QuantumScape (QS) 15 Feb 232022 Q4 Earnings call transcript

Good afternoon, and thank you for attending today's QuantumScape Corporation's Fourth Quarter 2022 Earnings Conference Call. My name is Jason, and I'll be the moderator for today's call. All line will be muted during the presentation portion of the call and opportunity for questions and answers at the end. [Operator Instructions]

I would now like to pass the conference over to our host, John Saager.

operator. you, Thank thank quarter and everyone joining for Good earnings you call. fourth XXXX QuantumScape’s afternoon, to To discussion, ir.quantumscape.com to supplement website view IR today’s our please go shareholder letter. our to at

attention I to for begin, statements posted of as is our that safe our we Before quarterly forward-looking call your update. harbor to want provision website part on the

technology financial or future statements relate Forward-looking or generally to progress, future performance. events, future operating

subject projected. and to regarding these matters not financial Our could periods results actual materially are and expectations to beliefs and cause risks materialize. may that uncertainties differ Actual results from those

There cause forward-looking the other including uncertainties materially statements future differ in factors letter, cite are our reasons SEC from filings, predicting the shareholder risk and we that that actual results difficulty outcomes. XX-K by for of posed in may the content our to Form

Co-Founder, Joining the in a will and CEO Chairman, us Jagdeep update Jagdeep more then strategic will be on and will and Hettrich. our provide outlook CFO, results business, and Kevin today Kevin QuantumScape’s detail. our Singh; financial the cover

like I’d Jagdeep. over to the call that, to turn With

XXXX, briefly In results XXXX John. goal and plans our and the in an major significant like achieved made and key overcame you, Thank obstacles, our technology, ultimately I'd year. of overview for recap our advances our to encountered we provide in for XXXX.

incorporate throughput on we to and first assembly, prototype battery film cell quality, our AX needed XX-layer cells the separator cathode improvements important most our system, production To was for to consistency, goal achieve customers. ship Our and processes. designs and into focused from this, to XXXX to of our several

team’s by and to to team meet overcome and successfully are shipping target on end. as of see to deliver adversity We rallied this customers We XX-layer the goals. demonstration our AX a that incorporated our these ability of the improvements, cells year pleased

testing, reliability we including protocols however, This continue cells customer capacity early-cycle performed fast be as for consistency prototype we our initial our believe will steps continue XX-layer that retention; represents commercial our and improve technology a from disclosed, reliability to AX most a XXXX upward trajectory. and charge materials expect I quality generally, we processes, results discuss have as and these of can cell we well the move report focus specific on goals. remaining into make product. that key on and and can’t testing need area its remains though work While XXXX, a significant we is some of lay forward, this turn to progress We out product. I’ll milestone more when step to

shared prismatic year. of our We accommodate this and The intend contraction to that first on AX cell. pouch formats, and the a later the hybrid discharge occurs in and in charge more shareholder this to of between share architecture prototypes also lithium-metal volume incorporate architecture new expansion cell architecture, the cell and details proprietary during images our designed the letter,

on equipment. majority initial We've QS-X merged a the tools of received QS-X focused a pre-pilot In by progress, production. delivery we cell addition our build-out of Phase X necessary volume have necessary to was and on the engineering now One line to also scaling lower the production XXXX, of cell our with in development majority goal production of continue line. consolidated up our line for QS-X this taking

which in demonstrates development, key production of to final progress the separator ceramic scale this weekly qualification and goal, We film to solid-electrolyte of peak level year up manufacturing was process starts. achieved for our Our equipment goal capability. a X,XXX

a with from next-generation EV a three culminated reported, see we pure-play customer sampling including automotive batteries strong OEM. automotive in previously EVs a top Next, interest OEM this I'd and XXXX, like we to for by as makers global OEMs. to revenue XX briefly discuss Over of agreements engagement. variety in And more our auto continue

the electronics cells testing dozens XXX from with have our campaign for we quarter of the shipped for We sampling We're zero the cycles. pouch sister electronics customer single externally report cells this reported applications. layer industry, pleased we to in the exceeds requirements consumer now that many last consumer For applied surpassed believe pressure.

