Lion Electric (LEV) 10 Mar 232022 Q4 Earnings call transcript

Good morning, ladies and gentlemen. Welcome to Lion Electric’s Fourth Quarter and Fiscal 2022 Results Conference Call. At this time, all participants are in a listen-only mode. A brief question-and-answer session will follow the formal presentation.

As a reminder, this conference call is being recorded. to Investor call Relations like Adjahi, to now President, Vice and would turn over the Isabelle I Sustainable Development. ahead. go Please

in from Good could our include other that CFO. in statements. the differ CEO, let me Please fourth estimates Lion's you to and Nicolas over cause conference and Today, Welcome that invite With that, differ assumptions, to review to this morning's EVP fiscal actual could those Founder; the in here Marc? forward-looking results our statements. everyone. and our I'm We Bedard, regarding materially results implied Language]. call. factors, cautionary and from our quarter press Marc forward-looking our various with that note it begin. materially actual language release information turn to the those Brunet, XXXX results risks and implied [Foreign and morning, and to our discussion will Marc such MD&A in

of Isabelle. highlighted Thank work school production and we year, our XXXX for the items starting glad Good in of charging each and investments. infrastructure areas our our Montreal focus up while our and strategic to building on leadership our deliveries. maintaining and space. commanding plant, electric report Joliet objectives at that these production accelerating were last Ramping the our for as plant, plan I'm factory our of battery guide vehicle we and bus we beginning following at discussing delivered you, specific the everyone. At morning,

cadence as one, vehicle in our will bus two, projects we today. assembled translated we elements increase about first electric Number milestones manufacturing our growing two our in plant to significant we XXXX. continue XXXX three production with our for manage we and battery in deliveries revenue, expect manufacturing and QX, term up in continue to our three, capacity, continued ramp growing and to battery factory. school to we our will U.S. number this which continue and pack align Number There new our while in factories first achieved near are demand liquidities. to growth into also vehicle And expected two we smartly in carefully vehicles, capital talking trend spend our we our main be at will production unit invest to

for We color will each questions. provide we of items line open these on before the

Let's begin with deliveries orders. and

of fifth delivered quarter, buses in a of XXX more in XXX row in twice During the delivered vehicle deliveries. fiscal XXX XX In quarter consisting the sequential XXX than is vehicles, XXXX. vehicles and delivered This vehicles we growth the we trucks. XXXX

order buses, currently school from book at as have the vehicles of XXX XXth started program to for $XXX that districts XXXX million. orders including for value includes stands program, purchase It electric of April PO the XXXX deadline. school orders awarded ahead EPA the were Our total under place grants

deadline. of buses well bus Also, of the allowing to upfront manufacture expect a upfront the as payments already have make on by EPA funded vehicles. significant will the positive after Clean receiving program, all a in confirmed liquidity order. have our cost XXXX required EPA the purchase proof procurement this to we we program of these by program impact to This these electric us October started Speaking rules, ahead invest per program School to delivering

to energy for infrastructure book trucks. for million includes PO and book related our last, charging mostly amounts $X electric approximately services. PO orders And also Our XXX line

funding electrification for and continue this great customers. initiated transportation Beside shift our news other the EPA, Lion discussed programs the support ZTF to represents sector, other previously, many the and of and which to legislation

Decarbonization XXXX. and vehicles billion by In Global duty and XXXX which allocated of Transportation recently Government Federal and California, sales zero Memorandum medium For budget heavy Understanding vehicle U.S. climate on of example, XX% the signed zero medium XXXX Blueprint to emission the being duty to XXX% change. by $XX the proposed the commits for vehicles published heavy National and U.S. emission

On the manufacturer of per a vehicle means X, eligible tax was which officially States in that the by IRS IRS, Lion as XXXX our are front, vehicle. for approved $XX,XXX United January sold the qualifying credit starting

impacted Let by chain. a extent XXXX. provide Last although supply to continued to me supply update on year, our lesser than several an now in the chain factors, be

components ultimately previously, generally and vehicle discussed this longer cost collection. has of for into As higher increased transportation cost, translated times, lead

improving, hand. we While we end impact will as issues continue battery impacts, and have the including XXXX, those our place managing additional and vehicle such At for the in of qualifying suppliers we components challenges production motors. cost. on in put which and cadence inventory may proactively batteries expect this mitigate had continued BMW approximately critical nevertheless packs supply measures chain XXXX successfully quarter, we are chain supply several year, which To

This inventory address which Lion will battery in to to gradually should convert I as our minute. ramp a we us own production, up enable batteries

As by far Romeo, progressing. as battery packs process is the to arbitration be supplied

initiated and with our intentionally relationship to In addition, that Nikola basis proceedings legal our with Corporation with we it interfered expectancy in in the contractual Romeo. Romeo our against relationship respect on business

expect, will situation. this can on refrain commenting we you from As

of development the about our vehicles. talk different now me Let

tractor for substantially the the have commercial expect battery and supply timing begin that be LionX Please we year. the the by platforms the these and the truck note bus, truck LionD LionX development of work completed tractor of Joliet for a we Power could production accommodate the on for me both and this start production buses LionX I an takes to the our plant the reminder, manufactured our and Romeo Montreal battery plants, of time the We be trucks, the impacted in manufactured for plant. will bus, the capacity the the LionX the at being, just current while ample demand, to will Also, reasons packs where mentioned. have as Montreal to be now Joliet update which trucks commercial

As we first up buses our made-in-America plant announced, the throughout at of first our completed we school the increase ramp bus capacity assembly in our manufacturing buses number unit and Joliet. electric electric we the quarter, delivered In QX a gradual of the school U.S. during production first in this regard, year. in Joliet manufacture expect to by a in followed while modest

We will capacity the end carefully Joliet the this the with plant production an year. continue by annual goal to to of X,XXX invest add buses in a of year

completion the own XXXX. our certification of first completed the we battery battery the production of of pack this our battery for plant, Final model assembly manufacturing in at gradual QX pack by the following is of line expected facility, our the As our battery of the battery followed of our installation portion first production battery in in year, factory. a ramp-up first first half in

