Xos (XOS) 11 Nov 222022 Q3 Earnings call transcript

Greetings, and welcome to Xos Inc.'s Third Quarter 2022 Earnings Call. At this time, all participants are in a listen-only mode. [Operator Instructions].

As a reminder, this conference is being recorded. At this time, I would like to turn the conference over to General Counsel of Xos, Christen Romero. you. Thank

begin. may You

Participants over historical reliance refer measures I'll turn the the earnings of GAAP in information With on that, in to to measures or XXXX website references On Commission. of duty can Chief and XXXX call current and presentation This everyone the Chief performance with during found can Chief any presentation, call, because are the issued our will We making website Sordoni; metrics. Dakota. and update release, Exchange be found be statements of Dakota forward-looking Please be investors.xostrucks.com. These which expectations are operator, of third non-GAAP we on section call. Afemikhe. news this measures. company's today. call, which latest discussed undertake subject press not this includes Executive do to joining and Today's definitional Investor forward-looking financial release reconciliations with Hosting to at should Semler; assumptions not investor.xostrucks.com. differ Xos could and incorrect and quarter Securities if Giordano to our Officer, the me information on results forward-looking materially to third filings this to our assumptions, based on our Operating it during put forward-looking also Officer, today's will non-GAAP and contained thank be financial of statements. you, management Kingsley for Ahead press for quarter comparable any in risks statements. factors the you key Relations its us earnings call at Officer, documents statements Actual Financial earnings Thank conference cautioned release any from reference this today uncertainties. and a reports are and undue our

excited us joining progress quarter and you We you Christen, joining earnings everyone call. everyone Thanks, today share for appreciate challenges the XXXX are third the for thank quarter. and to and with our during call faced made the

steps will respond external to We dynamic environment. made our discuss organization to to evolve also the

today, set as worked Xos plan our success. internal decisions liquidity. results deliberate we several for three trajectory focus to demand, made half During other success up since new margins led of with and Kingsley wrap our and decisions our We've solutions the quarterly this coming decisions the our to and In for and will metrics: has quarters. end to demand, chain evolving provide These economic key updates of environment, delivery then team in environment. time and the capabilities, align considerable a past two constantly we've update over growth cover Then our I'll the quarters And supply the a delivery a on charging these the call to XXXX. business the company understanding the quarter. highlights, infrastructure will and dedicated to second future This on review outlook will manufacturing up, Gio our uncertain supply for financial an third customer chain. quarter our review external the realities. of provide on set detailed diligently operation I

this growing I sales you now. will We and growth which percentages with our and see triple-digit share on demand plans, continue to revised year-over-year with will capitalize

increased and backlog national First, breadth has of orders we've substantially. large and received feedback from several Customer positive, customers is repeat our accounts.

which cover of accelerate to detail. for However, internal infrastructure the due increased customer in customers, an will I has timeline We've to the to delays in installing deliveries implemented infrastructure. charging delivery project further

as R&D and next the in reduce subsequent rightsized that focusing we years. products such and this initiative to year organization near-term is step operational Part drive Xos believe help We will van in profitability of the expenses. Hub on have the

and supply the measures manufacturing number in benefit in efforts in-process capital cost-saving of our days on our reduce Tennessee. simplified have chain, inventory We Flex focusing operations and in also manufacturing the working will site future. These

an launched the combination pricing gross have half cost we this and through internal costs. to align We We XXXX. on of overhead project the by organization will end achieve product lower the lower actions, goal positivity of margin that of achieving first a believe

notes ABL to as to we and continue Finally, margins and expect scale investors we and to position capital achieve financing future. deliveries, have third the access the via additional financing in These access continue an better receivables convertible business. the positive decisions near during with closed capital to we growing to two access quarter, debt us gross

a and seeing support are we're customer our robust building organization, We demand sales for products. strong continued and

As our the to quarter compared revenue of was million, for XXXX second the XXXX. third $XX XX% up quarter of

delivered During as continued American across XX excess across in Merchants to vehicles expansion for North with as not last-mile new customers units operators the These XXXX, well period. the cities and third existing EV vehicles such American as quarter demand states slowed. of application four The during Fleet XX commercial has delivery went Ground our we FedEx North customers.