I'd Now our out to like XXXX. lay goals for

generations our line. well focus prototype plan AX incorporating to as reliability, manufacturing as process bringing we advances of in samples, Beyond online shipments, and consolidated subsequent on QS-X of functionality, cell the prototype capability

for goals on focused are year the these items. Our four

is cathode loading capacity approximately goal increase first to Our to X mAh/cmX.

a density approximately in X goal current while with range energy or and be maintaining active quality, for electrodes, be optimized mAh/cmX targeting higher material. for optimize ensuring conventional density, our addressing interface power. the either energy lithium-ion capacity power mAh/cmX. can range catholyte we're believe cell, required of in thickness, a but including would for cathodes cathode of rates better approximately loading We microstructure coating our to As good the to optimizing batteries, requires of loading X cathode in necessary challenges, technical several thicker cathode This the calendaring the

improve our to cell is the efficiency goal of second packaging. Our

a final materials battery dense energy be, the determines efficiency materials the active density. of While active packaging could inactive of the energy the ceiling battery the the ratio materials, and set how between

path this commercialization. our So we're front to targeting improvements year on on that

and improve we is the to Our commercial of and move third XXXX from materials as consistency prototypes products processes. goal for quality to

lead core control, manufacturing plan flow. will to reduction process Some controls, higher and materials of drivers particle our such reliability. precision input process consistency implement and include we quality through and process of We believe across and quality ultimately automation to our improvements increased which in

using Finally new expect significantly And our to initial process its comes than ready up our to that's fourth in fast deploy begin our similar to production. faster initial line QS-X throughput online, is process. will consolidated times three more this When new it we current implementation, to lower-volume expect and equipment current process our be a support we production baseline. goal separator can most exciting,

our production in in that an step fast believe the deploying on to mass years. coming process We this important path XXXX is

focus commercialization. target With substantial aim towards key make the these on XXXX our goals, of four in product to we progress ultimate

about like we say to our our outlook. out a to word our letter I'd note, last commercial In underlie laid that that opportunity. On premises four year, key shareholders strategic

battery transportation. future electric of First, represent powertrains the

potential compelling batteries Second, the current improvements have to lithium-ion over anode-free deliver lithium-metal batteries.

Third, fourth, we can scale manufacture up cells our many we cells. mass layers. can to And our

propositions. By layer first XXXX AX of work We latter continue possible X are weekly film range cells delivery relevant our shipments equipment starts is on a the made line, XX-layer scale, believe cell up of our demonstrated and for goals. Beginning the our taking to for that was have that goal count multi-amp-hour the toward to to we believe established, scale well and in two applications. consolidated of our points it's focused scale up progress QS-X a our variety hitting we

done. Of to course, as more much I be remains mentioned earlier,

over previous problems are years and when solved ahead, When rises happens, that we difficult teamwork, way stubborn have occasion. to sure months that solving, the we'll with the However, ones, and to past our that we're grit. two difficult years determination team the same demonstrated our challenges new results in these need consistently problems arise. new the and In the tackle confident

our year continued your of for progress Thank you With the look that, more over ahead. to support, and forward sharing Kevin. hand over you I'll we to

for our operating year full fourth quarter, expenses Thank and you, $XXX $XXX million Jagdeep. GAAP were million. XXXX was the In

was for net operating level the $XXX line XXXX guidance GAAP for of expectations our loss $XX stock-based for operating and $XXX expenses spend Cash entering was in and less expenses Our million year, million the $XXX of million. $XXX the year quarter full was for This with million were with to compensation defined previous million. the line depreciation, million and $XXX as quarter in quarter.

certain and X production to consolidated captured XXXX equipment $XXX of specifications, separator line of cancellation quarter into for $XXX separator equipment million. engineering million, line. below full was Phase fast of variance million develop further to to focus to Drivers year process guidance CapEx new of the million was range the $XX the our and in deliberate savings preproduction production fourth include the on incorporation $XXX hardware process, and our through approximately guidance postponement QS-X intermediate-stage

QX equipment. cell facility was towards and continuous imaging film medium-scale directed CapEx investments, primarily our

to As reduce consolidated operating efficiency to well to our QS-X capital as line we as try of build-out our ongoing enter XXXX, the expenses. we maximize and continue

