. Okay.

when one the begin review think maybe producing that’s capacity remarks more we already I expansion prepared this want X.X we mostly addressed to our but in China cells will production, about and that if just time.

we volume bit few am little already Yes. and right ramp the full the first just We reach takes the the factory production, end slowly are China The have cell. need design it we of To and – delay. up producing production I process. Maybe now. to the right in a ramp-up, a small months, month. We and produced this now,

margins. last Okay. production the about XXXX, going automated gross of question, back to margin was Great. impact progression, our on investor curious gross And the the the

onwards. definitely see QX from we will show actuals think us you the let I it, QX,

suppliers. planning, report looking the to And we As will technology we around one focus that on automated we are lines, negotiating year. of with out that efficiency right, we are confident just said, fully progression production throughout really core

with to our that what’s how Terrific. for do the And in final assumption XXXX guidance. much guidance the the of ESS and has – question

XX% around XX% rest It’s to about is commercial ESS, vehicles. the is

getting year, the just So, we capacity revenue we back more got – like that. positively. mentioned, expect showings really as like the constrained growing of still have end still India, commercial the strong China. we into it’s vehicles like from grow beyond And And really to actually

Great.

the So closing our I terms any for of call Wu would does Mr. to questions. in that back like to remarks. it turn

high delivery. general, so concentrate The is the any side. business. as and am don’t We finding I for happy – growth on our deliver for the the and And I you see money our find targeting to problem much need In as the Yes. expansion. cells only to now. products us business – right might do possible, our

Thank for very I I Thank all meeting. are this we year you a for joining think the is you that so busy. our am – This high multiple growth. makers, positive all. seeing

you. may concludes evening. great that Thank Have parties And today’s a All conference. disconnect.