shipment is regular Although the the delivery last sector holiday expected. in seasonality mile during season peak

anticipated year quarter However, guidance, we half fourth seasonality. are reaffirming our which

are the wide other types Xos five of a new also infrastructure suite chargers DC Charging Energy enabling both is deployment of announced electric with expansion hurdle range our commercial slowing Solutions that of charging of fast with vehicles, applications. Xos of compatible largest deliveries. We the pace Xos a and

UniFirst, the improve at of services our services, fleet have across the customers process have This uses customer construction, infrastructure. installation sites of infrastructure, deployed starting quickly provides of as a turnkey the charging design, and have deliveries planning, possible. permitting, and also managed will helping commissioning to which with site as engineering and improve These expanded site evaluations, We customers Several infrastructure Xos team which margins. charging made use including team, Energy infrastructure Solutions and multiple country. help secure Loomis are charging these pace now robust

our leasing organization expand distribution will to one a XXX,XXX locations our listed In Xos's America over in addition months. like with largest highlights fleet. with and NationaLease, to services to cover offerings few vehicles We this truck and vehicles solutions, strategic of I'd leasing its last partnership other infrastructure and the the in over announced part partnership, of over full-service as With be NationaLease. North XXX from the network

world-class and TCO, leading Inc., provider U.S. Additionally, X through an cost aftermarket in quarter, X create in Truck expected National to our service vans Canada contract and service pilot Williams for partnership ownership decrease maintenance. customers. for the ownership, named the or is extended help we support offering Class we vehicles. provider extended service Subsequent a enhanced commercial W.W. overall with of also the service step for total and end extended customers Xos with to third of our the to This an service introduced the Protection Co. truck contract experience as

fleets for work Xos features into integrate costs. cost-effective material our effort direct step features ADAS, Additionally, further to we are of time, improving forward driver phosphates of in lithium been margins. cost several total new costs, has in Xos' known changes cells for XXXX. some will our began focused ongoing for use fleets development battery to iron van commercial locations safety part and making will parcel such driver save This commonly plans weight help chemistries on to the going standard vans. Xos expect vehicles. gross early multiple XXXX Such to configurations and step of as more vehicles more repair, platform, less of insurance, as sensitive making launch delivery. our This such to In system, ownership This we an become both in our unveiled we battery new affordable and and as advanced quarter, reduce on past includes all assistance

powertrain, weight producing continue will service vocations sensitive parts. line our battery and Lyra We for

options, conducted to on to that addition like high components this assembly usage significantly. analysis In led to high have value managed voltage material value direct some has battery steps cost savings material and of XX% engineering roughly and activities In costs. harnesses, reduce we've increased

We costs. to now turn great Gio. that, over customers lower safety to cost while of consequently improve ownership, help are With strides total also call the I'll material the direct making our and reducing

Dakota. Thanks,

focus delivery operational delivering begin positive of end and the the to by gross volume second units margin Our is year. increase next quarter

make efforts van our our as help in step production while well reliability supply performance. has performance will improvements dedicated as This overhead internal in the been project bring Byrdstown, in by an the the to on tandem platform chain established costs. as from reducing well direct operation achieve The goals. We North step we initiatives: to internal significant these action, to plan partners price chain year, platform as sure and van our begin effects and preserving includes engineering, the to of their as supplier streamlining following have focusing areas reducing continuing our will reduction These key team design to of cost which Asia the through cost improve a our our manufacturing freight reducing re-domesticate the of material We've vehicle and coming our working also costs vehicles. engineers robust of costs uncover This America. supply new the to well take as we'll Tennessee. see further manufacturing in with to and of parts margins

our margin revenue systems. continued our expect ability improvement and support our our inventory continue as to we to take be work steps to margin is here chain and execute the existing sufficient positivity through capital linear and Achieving on such While these we to along to growth. the supply access manufacturing core in end we don't focus, are from with plans, second growth quarter to gross of to confident optimize

power are Energy team Xos can out customers simultaneously, business Xos with charging infrastructure. In updates our alleviate as hub excited We be the Dakota we Hub charging that to mobile the mentioned, bottlenecks. we five forward to future and used up summary, The draw made to customers. that a look mobile scaling to continuing of while Solutions charging station Hub progress responsibly. the the in right providing electric path to by the is has commercial trucks electric with many near Xos struggle charging the on the grid. I'm to roll from our the begin minimizing we're charge aim on As adequate believe station to with to our obtaining the