For capital full between our $XXX will spent be QS-X XXXX, and which of expenditures majority see of we on the year million line. $XXX consolidated million,

expenses well as we've utility Reductions On materials the organization. across primarily operating resources side, and as services, such reduced where personnel. non-personnel the spend possible spend, rebalancing optimizing through as came

run of cash see operating XX% The million. cash $XXX we below XXXX QX midpoint which rate. is XXXX, expenses $XXX million and our For approximately OpEx between

to with reduce liquidity, to raise being billion guidance on this, and prior identifying our extends billion. $XXX in the CapEx opportunities now spending we to half With strong and As strategic increase focused a Historically, we balance by about our opportunities quarter second a on $X.XX respect over fourth from ended these and an further cash, million capital intend above savings $X XXXX. by the runway result initiatives, operations runway. of we cash believe of extend continue to of into the spent and we to end of XXXX, cost cash new sheet, XXXX previous in maintaining through guidance

that, it over you, John. With to I'll pass

[ph] believe investors begin on investors otherwise received portion I today's Q&A interested. from of with would few Kevin. We'll a be Thanks, questions sale we've the where

be are questions here. I'm significance Jagdeep. context additional similar Primarily, for AX investors the milestone and But what's summarizing two several needs what to delivery? on from you here? Our can that the first more give questions work from done of

Sure, John.

that previously functionality our automotive make first but commercially of scales, our electronics. of is milestone, capacity AX applications, We've scale technology data for some compelling technology our range in smaller shared So relevant performance a the significant and consumer multi-amp-hour they because the including the this and core is ability at think of these on both significance demonstrate multi-amp-hour deliveries a to the of cells. we is variety

areas. what's of is increasing left reliability. packaging a letter, two cathodes to activities the leading improved of including we're and efficiency. In is to in to as on focused our relating quality we One work efficiency, other set thicker and density, on continued And important improved terms do, now production energy reported

Finally, production about about information which process, our separator to work new we're also date. share we'll deploying at later a fast plan excited on more and

line time the Great. your to of affect commercialization? Okay. AX does the How delivery

any subsequent our here like Regarding provided XXXX to consistency, runs emphasize improved to the the and samples, reliability. we electrode quality words, improve all process faster-driven samples improved since our packaging production is haven't through point BMC goal. main commercialization last cathode increased all leading line, updated this path that The thickness, communications including those require earnings the the on other efficiency, call. In samples, time to I'd front incorporate

Okay.

is question next Our for Kevin.

now. our attention moment to finances Turning the for a

the into you help drivers half what runway of cash our the of extension second XXXX. cost the more details, mentioned savings You these explain in Can are?

Yes, and with John. of including separator engineering from a new predominantly areas, OpEx as consolidated materials in line, line savings Phase process CapEx of We associated areas, preproduction spend. savings utility described well in found optimization resulted number X a QS-X merger savings the the the into of nonpersonnel as fast savings services, the letter.

an organization, by while have efficient of was possible as the mind And going $X our and $X.XX about to contributed time focus as billion, to liquidity development are As excess guidance. year-end be and always in of to billion priority. want which lean course, our the our efficient which keeping is, we highest of in line, team and this lean

second mentioned, with. half we're improvement something you the XXXX, forecasting that into encouraged the as from pretty XXXX. runway So, That's of of now end an

Thanks, Okay. Kevin.

back shareholder you the in you, Jagdeep. that Can letter? talk you more separator Turning new process the disclosed to about

John. Sure,

one We've we've project, and as of higher this saw produce will this process working an So risk, allow to some level advanced high and on seen small-scale development some encouraging now is us time data equipment that and has on been worked. quality significantly but faster very high this consistency. a return for with from believe we

our process So based scale pathway. on this as on faster this to primary data, focus we've chosen

and greater But an over believe fullness new allow process. for we commercial production, time, of future the with goals. can the is XXXX version this equipment magnitude improvement Xx than think modified version sharing production key in also of throughput our near of process we look of of our our a term process a course, we current as forward throughput of Deployment can film us Now to in in about we order that on the well. to progress process scale use And near-term of current i.e., this this one get calls.

