Aeva Technologies, Inc.

Good day. My name is Hillary, and I will be your conference facilitator. I would like to welcome everyone to AVA Technologies' first quarter 2021 earnings conference call. During the opening remarks, all participants will be in a listen-only mode. Following the opening remarks, we will conduct a question and answer session. As a reminder, today's conference call is being recorded and simultaneously webcast. I would now like to turn the call over to Andrew Fung, Director of Investor Relations. Andrew, please go ahead.

Thank you and welcome everyone to Ava's first quarter 2021 earnings conference call. Joining on the call today are Suresh Salahian, Ava's co-founder and CEO, and Saurabh Sinha, Ava's CFO. Suresh will provide an overview of Ava as well as share developments over the quarter and objectives for 2021, followed by Saurabh, who will discuss the first quarter financial performance and 2021 financial outlook. Ahead of this call, we issued our first quarter press release and presentation, which we will refer to today and can be found on our investor relations website at investors.ava.ai. Please note that on this call, we will be making forward-looking statements based on current expectations and assumptions, which are subject to risks and uncertainties. These statements reflect our views only as of today and should not be relied upon as representative of our views as of any subsequent date. These statements are subject to a variety of risks and uncertainties that could cause actual results to differ materially from expectations. For further discussion of the material risks and other important factors that could affect our financial results, please refer to our filings with the SEC. including our Form 8-K, filed on March 18, 2021, and the risk factors found in the section entitled, Risk Factors, Risks Related to AVIS Business and Industry, in the proxy statement dated February 12, 2021, filed by Interprivate Acquisition Corp. In addition, during today's call, we will discuss non-GAAP financial measures, which we believe are useful as supplemental measures of AVIS performance. These non-GAAP measures should be considered in addition to and not as a substitute for or in isolation from GAAP results. The webcast replay of this call will be available on our company website under the investor relations link. With that, let me turn the call over to Suresh.