We are reduce CFO, to during count This the The a to work to decisions moment. gross employee the in logistics near-term Kingsley from to shift secular our pass will opportunity and immense, I'll a and difficult margin expect net the continue to clean proud the as for further carbon includes that Kingsley the public we benefit now of achieve Afemikhe. both needed private make. we discuss solutions hard call fleet zero decision and sector economy. remains and quarter head team's positivity over in the to to

gross Many demand Xos meet performance and growing to strong good products, over focused and our allocating positive everyone. afternoon, capital our for is prudently. financial quarter. achieving thanks, margins Reviewing the Gio, on deliveries continuing

We the $XX the in year. most in action took line is early the driven and those million selling of XXXX. revenue to and take second more quarter expect the price to a plan to the year Our average our actions compared options the increase million in quarter. in of $X.X zero-emission guidance delivered cost-competitive earlier was We as remain This to in compared we units by XX% XX% second increased quarter to units. with XX% increase prices to price in deliver in realized further and of one

excited in grows talking our it more about logistics, in Energy growth fleet to as and a stream see this include We'll Solutions. offerings, service revenue as the Xosphere, which be XXXX. are We financing,

million other trucks for previous as an backlog, materially work sales due were products is margin inventory which cost our due these to without adjusting inventory, total, We sold obsolete booked the was in XX%. we quarter as by that continued continue in in would in of the improvements these, In to nature in our and million. procedures loss of gross these sold. add $XX.X includes future our a lower adjustments in margin to Our to are research million adjustments. our We compared adjustment prices. a increased million higher loss been goods And selling largely increase older the through during adjustments non-cash second of orders $X.X This goods gross million our an adjustments backlog is believe to efforts and compared $XX.X with transitory we quarter and our $XX.X average $X.X systems the and now invest to for have our development to margin that These quarter. quarter. our of in a number of loss driven of cost

continue positive 'XX. the of the unit expect the half at We towards to be level gross margin of end to first

our operations improve As materials by bill Gio of we to much the mentioned, and programs development and have costs research availability focused on and remove and of engineering to near-shoring.

significantly addition, mentioned, freight centralizing by manufacturing facility will we reduce Dakota In in costs as other in and Tennessee. our overhead

now expenses. to Turning

in $XX.X our a affected decision Our operational all team reduce third quarter team value to made managing We difficult fell $XX.X May the and headcount operating the million We quarter. I and to our maximum from and in of all million those XX% expenses well. efficiency by workforce from second focus XXXX. wish

in quarter the million marketing $X.X general to we result, second R&D a As sales expect versus fall and both million expenses the fourth quarter. the $X.X over administrative expenses in quarter. expenses were and and

of see coming reduced year. expect the benefits activity delays of material in We the costs in part this to fewer

Turning cash available-for-sale in quarter of includes million million, sheet and securities liquidity. $XXX.X in the issued convertible quarter. of with and closed $X the We which equivalents balance our We now $XX to million restricted securities cash. cash,

reversible in Both accounts our $XX.X $XX.X we of issuance the and net inventory inventory debt quarter, position. liabilities was versus Growth million, of million costs our discount, in of position at of end $XX.X debt and end a quarter. the the the free fall As was positions $XX.X quarter, to processes. conversions slowed, the in and receivable record of second flow the flow for growing down million and revenue quarter. now or second fell CapEx as our cash continue payable to over systems million we from quarter cash million, $XX and we less fine-tune it expect the Operating net fourth despite further

Finally, previous guidance our we of second the reaffirm for half XXXX.

to the We of deliveries range and in XXX XXX expect be units.

of and million million loss range of $XX.XX and revenues $XX non-GAAP million. between expect million to in operating $XX We $XX.X the

I'll We over will you Thank very provide further back and on new year. early much, Dakota. to XXXX guidance in the you turn

Thanks, Kingsley.

open team best for build to we possible. continued to our commercial up it efforts Before I questions, thank want their for EV company the

