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Canoo (GOEV)

Participants
Kamal Hamid Vice President of Investor Relations
Tony Aquila Executive Chairman
Renato Giger Senior Vice President & Interim Chief Financial Officer
Craig Irwin ROTH Capital Partners
Jaime Perez RF Lafferty & Company
John Murphy Bank of America
Joseph Spak RBC Capital Markets
Call transcript
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Operator

Greetings and welcome to the Canoo Fourth Quarter 2020 and Full Year Earnings Release Conference Call. At this time all participants are in a listen-only mode. [Operator Instructions] Please note that this conference is being recorded. I will now turn the conference over to our host Kamal Hamid, Vice President of Investor Relations. Thank you, you may begin.

Kamal Hamid

quarter year fourth call. earnings Canoo’s to and XXXX full conference Welcome name of VP Kamal Relations My Hamid, Investor is at Canoo. is Interim and With Renato today Tony Executive Canoo’s me Chairman Giger, Canoo’s Accounting Chief Principal Officer Financial Officer Fernando. Aquila and public Tony worked for CFO as has many company Renato with years. a supporting where more responsible he than with for of multi-billion in record leading leadership years brings track complex teams, dollar was operations. He experience global XX proven global organizations out our to invaluable will build Canoo. as He structure us finance we be at

During this make uncertainties differ may significant a we current may expectations. forward-looking and on call number statements These and risks to results based our actual are subject materially. of

are affect and file on For reports release, today's results future XX, may earnings financial please XX-Q such is that most the we with to we disclosure X-K our discussion that All of required in forms by recent and in any obligation of statements our could the Securities XX-K assume that information as our on law refer no factors March Exchange Form business, to and currently to Except the based as update made today, statements. us. Commission. available XXXX,

including for data bring brings Canoo by are market growth in For leader domains from story, and With everyone that visionary in to who shareholders, public the focused high and play anyone Tony Ensera a call I'll up, has recognized turn connected private productivity. the a built to his entrepreneur over in both companies Executive Tony. are who software is would Aquila. on ecosystem public to else. several He who ground those He building created and Chairman, technology, of that, led deep Solera. and businesses new EVs and before decades experience auto the our marquee our you the the value significant to mission we're important Tony consistently is

Tony Aquila

the to of because thinking the invested the everyone. in it platform Thank and maximize opportunity and we've Chairman, Kamal. the to EVs and to Canoo market of growth done our shareholder multi-purpose mission opportunities with dive role Since technology optimize you, value. Executive determine I bring our with the industry our leading to how associated a enabling on created a consultants, working deep team

of we to world-class worked First, announced we I to build EVs years joined, who Shortly as are Automotive. building very Interim that known many as we have Hector Global Officer along finance from and process, new us Chief a Ramesh new Tax private drive company and Treasury will VP Strategy, and infrastructure a Accounting to systems transition of Murthy, our Counsel our Ruiz, big I has our on He in Savagian Automotive. Marketing the necessary bringing out Officer, brought to C-suite. Pete public Aikman years, company a out and brand our little our for joined say, Board we market Giger, our we of now market Directors our our add Chief has P. experience brought and commercialization to and Technology Pete To us team. valuable go-to our CFO. Renato in move Chief Today, have P or been with as from develop with and Officer, many strategy and after guide Mark as

our on disciplined executive manner. to team the will focused in be a four out completing we Over build the next quarters, six of

LV derivative. Phase our use two manufacturing shift as to will phases. launch production announced of X, the into decided have we MPPX manufacturing we to Second, contract previously

high our derivatives. MPPX selection and volume of shortly. announce Phase will will forward move will X, the micro-factory our where we partners we on mega certain We our build

governors with will a shortly group we down select of discussions deep are States. We number final their to And in and of a teams.

which expansion launch the return engineering dollars our in on us high-tech supporting the board an capital is services labor asked opportunity announced, of experienced we COVID-XX, on an educational and in, We effects impact shortages, and our this the best report. and on the reporting i.e., originally starting companies, stated an vehicles further brought RFP allow automotive pickup infrastructure manufacturing. be of their three The et truck, multi-purpose deemphasize have this be many including have battery, complete, will cetera. creation we geography, is collaboration of our our chips, We to incentives desire or the simply, with team vehicle. lifestyle force, commercialize contract if decided this capital. our IP of infrastructure issued line, on enhance their this will vehicle focused by And out MPDVX return have answer for delivery design on negotiated highest derivatives, and industry of the for investors accelerate billions we the Due third, areas our will Once quarterly next it in EV to other our to build will world-class of States. was systems, impacts, have RFI, derivatives who yes, and our the the reporting to

now All multi-purpose on what attracted Canoo. these let to our me I'm sit about platform, which enhancements to business which MPPX. our of model. me tell call we excited And you

an potential bottom see. an opportunity Free full we as investor we legacy Executive the designing now to approach, and of up an took an electric Chairman thinking, as deliver vehicle. from the inside-out First market from and the

in a cases. propulsion we and maximizes built gave customization. revenue the Industry-wide, through the other represents customized We has canvas the OEMs today cycle that productivity platform all small a of while life forward use to touch-points XX% elements on multiple-owner on of entire manufacturing. the today. for a that ICE us a generated part throughout focus which first-owner solutions life simplifying aftermarket OEM, us potential the or vehicle profitability EV a only vehicle of cabin No space reducing XX% and focus cab whether Instead, associated design the cycle create cycle, Our or to owners done from with functional to the blank count vehicle. is and will vehicle. capacity across vehicle sale, doing cargo gave life of a profit interior the only Bifurcating, mechanical