LionD the The battery battery first and in LionX end planned our the buses trucks. buses of reach hour by we and of production X.X X,XXX Lion capacity plant, the and approximately gigawatt represents capacity year. batteries LionC mix a With XXXX are vehicles serve the in school to a of trucks. the power will investments for to targeting This

be cyber innovation used completed vehicles for substantially shell warehousing space. building, pre-delivery the initially this for of now will and of building and and As certification test work as inspection batteries, and vehicles, this is year for a the

for and making trucks for Commercial trucks, or EMGS recently requirements Solutions will electric fiscal for financing positive agreement in further will XXXX, this Capital performance with medium thereby for he have talk Finance, now allow financing of balance upfront leverage school for specifically buses eliminate type the offering our required on our solutions objectives will CAPEX color Mitsubishi their provide pressure North it financial sheet could easier regarding for vehicle discuss and agreement Lion should our clients of offering. significant about American product very and our provide our vehicles. as without Mitsubushi's announced expertise it all also provide purchase we purchase putting and the for QX the designed Capital impact for me This Lion Lion's of through customers capital. customers of our Solutions all now buses XXXX. reduce Lion to financing Let a and Nicolas Lion to our Lion capital to This heavy-duty and with vehicles, and simpler financing secure will as

I Marc. then will with I start the the with investment results. our cover of XXXX year you, full financial for will Thank and our highlights liquidity outlook the and XXXX conclude QX position. projects growth

quarter the revenue This year-over-year QX growth of fifth During delivery. the of XXXX, and were to XX in XXX delivered delivered which XX consecutive in $XX.X buses vehicles delivered the consisting into of revenue. translated compared million $XX.X and in in was our States. XXX QX XXX% sequential we of in growth Canada a United quarter, million vehicle trucks, in XXX vehicles,

our by of to negative We chain important profitable decision inflationary within growth. supply challenges, costs, ramp-up, growth impacted gross ongoing posted to and plant strategy our to pressures part invest and conscious an in which is margin goal our of achieve continue long-term mostly XX%, manufacturing

and at gross we operations explained, to facility production establish are campus up to all investments future, the manufacturing and making for As ramp Lion the foreseeable previously continue our should margin facilities. the of to at reflect Joliet our

expect be over As will units. as to numbers we production, margins improve costs we increased scale of fixed spread

expenditure net for was share-based negative to This share-based compensation, as $XX.X slight is million removing million. EBITDA of QX QX. versus in period noncash Adjusted million again of negative negative $XX.X year QX compared amounted a to $XX.X for $XX.X the QX to same of $X.X XXXX. compensation. million, After and SG&A decrease million impact amounted noncash million the last in SG&A $XX.X

Joliet $XX.X for to equipment million, XXXX during expenditures QX of Lion costs. than the Innovation million, early expenditures opposed Joliet end lower to to Center than higher $XX.X as During for of year. Capital of timing $XX and same to of million last $XX.X of plant period the incurred estimate the construction for million previously construction previously received to compared were $XX.X the and in the timing $XX Campus disclosed estimate Campus for due in tooling QX the the Lion as disclosed due quarter, equipment milestones the XXXX. Capital of incurred million in battery were amounted due and mostly later the to million including CAPEX plant earlier

as compared approximately in last million $X.X addition the For mostly to million amounted quarter, year. to intangible to assets in consists $XX.X which R&D,

XXXX. trucks a the year in XXXX. during XXX XXX in million and or make now buses and the XXX revenue me of United Canada full deliveries total a XXXX of vehicles translated XXX% XX few $XX in consisting performance XXX on up to to year, selected million delivered comments items. for $XXX.X Let We compared of in in States. as $XX.X the million XXX XXXX, took compared place of This as vehicles XXXX

profits X.X% Joliet growth $XX.X million negative gross the was and negative $XX for EBITDA for incurred $XX year the the the $X adjusted incurred negative Lion R&D, of projects, were plant million Campus. million Most the Our the of incurred or million. $XX related year including was and million, approximately for of for two CAPEX to

intangible million stood to year. at additions assets $XX Finally, the for

Let growth minute in me now a investments capital for projects our on spend XXXX.

previously signaled, did plan we what in to although a CAPEX invest As at further activity, versus in we XXXX. pace reduced

capacity we the expect year. us annual buses for to XXXX by million. allow production These the amount of Joliet, end the investments of infrastructure CAPEX have in to For $XX place should to an X,XXX

X.X production battery capacity the million Center in incur expect in the of the with to million end hours the In $XX of to to the gigawatt we XXXX. expect facility, Innovation year. in annual parallel, approximately $XX to of incur goal we XXXX, up for CAPEX bringing For CAPEX by

million through approximately federal provincial in that incurred be $XX to loans expected for from XX% purpose. such $XX Campus, million the capital approximately or and the expect be of financed Lion in We XXXX secured will expenditures the

capital purchase few we a words and resources. a In a of QX, common Let me successfully share. share closed each consisting a offering say a unit warrant common $XX now liquidity million units, to of with and on

million our $XX during program under raised also quarter. the ATM We

Finalta. the facility, credit $XX facility drew facilities, and debt the a used credit new refinance PDPC, the we with credit previous on to Finally, with loans our to on including Lion related government Finalta Campus, which and was facilities our million revolving

As exercise in loans incurred the the million over-allotment had we we cash proceeds of CAPEX of the for unit government the end offering, $XX the Campus $XX of were after the We increasing by option of Shortly owed a position gross $X.X end the also for announced QX, million. XXXX. on QX, Lion for million. of

We $XX also transaction raising sale-leaseback of the in plant approximately proceeds million. announced a for gross Mirabel, battery building

CAPEX program. the the capacity will Campus issuance As quarter, for remained we approximately XX% financed previously through At of federal ATM Lion $XX our that provincial million be of the loans. end of to expect approximately the and incurred mentioned, for the in XXXX under available be

with to raise that, we in I sheet XXXX our us to monitor While and liquidity it that opportunities will our seize balance become for provides available to flexibility to look runway, additional remarks. continue pass back and will concluding capital. With may Marc closely