Our team focus liquidity a decision believe and We managing deliveries, has on Xos industry. trajectory profitability future this growing hard incredibly to unmatched our is growth on success. worked to for increasing set in and

customers. Our focus with our building model sustainable, is business that a for products fleet scalable create value

be and it than like and and with significantly our partners less team, We would customers. have possible our six more this without in years our loyal external accomplished time, new including questions. to Xos Loomis, our Fleet, peers contractors that I capital Merchants less would not customers especially now thank the to this to UniFirst, XXXX. quarter, FedEx over open Ground line the Operator? operator call in the joined and will the for turn family have customers several I

pause At We this our will question-and-answer [Operator now the Instructions]. will assemble begin we time, momentarily roster. session. to

ahead. from Our first question Please go come will with here Capital. Donovan Northland Schafer

taking. Thanks initiatives you're kind taking and Congratulations. the guys. continued Hey on And questions. the growth for of the congratulations

speaking, Tennessee broadly really about in of and the kind right and improvements of to on sort down headcount just area the they're of the reductions. talk the operation want on focus think I doubling kind that moves. I

Tennessee maybe out together operation do relative is assume kind things on as -- in be sort increase essential de-emphasis a safe to relative of focus of real go is So, those terms, where there? is and manufacturing pumping there's on it Los place a really a Angeles to the

of also interpreting to vehicles has thousands previous less Tennessee. It happy do demonstrate vehicles. context. on already facility cost to think can really in question correct. It facilities, our We material it gross order overhead make and ahead it has products can associated I'll to to reduced. one, do your team, the Thanks, really I we've with a vehicles Los decided manufacturing chain positive can profitable team, production start, our and we on of in and improvements structure. focus great want Yes. has details. direct And then to but And of from more But to ability and our delivering efforts really, facility that our all produced That operations in then life. in be centered Donovan, for we in get facility reductions. our supply means the of vehicles is profitable, all running costs need with go center sure, really our costs Angeles where Mexico cost the margin more be quality long-term. ultimately what scale so, team, And are can meaning very our on any our energy, exactly are optimize follow-up process for and one certainly and for to we provide and our a you're

maybe kind And of of an guessing kind be Beach the thing, design Silicon call I'm an a of and in all that sort of they role engineering sort kind will still assuming become of because stuff. Valley Silicon from of -- also role, and meaningful it L.A. it's extended satellite

still commitment there? kind So, Angeles longer-term to headcount is -- a as and still Los there meaningful of you area

Yes, absolutely.

So, going we're on and is within to to going our this cost on here vehicle. our core development, and where engineering to most of and resource our efforts on maintain future And reduction team continuing we be our research platforms in preserve view to to we're maintain focus based. as improvements continue the area facility that that are and a

pool is are and our know, for As unlike incredibly hiring is within good our and some build Xos Angeles we which there technology, on own focused Los associated that intellectual software of that skills powertrain, all you developing peers. property areas battery hiring core for an probably the the of

Yes.

-- add but products, not Los have we only deep at said just that what would I capability Dakota have and headquarters developing on and by R&D saying also Sorry, we Angeles, testing Donovan, our validating products. in this to is highlighting that Gio. saying

So, testing other chamber the Tennessee cycling products where a validation onto really cells, put a electronics deeper modules the do on shaker put would thermal starts before from really that a cell table components, production. new battery we it insights on and new we battery in vendor get those or for our take trucks to and there that's do example, in for and and new and goes

battery We low manufacturing on production in also or Angeles. have the Los capability volume side

Yes.

even kind this an so, where have with and makes there, equipment of capability for the you can of it take I've with other clean has scaling. you up a sort talent how kind companies lot and would and seen sense. kind That it else testing somewhere and almost you concentration out of figure line-type end some pilot work maybe then stimulate Okay. and where still you some a of and solar energy that manufacturing of engineering

the case. exactly That's

Yes.