As company, that are on capitalize connected on our hardware lifecycle and a software the platform tech-first, industry-second vehicle. multi-owner can a of full

those Let road over me add on means market Big XX% to are be our there four about the by believe more billion light context phase-out that climate globally. give concerns, by some period. you technology of today vehicles phase-out the EV addressable picture, decades, from about legislating than generations. over Driven of X market. replaced Which the governments will X.X countries that will next car time five billion ICE We new of are sales EV in of cell sale vehicles new XXXX have vehicles and efficient XXXX. the to vehicles coming fuel to XX set the driven the ICE

As part all increasingly ESG, being of way carbon companies goals neutral. around to are and carbon other Fortune reduction, the XXX some world aggressive the laying of out

carbon the to emissions Providing path the impactful a gases, achieve on that, is Given way U.S., no Biden sector transportation zero further goals. put XX% the XXXX. most achieve to greenhouse within announced administration their tailwind, to contributes of by quickest, later plans EVs switching net has United reduction the to the a than States all

turning the higher industry, as seven four and in investment for to And point quest EV that manufacturing we We major of will a auto growth with market new jobs average at the mass super than multiplier to a pivot expected in and nature drive private and will of innovations due safety billions economy carry EV the job. updates EVs. jobs major new salaries of today, public per in such every the dollars advanced production, these represents improved fuel believe points. are as adoption Just

investments, is to a XX% to new vehicle electric breaks EV our is account Beyond and We an the educational become wait compared bringing that ICE ICE miles rely vehicle point of The vehicle that travels sales on even our are Cost opportunities By broader consumers, who sales an EV the in XX grow for for economy. annual doing and fact we to their favorable the the work, compound for trade and XX% vehicle vehicle. TCO XX why global after or ownership it, According at technology million the business rate or total already the CAGR are to additional car Total expected estimated workforce Ownership. of our sales, miles annual EV design per will mileage average it park. is who for EVs and have don't EV there it of growth cost car an of EVs to economic of X% will next driving people vehicles which a XXXX, on trades it year. X,XXX be in years. an are working XX,XXX basis, to to on people, to estimates is compared people that Globally, model for makes the the these Mobility delivery-class professionals. is putting of commercial development

directly high capital capacity fleet provides are cargo vehicle of volume vehicles commercial focused people benefiting XX% from on on over return million course, MPDVX with to benefit road over ICE a Our economic when And capacity, leading There switching on to today the eight compared similar to EV. XXX TCO mobility metric to low people. savings have or are our basis and TCO would our working working the on the and that metric volume years mobility a an commercial footprint. we

on in experience, have and bring of me OEMs great emissions clear proliferation It have large companies such market; positioning mile the automotive therefore our to design the not. with it EV investments, models leaving of market inefficiencies they to the Given performance gas ownership. that the to the, a of user and TCO needs. vehicle view, massive technology puts EV themselves total on the that as volatility of Because or that at the existing value and to drawbacks compete reduce companies already surprising it residual many and don't bill per are experienced often in of call In not of modifying and imperative and market competitors platforms have which lower platforms, huge. to we EVs. is opportunity first as to and shift need capital pressure the suboptimal cost players we others do our cost the materials, the the it incurred, greenhouse where legacy is long-term is focus leading cost ice balm delivery that meet will of the competitors risk

MPP. meeting We have our a all streamlined our approach with use multi-purpose cases to platform

from vehicle. MPDV and three vehicle, delivery our derivatives far MPP; lifestyle have So we our pickup multi-purpose our truck, announced our

of in instead multiple Our We XX% our cargo we owners, are platform space segments. pillars. cases XX% and larger native estimated common are E-motor to B-X-ALL setting us MPP power approach expansive baggage model commercial true our us way BXB. compared optionality engineered target lets apart range; competitor us legacy equaling to then EV from OEM. nearly which cargo revenue over density over not and business our This in other million to provide any without We're space resulted parts means not an leading paving to XX% leading greater vehicles, choice XX designed miles products; and with we XXX but competitors; across the allowing greater for XX% use TAM a BXC,

pickup like market. auto redefine the truck the U.S. Just

that with in to a sales from use market the EV doubling needs meets will XXXX, of redefine truck XXXX fact, In single multiple pickup we cases. the

of to radius the driving delivery Ford variety full-sized With enthusiast cases a markets economically a turning pickup, of vehicles Ranger and and in size a a and trade designed Prius, of the use payload to a cater benefit and are the the of professionals. our