Okay. Great.

nature. question plan view, first remind JPMorgan. OEMs? We different Jose can current from of prototypes gates to go longer-term of got through He the in with to stages little also and five-year in prototype couple bit Jose's a asks, that to AX with from you the is three the Asumendi us final you questions XX-layer a of a

Sure.

typical and on C-samples, So core increasing as gates demonstrations which capabilities we've said the product, automotive are included of by before, B the typically of A-samples, which maturity. stage manufacturing followed typically focus the

earlier, that XXXX all I point subsequent As said goal. our I'd the important is the through the leads to road emphasize milestones

products. new cell as foundation bigger cathodes, advanced density, form that as for functionality as improved efficient as I Adding process and, separator Those improves C-samples level both reliability and energy subsequent B-and that earlier. fast well through as as of commercial such packaging quality well the as the better more well mentioned consistency A-samples things course, more

the you, sheet, XXXX? balance protecting question is the and topic around cash Jose' until Okay. remaining of protecting focused elaborate Kevin. the Can balance you the sheet second for

earlier, want in extension to be our able and time the course, in an also mind is, mentioned as right the to struck shared highest the XXXX believe laid our resource as goals today. while We're lean XXXX possible our letter, And keeping out we balance I I we cash line, plan while As of in which runway. development in efficient priority. forecasting

guidance into XXXX. XXXX, cash the forecasting of the and now end Our prior we're second runway of half was through

our about intend And to runway. question identifying to sheet, being capital balance regarding by of the continue opportunities our opportunities to further spending the extend this cash and on by protection raise we strategic reduce new to

Okay. so We're Q&A now today's guys. ready begin to call. portion the much, Thanks of

open please up the operator, questions. line So for

[Operator Levy Securities. from Jordan is Instructions] Our first question with Truist

Your now is line open.

to than can and space the in it's it that electronics you're I taking thinking thoughts that could your knowing probably thanks wanted a if and about update. shorter start consumer Afternoon of about all I and auto you see talk for that I sector my the sector question. to approaching the just asking appreciate sort the on process extent cycle space? how

we've Yeah. interesting on development. Obviously, been longer very a very No, think we that's us. with for automotive focused There's a product space cycle automotive.

And calls, important feel space. bit it engagements the interest seeing engage in from consumer for about that early. So as to our a previous good are mentioned of us there We we fair we was on sector.

zero sector the provided single well cells show letter consumer zero that we're in the data as previous We are that well. those exceeded We've letters cells in We XXX seen to under -- this pressure. about. to also that as now mentioned the really letter performing we've applied layer published from we've pressure, which sister electronics be tested at they've excited cells cycles applied that mentioned

sector. that consumer We keep because applied pressure really about zero is talking in the important

device, to If in or much. have take a space requires that you the that's application volume, that going up pressure the battery apparatus, phone consumer there in isn't which

external cell pressure. density energy lot get high applied operate of specialty to not And is, no cell pressure. a want that having a just have without is lower to course, you of you enough, So really the

pressure style only atmospheric one to non-LIPON-based, pressure. with are our you and shown the have cell been that the non on So lithium-metal we zero operate has micro to cell only the knowledge, applied battery ambient

we're So about those results. excited

-- as partners shorter market. you excitement. Our we're point to the a cycle And it's with out, consumer share engaged to get that that

we'll and report those expect forward, have progress to to progress engagements we report. continue to we move So as

of to then but the working just power cell kind quick it sort of on side storage a give side you're things. of of you of Great. as seems Thanks other it, like for side that goes the And it? that. of It the commentary relates Any stationary follow-up. could to kind

Yeah.

well specifications that storage storage. space from as we last year meet hearing feedback stationary that for that good sector the mentioned We that space. that this agreement one for automotive we seen that announced well. in have of and sector early think requirements stationary cells the The is in as I we're from for the are performance

get fully capacities, market we explore production opportunity further we well. our terms intend to that as in of So as along

to one, a capability, point has really spectrum energy of which have terms of that, which of main density, battery us in to that And the of comes a better question across the questions, rather question if the fundamental better of your things on that all perhaps these full safety, resonate applicability good automotive for ones out the think is from terms based characteristics the of be power is go are technology. I that applications sense storage. consumer most think that after, I to going business our in than makes you stationary we is more what

Thanks so much.

course. Of

from comes Gabe with Our next Daoud question Cowen.

open. is line now Your

Hey, the to, bit could hoping maybe Jagdeep remarks. you the AX. afternoon, the extent prepared more share guys. to color the on sample, Thanks initial for all a A get

update performance, last so? is an partners your And think as with on pleased, disclosed around early cycle-like about So, you quarter, XXX I OEM cycle retention. of I there comments or achieved guess, it being your capacity then similarly, cycles

could capacity provide you is an define cycle update one. maybe early and there cycle So, then retention if on