And to Fleet. I want about Okay. ask then Merchants

they vehicles. So, you be not very obviously, good the to proved dealership not and There off it's revenue recognition can whatever. correct do It's -- like companies. you're of solid have But leasing I'm other -- customers all like of sending on this, is murky they wrong fleet get situation company and where a -- out me to as Fleet, guys. like service understand but sort they're they're a it, Merchants almost it if -- it and I a as or

and they it instantly. leasing visibility of actually with step what are? and whether whether does them you do from quickly vans, they those it like So, use you data services how them kind resell of you do deployed attached get that a all to vehicle sort on turned are How see send around gets XX able cases are get if or

XX, the away up that their or couple? that of end fraction you And lot for right all sitting them gets up XX, a on if uses some so, gobbled for of do kind send

company. great Fleet vehicles and an Merchants an them. Fleet, you Merchants as FMC Yes, ours been we has Around customer it's deliveries, to question. great more to good the mentioned, continues customer a a or of as be a fleet incredibly deliver management customer is

is And expectation But data share have improve keep we there can do that the all point for So, second then field the these make in I'll such around out to their the delivering data customer of our that they telemetry product. they utilization, confidential. them. around with vehicles do on continue vehicles us

have they So, our platform. Xosphere

assess So, we they're vehicles how maintenance all particulars in management. well the they're for performing purposes the being fleet delivered, service service more and can those track that they're where are and and specific and charged, getting how monitor to field,

on we the in visibility those customers. field do still have vehicles for So,

just Okay. That's And can if more one sneak last then the helpful. question, in. I

I have supply chain, for supply of wire might just an about last think that. example was where comment hiccups. Just -- quarter. Gio harnesses -- one something is last made there was been a chain It before there's it

Angeles, costs. Coast Now mentioned through price this on of putting But maybe that time maybe to help kind ports. Tennessee on of also sends going with the then Gulf from other Savannah, improvements versus you material or some more more emphasis product Los

chain those curious just and changes given have So, an on dynamics, update of made? kind supply there's if just you guys things

the Yes, work the improve across board. aren't area in this those a chain lot team situation, all but of the to done supply improvements has

You of supply America. sourcing Asia mentioned we harnesses. we've to of change on easier we've domesticated to lives example North an perspective. made from an that that chain a mainly make actually wire That's that component That's from our a the example relied

our coming than crisis, did Long the alleviate we ports supply of As chain to and during that Beach, supplies helped other far pain. in of the divert some ports L.A. the some as and Asia from

last fallen we've couple that well. doing of I now, of been less months prices bit the think freight a over have as and

So, We're still sourcing moderate crisis. when things comes of yet PCBs. it woods difficulties are out supply but improvements, like chain not there to in certainly

take the I very of helpful. rest my guys. offline. Okay, Thank questions will you

you. Thank

ahead. go from Our Davidson. with next question will Shlisky D.A. come Mike Please

for products? in you ice Are What continued, mention questions. at going to of thank was remarks, prepared on the One going place? taking all products whole the come and in HDXT those forward now, and Dakota, got afternoon for didn't those thing MDXT you've still is products. plan in you Good my the new

appreciate question. the I Mike. Thanks, Yes.

to we be the part to want MDXT continue to those -- Xos for the generate of that able HDXT We a are the plans are vehicles van center two on really as but and XXXX, platforms. focusing and step in to volume profitability able to the are meaningful on and to our going platforms, Hub be XXXX going in progress and platforms that alignment and the make

continue So, customers going we'll and them make market. centered vehicles and focus van majority field. in headway, the showcase demonstrate Xos be and Hub is vast the to continuing bring those we do to to of out in for XXXX. Xos to We're But them and in on the step

Okay. some us for thoughts at it's give a days you in or one looking wide what's question, And of you some a just of or kind and would what's implied the sure put like the year be but of of high other are end are the would point fourth to pretty many for not in left $XXX in some just end at inventory are $XXX of deliveries, confident key the which low range, at ahead guidance this us. that your end still then given how million. that's quarter the I'm range more the today, holidays the that even for of factors, Maybe left quarter after Perhaps appreciated. that build

is trucks ready in made -- It's range that real Kingsley, Mike. manufacturing good We've customers. really progress and key a drives thing hey, first factor, absolutely. Sure, that getting factor for are the The of lot two

