Xos (XOS) 10 Aug 232023 Q2 Earnings call transcript

Greetings, and welcome to Xos. Inc.'s Second Quarter 2023 Earnings Call. At this time, all participants’ lines are in a listen-only mode.

For those of you participating in the conference call, there will be an opportunity for your questions at the end of today's prepared remarks. Please note this conference is being recorded.

would of turn Xos, I to conference time, Counsel General Christen this like the to over At Romero. Thank you.

You may begin.

for Thank everyone, joining today. you, us

Officer, Officer, Hosting Semler; Pogosyan. Chief call with today Liana Chief the me Financial Officer, Chief Sordoni; Giordano Executive Operating and Acting are Dakota

release, This section this of can investor.xostrucks.com. on Investor Relations press be our issued will website reference quarter XXXX its found Ahead we second during of at Xos earnings call, which this call. the

making results forward-looking our in Exchange assumptions, forward-looking reports Securities be based duty forward-looking website undertake materially this in on to of and will with the to On These any key call, filings our expectations Commission. statements at which because our incorrect risks not factors any latest current found management today's release, of from investors.xostrucks.com. call earnings are news on if and statements and and could any discussed subject update can assumptions during documents are be uncertainties. this Actual do our We or statements. conference differ

non-GAAP reconciliations also measures the company's measures forward-looking earnings be should references comparable put reliance release XXXX to financial second undue to information in refer financial information on non-GAAP statements. presentation Today's Please quarter and performance the definitional for measures. Participants press of to the historical includes and metrics. contained GAAP to cautioned not

I'll that, Dakota. turn With it over to

our us Christen, quarter Thanks, everyone, for earnings second call. you, joining for and XXXX thank

Then, Liana Sordoni, quarter an regulatory our tailwinds financial efforts. second vehicles up On latest the share Energy the To and today's company's share CFO, on provide Pogosyan industry. Solutions the Acting business highlights, an update call, will the and update our on will our quarterly our performance. I manufacturing cover Giordano will the on wrap provide COO, supporting deliveries,

vehicles. for I'll begin are demand deliveries our discussing and our growing seeing the we by

deliveries In were the the XXX the the quarter. During delivered units and Deliveries associated modestly this the than and XX light quarter of a units pushed which negatively half to elected customer year, full-year guidance to some XXXX. expectations, delays the charging we into non-GAAP of infrastructure our impacted half operating second deliveries an higher to second first that second XXX will into quarter quarter, year first revise by we in total XXXX revenue Liana delivered cover loss of of our have in later. plan

higher van uptake long The by reflect and than updated largely anticipated the ranges slower variant. ASPs of both step mile XXX customer than driven deliveries expected range

from customer UniFirst per these like unit XXX our us Our focused with XXXX. understanding national in seeing that last generating in approach a on as the announced we in gives part relationships orders large of confidence accounts week achieving the of we XX orders of follow-on success targets. signed long-term memorandum We're sales benefits units

also We this Loomis repeat customer in vehicles the to of deliver expect between half to XXX year. XXX second and

at infrastructure chargers online many charging and Additionally, seeing beginning online the customers charging Fleets we we rules, bringing Act over XXXX, to by more expect Reduction months. Inflation of XX and our investing the began infrastructure spurred Advanced come the these of are on next customers Clean in

trucks continue performance produced and units and can among the second to and vans both the are exciting first produced are margin to milestone back successfully units. to expect positive first we shipped our This customers, to we be to our we industry shipped demonstrate gross that Turning Xos is commercial quarter, step These XXXX the for as an EV profitably. we first as OEMs production. improve the scale financial

we rest their trucks impact in the performance XXXX. deliver half even on of a way of gross margin second company inventory and throughout positive that the a of as have customers number negative units will gross still to margin We to generation on expect this through do year, previous have

Moving Xos charging infrastructure. Solutions Energy and now to

the the we industry a challenges installing in for underestimated EV company, new truck As charging infrastructure.