Yes.

see cells. We mentioned product. of been same seen, commercial fast first actually in pleased early our as both that charge core actually proprietary to obviously good mentioned on customer-specific efforts tests. demonstrate performance. samples these letter, And we did the -- these we a performance the say the We've have I be did comment with I level expect ability capacity we've testing, on the to multi-amp-hour to you, themselves. don't But days that. the on to retention. reliability didn't as and really, Those samples purpose functionality to we we anything the tend to AX of is What the of make So customers is can't and technology customer-specific

the curve. shape capacity we capacity retention, So, say is the mean of retention when what early we

ways of that batteries hit end life a that of lose is to bit reactions. the side one of cycle, with every that little charge discharge So, remember you lithium

that deemed of quite the cell that remains the the in and capacity, eventually retention end decreases or life. And the was referring curve on charge capacity with original the battery every when is XX% is in so we shape short of that to degradation good. what cycle at capacity curve capacity of be it gets to this letter And to were

In to in we've what we results fact, seen similar that it was previous published.

we retention. that's by meant what So capacity early

to tried add -- in the we going And be a and then think is coming is of year set this call, energy be are density. to I well mentioned to key to is, as letter on that what few do as One features coming the very functionality important. related we going

thicker the We Those more cell we the actual believe to approach the packaging. capable density mentioned to that energy will are we things cathode. energy the that the So, density mentioned efficient of. system the allow all is prototype

our And directly very to of get path of materials is then track simple. and the system, our processes quality good liability parallel other in down to in believe, high-quality It materials And to reliability. we basically translates as improving our processes improved that reliability. comes our that the consistency we is and and better

the So, forward that's year. this of both quick plans a and our summary going testing

to just guess Thanks, Jagdeep. that Super loading cathode going I helpful. on hitting X-milliamp And on then hour. note,

cell charge your capabilities. QS-X attractive fast previous both call, showed in of think which QS energy power had one good and of or pretty the slides, I the you

the And on watt target still charge still XX% still time you is Would to going up that energy liter for X-milliamp XXX so XX% to to to that density is the or hour So, the per expect to cell, XX the fair? the fair? Would that, minutes or and XX% energy call charge have it, that so energy XX% density. hour is question -- be for guess cell I bump the window? energy

Yes.

I the still long-term are numbers that you're So our we've the targets. slide in shared that think to referring

before. we quickly more we of we've per expect batteries. the cell cell watt that able And to the hours think should as vicinity So X,XXX charge somewhere do lithium-ion energy liter, to be still than be to mentioned in conventional XXX

for think yes, cell. we the not that So range unrealistic XX-ish-minute in is getting something

cell the cell, an it's the energy does not anode. thick that -- doesn't reason cathode. though mentioned is an we before, have even For that It which with

So anode. there's no to have extra in the to distance for lithium-ions traverse the

use So can conventional to distance, cathode the of the basically be transport includes cathodes, battery, thicker cells cathodes length get charge which we able conventional than ion and anode cathode, conventional can those to cathode purely faster to both apply the we a or more and so that lithium-ion have cells. that

power as thinner get somewhat cell, get because you could course, we be than you point of amount energy the the of cathode somewhat at electrolytes. faster extent to even And But the lower out -- that. higher of somewhat density, with will then believe, power cathode have, potentially

So, basically and density. lower you lower cathode higher mass loading, both which gives power energy

question answer yes, and to your also power we will an our So have on density. that our the should effectively, do interesting energy cell be energy power the short is, front, compelling of still believe cell level

Great. Thanks, Jagdeep.

Absolutely.

Our from Deutsche Bank. with Winnie next question is Dong

line open. now is Your

the question. that. you little to Thanks. change so beyond? in-process to for that more Hi. clarify that bit just improvement. first customers, capacity I cathode my do you elaborate an as question. wanted That's Thank or improvement now testing A-sample right anticipate on will your be does much that with my then How want I taking loading a

Yes. Yes.

cathode A-sample the well will to the So make umbrella. a have the sample subsequently. phase. series as of and that new capacity mass B see loading higher C-samples then as will packaging. of under that as versions And said we efficient before, loading, deliveries more really this lead There's as subsequent we've And being A-sample we'll a higher

sort this puts last? around so, or into the of Got XX you've XXXX prototypes of in previous series then quarters, each you’ll and B-sample I C-sample, terms so. perhaps deliver to A-sample this of alluded to continue timeframe think that do you or us be the How And to which year. long months And it. anticipate being

commercialization? for as out the us well, So keeping with A-sample a line of of ultimate year for sort time in this terms rolling picture