Nicolas. Thanks,

for the saying questions, a in book that and have as let three growth conclude ramping we gradually plants XXXX start order open we line we by Before profitability. good in long-term everything me our manufacturing up, place for with

plant starting yourself, official is with spring. focus this time this trend. your sustaining opening our you will see of this for proceed our the new of on the battery we with be of two Also, you to year, all factories the improvements Our morning. able visit this Thank since will

lines want number allow to now you limit just questions. the will of we to their I to Operator, ask questions. to open two, questions other asked participants for ask to the

You questions. can of back course any queue the come if follow-up you in have

Instructions]. [Operator

first from ahead. with Mike Mike, today please go comes Our D.A. question Davidson. Shlisky

or of of I my I'm guidance, but least for thanks said kind give weeks question. we're trucks already for at give buses, production you the March you mean directional of and us and taking for last don't mean morning first course. trucks at know usually Good the Could here? range quarter kind of sorry. I here. I some of any I -- the few

reminder Yeah, up yes. as just is going manufacturing terms a have Montreal, absolutely. question. yes, but capacity this very you Joliet -- as manufacturing the of it's we ramping we in well Yes, we're mean, Manufacturing don't just Thanks Mike, buses, give in in Trucks capacity. X,XXX units, that of capacity Marc. we well. and morning your good for guidance, and I said,

growing. the I we're you five well what the in can that as expecting quarters, tell that This in what last we've seen, keep So is trend I'm sorry, is XXXX.

quarter I've one I one it's mean, the and think So other. it to several will said what XXXX in the growth happen exactly from is other, quarter times, constant to we a this

Okay, okay.

just bunch, I'll go got Another other whole I've question, this a but here. to one

Work at saw Lion was I week, this Truck I week. So booth. the

-- of show, really Maybe one other You lot zero trucks a walk I are the and why kind side? as other how real b) aren't There really of really X show. in signage show many X. have the note seeing nice orders of on went there around can't we easy folks? curious, of in Class Class two the Class supply And your Class really general, you anywhere curious, only an ICE Class you of X if trucks. at I'm get aren't And X any else there, the kind I'm really or any guess the show. a to short flow Xs,

X is is else buses one mean, truck we trucks. electric a mean, I beginning, Class the this kind. I Well, a it right everything purpose-built we've like purpose-built I purpose-built of have right Yes. we're the doing, at think said or Mike. now

we're part the So us. talk it's after not I an that's doing. for of mean DNA

at -- this absolutely a we some else You're we show. seen X. I partnerships mean where almost right. with partners of market is now, the that right exposing And this with that there nobody were you've the this is the Class

truck To by for the the So we about crisis the crisis is the book years. delayed chain good that two only the of and we unit. And of in had feel at beginning that with that I of beginning basically market you also last couple feel at us the order it's and market us. the a everything years feel mean, We XXX see this. it's COVID just that, supply

the And you that feel operators if the and so the also of we -- of there floor, walk very saw good. you trucks. And our probably partners the interest we you for have number

LionX also Because those that's on I hard also X, X, working the year. are the seen year. I LionX. launching they LionX Class of for years is like, the models, mean, this mean want those And the finally, example, operators on for that's to floor, after we trucks the see true all other launching exciting. mean, tractor, that I for we're this so So the Class you've mean, I them well and but for all the the true but this

them, While they've are whole looking they many -- seen so And -- are the mean, thing of those about a the I of electrifying them lot They good fleet. whole the operators, them, already. at driving them. they're looking thing

cost that good and along. excited looking and trucks of coming so diesel they have that ones at spend in total right of and much that are well So understanding operations. the as what they -- their in they right by ownership. very that have They maintenance the a now we are And money means basically, now the are

thanks think incumbent of So we're retrofit see products. been -- your difference current for their and everybody have is basically question. doing starting the other has to OEMs got what of which between doing, the I some a see I

Okay.

Just the visits, on of question, Astor the I as you customer your Truck answer give have tail-part far as the feel speeds, think order what you etcetera? feedback you week the went, how it Work of itself, on booth folks do do

yes. I'm sorry, Mike,

I don't So meet we to need the mean, we well, the Truck to with mean it's do always in shows We meet the Work Show, those those customers already. customers. obviously, I do well. it it. no some went like -- shows, that but

to about -- truck. brand can on and also expose put recognition some equipment the it's operators that the of So about really the also

what basis. building a the all of doing part the brand, very with daily well. basically those mean, relationship building keep keep So of customers. We that's we're went we I on

the the market I I what in as reason, we of earlier, feel think at beginning this going three at some think Joliet, the why some I quarter be is this point But in just is I to we've is the of we're will future. said so This see reserved we So mean, a from big reason capacity few now. years in trucks for point. our at

it. there. you. Okay, I Thank it appreciate I will leave

Michael. Thank you

Our next Benoit. ahead, from Please Benoit Capital go Poirier Desjardin Markets. with question comes

good Yes, morning thank and you everyone.

I look If two stagnant last explain and the over at was book, mean it we what bookings seeing truck if it declined slowdown venture, if look macro -- financing we quarters pretty you you so, the environment the given the in Are costs, QX. order has look specifically this? for higher could