growing However, charging mile in is demand infrastructure our services for in the we improving at fleets investments time and suite outlook vehicle serve of comprehensive both growing for the by last customers purchase. of

compliance. we charging emissions infrastructure on will incentive truck EV a Though constraint remain will by capture improvement be and adoption, XXXX; through anticipate motivated mandate

In Xos seeing also we the Hub. addition generation to are our permanent second interest charging in infrastructure growing projects,

diverse at from a operators to to to vehicles capabilities table you transition connection, hub These construction a power and companies customers capable power of the As permanent bringing solutions. charging from the for may time to single of enabling off-grid infrastructure. are recall, is EVs the operators utilities fleet set five same installing looking before fleet

thousands their the that Shifting be Recent step fleet California, over for requires step driving in vehicles. to operators Xos’ the medium This ACF Fleets next required emissions In including in are comply zero alone. environment. Clean Advanced vehicles. to years be be of California required means in large fleet XX% the demand vehicles. fleets, zero to to vans California XXXX, will transition emissions regulatory of or order rule changes two vans will to have By duty

and is of time, event Truck particular standards engines. to XX states and Air Resources lower targets similar or required all XXXX of history Statewide CARB, by administered Bus California or trucks strictly with required which by with the At The a new eventually and fleets the pledge of Outside passage the for out of emission a comply XXXX. older in fleets enforcing the California California, Rule. zero rule ACF phase experienced retrofit CARB's other XX% a Board the signed have them. aggressive emissions setting has rule California

the in delayed, phase legislation as anticipated fleets engines most final proceeded be this having the challenged implementation While with planned diesel to XXXX. or of out older landmark occurred

rule non-compliance. We for same the with expect CARB ACF including rigor to the enforce fines

of Our conversations emissions zero customers the the mandates. reflect with new seriousness

factor track step infrastructure, charging compliance. why us. not which fleets We have on into of a Solutions vehicles orders will is such remains number limiting are Xos a typically Where received van is that focus for yet delivering and the comply, Energy fleets are bring California to

state $XX,XXX of cases, tax the additional states seeing population. the On available front, strong a U.S. In of below on a the and purchase cost the XX an federal some alternative, one. stackable providing IRA a meaningfully day diesel advantage the incentive XX% covering of in incentives we price and credit cost the ownership uptake are van step bring of Xos total incentives of

not stress we relying I purchasing not decisions. however, would that like these to need on support and incentives to to are customer do

compelling Our vehicles a TCO advantage already an offer unsubsidized basis. on

I our Finally, discuss like before would cost on to focus wrap efficiency. up, I

have order to achieve changes reduction in the them. During made meaningful aggressive quarter, expenditure we and set operational targets

on and our overhead First, professional spend of subscription we including reduced range costs a software, services. insurance,

remain every difficult we appropriately to make, and achieving for thank support I committed the building Second, to business made with the the their quarter. to during reduce headcount workforce. like our We a easy sized would This is Xos sustainable decision in never decision to mission. an employees our

heading prepared we manufacturing will into Gio Finally, bring which quarter, cover to third the shortly. in-house, our

We sacrificing that these actions have Xos our confident profitability path are placed without targets. right on growth the to

Sordoni, operational to turn update. like the Gio? I would Gio COO, our over now will an who With to share call that,

Thanks, Dakota.

to costs, management organization. relative agreement. improve decision decision simplify manufacturing As in opportunities was Xos made made control the inventory This the was the activities within lower quality and mentioned, after we identified to to the contract source our just contract manufacturing team our significantly

by at and employees the the former Xos. using the Xos formerly As be in the our facility vehicles from third contract Tennessee such, of joined processes same to team. beginning quarter same manufactured All manufacturer continue XX the same

units, many margin as focus and earlier, of know, units. positive announce we're Dakota and that remains gross first our operational margin we've shipped mentioned briefly As you delivering gross happy successfully to positive produced Xos' on

which meaningful is variance. the this the COG save among the of improvements goal. steps simplify of process release savings come over XXXX and from achieve yielding $XX,XXX to compared in XXX prior a the design portion taken those XXX in that to order on new production Chief van them, assembly per Significant The step began shipping mile line. time has customers team vehicle the to savings in both the vehicle, The of model. and quarter,