case. of to satisfy core and this next. makes then owners, can unique take as be example, resulted van In across how of and owner through delivery a it food Knife to the to you customer repurposed vehicle refrigerated from to press concept specific new vehicles and and recognize Diving can and the truck, with truck, delivery value coverage, and of feel customized vehicles one our our as owners the see as the each Pickups. design owner initial new of all cases generations the level meet in electro new a customization the our the to revenue deeper future strategy mileage. beyond customers is retail shop, modular highlighting regardless techno value used up-fitting ability Our the to interest into next and This We vehicle sale use case mechanical innovations. our a a use Swiss significant Army has we goes the age or vehicle that proposition pop-up and

in market with IP revenue aftermarket our cycle; alter accessories, will vehicle's drive on broader across will capitalize We value two, TAM; three, the enables three software life our of customization our IP generations fundamentally vehicle our One, ad-ons engineering proposition will streams the ways. upgrades. owners or across our strategy and of addressable

our popular improved engineering IP was XX% vehicles and on today our manufacturability. as much road the most of to into Going provide support MPPX designed further as the

and an updates, fleet-wide our electrical vehicles. to processing management are and or software on requirements autonomous Canoo and support performance and ergonomics. enhancements, We performance deep to first and to worker steer-by-wire, market. integrate innovations leaf excited architecture truck necessary power our these most technology, and the to us individual the with allows and on network allowing patented and for the that features in-house, designed intelligent vehicle basis vehicle future-proof which us coupled and be our issues many solutions market to develop brought develop thermal will and proprietary focus battery performance with our respond for including a our to bed spring sensors are on We advanced We a rapidly new communication security driver driving,

support via software and over and collection All hardware of staff. our units proprietary electronic year control the updating our data

all By and of validated gamma and owners. cycle and third multiple throughout externally of cases us we continue owners important be the across generations internally miles life customers continue use vehicles our almost our we to have XXX,XXX parties to for both providing accumulated to-date across As vehicle with build test validation testing built. the data targeting by

For and example, QX, an or We added owner. QX, pickup with In to vehicle to all applies in our solutions models. call we could after the equity. by brand us MPDV, front two demonstrated shortly will our include more, could we our approach our revealed all the this revealing this recently revealed the truck turn storage of gate, that a previously second, then our Renato. delivery bed, recently MPPX. effectiveness our be expendable which announced with fourth step new pickup third us strong brings Renato? over on ethos derivatives And vehicle. announced, With the of help lifestyle three to I'll and vehicles drive This multi-purpose

Renato Giger

the the million compared fourth net to fair fourth year prior to earn-out EBITDA XXXX $XXX.X gain GAAP a of prior value $XX.X of loss of liability based compared $XX.X million earnings company. research to quarter research $XX.X in be I'm compensation period; year year quarter today $XX.X to the fourth million $XX.X here net Canoo's $XX.X quarter expense excluding the of call public minus contingent $XX in net quarter SG&A the of million fourth shares, non-cash in in on was compensation as earn-out XXXX to with the development in of GAAP $X.X re-measurement stock Tony. you, quarter period. compared was the million a to of pleased quarter million. period. shares on excluding of the results; in of first related value the the a expense XXXX million. million the in GAAP quarter of SG&A expense and the loss Thank first of expense in of was very $XX.X adjusted Starting prior compared million fourth XXXX was adjusted million periodic loss $XX.X liability. was million in of stock-based development included in our and $XX.X XXXX, XXXX fair XXXX minus $XX.X quarter fourth EBITDA prior Fourth million the million XXXX was change period, year

expense Research to $XXX.X the was year Turning million XXXX million million compared stock expense year and was million $XX.X in year, $XX.X respectively. for $XXX.X and in $XX.X and XXXX results revenue the $XXX.X million based XXXX the million of development development full was Research to full prior to respectively, year. full XXXX $X.X the million, year of and million the up prior compensation and in in of million year. XXXX SG&A $XX.X prior million $X.X compared $X.X excluding our compared was to the expense

expense periodic stock-based GAAP loss and XXXX and net period. loss was of of $XX.X respectively. an XXXX related value respectively, was minus $X liability million loss Excluding re-measurement of in the in of the XXXX billion a change EBITDA $XXX.X to million gain $XXX.X adjusted fair compensation adjusted net SG&A million on value GAAP in to of million million was year period. year and XXXX $XX.X a $XX.X million to fair shares non-cash minus prior the $XXX.X contingent prior share XXXX of in $XX.X GAAP million million net EBITDA included compared compared the earn-out our the liability. $XXX.X in earn-out

ended balance in used cash sheet. on December fourth for quarter sheet year for $XXX.X million expenditures cash million our XXXX the three year compared prior million to Cash flow; Turning was ended $XX.X with compared to for with ended the and of we the in in $X.X prior million the in for $XX.X Capital period. expenditures was of million period. $X.X $XXX.X the XX, million Capital prior months XXXX, $XX.X our the operations prior were million year. the the XXXX year December December million were XX, period. Cash compared ended in $X.X year year in XX, used million to $XXX.X XXXX the compared operations with balance

million and excluding approximately for stock to anticipate million $XX QX expenditures, $XX for XXXX. compensation, me to and let the million We million based Now capital $XX $XX expenses, for our approximately depreciation turn to four-week guidance expenditures. operating

closing remarks. his now Tony? turn Let me over for Tony you to

Tony Aquila

our determination make the player We vehicles it it a revenue the one by their Canoo to all in like questions. and today. Thank of believe market. will now building based top people combined market up our thanking platform first multipurpose most innovative hard for the on our of us to great you at And start derivative vehicle Renato. market I'd coming and To in the to EV and three-pronged work use-case up on like model open to I'd with global wrap