Yes.

any other said what communications than call. haven't the provided last relative time we earnings to -- on we line said anything haven't So new we

this the and pointing you are products, that I think key when I B the key those C-samples look the subsequent focused of some in is we, the and commercial we're on thing the think, main requirements things that out for even and XXXX. are samples on call product, at

the sample the -- advanced energy higher A need cathodes. fast C new ability dense we've or versions product, or have They cathodes all of to all efficient think need or or this would loading they B these it's more we capacity all the need they the alluded more frankly, also whether to this So more call. And film production process that this on packaging.

are those prototype things. think We go all to increasing they key you obviously need really liabilities products. And from all

that foundation key have that we are So things of on on all goals kind this for us. done focus sure goals those to of we key want these get this are want And form year. sample these execute the for things to just to that's we in those which year because subsequent all make our why And for part they important we the And regardless future, this of a an year. is will milestones.

that? you. Thank it for material more year? it the consistency. more If Got details it. you quality to achieve one more elaborate of that of just on this the I squeeze like steps Is -- Is Thank vertical the Could equipment? you you're more integration? for goal improving in may taking us sort automation topic so Any perhaps maybe on much. that and of

Absolutely.

can things a lead lot that to So that to quality we of there's improve. want

example, issues. for of particles, if you of like between your sitting large eventually a any things have kind could layers cells the lead So that to particle

in in that together have, welded tabs of that lead things are defects and had lot operating more example, have to There's the process you If is things your within are quality. cell assemble a the incoming bring all example, materials control. not is partners you getting to different as layers you control around, precision align the properly could for If if statistical the buses not automation, which If various all material -- not allows limits, issues. just or how in you for layers. the that itself

areas of quality. contributors better are and And are this up tighten things kinds that to all those consistency. So quality ensure year we are are potentially the that better trying those to to

emphasize the point think well would have I to the efforts in control those XP battery multiples quite is industry the key of ability other as industry already like lithium-ion the on shown as including that the the I well. industries, the some parameters letter, capacitor

And particles so level we don't there. that having controls, on the execution kind place processes, things. that have precision tab don't or bad ensures automated those need just have or don't of that manufacturing we to extraneous don’t floating disciplined plan around wells those in a disciplined wheel puts a we We emphasized that process, that placement team we have and those reinvent of

that front. that So to repeatably discipline on those are all organization has things an that a doable. We execute implement just need the to

Thank response. all the you. Appreciate Great.

Absolutely.

from question next comes Snyder UBS. Chris Our with

is Your line open. now

the you customer from general that and specific understand I testing AX you. you results. Thank customers provide you share got feedback post of from some protocols cannot sample? -- could But delivery

specific reliability some samples And what we We've provided we which the want early I curves charge, of these well. we performed can of of also retention have I the and said most out that some the of the done, capacity is the that that fact, in mentioned tests improving fast of including we cells. on. reiterate that to areas feel keep so can earlier, is, that point one were

talking things this and the to quality process to improve we of so why lot particle And and so do plan time automation a on. we year that's all spend consistency, about reduction and

we phase, with next additional our we the functionality say, go where here this I think we're specifics. But These lot are earlier say pleased there's And can we from involves not which about we and that that, adding are. talked we're think about customer-specific well the we than positioned to results. Other a can protocols to standpoint, today. from actually

how Thank on one that the samples sample sample samples customer of I A kind it I customer the progress? the just And get specific you. many the generations the sample prior is across Y as another uniform up guess, appreciate that. guess like than pathway of we then, line, on we subsequent on the A are updates maybe of of should I B in will the And sample different same to the then from questioning these on X AX expect? A of generations customers? the following be or And would some all customer that A sample. to

Yes, question. that's good a

customer an actual the the that's because serious C going from can't a -- be So that that customer backwards is it's a first me sample of you've made product, sample sample of production. more -- sample definition the planning that in they're production it's sample. go And that Obviously, to C you is you product of a that it's a be tested. of specific -- on is all, to very C let do type that's using a until told sample line right? that got will natural into So going

interested The sample also to sample likely the but even capabilities customer-specific, samples, But also the to sample have things be the the is that's of B the A customer-specific less than is element different make different of because The technology to it. product. most there, most B going test is customers maybe sample, because C core used oriented have they're demonstration it's so a to typically vehicles the a in.