further cost work year we savings We component inventories. continue updates as and made over existing are rolling expect the out improvements to through the next

same higher the product higher for our and we're time, customers. quality performance building At a

front, quality world real is mile team wrapping to durability. XXX,XXX lifespan block a simulating the time, up our On track a of validate test

a remain On supply competitive in for positive future well-positioned to in made advantage that drivers driving quality the provide we've Xos new process and margins, process. base inspection parts These are and inventory cash avoid improvements In factory, scale production summary, line, to vehicle subject flow. assembly write-downs. towards we the for quieter We results fleets a noise our generating improvements regularly and business, high continuous a levels. driver. we where van step part our the design in Elsewhere look implemented incoming ensure expand accept to we the from experience

now will over our the quarter. results CFO, our Acting Liana turn who Pogosyan, cover I'll to call for the financial

everyone. and Thank Gio, good afternoon, you,

quarter, the million $X.X of $X.X second revenue the first our quarter was to For in compared million XXXX.

other margin first goods compared of the Gross sold of recorded during increased million during second and driven the was mix, of lower cost compared $X.X million quarter a of the adjustments. a channel and $X.X average physical million to in from XXXX. to was $X.X selling quarter loss This quarter. Our first quarter by loss due the reserves a inventory to million the price quarter $X.X additional to during

was largely operating first $XX.X for $X.X million the first the second quarter million quarter million of was million. and million our general Non-GAAP expenses in to in $XX to driven quarter of administrative compared decreased of loss expenses quarter second and XXXX. XXXX, by lower Turning $XX.X operating the to the $XX.X expenses, quarter from during

in changes made and including additional spend, cost priorities our reduction software the earlier cash, a million. closed of focused cash quarter, equivalents delivering bringing and of more preserving of in-house, organization mentioned reducing cutting units, We The Xos outcome $XX.X profile. our is with changes As and with quarter liquidity during resources healthy second head margins, on call, then investments count. expanding these subscription the more top manufacturing the a our streamlined of we

In quarter short-term with payments primarily million related Yorkville in we and debentures notes. on used convertible other operating during addition to cash $X.X our to financing second activities, financing insurance in used the activities,

the maintain we'll for or working that believe negative and to continue as million gross $XX.X negative margin, sufficient grow and quarter CapEx towards cash million of quarter. volume, was raise capital less liquidity. capital positive to flow cash $XX.X We delivery options we'll last with Operating we progress have line in flow build free additional

the forward, a of and million, half million Looking non-GAAP more through conservative orders year guidance delivered, current first be for in to to the our $XX.X XXX million. in to in units range backlog loss to to operating our of as and to revenue deliveries between $XX.X lower we're million XXXX the and The second reflects on XXX delays. revising full-year $XX $XX.X our change year permitting outlook half our the customers forecast work based a the of infrastructure continue of

our Our expect initially compared to revised the revenue anticipated ASPs, expectations, stronger non-GAAP the efficiency by our we supported have operating and original over reflecting loss is achieved cost progress than range we year. to improve

to now I'll Dakota. turn over the call back

Liana. Thanks,

product. by The on most encouraged a of customer are whom challenges are units development forefront industry and our focused over gross fleets. generation vehicle the in generation position of remain second of established in We relationships, phase our with we margin first the the competition, customer our positive advantage production remain the maximizing at in

Beyond complete share and interest use off trucks, is in maturity we vehicles highway in vehicle specialty on that renewed reflected of powertrains to the Xos more soon. for our technology hope in

remain cost direct second to benefits both customers towards this mandates deliver with success half that look the Xos' on efficiency maximize our for the and strengths ability and success. and Xos from we track and to you quarters year, look coming and our forward of long-term in incentives As shareholders. ED We to have to sharing internal value committed