Operator

Thank question question. ROTH Our [Operator comes from Capital Please Irwin Instructions] state Craig you. your Partners. first with

Craig Irwin

Good questions. my evening, taking and thanks for

Can sort a hire over like of completed the what to it XX – is people in fairly in you look stock updated This to it's hiring So you maybe XXXX? more are the of was that? in talk looks process after some Do of about with hiring? many How SPAC a ramp operating R&D. the been expenses you have course expected because of always you and a number potential IPO. when And is significant there's bit good, of where OpEx in What the the XX like number. the comp growth very healthy that? use is an you aim to

Tony Aquila

Yes. good Craig, morning. Hi,

answer that stock So, hiring the from from in – move a phase. be we'll we're But comp the FTEs that. a about perspective, adding I'll piece. another targeting perspective, through as asking gamma XXX do Renato we hiring

– we've a aggressive there; is to done and war that pretty it hard to right course, talent for use actually speak Of it's things been to out market continue the plan. well. find our so meet All tactics people we'll to considering a

Renato Giger

it today. going it not Renato. Nice down, it and cash because we price number number is depends of as share it two, this has the forecasting companies forecasting we you. are to are up that It's or that not because comes one, not therefore to relevant meet Craig, impact. no When on compensation

Tony Aquila

are tactics. we're to XXth the people refer I to What what Craig add ensure the I targeting that, in we aggressive percentile that's best is above hiring and again, to would

Craig Irwin

Okay.

little second in remarks. there a – of your contradiction bit The there's a question prepared

on but us engineering help talked about your IP broadens then services. you resolve and about maybe given give partner Can would engineering TAM, that the Tony, announced story subsidize color So and deemphasizing more hats bit deemphasize was you little it your their that you're the would a how the us you broaden engineering, potentially opportunity development why original with that multiple license. – you

Tony Aquila

Yes.

board just accelerate first the a comments thing talent as said new everything this, the from to that yield I for contradiction, IP contradiction say talent perspective a on marks would too kind I we us. and the was derivatives Look, from it look, goes statement. hasn't your war it my our at the million, best creating with into to of question the in and looked would been really So company. feel the our We to it focus the do like $XX is it

IP certainly the chairmanship, from I I when once a earlier about I have I also I had You concerns invested we analysis. involved more if been – lot leakage this certainly, had started you my And the work. started I perspective, do and then this. took of

you really for going that engineering a it find shareholder if all OEMs, a but be to house sense. continue value. And If study makes like not or look to is to we'll you things, can partnership just contract best something the drive

Craig Irwin

is I'm talk Chief Okay. turnover turnover And but about is going Marcinkowski and Balciunas. gone Ulrich first institutions all what's the de-SPAC the These Officer? right? of a question, Ulrich for lot Paul met maybe which you with Executive and the this a here; two process. is people still appears question have that the Alex tomorrow, then, now to like are and gentlemen sold A heavy them and call high Can pipe. are Ulrich going this on ask the So we missing. didn't fairly your today, on That's tough

Tony Aquila

Yes.

open. been call obviously experience. still public. of to people We're going not today the bit in navigating California public through company Texas; So look and from of Dallas, California, kind we've with a a in due as Texas being the bringing extreme in lockdown, We're wide making

and mentioned the as in as my still bringing with one this stabilize. we've in and its comment about the in and your is that been company, positions, will been respect these as people some turnover, I but Ulrich together far currently CEO turnover there's comments, to yes of So have they true worked

lot will a this of companies they in the experience with public and through markets. SPACs bringing go people I of be migration in think a lot as

we're just I navigate as So, think ahead we ahead this and it, quarter-by-quarter. we'll of of bit it a and stay step-by-step

Craig Irwin

I question, Last if may.

and obviously engineering services. deemphasizing engineering You're

seems to that Is that So going guidance accurate? longer is the that SPAC no original model imply forward.