Nick gain, the you to to EPA Benoit, bigger your Yes. the obviously, answer it's we first here. I no, forward, have and that the with speak Good operators part And -- there's good of a also order your to of working factors help not we're expect decline. with of always book morning. look there's working a order will number orders this to -- We book. smaller we're momentum. the on. program we're when mean, a influencing number seeing No we contracts that the question,

feel forward. So about book to order we going bit continue a the

-- question what momentum of is early think trucks, on but announce the Marc addressed we I well. remain to terms obviously, And we In that. the but excited orders, want about but stage, it's building there is still

were look What the at we you color. Mirabel. of look front, cash quarter. about also ramp-up plants? If the in over great for how XXXX should free in acquisition slightly Great Joliet flow $XXX just overall million get provided your of over in you at and the light of burn XXXX, we okay. the about investment intangible in successful the Okay, color financing to And liquidity on

lot the But after $XX at balance And of million, sheet, right the of the as back have $X.X Yes. leaseback quarter, million that's I'll from overall offering. XXst. then balance take million on and it the had Benoit. sheet, cash we you the December on over we look the here, December unit sale another $XX when of option

the expect some purchase which facility increase but had those capacity month, of of to scale. from as $X million. end me. the will that XXX units. under expect There And upfront $XXX have for purchase of we of at base EPA excuse the those end about million we of for the payments of We Recall procure orders But we course, that quarter. borrowing revolving we the we program, end was of as the there at orders help credit -- the the the to quarter, continue at significantly secured the

that the we're giving specific on $XX CAPEX growth for million is for guide The XXXX really projects.

continue we flexibility. be to sheet said, feel there and the Of our significant all that in in provides But acquisition investment intangible course, balance continued need or of with the to R&D assets. and that operations, we'll fund us with runway will

of as explore course, still conditions, possible And alternatives to much will, the we million course, We're very $XX the on as mindful raise to to of and have We ATM. capital. recall, of continue market remaining non-dilutive use, instrument. we'll try

tools So we that the that have to fund could be one of our operations.

Okay, the thank for time. you much very

Thank you Benoit.

The from B. ahead. please Riley. Chris, with Chris next question go comes Souther

program, bit the and looking program might Hey structure EPA more the XXXX And applications for the for the you'd XXX of a in what And many How the were those be free my the guys. with you really can that EPA were filed a next about are little orders. round. long Thanks of you talk round agents guys was discussions for round? independently? versus on file some a timing Thanks. there in of might think obviously, and here. the that for that be that the the waitlist that taking out first there purchase little they Maybe case questions bit

are but some Hi part converting we question, say purchase secured the of agents. free the the of terms were those that of in I'd terms were successes first Yes. your seeing the orders XXX, majority from of Chris, in

around going agents. significant there's that So importantly, I And more free well. dialogue is think

company. that, the question of and So deadline continue What to the is again? these And priority one. that's things the a course, The for XXth number the second make was will time. April take part we of key

Speakers]. was That [Multiple the further about

allocated $X will year. we next expect billion There be

part that's to that and like And it well. billion. be via year program We today, of in essentially place of then first will the one the separate of be in as $X a of a form in more the terms the this that but there hear half the reimbursement could component of procedure attribution timing expect we expect of

it. Got

helpful. seeing in of seeing bit I'm some like on but that other the Class of those side, the And a the past truck you're Okay. those IRA really it demand Romeo vehicles moderated for third momentum the sounds kick maybe bit it waiting then dictate what a this in timing you big quarter around going a little it can of subsidies? in you quarter, is That's customers you here, the if talk and some X, to are there? kind were to that had new is outcome about for And curious any for subsidies details now or kind the starting a uptick year in IRA are orders and of

I now, this The the mean, I this mean And of purchase. I sure. that I Chris, Marc. is are all mentioning I unit, the the mean, right was most earlier, really IRA XX,XXX operators Yes. mean, as using to TCO is cases. is in out, favorable TCO, gone has the for And tool the good. is

lot a the LionX the around was momentum So LionX. feel talking earlier. about I we that's There's great. of

the as will partnership [ph]. one. have Amers this be launching that we used This electric the under the obviously, ambulance be will with same we So year, LionX

earlier, we I in talking also. mean, there's is almost market Nobody LionX, else big nothing this right as The this good. And now. market were is a else. the So

of So we're good the LionX. a some expecting with results timing. matter It's

one the LionX we mentioned is This launching of by end the be year. will You -- tractor. the

this could have it mean date. impact, I right, absolutely I Romeo, with launching You're the mean, an on though thing

the delay we and with could tractor a the now, right But that of orders for product. LionX So said, have customers. the launch lot that momentum there's though, that of being also

products medium of to So like those as as of line adding buying the makes of also I launch And we're that full possible, duty operators, to we and for they trying of difference. most heavy this models. many a mean, feel product. are huge go fast Because the duty

they speak LionX we a a LionX, and can customer, a tractor to time also like every a So LionX. buy

So the not adding very is the be providing. going Lion other be full OEMs to something will most of to that specific lineup

Got it.

Okay. Maybe we you to and starting timing either you just to scale provide here? gross or profit to for do you're need positive the be positive Would EBITDA able hit any last one. volume as update up around think

Yes, I'd good unit Chris, margin. Obviously, on economics. say, in some gross the we about now, feel investing continue to we're right to leads up level that scaling and drag the

going or at up, scale to I -- continue we won't the a and improve we But As provide margins we're this as think timing well. to EBITDA gross eventually the time. specific number

Okay, thanks.

you. Thank

from with comes George next question please The Genuity. Canaccord Gianarikas George, go ahead.

market and to of ask themselves your in potentially a Hi, bit terms concrete order about this, materially bit in understand you share you and good close very the orders us manifesting morning Could a to little program like we're I'd EPA guide obviously, and of are help thank for taking your expectations my little book. conversion? questions. being what

of markets here. the clear we're ones which a all after clear it's to There are free of list agents. and all the are some mean, I look, applicants, going There's us Well we're see areas regions we're with to on having ready regions. where you where success for idea it. more and mass to deploy focus in critical But is us certain the the

mentioned we far. targeted so can't share, I momentum we We've And secured I good XXX with units. market purchase point the as free delivering specific before, agent. unfortunately, we've but think have some a orders started already So

to looking we're get So as much as can. we

feel is argument you. because order compelling, very the I and Thank like there start book little are compelling, in to bit see reduction itself turn about ask Okay. the inflation offerings conversion you to do incentives momentum side. commercial And of a well When very and your incentives to the do the the when TCO I there in your many because eligible. that we'd on then I to believe to are I'd start expect P&L? orders understand switching think are as out. momentum manifesting you but