With for that, questions. let's open up line the

Instructions]. session. We will the question-and-answer [Operator now begin

with Northland Capital. go The Schafer first from comes ahead. Donovan Please question

of so so did guidance, taking it -- lower I given it it's guys, want for How have it visibility to the Loomis I'm confirm low is, that what included believe committed if are I in levels to this, if a it of -- deliveries that in the of in you vehicles year, confidence. of the there. was there part gives level could correctly, just confidence. relatively -- kind you things get quite maybe there were still you a high It's sort Hi wondering in don't but that Dakota, know give of second half of what that's thanks that's or can you of kind give something, the you with still if first a the heard the sense XX just I the bit. the if XXX XXX that said start general delivering of the and the -- if just you big guys it what confidence is it I year UniFirst you you that there us questions. to -- half

provide connect. more to get to Happy absolutely. Yes, Donovan context, and

revised we for wanted we make in bottom guidance, really So to that XXX% end sure of the confidence range. our achieving that had

to of vehicles facility. to of have some be year. our So for second already actually the XXX already. the as be actually we several and going shipped just those made shipping to in you vehicles range are that them Loomis of going from soon production noted, of We've half in to deliveries very are Many are XXX the

national are strong near including that have also others to able shipping UniFirst we inspections very those then about future numbers. facility pre-delivery really, go have And being Post. Canada be we that finalizing do to basically several achieve to like the from on we and the are accounts But to folks customers, and going expect in conviction like

national other some for fleets, here really important now. large infrastructure is time The dynamic planning been of have a them that for many

can hurdle going them home continues that trucks line, possible. So been of be to into these know we get a in and as a off seen, we as service installing infrastructure quarters that quickly infrastructure come we've have these while have as they're customers the to the many proactively,

guess it preempted for Okay. or that EV infrastructure That's there better vehicles? of relationships ask, kind are get voltages. hearing even to Is Is get just -- are I've what that to just just then primarily disconnect the question maybe commit combination cabinets kind supply anticipated is there helpful. or these fleets sites mud hands where on switchgear heard around the you seeing what many operators like challenges, -- the that with was on going shortages? equipment of like with required it fleets is have it instead more able that a to stick big a are And of more higher follow-up utilities granular on out their why there. it being the is kind in that's of been what illumination it? product. there the any and ahead it of ask given I you my is updates of kind the and if larger there fleets actually challenges, get of to and chain of all I'll can are trends like vendors national kind and get it on the the directly kind so think or have on developments I I have more of with enables Loomis what -- So and infrastructure company to if often what

important orders look of customer. have charging at as from process we in deploying with that question. chargers conversations actually than to having from many recurring the we more start receiving When soon we truck of pre-plan them. we're infrastructure, really Yes. than cases, It's And as now purchase we're the the customers an ours are customers order

a utility enough getting additional site for in infrastructure timeline know a The there's not from deploying because for tent the power power infrastructure site. actually longest be lot Just on the the a permits vehicle. approval they deployed if currently and than getting process longer poles the getting and building specific are of can two

deploying Energy of do do exists also concentrated in time to Solutions we customers, actually what depots for vehicles site, assessments infrastructure areas. enable in of actually seeing the and that'll those out to that's existing charging site of sites, the deploy going and and on the and we we of a going plan to power maximize minimize with start deployments preparing locations, incentives amount Xos and several vehicles to their them fleet us whenever their inspecting consist what And of utilities, maximize then

So several obviously customers, those. one Loomis big of a being

and We iterations couple infrastructure deployed And through with we that process are can as sites several other be through the possible. as supporting gone perfect we've that customers. with actually that worked finding a quickly of

In get we the where that, hubs some around can't we to cases customers. those been have deploying of

So is, at support and what also that Hub out Xos install to on to we're able to in the about the there. already this hub site a are we've five that about that going And and week talked least quarter chargers is to doing previous we're now get quarters customers. vehicles up within in

permitting being where power provide additional the utilities for permitted hubs. -- a that permitted, the being hub stop that smaller to small you or can or bringing approved, able power depots it's is while is constructed, multiple to infrastructure utilize while And gap that depots being have be or

So concentrated it's useful customers more vehicles locations. as we really in rolling these to out start tool a

third Thank more you. on if be it'll if or early be helpful. to squeeze less Do you just of detail in And question it'll quarter? That's have the -- in the tendency one kind much how be so guidance. if honing thinking for there's the of the and of can quarter. maybe the sort out, I quarter, but to of fourth think, the and further towards should or sense fourth it quarter third growing the a kind big third if would going with push heavier guided too everything, quarter be you favor to more half say, well heavy it's the of with if second at going we more push-outs guys to is quarter you ramping, quarter fourth from maybe quarter to but one, that's weighted And in look means and could be year between two kind that quickly that and the third of the or for risks second

Yes.