Tony Aquila

doesn't complete we going the pre-revenue – with this that point We'll started. gone be world, we conservative. not give guidance make the to very to giving in have work sense at – want give be all side, And we we're on until in SPAC the that to that's

If more they you look the team now that missed into and never is coming the of more back at consensus. history play, – they've been

And standard, going best so think our way doing this lead all at for a certainly high and do important I is public company SPACs, to here. we're to the

we is. reservation will it is models. will information and contracted, and on not so rev be delivering step-by-step – building based this known as And light we It be

dangerous. that's think I

could misleading. I somewhat be think it

And got comes point; this different that the capital like in it, a leadership operate acknowledge a through under. Certainly model, following better the on that. from I so standard to will work as basis. any up think we plan and different areas you'll your model guide of do and Kamal, to it, you Craig of basis. typical you as the you through at is showed especially mentioned change you so regular margins areas on but And return you with a be speak, we'll

that and table kind let's of through it. discuss So

Craig Irwin

process. So that call not today, I on SPAC and the significant IPO ideal these surprises a acknowledge will are after that's

wanted Thank to that? underline you. just I So,

Tony Aquila

we to when you ahead wanted going the understand explain did certainly of Totally get to situation that. hey, puts but the to you is profitable really I how done understand company, closely the but wasn't they original we've model, perspective; here, which your and rectify your to to understand to this past. build this we a obviously it do in and how we work in here intend And and work

do, understand we're why think can going. we very changes. these once understand where you clearly And made you will I you So

Craig Irwin

Thank you. Good luck.

Operator

Jaime Perez question. with RF comes Our state Lafferty next & question your Please Company. from

Jaime Perez

several customers? you these, end with Thanks on feedback call. these you any Hey have prototypes everybody. and are question How A taking or you mentioned the for prototypes data quick at doing? all fleet of my

Tony Aquila

Jamie, a on that sorry. I'm up end? you please it this repeat broke bit little can

Jaime Perez

sure. Yes,

XX have these on you prototypes; model yes, mentioned could these customers, fleet could see and out you you there? the are us how tell So about drivable – the maybe along when prototypes we a release way you with prototypes far press beta

Tony Aquila

Yes.

truck for obviously and the MPDV. So released we've the video the footage

opens So we we're XXX,XXX the the have see vehicles, can will world ride through. in, and soon have and Analyst as Day we'll coming you we a up, tested proper in as bring it you miles – but guys so

So do testing. we of typical terrain conditions in have different all kinds of vehicles these you in what

happy So look forward come which to, we're to the do we and see meetings we entertain to due currently right Texas, by the prototypes we if way them. you'd in when do had; some have now like to down and

Jaime Perez

great. be would That Yes.

it towing tested just have as F-XXX? the trucks, something out capacity, as capacity, compete you could I trying far to pickup mean, in have weight prototypes with on how much you get these especially Now, like the and it

Tony Aquila

Yes.

can kind the XXX a the X,XXX again plus the come pounds. capacity around engineer continue show bit. depending to far that right and as now effect. more we'd towing down everything you what But and to happy on on looking we're range those we currently torque horsepower, X,XXX pickup on vehicle, truck aerodynamically little that's drive, about look the a of it when size we'll range, pounds to kind numbers like detail of XXX vehicle goes – X,XXX up range in and pounds, that's you at somewhere the that, same X,XXX the in of So depending train, capacity focused XXX got and, get to on payload And again, pounds of mile set we've up

range. a up get can little you higher on the So depending

Jaime Perez

and particular scope capital the question; manufacturer, And progressive, bit need have like give the far what's us have outsourcing maybe any have – outsourcing? detail of JV, far do follow-up as we on you project a a lay you identified one you little the for my any how to as contract upfront a

Tony Aquila

leadership we the the new that well some deal. or administration. with now change in those manufacturing, launched in detail. couple tailwinds a right the of And Biden very creating contract of experts. wanted as in brought state brought manufacturing from have a We in There that the we as two-pronged look where We with lot were to we're approach, with hires a subsidies obviously of especially into a is into finalists phase,

since motors, have engine design we that element the announcing, a the the have your lot us plop you own engine. are. and So months. a the experience announce componentry, to of we'll of is it looking respect up that and platform, the finalists. can component in a own new somewhere course, is and geography to micro we we'll designed mega our approach we as of the lot that the little And is the between internationalization, have of the lot base, micro-factory a we’ll introduce those of be of to And capital bit can part With weeks and factory you internationalize capital wrap so range else do will since do model be coming your because make our people take different in

activities. of kind similar best-in-class So

Jaime Perez

own manufacturer outsource taking manufacturer in right. rationale plant? from to an What's and your All the the doing going

Tony Aquila

Yes, so good question.

a to best internationalize vehicles, platform top is about and way announced. the because MPP If you platform address your we've on units basis, to across low volume the hat think common the

demand own. long-term the while once running the deal manufacture So, to and get we state. of term, short with our we factory that that have we component we announce up on the want part In to

if would to our you be use in again similar wise and to can that the volume on about hand at a if for it's that addition have contract right without is located side, low very expansion much to geographic your In best-in-class tilting too it this you of your time geographic manufacturer place. think the

And So your need in quickly. want and get from opportunities produce America, cost. you lot we Europe to want because leakage real to getting obviously so are of have any to coming here, of demand in North and we to we the to But that. interim, the deliver we be also, able in here ability a all have pretty that that through can of capital so something then don't have we beyond,