Yes, down the are a fleet well the to in both as with enthused. we -- thinking traction trying getting operators full we're as were there say discussions and And were of we're big. dialogues the speaking very ago years the a years, number couple that convert come I'd mentioned Marc that's fleet eventually some months. And of few with back seeing that with in the the are looking names are And in larger that as that slowed discussions. good last were recent the quite units some parties and

promising. quite it's so And

I interesting think tax about it really $XX,XXX is broadly. what's that credit the IRA applies

And or with programs, so of that either quite program is. broad in its something combination helps how the because on other just scale bit a it's own

to space And for so year. is in we orders truck the and there get stay certainly that. what tuned And obviously, expect we so purchase this to announce the want momentum

well. out a well, and needle. have that And those And this And one there a George, side. in we a us U.S. make, yes, $XX,XXX are will those are big difference you in the side, also this is way Canadian on opinion, the -- programs as if the also we But obviously is move the Quebec. many the [indiscernible] like feel helping in there also take making our on look

some other there of also money well that there's But like now. on the are as U.S. program. So right type HVIP side programs

with the that's this available the easy easy Lion we feel like local all through feel Lion right many manage to in And it's doing we with there's money places. this money ecosystem doing, we're is like Grand, we're not that our is because like thing one what customers. So it's And the well where now. really

mean, I started programs, those of just many to apply. But

waiting [ph] thing we SCUBA we couple we'll that. and side, now been So result EPA the see feel a the the obviously well. truck side spoke of for of But the years, as -- on the well, about on same

So there are came customers. some subsidies that to available the just

that agreement needle So this that some help we the their say, one for they all you're with And the and going finance upfront NGS feel we're mean, really something new Mitsubishi the operators, we need obviously a and money product. challenge, Solutions of of up-to-date because when of help this that's the of feel because is can I that, we're have but part -- as let's challenge. I cost Capital is new electric and always we move that's the vehicles, them. well But that's mean, well. helping as us selling to we on they reason Lion to will very feel

to So are the that else some and me it Red through because sounds and are of to speak. like new the to bottlenecks you're anything point as Tape at time just math saying opposed paperwork, in people still this are the the programs working so really

with little a those but the we're number the the doing the we can that use mean, like business also we a, calculation I I saw there's training help. mean upfront it, is is decisions, truck that, I product, like doesn't always question back to difference yes, -- operators, will cost they big make of to units truck then mean, thing we've us. I now. I the bus the the see They're let's now We living them operators. possible mean there's them of we on most that's not feel and it's on bit to people, that the yes. mean, those a and now it's will now, with And happen between the side, those XXXX they're it's start now, just side. bus in electric. with And will happen this and purchasing that exist -- said going they're little buses regions products, that of what go but I with, bit that making there's full but a with that, mean, I same tomorrow. we with And truck to change. mean be We this say, selling really we're they truck school modest a right question, everything, after started business it the helping going is this in lower mean obviously, when orders I the mean, the helping money TCO, will is the helping making I Well, the can selling And and vehicles. feel anymore. those buses, with is reliable,

you. Thank

you. Thank

comes CIBC. Kevin. with next from go ahead, Please question Chiang Kevin Our

ramping how Thank Good morning. you're speak questions. my could for you you here. up to Maybe taking labor

facilities? be is couple of ability match your production to color years provided going targets, years comment here maybe guess where here? like also factor to order And going current of find on I of You've I be guess, on and looks turnover your great today in over your the you next ago where headcount is terms within to couple versus maybe if capabilities. Joliet what in the how a production could is to

Yes, good this Kevin, Marc. morning is

about the units. manufacturing to if those to the manufacture is buses I'm We the for units. equipment factory X,XXX and capacity the we Montreal people talking have add start So with,

And mean, good So that. navigate now. just the XX remain the we're we're an issue probably been said chain pace I right issue next as it maybe has I supply But and months. able for in an -- to through year, next have a earlier, we will

the saw You the comments going QX through. trend about we're my heard results, that you and

challenge? a doing side. are do need So We bus we I Yes. have labor is mean, people the Absolutely. we the on fine?

of On the match book obviously, the also, up a need be. truck to year, equipment the the X,XXX XXX we timing -- do saw with we Because units side, And as labor products. are to need new of order we the well, but ramping at units. the you the we the the need launch manufacture have this

or side about me specific on In having a let truck challenge Montreal. labor Right with see don't we respect speak we're in the now, to right fine. the doing So Joliet. Joliet,

the invested. this you X,XXX And the at now was if manufacturing people mentioning will right We the we -- that we've about have XXX in buses. of Nick be will end year CAPEX have and capacity earlier, over

the So our same. is trucks respect with the remaining decision to

start investing short-term manufacturing of have not a units will I basis Montreal We factory. in capacity -- on X,XXX the at capacity, more because mean, truck we on

we We're doing in now Joliet be be, XXX we're in and of will we're doing throughout and people will labor right ramping modest the ramping -- now, mean, up a earlier, fine. we XXXX. I but said over need have ramping in right So Joliet up the we up vehicles be I as QX, output doing will number fine. we as And

great. that's manufacturing started We in is be to XXXX going constant So this and ramp-up. a

that the right year, see right for hire are So go you're higher And exactly in we people, number than the a in whole but over we're But going results, this countries. I people we you expecting. both right our is what to the to mean, that can the have we this -- it's we recruit need able challenge XXX but now to that now. expect to always

over of terms two Obviously, essentially costs on fixed? book? my you there in commodity you excellent. or That's of are inflation. issues, that came order chain these how you a Maybe so I'm in where made various whole factor of here the inflation -- you put essentially get vehicle cost some you price these vehicle have manage question, an the when lever have X,XXX like margin may some or to second and points cycle in you occurred contracts price as adjustment the delivery orders unexpected at is cost almost order indexing protect is the And just into the wondering the have book into vehicles. that Do supply sort maybe deliver of the year that the this or or line fixed production during gross past time

your answer question orders on were To at a vast there, here. minority purchase fixed Nick Kevin, yes, price. Hey the