charging delivery bringing season. about But spoken you first trucks, and help busy our solutions on our some The holiday focused lot the and very, by And ability I like to to very we've companies, a is our see normal secondly, quarter, also take that. of specifically parcel we've is the And the reaffirmed are infrastructure. take on customers customers that other trucks. then fourth in guidance customers' we're the our seasonality with they're factor said, factor delivering we're just the the

trimmed cost see or for Okay. you you And get month have and level seem help down positive? you a margin unit Great. year to to structure least company gross level as time what Thanks a the on frame EBITDA well, at might per me, positive next the volume Kingsley, that. to what at can becoming

about think the is to positive capital EBITDA we through operating their by that When absolutely. driven factors Yes, us inflection. get to

units, guided another to of And that more that's a which core we'll year, in growth that. couple things. for soon there And revenue. A, We also focus about drives what point. non-step next of early after haven't specific but talk that the are us van our volumes

So, I as lot service those offering, was well. as grow growing. about and a to offerings, fleet significantly is a which are service speaking expect XXXX in high-margin we Those our

Xosphere So, you have that's some other that of the items Gio working and been on?

Yes.

a a So, just help logistics of And the next and as lot of about consistently. critical very electrify other we offerings Xos very the year launching that different of it. customers. spoken we're driving very really Energy, have, Xosphere, something stream the that part the Hub, a see revenue Xos something year, we some our that it's the to customers our our of with part We also spent we've and important through aspects

increases point? thoughts, us XXXX Maybe of about at deteriorate shipments improvement about just your one Maybe squeeze the give the safe assume you guys here. to this at going after feel conditions it how substantially, you last fourth quarter gradual here? Are supply don't is quarter-over-quarter Obviously, continued chain forward? Great. one Okay. some assuming just looking that

really that We in within to market. the continues exist confident Yes. remain the demand

that volume XXXX. years last As to sales anticipate down there's demand We glut. year-over-year for we slow and two existed as in shared, demand in because don't percentages the XXXX triple-digit of of replacement a has the growth the backlog will we've sales chain from seen supply that vehicles

initiatives our delivery for charging of year, for to internal that improve deliveries. continue volumes specifically indications the conversations dramatically will infrastructure a very given demand and the the improve and growth We lot confident lines guided But we've also sales in the to time customers, we're and be the had that of with strong next haven't enabling full-year year. to delivery our in will further

pass will it thanks well, right, appreciate. for along. All that I I color.

Mike. Thanks,

ahead. Our Revich Goldman next question Sachs. go will come Please with Jerry from

Hi, good afternoon. evening everyone. Good

Hi, evening. Jerry. Good

if cost could Dakota, you about truck. I'm talk the per wondering

part. we're gross $XXX,XXX-some get positive I per spoke talk part about today. what's gross the the pricing the appreciate the per at of profit the running to profit to truck So, there? about path truck what's about, build targets odd that get To Can So, And the we materials to? lever. to you get need

Yes, mentioned, can And action on. I'm more have We've made in taking the continue ASPs these the a earlier and XXXX you of we focusing of increase established happy areas. detail each as then is ASPs follow and price first, of our increases provide impact per action. to little this and which reduction we prices in to we're have detail to But the our bit buckets at quarter. Kingsley, that basically an areas up cost kind already really overall, of price year, will well, going as we're some on price beginning and

step some chassis vehicle subsystems small of third that our are each or a including and modifications reducing really the high-voltage The areas, compounding system, entire the materials area of battery while build direct And are area our analysis been And they of to operations. second the we has MDX value direct harness year platform, level incremental place changes been some of engineering And and area costs. of our focus our well bill effect high-voltage there taking significant as and front, is significant overall those as streamlining and our adds changes, contributors, electrical van in cost. on that value may several those this the savings materials cooling be that architecture activities on, that for platform this to has of our then materials each to components.

into to an on our operating overheads keep that there, centering costs So, production allocated Tennessee. that going manufacturing overheads ultimately, the that of building operations gross incredibly calculation. Tennessee margin in in improve and our efficient and machine will operations freight focusing one reduce on our It's shipping factored in that keep facility ultimately And reduce location. quality logistics our and our there, and side outside -- get on

and which organization we resources, gross reduction force earlier to some the other of done were further taken we've that overhead, allocated areas thing The we've which the implemented in other the noncritical that were improve will this margins. year of is

touch those we but the -- to them removed of costs Kingsley on bit a I'll those are some little and future how how in quarters. and we've the remove that's let buckets, detail continue So,