Jaime Perez

fleet Europe, consumer as versus far or open market towards demand the particular more side as No, any U.S. customer? the

Tony Aquila

So lot the it on can of speed-wise the of American go go on size because strength, roads, of especially turning radius and multipurpose it. is Europe equation. vehicle, it and roads, Roman roads, part delivery can go our very on more It strength on shows the of important can American a a adoption Latin which

that, addition already to statements In countries vehicles EV. out to phase for ICEV those made their have

part in two-pronged driving that's So this approach.

won't market. these bringing if a are any the have they other us people into bit things. and shipping, may of we get hybrid, for to are quandary I think in of costs will ability do vehicles going don't that some especially a CapEx a long-term but of lot to a themselves We have new to have the This of delivery schedule. ensure leakage our those

European think somewhere in So being of the it as theater.

Jaime Perez

That's all have. I right. the questions All it Thanks. pass I'll along.

Tony Aquila

you. Thank

Operator

question. America. of from Our with state your John Please next question Murphy comes Bank

John Murphy

afternoon. Good

that how the mean, mean, to of or you and are if that or, somebody, Steyr, follow-on much a looking a I platform ask company addition assembler just you a on to will. I mean, the contract I manufacturers you're be a manufacturer, is going wanted really far engineering Magna Magna sort somebody questioning, being manufacturing at help, to the along in in to pretty process a lot line an on Just of have contract a contract design capability would help itself, but of lot of

integrated get how curious you'll Just them. with

Tony Aquila

MPP we've to on point the least – as of your think, talks At we're Yes much an one or pretty advanced. released from videos desert. – skateboard, We've can out it chassis we've see. about market the in lot most stuff. look, of crash driving a of as about, the the And, a I done the can tested; far we we already as so

So, from them of the of one of that own running. that partnership most while our be, kind and likely to some manufacturer part our up getting with we're perspective, would components factory

and lot our have – that, components XX% have North be the the the engines, a around to addition components of America. U.S. or In own located to we're we to be we our in ours of targeting

gives contract not reason return to our we're of doing good capital creating which be engineers work have on to parts, wasn't out we're a engineering So we for to another very IP, asset creating build why the goes as brand trying assembler versus an the IP, we us country-by-country. very think, today we leverageable that our own that delivery state-by-state, as is which our tangible strategy have

John Murphy

is manufacturer, manufacturer characterizing to getting fair but stepping this want you time. And way the succinctly, more time, contract stone the you may that's it? use a company, there. manufacturer over maybe be a ultimate is this So that an interim a that Is contract to niche yourself over for of products

Tony Aquila

it's think to your. one-dimensional a it's an – be on this, not I multi-dimensional to thing – not it's

do units. it, geographic the derivatives is, So your addition want are those lower and/or to on manufacturers because with ones But your just you to expansion, the same like our to one help adding another specialty MPP. which best-in-class dimensions volume in are we to contract that, on your of remember use units three dimension is obviously

John Murphy

it. Got

question. the of I amount made mean, obviously is And a money side. the on that certainly when coming commercial of in and landscape at the a then second is competitive Okay. a lot you truck look tremendous business

curious the would So theoretically, different the opportunity look substitutes mean, up than drop, can I'll are of and bubble are starting here competitive bright GM products getting are would ask Ford GM, be that likes like somewhat have I'm you're of just debate you I of I that operated. mean from sort when they that there other at other traditionally certainly response companies similar. this you the sort are or way to

going that be be looking you're for legacy What folks at So what to you're relationships customers the of some from going going the competitive the think after? do to have response? about you

Tony Aquila

battery of to going are putting I electromodding. I'll platforms. these be doing think from a systems lot basis. suboptimal to be going guys what TCO is a They're call in That ICE

the last to wrecking probably frames. years nut and every you And power when you every and you all distributions performance sources, just car background the its XX fatigue start yard. way the from our know aftermarket the for bolt guys, to were As put different weight

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John Murphy

you're And then Is opportunity that last to I the sort how in But of the dated the a is about way sort I any side, as just just kind of much commercial Is of that bit. curious was or on going in the you're sort quick, changing thinking mean, or forward. it tweaked just the subscription side before? that story know is little same too there or mean burner still real of later model part back and of because model just you've play, I retail putting consumer the or before. that on that this business is

Tony Aquila

know industry question John, So well. great so the look, you

about experience think to mean lot role, Craig analyzing and you the to I And If a the in membership on talking value, the lot of this was at balance we a about will money company came the I have we balance my that took have sheet. a I a model, bring spent point rate and residual in think that of and that sheet build on people to changes, how scale. management wanted when

can to on you've starts got only percentage on have big as membership you probably So develop business of can a you, you imagine. otherwise a your certain cache that

basis. from incredible. appropriate you, one? here anything wouldn't Had on we'll change been experience design, has team can hats doubt. engineering and I of So based would have the I the top be it without changed MPP I doing on I cases my I compliment after I why which day tell is use went that amazing that a sequence an on Would have,

it basis positive. it's the modifications your there's that a when the As but yes change you mathematical on doing. can burden To point about to really financial see we’re you think on probably sheet, XX% balance