sure, billet seen XX that months, some today. and that's over year or the the reflected for in in presenting last we're have, the gross materials inflation We margins

scales model well. We continue that to think the really

the direct heard to through way price the protect previous increases in think gradually talk to obviously quarters rolled and some out. that to level economics unit we we of figures They well, bottom a because works you've the being unit that's with and scales our case. those going those book. line, start seeing well the relatively nimble that's model, able we're us case the that and start order price a So that and modest increases, with is economic works we in about implement well that are But increases. we to think And That sales level said, quite in the still P&L. that starting price it's today really with the feel the we're

here, time, you're inflation not maybe you this to some couple pretty that of has what do over a because just been you and breakeven someone where inflation give earlier, versus the structural, perspective thought versus know going know seen what of I years me over think think but is much or manageable, today number I maybe number qualitative you materially you've then, tried whatever you is that the from ask and years couple -- it thought the to breakeven unit the past same? but do transient the maybe was target is you pretty a changed still ago of

Yes.

price is For are mentioned, important bring inflationary when as objective longer sure, the term, to over said the that adjustments scale to it say the Recall will always that. going pressure. customers reset we've have and has that our an And time. think than -- down more I'd just unit our we impact. But I will mix forward, of sort price

it objective in What term. different us. that For sure, the in term. the does a a for price in inflation takes us longer delay direction certainly reductions very remains in The short cause

BMW stock now, of we in Kevin, the also X,XXX batteries we I the like keep those mean mind had rate. that a in batteries, And right that we we're speak. using fixed as have

an impact billet this batteries XX% So let's account -- of of for, an the has the to of material about say, XX% EV.

make mean, made some also, difference when we're we've is going I this we're comparing to this factory, costing. pleased in I in mean, and terms a such factory. mean, significant the that to battery by point we're because So very others. huge the cost. investments very I of The at battery shaving is the obviously,

and this advantages own all our about and that of in cooling efficiency better makes we we're battery this, but this difference. vertical is a huge integration. spoke in the totally factory And all also technology of something adding this earlier of better of all and So costing, controlling terms through

be we So using mean, batteries not the BMW this mostly going be really will that cost right for to it's and changed. now, has I XXXX,

through big our that's inflation. of helped and this this that material, So really piece manage something is a billet us

Those of And are much. very best XXXX here. Thank you. you in And great thank points. luck

Thank you.

Dan. Barclays. go Dan The Please ahead next question with from comes Levy

required Hi, ramp the good capacity comments your that us are achieve actual about that as on to be for go unlocked? back factors Joliet you and to plans could little get then your Maybe production gating taking met talk a the we of I to give the want a annualized can you And just rate and being of how about is end you more morning capacity thank X,XXX run year. -- the just of the to capacity? to maybe questions. of think to some by that color

you, good Yes. Dan. morning Thank

that yes, within So official in as see next been few able do what Joliet, the and be the so to yourself we've opening well. doing months, you'll we'll

We have working stations have Montreal at than we more the factory.

to this X,XXX years going So buses. X,XXX And be year, end basically, a buses. at the now from goal of have will in of few capacity a to be it's the

this Joliet So capacity. of in of those XX number manufacturing been of now structure stations planned about what kind doing working is working which for with has we're stations, the

bit with intensive. X.X well. But at a of that done. we're this was X,XXX little the in we're less do and this end those the at the year, -- units more there investment. Montreal, still get year battery looking factory the we're I in we hour, already CAPEX looking with the when in CAPEX news, done same labor XXXX, little a at I plants automation the we're gigawatt thing after the it's Joliet. need as when mean, bit good plan. to almost We've of mean The the there, though, this investments is to So by invested that end

manufacturing one on of mean, them, three done. because of I this we're for us And big basically a the on is already year XXXX So really school managing I is is those plants. we're year the up kind mean, scaled this buses. where

And plants, the they are I mean, ramping up there. other but two we're

equipment site, the people there. on We have are of lot the a already

of So for turning -- let's is big is kind it's year this a say, point mean Lion. XXXX really I great. of,

be X,XXX well So hire this the asking space. feel basically, we to by were we because that the labor -- end of do this the the on manufacturing units, you then, think I we if year, will need

like it's I we by the a labor basically XX in to equipment there. decide to mean yourself. will units if hire do able be that you'll will So that But Joliet. we the see week be

CAPEX after it that, that equipment the the to the to took absolutely X,XXX, go CAPEX amount the from there and of same will be of to X,XXX So not needed is to X,XXX. amount get

the a it's in anything more lot spending we've So modest past. been than

of, bigger a by the we and timing to will when do it couple at almost that the market do let's even say, expect to we are ready And be of we not to So are some kind right. take easy double will will right be be the we now point. manufacturing need storm years that. before than probably capacity after But

Thank you.

further just desire a spending lot of expenses spend an to meaning manage interpret, limit not volume now? growth, heavy to growth. of there's not required, it additional and underlying The sort unlock is So done sounds there's to like to

CAPEX the in mind top Well, the And the very aligning gigawatt thing sure same making and of that for no our to that's carefully order spend. go we're hour reason to I and liquidity spending. is I I us, investing with I we're the we're X.X mean, managing at to mean mean, decided doubt. we've book, the battery mean, Joliet. factory, respect with we're

being go from to but will we that X,XXX, are taking Joliet manage. minimal, X,XXX there we to in if ramping from place careful say, spending yes, a far. is X,XXX. mean units so And then been through very carefully get X,XXX we we've very compare That said, from in have spending mean Because everything be let's about saying up. we're X,XXX to very, we X,XXX, like doesn't mean to X,XXX going going I being though, that. So will steps everything to is we're that I when to to

carefully lot the success in orders, to we up if be of go So spend. ramp we the of to we're than those will higher CAPEX because a having all X,XXX, able need in getting

all in top mind we're investments and CAPEX always are So doing. everything of those

Great, you an underlying Maybe said were as more color talking constraints are supply you're thank issue. and follow-up, actions? little just those taking action you. as still then about a Thank just mitigate what you a those constraints on And could to that, provide you you.