I going the think these to two both it in looking of of uptick for quarters quarters at from previous be a both significant them.

because a peak potentially there QX, higher carry and of QX bit shipping the in October, While still expect over some to than is seasonality QX. be in we and into deliveries November, season little December

said, we're busy to possible every before opportunity being season. the taking accelerate That deliveries

of to a there's so little come bit charging we're QX infrastructure And able or if some could commissioning. chance a delivery that in in dates pull higher those

helpful like an just Yes. Okay. a it's sort actually thing. positive then of because That's

all you time, fantastic. ahead If hands can to of kind a if there's get of it other of downside like into way. the not everyone out it the plays But

fantastic. know, take Okay. I That's the shippers the receipt Thank questions right. to in sense. it's Well, are quarter, helpful offline. so, I'll fourth equipment hard holidays all that so and commitments, take it that the that's for busy rest my of makes the And congrats you, yes, makes the just Loomis on guys. of

Yes. Thanks, Donovan.

Please comes with question Mike Shlisky ahead. next The from D.A. go Davidson.

out Hi, not months. increased actually start the orders and rules. seems they're backlog your actual afternoon, months or month X.X to these not trying few the We like a on sort to sending first and follow. ACF some change, to of backlog on even two? to customer taking I'm touch last want a seeing lot from urgency We're and as conversations It comments good becoming guess meet of Can have to away questions. rules. ordering have made, over Dakota starting give you us you a your I'm curious, people states only something I amongst that the any thanks sense going my we're though are there of for this to to just

the context, Yes, Mike, Happy absolutely. more provide thank for you and question. to

is and XXXX. an at just We rule clarify to the milestone for in the have the of end phase uptick, seen actually ACF

for So phase-in that cycle they're least that the But now the be to means compliant. January will to purchasing of in going date requirement planning large start one date they ensure still XXXX. X, be to fleets, advance need at

customer seeing a It's an recurring vehicles. particularly to uptick next started the to the as delivered, be year, regulations. that but have determine uptick, are additional And of There's they're that will would part demand. that end we've we if a well be some going purchases lately to purchases see when to of as be driving to get those seen an for been if subject going demand those in be have they new some the for or of QX we of order early part actually deliveries vehicles are fleets

penalties, the if the And don't it's can't is if backed up, PG&E meet mean, they a not rules, it, the the a I fleets just a charging just nearby, little bit install has fault. so mean, transformer doesn't station I someone and have about ordered they someone

that So control? things I are for are there infrastructure of get exemptions those guess just their the don't out where

any least from seen situation make haven't on inform to We were of change, that remaining solutions the regulatory until get we completely from to permanent our that but and to from on able the top utilities infrastructure the trying at and the agencies, like the sure If we the gap guidance commissioned. best have and are it approval does CARB hub stop good customers. obviously can customers be monitor nothing we short-term can in a

out or you it can a and the supplier volume. potentially if Xos Okay. of side potential on units major last there's any now figure thousands I I'm for step trying van volume we company batteries this quarter, week. to mentioned fulfill had And here, Proterra other that of had but mentioned the of

I only in a player today. other Proterra think can the I supplier uses vans battery of step think as

Another also step into has expect their launched van that's battery. about to Proterra be

ability what's step I at demand your soon, if having step the your whatever out got going any of any that getting are with they're and but meet vans in away So time to they've challenges door, other out companies mean, not factor?

utilizing right and chassis or a competitor in that van system. only the several Proterra building important battery other really step context a the it's Yes, of chassis electrified van was you're an real step