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range. XX% the XX% in to You're

it comments the in leader, as categories. before the And the I liked present future this. mathematically always I apologize we'll believe through walk up to so So a everyone's I model, past, holds model, take own again, three I you I and the the in model. anybody, and know you all the or the

John Murphy

tilt calling, sheet keep to vehicles. with this definitely to much owning more is but the more sorry that I will so on something then I'm of commercial mean from you're balance the and consumer from away sort a – something more be saying fleets heavy away the

seems there's goes and less a Is it fair? like So risk. that just little off bit ROI a

Tony Aquila

where if to after are the just and our it was, if consumer efforts people on moving risk And where it, the and side on value commercial at the be you COVID study that of going LV really of user, what But the nose market world, of first. of we're really was the [indiscernible] and definitely people focusing each other. we a that's a in to hit the factors punched it is close of commercial bit deepest professional don't the kind want mobility hybrid is would I EV kind that you the data that so, developing, tell We're you concentrating will, down. taking and which bring is,

more we've positive So this a has financial but It's optimized trend. just yes, math. absolutely it, from perspective much a

John Murphy

thank incredibly Got helpful, That's you. it.

Operator

question state Please Brothers. Our next question. [indiscernible] comes with from Taglich your

Unidentified Analyst

my taking questions. Thank you Hi guys. for

you were I ones. And they them will prototypes, shoot I two the last answered, XX but appreciate of new in of product validation. better but that year. back XX same number Some drivable properties, August go have the will to I were

in so fourth quarter, So the some no but phase for product the cars important is new built have crash us. you been validation drivable test, did

increase, So can was built if not that you you? can example, thank assume for explain Yes, the prototypes but in QX, you. now did the truck, so pickup number I

Tony Aquila

Yes. Good question.

gone increased we've which COVID to continue So look, next and to in and driving our put up. said COVID tested the quarter impacts of more obviously where with report has crash were. do and why we'll testing, is seasonality on or pressure that, we hat our exactly we accelerate in has so number of some constraint can the modified low respect volume of we we'll little chassis, testing it, miles a we've example that's can testing. place, tooling And It's now. for the starting chassis the bit reusing MPP crash MPP until some we test We're then get so but right on current a and the again. we're putting We're recycling of driven. the top it manufacturing then regenerated

Unidentified Analyst

the wasn't it of we it can said number was increase. But COVID. it's drive parking it lot, prototypes truck, the drivable? not if You pickup the really So in did

we it that So is try? could really something

Tony Aquila

it is on truck our MPP. MPP. yes, So of pickup top The our is on

it That's here. back of just lot we and mileage. get it chassis we That's you another of took put done kind it's how a work. we So rejuvenated to how and

gets cases, That repaired. it and gets line. like vehicle back sense? a wrecked, the will, you on makes it's It's that If use put

Unidentified Analyst

test your great. third, second, for That's a That's good philosophy. fourth-owner

Tony Aquila

reliable of want you so and to That your the we're it insurance a That is view is for of be correct. your as a on it. good part cost ownership, have We as total costs. testing well way

Unidentified Analyst

we to timeline Great. the launch the the then lifestyle said still changed vehicles focus then due you truck. timeline delivery Has first has changed? going, pickup market you. should expect is, introduced you. question vehicle, Thank And so second you the on you my the the the where to of more truck, first lifestyle Thank or launching commercial, is

Tony Aquila

still configuration to working a through the more now. which upgrades launch going lifestyle We're we're bring We'll it with few Yes. vehicle.

and So it pickup then the But to going can truck. yes, then and we're the needs of other with the customers. meet MPDV stay on the some LV first

Unidentified Analyst

Great. Thank guys. you

Tony Aquila

you. Thank

Operator

Spak next question. Please Our question Capital comes from Markets. your Joseph state with RBC

Joseph Spak

I guess. Thanks much. so of want I couple just everyone. Thanks things. clarify adjusts, Lots to of a

a clear, think Or First back time? possibility something to model that you completely just you've still a that subscription be on, later is just is to at the point abandoned? in

Tony Aquila

and think books like it and something No, We're with issue going capital see Joe. it's lot more your you're to raise on sub-XX% is going whole will idea struggling you going the Otherwise in see a mark-to-market. it know, any to to can to to you're just accounting, on ratio this is. you membership innovative a I model industry as we all was to And got of focus have as then the have sales our be because have this category.

be for in be would market. reason our it It no appropriately over-weighted. there's So to rated

to there's into doesn't accelerated positively that, the In it addition bunch tax, class. you impact of tax incentives, get depreciation factors a areas whole of, for the

the only on vehicle who return those a it at detailed capital are much for owners but looking in and us of we're So for membership. the not in more the and perspective,

not sense? away. being It's appropriately sheet. makes So That membership our balance is managed going just on

Joseph Spak

Yes.