get I'm sorry, I that... didn't

redundancy, of and -- supplier it's sides what well, we've side The we've on it's Dan. the on in exactly one mean, redundancy, doing been the is things we're like And very school of -- well. supply only we're doing been going almost years, OEM of the natural the I kind both with especially bus last the with chain? Yes, that's of border. the supplier what couple it's doing now, we factories that also

U.S. having suppliers need that Canadian having we're nothing it be. mean, the but side, on and the on country us side, from using prevent to So one one there's side. in on suppliers we're supplier I it's other using the

bit with So I as components bit And like did, some also is same a example don't mean, great also X,XXX it thing doing point And well. the that's we well. batteries, -- we're thing doing. served price critical now. of say is the the We the have fine. and one to I batteries was I good some little what been like At number what us in we've did past. little think overstocking, one this is we a but

issues? all the from better we we not. we've better those getting we the like Are Absolutely out other. feel wood what been Can one Yes. and manage supply through So we're quarter that? of navigate that's And doing. of chain and to on

that equipped all we mean, And regard other worst -- us, about well Honestly, this forward. of the talking chain the impact also been in there that's headwinds feel very be chain. been supply Supply is crisis, going feel war the will impacting in any for mean us. we've behind obviously, I I but we're headwinds that

times. of that Lion crisis a difficult So lot customers war. of in protect well There and all we're was a to other there's a our But for reasons, feel equipped COVID and those chain supply I including that. good

you Okay. Thank much. very

Dan. you Thank

Rupert Rupert. Please with question go from The National comes Merer next Bank. ahead

everyone. Hi, good morning

and to could these about the around on another to a issues run months chain, or you we if the does far, call have so supply limiting But in talked hire people. could So week by you be XX mentioned it you capacity your year, for seem think be and enough Joliet, end XX do rate, so. production of you units the believe I

So chain by for limitation end you of like the that it supply comment? think Joliet not the sounds be the a may is fair year, a

control, feel Well, under control. more we that it's more and Rupert. It's under

Let's put it way. this

had a like next mean, Right limiting chain. feel XX issue, going and is to year we better about We we -- going to we within supply totally months. now, is still was an but go different. mean, you the If better I the tone this feel factor this feel the I the discussions ago, be away

You're absolutely right.

factor limiting be now, yes. a year something hopefully, a mean, supply I will not anymore, So be I will mean, in that chain, from almost

limitations you other of that production, order kind we of any the there know that those to are run is And big let's enough, on deliver year, there rate? orders enough to the could produce but book this are say,

receive was obviously, we schedule. all we're because orders going very equipped are in well sure that no subsidies. is that approval And but something final I trained, Well, the it's always delivery our customers red It's mind of the of this, charging also always the subsidies talking infrastructure us. about of aligning that and for top rely But mean going absolutely, the with subsidies, being terms I of always flag. past, when there's in the making most the but and well, are well that buses of the the is to ecosystem on they have

we mean, several for -- God of is Lion launched operations of terms the I operators. ago. energy So a that huge, had the thank that this years we've this feel huge making We difference, in

make good very I to a sure the to need years, very is would that at be but they really buses feel be prepared going need we to this something them, the receiving efficient it's I for And fully So operation. them, them became doing. when say to very, and receive they very, throughout it's that trucks

So a you of heard me ecosystem. lot this time talk about

are think Not huge of selling one with EV dealers. when advantage decided it think the say, very one easy that's And of everything the some think that sell a themselves I it's let's difference. OEMs I to do have direct. we we're to for to big turn us dealers to it's we've And that and they makes well. reasons of comparing other take, And equip need the that. the serving I to

Great, on battery that. And the secondly, for plants. thanks then

believe you your be So gigawatt capacity hours. could X.X

you I enough vehicles. think said that's for X,XXX

So plant there uses. year, battery to that obviously, you can capacity need parties other what for than your of or improving end the could any to optimize be third Are of for contemplating internal your by say, the you operations the those any capacity greater margins? using you are ways sell

is is this because to an automation. X.X, everything option, it's up we're Almost reason automated. Rupert, always matter a going be to scaling It's And of mean capacity there. I the

to do that. an mean able we'll and It's very that, operation. you'll see opening You'll in I a probably see April, exciting be

matter of robots. matter purchasing a a of So it's right the automation, it's

was So X.X we felt hour gigawatt the the number. right

that buses. right. like if selling selling trucks, If it's will you're I we're we're buses, mean only like LionX tractor. it's mean, only I like if XX,XXX Yes, like X,XXX only trucks be

regard. of is selling because to doing lot OEMs, capacity -- on right a this have do packs the not means time battery now. in And ample essence is this right market planning for now more. well So other time anybody as we our to We're else

mean, battery this more buses. will pack. battery integrating a trucks their pack you want selling That means mean this If lot to right, the with I it just than or do current a --

those is a lot I for years understating, many through the battery truck bus. the that on integrate have of a So something to integrate OEMs say, a those This pack we're on we to would packs. years have it but talking takes time been, incumbent or that

the capacity that want short-term don't the to need because option a or costs. and So medium-term we that like feel thinking short want on selling make this us sure focused about we're fully that to not Lion going it serve we're on And because to we like we getting We basis. products will we feel any well. better it's keep

So now. not an option for

Thanks.

just follow-up concerns, labor few so have limiting other mostly plant of able it's imagine I the plant. any So chain Are plant, factors a concerns on the know I be to battery the other for automated on hit final capacity that supply or one do concerns there run that you any battery rate? any you might

labor No Yes. concern.

is absolutely labor not -- I it's is not let's challenge. chain a mean say, always You're Supply a right. challenge.

the for our say same than supply chain should we I that the operations. of have rest So have challenges we

So we know do our -- times suppliers. of all lead the we of

for cells, keen solid in what We agreement have is we're which the a doing.