And don't biggest ramp one continue production solutions for can we to to going failures they've few growth that of demand. flexibly well customers support want to like vehicles. obviously The industry this impact as success charging and pretty incremental to their ready that'll thing is ensure ability for and So to infrastructure to go. to deliver roll these they products. that deploy to own ready as We to vehicles definitely their got for are the fact for the able demand that be step while and going vendors provide within van for continue fleets we to are we the obviously the to regulations any be see that bodes our advance need us

a we It business actually us could powered expansion potential the supplement growth our been Xos powered business vehicle applications powertrain to build our We've also out grow is in by to for Xos. off and highway too. as by are think some as business now and well into about that continue continuing on that specialty selling

have to for Can one get you for sense Just you to the XX a you any trying okay and around be foreseeable you're access additional next put future. months? maybe obviously Maybe Okay. whether last cash over or some the me. burns one may when where for brackets to think your capital going if

context. Thank question. you Happy to provide additional for the

the remarks, As and funding we we go continue in quarters the we various and to also have additional come. that into capital are pursuing have reductions also made previously cost we mentioned in opportunities to evaluate do XXXX our prepared to sufficient

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

about like so talk goods can here, just proportion and sold sequentially. that sequentially am unit wondering, what more I you of the it of Good in afternoon, of is everyone. cost COGS moving was and up overhead because unit looks that any from pieces per up good was shipments. your evening, than Dakota terms

that. additional to on Happy context provide

this of the sold this why just quarter of lower write-downs So of that of were additional to as that that took price -- goods this reserves selling and more was primary -- course inventory up specific average sequentially drivers standard, the well quarter. business overall part was cost main was we as and quarter

And the the context. much How thank you write-down? was for

was the $X.X million. was write-down The for approximately quarter

Okay.

back the versus truck what previously contribution the the new of be truck? profit then expect year guidance transition where are you the to half gross And going of the proportion in of generation truck you. Thank deliveries, in new to for Okay. out production terms the first priced positive back half

don't the which range of look split that And revised long guidance is the we inventory We gross Yes. of the will really And and inventory, important is the noted, and the vehicles positive older at newer between inventory for the significantly majority as of applications, as They're including our battery delivering proportion the other chassis that thing back the onboard battery vehicles, step a actually higher long newer we're range have of as is larger specific we specialty well half but a mile those strip the is the are range be vocational year that's margin. size. of ASB vans. because larger long vehicle. XXX range vehicles double part

drives also gross levels for end range the our So mile helps of lower Those platforms are vehicle. than year. tail it margins our typical higher and higher XXX ASPs it inventory also

expanding and what's on in-house, like a wondering and driving timeline if words you production in transitioning are on steps And comments in change I'm the exactly looks the profile. that just more process prepared just Okay. on mind folks remarks, what Thanks. the wouldn't what the few your

Hey Jerry, were of just QX that's the The payroll our that this taking the is transition's I to over manufacturer's as so responsibility. of Gio. Xos and appreciate complete and employees the assuming of on QX, previously been contract start payroll question. end that

rationale? more you about on driving the what's change, please. Just the okay, expand Gio, just And say can

Yes.

Xos streamline costs well. place. to Xos it's rather and the already. and a factory opportunity place to the of arm's by been site, was working relationship bit site, it our team than sense where sort a the as to reduce simplify own them length deeply onto that made years smoothly also those contract now, in had manufacturing on the our operation we've on few a team with So engineering folks we folks for quality and involved own just and got run I manufacturing folks having an made more it's just and bringing think in We And things

the you're Okay. of result? versus magnitude XQ reduction as XQ cost that anticipating a And

manufacturing X% probably operational and fees to we'll of to a vehicles delivered. timeline and From But additional costs, see standpoint, our get there's savings XX%. that manufacturing improved are come savings assembled from around improved communications that

Our of El-Sabbahy go America. with Sherif next ahead. from question Bank comes Please

Hi, good afternoon.

with produce a supplier? on in internally the as all the still just production change coming you bringing to from So new in-house, have packs the are begun or vehicles staying packs CATL

as from producing packs we're We the are packs, producing so CATL. as both packs vehicles utilizing Xos well for our