Sure, Jerry.

to having final PDI. of also But here think efforts we number costs we have of about the in an a Dakota maybe chassis battery through costs, in you battery a one just freight cost, the manufactured think two element having reducing of moved direct Mexico those And fixed about, in as give in them packs I to thing recent to that the the is we sort from Tennessee. development buckets, shipping the having of level us Tennessee that's note costs, also the cost direct different material Mexico confidence spoke Tennessee between making production and over chassis trucks, facilities, one have for the and then L.A., and of these as there is are our costs. when there mentioned, the being in

material costs, reduction reduction the overhead in very also direct see look from a cost chassis -- the battery well. and costs for significant seeing we'll we're our freight a costs also and you indirect amount of large our the in well. through as cost when in reduction other costs, as the a So, is And

individual price will gives we've be Point second of on a and look margin us the the half next we unit mentioned, times Point of of the we year. ASPs gross lot taken you that and being about So, pricing customers A B, can have increased the as a the to also we because then the and points actions of detail into it confidence realize in basis future expect in positive where delivery

And are deliver business trucks. just equation for the initial $XX,XXX step to interesting on vision part for because to at the about I vans the to cost want premium part lot the your modest EVs diesel a a really of and say was

our truck cost per is so, $XXX,XXX And today. over

truck, focused just so costs, been proposition $XXX,XXX to actions, that that on. in get can folks So, $XXX,XXX on per have we're these I'm you how just truck doing value does based to us per we assess wondering, this relative for

great Yes, Jerry, question. a it's

the to business of XX for utilizing fueling always and past of And going particularly or of happened And operating package cost that service. of our ultimately we the significantly the what up and we acquisition more idling that markets operating these is of start gone the cost of on gone particularly sitting a in vehicle, that of trucks are customer cost started the there a in So, the have delivering has eight way of day the to their fleets see have always has is focus things ownership. factored so, a total also overall has year in the cost up reduce that's we fuel the to in and been cost vehicle considerably, to maintenance XXXX, hours the diesel fuel. that and one of some

And taking be customers to even though several vehicle. that passionate years because that have vehicle compared broader action, TCO are seeing of price to diesel of are advocates them the a we do able obtain So, the energy and electric as five vehicles the fuel still first competitively the of more we still to flexibility see volatility to in they're three within adopting and a market. savings price we

price business. building still them Our competitively goal while has sustainable always been as and profitable as a to possible

gross of sure customers. in business that's And strong as so, we're deliver going modify can possible something to future achieve take margins make to value also as and much and we the the our to

savings we areas to cost materials the that we'll and will to continue value we going continued internally when in stop reduction and vehicles. profitable on continue isn't are be engineering value of It analysis various efforts direct the the of the do to introduced, vehicles. So, and initiate cost the

with Jerry, of cost most to the zero-emission our road. minimal from had our one few year, pushback the the the competitive on on forecasted and add that, And we've trucks. even in the price take road. them have next still to fact, options taking on And remain throughout And we we one just actions price been action options our of zero-emission customers and from excitement year,

Yes, cut didn't Dakota, you I to off. Please? sorry mean

point And competitiveness we XX%, folks important options one if the most price price. at above of I the we market the representative is are of in some XX% remain pricing competitive one price in of where their really you peers that industry, our the still a of that increase No, vehicles. actually shipping look think a is

making TCO transition So, are in. about it excited nearly customers doesn't provide savings the that the

thanks. it, Appreciate

conference Those turn Dakota back closing will to I have today. are the remarks. over that now we all for the questions

Thank operator, today you, and thank third quarter discuss joining you, our everybody, us for to results.

solutions to a with making tremendous progress towards are for to platform platforms last more farther, produce objective build new the a innovative keeping We on of conferences. look and many to have we provide our go some our the to We and customers. longer hope our of fleet upcoming the cost-effective that progress, future updated you, Thank forward at day. see of you great and you

gentlemen, does for and Ladies teleconference. thank conclude your much you very participation. today's This

may lines a wonderful have your disconnect and You evening.