So we've announced year. that last

this and suppliers with is a very we most place And in is strong. Tier long-term of this So have those X relationship as well.

many for years. I the building So suppliers, them, we them we of most lately. just of suppliers had we I then many relationship then as many, mean start -- this with mean start

very suppliers. a almost it's So that we have good those It's partnerships relationship. with

all So we're next we I with I've for -- and chain the challenges we're challenges the to the operations. manage would XX the those. the are earlier about but made months XX comments supply doing chain same say for the our And rest way the in navigate supply same, those we of

will thank Great, there. I much. it very leave you

Thank you Rupert.

James. Michael Michael. with Please comes go from next Raymond The question Glen ahead

has answered. Thanks. Hey, everything been

Michael. you, Thank Okay.

Abhi ahead. Our next Abhi, question Financial. go Sinha comes please Northland with from

Yeah, thanks in. for squeezing me

impact supply a could revenues just Is one or what was exact any I there been? the the on the in can of units, last impact, could have lot. units of on there have terms whether revenues question been no answered supply you the impact, quantify way what chain was you just number or there, -- So one. have chain, know

Yes, mean, chain Abhi, managing well been not we've I challenges. to easy those say. Obviously, supply

the So our we production people hiring schedule. needed been we've accordingly with

about number you're do, do trucks the I very news about order when good, well that. And equipped I is buses we is But mean, we looking earlier. at to this what think you're the OPEX. sure So this the I you're have and part where good also and is starts. of CAPEX, operation very spend of capital it's is with careful doing. single spend. also it that spoke only selling, this solid we're and -- and It's on making we're being capital about and can a book that And not making every buses we're trucks money

of spending So everything. the economic conditions, we align according including our all to

there So I lot chain the I we if no have obviously, did to supply mean, easy last done a we mean, we units done, but could answer. year. that more could than was units not challenges, ones have

the supply side or Canada the on issues chain? more face you did And U.S.

both have Well, on the sides I mean lot on of border. we border. would of sides both it's I say a of suppliers the

-- as the possible. the us. and local So that's landed we're it's mind as trying cost really quality, top for always to like But we're of be

So Canada. suppliers in we have

We suppliers have the United in States.

now. We we -- have know, now. I will will authoritarian suppliers be in to in from any any between won't years a you We're with there's we trying significant not don't avoid think business not countries But few U.S. countries, some difference other countries doing and I as and right -- Canada authoritarian well. as

understanding and think it's really their a have your knowing matter because they challenges. really I supplier own of

other selling as be well the that components some the are in Sometimes, that us. some putting they manufacturing they into for countries will they're components

and the their to business understand two understand stay the on them times and their lead game don't they our transparency I between and close So sure significant we a is make see products. very have full difference we any to deliver we will really when But countries.

Sure, thanks that. for

last, one if I Just could.

kind power? to the that be? for trying guys BMW cost, on could battery. I On if of looking -- does I talked factor, for would own, impact understand color about more the margin you robust, charging like you the if what you accretive know you I'm are this margin understand your is there more on speed, anything switched differentiating provide some When powerful you because immediate terms to in that do what's else adds of And more that to making batteries, the any quantification, how with it

and differences buying OEM Well, battery are an -- be from any many between packs that Abhi, so pack packs could there suppliers. our can

mean First custom made I of let's those for Lion all, packs the products. are, say,

they're buses. are weight a a of perfect it's and seeing So And trucks huge because balance saying that. of and our difference operators the

them. only, hour not are we a also experience, XXX-kilowatt And safer And needed. in also have a mean, it's driving way Like multiple do if we I more a for of hour to it's So kilowatt it's as modular approach. put or better but XX-kilowatt hour well. selling

need and of number their customer invest money they for the buy basically, operations. the kilowatt hour So in can the

difference. huge a that's So

mean, well you and thermal users as huge operators, -- day. I In and also, the trucks custom we Lion the the better most the our the or like mean technology speed system, with we're that it's art, charging Lion from like night batteries the out batteries management makes doing many the terms BMS speed fully but state right the a reasons. the of technology to get I is well, difference. state-of-the-art, Lion I wow, way and that made of BTMS, of the for customers as The efficiency the now battery could there the the buses. than see is the it management really we for mean, charge, But system, also for

So truck all the using we respect on very, operators very with of stations, the the Level Level most the are X now X. all became of operators good that of and charging and side at to

at So future. that in right short-term we're getting now, working lot I a the mean, more we're than but on XXX-kilowatt,

a So XX a operators that makes lot a like trucks using for huge day difference. are of our hours

but the affect system cycle. well, the battery. speed I also So charging charging the the the speed batteries It but life as well, cooling affect of will as also, the for efficiency will mean,

So you're helping when in you life well, your are batteries manner, cycle. able to your timely cool a

So huge also making those difference. and are that we cycle feel getting factors all of is your better life a

if more know don't on to gross Nick, you asking you've been this? margin. about I want the comment any Now

level. There there, will paying getting certainly we're at of the say that's ramp-up I'd from improvements areas. some terms Obviously, just profit -- Look, that components our parties. but We're one of in own the We're reducing, margin supplying terms we're that help. in obviously, expect Yes. time over commodity switching cutting get of to key the that is third to the batteries. to we we're

thank Sure, you. That’s Thanks. all I have.

morning Abhi. good Alright,

Our Craig with today Craig, go ahead. please Irwin final Capital. from question Roth comes

simple A very question.

for million? and this $XX any guided CAPEX Is other was we what million for it, you total $XX are at $XX year CAPEX then CAPEX. So or at there million looking

procurement etcetera. is No, of some other qualified, there maintenance and at that Craig, CAPEX, CAPEX sort

year, the Over in about XXXX. CAPEX was $XX last that million. That's

Thanks Nick. thanks Okay, guys.

Thank you Craig.

back Thanks. the management turn remarks. Those for the the time to are I'll call team any all have so questions concluding today, for we

forward discussion free the contact for any Well, questions the have. joining to look We me for thanks today. continuing you, to may feel everyone call and you with

You have a Thank nice day. you.

Thank concludes joining call, you, This lines. may everyone today. for you our and us disconnect your now