Okay.

respect fleet mobility you absorbs well? you've a seem the sort working problem the the of or mention selling pretty a electric well. conversations could if obviously because itself towards companies, fleet does TNCs directly mentioned leasing people had of couple a to TNCs if have that And as curious, you're directly and obviously it you the either the with subscription mentioned conversations to it And you obviously with lifestyle curious So or times, that you there, maybe either lends vehicle any some like or plans benefits, of had? lease any ratio I'm vehicle then so

Tony Aquila

model. they balance are into of commercialization not It variable work lease mechanism in doesn't the interested for some They're moving are What right. for their works just interested as that Yes. their But kind we sheet in a yes, well. phase. subscription,

online. We international sales up have coming

looking decision have migration So we're at already the on. next that entities that's made activity the over and we're two this make the to pipeline generations large car focused

opportunity, as answer inbound And as a calls as lot to we is well the see of outbound. And yes. your so today, of

Joseph Spak

one, you electric Hyundai IP that's their Can about, if deemphasize did is back with you how you potential go assuming for IP engineering Hyundai just the sort unwind work the vehicle of just table. back the like you talk Okay. out with to was original memorandum one the going any me, of to leakage platforms Hyundai mentioned Do that do Well, now last done? I'm access to which technology, arrangement off well? But you to of that understanding problems gains leakage say that obviously decision was arrangement. as think what there the is coming one release, with that own

Tony Aquila

I of think pretty point. what is in case kind happened

the factored which any learning and this get But contract do in the we're one, think IP of And way addition value just companies, focused the the would we it its experience area to. So value significantly. look, contract of very and changed residual it. value of we that engineers, all if IP, like have based it's the go we that protect in can work, we have can our in company, of on on on and of through based adolescent labor not us manufacturing I

say, kind caused it's us of So on that to put hey, hold. let's

much demand three have so We derivatives. for our

then is if look this contract the line to all work let's, best in. not at manufacturing as is that you partnerships, is done. And know industry. business But partnerships in get work can work Let's be there

I'll And but it doing some to obviously leakage, big of that I'm to fan a you decision, make there business. so of was leave well, that not type

Joseph Spak

much. Okay. very Thanks

Tony Aquila

you, Thank Joe.

Operator

Our Kronos next [indiscernible] your Capital[ph]. question question. state from comes with Please

Unidentified Analyst

discussion year, the possibly some with manufacturers. that you had times couple of year Hi during and contract a you last course OEMs the the stated of

QX. wondering be that You the just that, changed I'm there are of announcements said by end that going what all some that? to happened

Tony Aquila

Right, so only I you're as future. speak know about present again, the the owning and to the Look, past can as what I much this.

little than I maybe were statements. they on think would that focused – their they more be were aggressive in I a

team they think the standard But I not representation only they more our the I be We had maturity yes, announced the contracted. this of opportunities presumptuous. would at is but to what weren't of public think that market.

because So obviously I don't I and that that's of can did kind much because different the study all help, also solidified also on and based wanted with that, didn't really the say direction But boards we in to I about really go a it matter know observations more. much, that.

contract public we'll again then work team. So certainly our wouldn't to this announcement. with commentary. this experienced way an think past comes manufacturing, an Again, And respect to we I make company back having

be the with make. to you careful got You statements

to look reset the negotiations although little So the again, premature, caused us place. all in a I think actually a and at much it was we're better

considering all trending they're direction. So right the in things

Kamal Hamid

a got question, that's think fine I we'll you've up if Steve, follow that. but after get-off

Unidentified Analyst

say that are looking six Okay. or you your With what coming the months to can you're at? a major respect milestones year

Tony Aquila

Yes.

focused progress continue reservations orders. on be we'll our to will So for gamma look LV the how report versus we really

be to manufacturing addition and so get the we It'll fit that, won't short-term our decision a contract it strategy. for locking long-term long-term, can on return capital. geographic in In the our partner into

state and we with partner to announcing to who release. that, the addition at In level build

In again way taking report. will addition the to that, defined QX alignment with we'll that start reservations in we be in

have absolute and you so orders. these And clarity reservations into

to few be at the say, it from looking a going things be are if important your would I those that side. would So very just I was of

Unidentified Analyst

not just comment, have one you Thank very a Okay. much. question. I

return would more and relations I emails. Relations team, the gear call investor know had other they forthcoming. on with answer suggest Your success gentleman your emails but Investor get be team not to able don't I that up do and if any to any the that,

Tony Aquila

people asking in step-by-step. are people. a great overwhelmed and And a just little it's with more for building responses We a few team, brought he's the out we comment. Look, been

this me to much think anytime So job, do call feel I better a free but certainly quarter directly. we'll

not in you're If timely you. any a to acceptable getting manner, responses that's

Unidentified Analyst

Okay, very you so Thank well. much.

Tony Aquila

Thank you.

Kamal Hamid

you'd you. Texas, reach like for or have joining us everybody. questions the so you much today. and come if visit Thanks any see Thanks to if on And to Thank products. out follow-up down

Tony Aquila

back And up. in open when California we are

Operator

you. conference. may concludes Thank participants a This evening. good today's All disconnect. Have