Understood. you And new legacy, if breakout sense versus there? the able CATL covering a the a give are the are product the can you of, of to platform get majority packs

Yes. packs LFP have across packs. cases the or are or breakdowns But we're existing utilizing our the LFP. suitable of NMC to utilize to how systems different that are both performance We and many more many strong utilizing seeing we're use how different of chemistries the don't continuing applications for and

how And of produced you Understood. year-to-date? just of sense the that have able you've with to us but scale vehicles been much delivered, not give produced are a

margin the is we We don't be XXXX move into second the our model, majority shipments through the been that van model. which actually the but of to have inventory moving be of to guide positive going gross half to and for step That'll year. continuing

Please The comes Davidson. Mike from next question D.A. with Shlisky ahead. go

Yes. Hi, here. follow-ups for my taking thanks

take manufacturing, that their place. basically or that other no got Is It's just one there's CapEx to the confirm paycheck where have to transition get in idea? the from. they additional Just in-house costs two,

and facility QX CapEx. million investment amount. incremental it that was some and in made incremental nominal with but There $X believe We equipment was was the less very bought than associated fixtures I an in CapEx QX

ask the appreciated? be folks you to wanted just would you et any truck received who feedback previous can as as how I far compared is the different they're field feedback have the the XXXX it. on Got to in model, gotten reliability, Any actually product have year's Okay. the us as performing how model cetera? give range, to

which one Yes. range several is There's been you of improvements, first the increase. which Mike is mentioned,

system, battery package range kilowatt which on energy longer as and of means vehicle. So different an XX ranging different sub well hours we incremental the a a board have as software storage

extreme And that really is important climates. for the

day, really are utilizing still climates where extreme So heater the areas in under they a where have typically their routes during climates range of delivery systems the for of Northern deployed we full vehicles seeing some in like climate in do Canada are extreme XXX parcel length their in the miles we day. they or

And achieve a that to XXX has system. on we're so able But that with the mile new pack incremental weight this range still battery.

and really of other driver the a vehicle. driver The lot improvements -- around of the comforts center drivability

which system, a cooling on by being drivers. our system is vehicle HVAC robust So more new the already the noticed has much

and a accrue software continuing time updates well We and will platform this anticipate form we reduced also air is new flash efficiency the ultimately, on releases, the software of the our this the over of. the which do vehicle that to fleet And capability by as incremental vehicle, and to and new drivers software as releasing this on customers we with the cluster improvements several the that, appreciated to will vehicle hardware over operators have improve to And TCO. new package being drivers. get benefit and

just when far deal a is add This is ability the would customers but really this said, monitor also a to needed. only the air vehicle to the push having I our space. fleet and updates to over that double huge their in capability as unique software not what updates commercial Dakota Yes. remotely, on click as

offering in the is over commercial their I only our think -- not be update truck the we if might that capability one only of provider vehicles.

the also went very through to in also chambers as intense well that customer new feedback being I'll about tests as durability. these thermal vehicles battery of addition a both platform, in excited customers mention and

but technicians miles thousands durability performance the on folks that's EV their course. quality build world testing anecdotal, quality real come drivers of the of commercial the highest the test track is durability all the at seen in facility that mentioned terms and day they've completed long through So who the this durability vehicles of and

the turn Dakota conference to like to for any would I over Semler remarks. session. closing question-and-answer our concludes This

expect expect we which gross of we are quarter, access growing been on tenants as healthy year, we into operator, as capital positioned within work see find continue the see business, inputs. appreciate three deliver the the to second we last sources and hands launch thank ensure and of grow half the to that that demand other to year, the with also chassis and of help you, the markets to we've we our through to margins, these strongly you, the XXXX to to that capital focused We and step of continue over products, in insightful everybody fund questions reiterate we capital the customer which we is and And the deliveries have improving van scale which Xos. the new to and Thank us want our third of for fourth opportunities platform XXXX and all and into core today. we vehicles joining to to maintaining see the strip

and Thank questions time you everybody today. for your your

up you with next Looking forward our to on earnings call. catching

today's is conference concluded. presentation. now The you attending Thank for

You may disconnect. now