about functionalities one set care or than certain A with they see a have customer other So functionality customers. other yes, more sample, even of

variance will samples. some all those of there customer-by-customer so And be

rather those not all with where meaningful try share wouldn't samples, to to to will. the be on extent managed. transparent meaningful that we more progress milestones, than the need we they're those to. absolutely But extent less you And that then we are Relative we to

expect sharing on meaningful any customer So we updates I that would milestones. would be

B that deliver delivery, time you. could If B final the I and I does clock sample. that. what a months, one said on you A clock Thank of have start kind of between appreciate Does in sample A that of roughly just start line or when the the sample? last you squeeze XX with kind guys past, AX when and In quick A the sample. generation

provided we of that think I approximations. kind earlier XX-month windows were that the

version AX think I same And if you're in you time so still as think then at whether you an roughly some frame. with approximation, look it, I the or start it of subsequent

be So I to overly want we precise. don't think

it's think to are about that years away. milestones overly hard be I precise

we that was one progressively wanted provide that provide there mature sector. is point that a that series main more samples to of is The mega need the automotive to to we

is The demonstration the on phase is A-sample focused those some core of which and first milestones, functionality capability. of really

wanted And focused rough functionality although, phase the on which next that could C-sample, is production be on actual smaller, the and provide focused and versions the is tools. final process, version, the lower we of B-sample is The tooling, is volume to phase which the but the the production it on processes, range. right on

a So people had a delta. that two-month the what but something we we're much have talking not the about, mentioned. a It's sense I not was it case. think it's of And that roughly XX-year delta, remains range in pretty

you, Jagdeep. Thank Appreciate all that.

Absolutely.

Sachs. Goldman with from is Mark Delaney question next Our

line now Your is open.

idea be you trying on And much the and all Good the to sample letter. better thank could, that details first follow-up fore in My of and Yes. please. you topic. afternoon, just any I expecting? What's sort AX question understand questions in A-sample very an A-samples we and was a thank many if should between same the shareholder more and of depth, the how difference for

the that mean, working the think Well, on present -- we the I we're in we I things out -- key right. this letter some laid -- of year,

capabilities, what is AX so capability the -- demonstrates product. that multi-amp-hour so said the core the and we has layers of So XX

lithium-metal and so can retention with earlier, fast tested cell. be capacity on. a tested solid-state even All customer. Customers we charging as to separator, start that mentioned by zero So and the it's lithium anode

they include working subsequent this you generation that will mid are packaging, things going the thicker make more year, will The which And that and all cathodes, we're their Those also features on way of way releases. year, the their second energy dense imagine the C-sample. fast make process. A-sample, and production into film might B-sample a those to into of

really number roll that's we to into cell. year indicate new is, functionality where a the But laid are And is functionality key trying key going of there's we the out for in. think, areas I the A-sample the there this goals

the subsequent samples. maturity that, will imagine and you probably to we B functionality one manufacturing And C the further focus the lot A-sample. of in, getting more least will we we can So of core then some generation and at think on a of have for

That's helpful. about Thank company you the for letter some on of was the clarification the shareholder spoke in there. My other question optimization prepared the the in remarks. efforts

elaborate mentioned there? any that specifically color you. was personnel. rebalancing perhaps more you could that things you I'm Thank was and on can share the hoping of One

of small organization was in within XXXX predominantly to reduction net operations. as focus a a not effort, better and we aligned the There goals. manufacturing Yeah, did to team, This Mark, eliminate the X% part the goals. the include positions wasn't of on our near-term planning did transfer that consolidation in teams approximately reduction

to In operations. fact, we personnel assigned had a manufacturing small increased

Thank Understood. you.

further There are questions. no

the closing pass team management over remarks. I'll back call So the for to

Yeah.

in to I our their call. market. you this thank dedicated today's coming helping to I'd support market. our for on new overcome to the just their mission, course, further to problems for their of thank like ongoing look customers efforts get progress to And us of incredibly forward to our So reporting for want for all our technology technology commitment quarters. bringing joining the with associated team to We groundbreaking amazing hard investors

conference That call. concludes participation. the for Thank your you

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