Thank you, Andrew, and good afternoon, everyone. I am very excited for our first conference call. I would like to start out by thanking our employees for their outstanding contribution to the completion of the transaction. I would also like to thank our shareholders for their commitment and support. Now, let me highlight a few of our accomplishments in this quarter. As you can see on slide five, it has been a strong start to 2021 here at AVA, and I would like to highlight a few key accomplishments achieved in the first quarter. As mentioned earlier, we successfully closed the business combination transaction with Interprivate Acquisition Corp on March 12th. With an upsized pipe, we received over half a billion dollars in net proceeds that we expect to support AVA through our planned start of production. We also continue to build on our commercial traction with the announcement of collaborations with a self-driving trucking company, Too Simple, to deploy AVA 40 by hour. and with Denso, one of the world's largest tier ones. On technology, our team continues to push the boundaries of what's possible toward creating the best perception solution built on AVA's breakthrough FMCW LiDAR technology. Our system is now capable of detecting objects at an industry-leading 500-meter range, nearly doubling our previous systems by software updates on AVA's existing hardware. We also bolstered our leadership team with industry veteran executives who have deep expertise in engineering, manufacturing, and scaling of advanced technologies. This includes Tim Willis as our VP of supply, manufacturing, and strategy, having most recently been Waymo's chief manufacturing and global supply officer. In addition, as announced yesterday, we have established an advisory board with the addition of veteran execs from Apple and Volkswagen who bring tremendous experience across automotive and consumer electronics. Now let's turn to slide seven. As this is our inaugural earnings call, I think it would be helpful to provide a brief introduction to the company and its unique 40 LIDAR technology that's driving our traction in the industry. We are a sensing and perception systems company with a singular vision to bring the next wave of perception for all devices. Today, mass adoption of LiDAR has been limited by the performance and scalability of available sensors. Since starting AVA about four years ago, we have developed a breakthrough 40 LiDAR on chip technology that we believe can achieve the holy grail of sensing for perception. A high performance, yet scalable and affordable product built from the ground up at silicon chip scale. We believe this can unlock the massive market opportunities across automotive and assisted driving and autonomous driving applications, as well as non-automotive applications such as industrial automation and consumer electronics. We have already earned the endorsement of a number of leaders in automotive and advanced technology, including Porsche SE, the majority shareholder of Volkswagen, ZF, Denso, 2Simple, and as we announced today, an undisclosed large company, among others. Now turning to slide 8, I'd like to share a bit more about our approach to achieving AVA's mission to bring the next wave of perception for all devices. While the goal is wide-reaching, we believe it takes a singular focus on designing the best perception solutions to make this possible. It also requires something that is more than just slightly better than what's available today, a solution that fundamentally changes the sensing and perception paradigm. At AVA, our team of multidisciplinary engineers have built from the ground up a breakthrough FMCW technology informed by a long-term view of where we see the end state of LiDAR, not what's best today. We've done this through learning from years of real-world testing on the road, as well as a clear focus on simplifying design to enable mass scalability at affordable costs. The resulting performance of our industry-first 40 LiDAR has been validated by our partners who are leaders in the industry. More specifically, our approach to partnerships, it is not to win the customer count. Our focus is on aligning with companies that have a shared determination and the ability to deploy LiDAR at mass scale. And we believe strongly that working in tandem with highly capable and well-positioned partners It's critical to addressing issues that have historically challenged the industry and enable AVA to bring 4D LiDAR to mass adoption. Now let's move to slide nine, which provides more detail on AVA's differentiated 4D LiDAR. As I mentioned, our core technology is a Frequency Modulated Continuous Wave, or FMCW, 4D LiDAR that is integrated on a silicon photonic chip. Unlike legacy 3D LiDAR based on time of flight, ABUS 4D LiDAR transmits the continuous low power laser beam that is embedded with a unique signature in its frequency and then measures the change in frequency as the beam reflects off the object. This provides several critical advantages compared to legacy time of flight LiDARs that are available. First, the ability to measure a fourth dimension of instant velocity for every pixel. Second, immunity to interference from other LIDARs and the sunlight. Third, the capability to detect long ranges with 100 times higher sensitivity compared to legacy time-of-flight technology. And lastly, by integrating all of this onto a LIDAR chip module that is built on proven silicon photonics processes, we can provide a lower power system at mass scale with affordable costs. Now, given the advantages of FMCW, why are other LiDAR companies still using Time of Flight? Well, this is because we believe that all non-AVA approaches to FMCW have inherent challenges limiting their market adoption. But AVA is not a traditional FMCW company. As you see on slide 11, AVA's unique approach and IP has enabled us to solve for the limitations of traditional FMCW. First, leveraging our unique photonics design and proprietary algorithms, ABUS 40V achieves millions of points per second per beam, enabling our system to have a low number of beams and a low number of transceiver counts, while simultaneously capable of long range and high resolution. Second, through our silicon chip integration, we are able to significantly lower total system component count, which drives a material-relative cost advantage to other LIDARs. In short, AVA's differentiated approach to FMCW provides a significant advantage to both legacy time of flight and traditional FMCW. Now, switching gears to our business update for this quarter, I am excited to share several important achievements. First, on slide 13, Ares, our LIDAR platform, has been progressing ahead of schedule. And over the past quarter, we have made improvements in a number of key areas. First, building on our unique FMCW technology, which enables high resolution without compromising any detection range, we have significantly improved our previous resolution and now can exceed over 350 points per square degree. Second, we continue to miniaturize our packaging towards production, which is now 30% smaller than our previous design. And third, we completed the reliability and compliance testing that meet the necessary temperature, vibration, and ingress protection requirements for passenger vehicle applications. Moving to slide 15, we completed the third generation of our LiDAR chip, which integrates all elements of LiDAR sensing and optics into a single chip module. And we have done this about three months ahead of schedule. To our knowledge, Ava remains the only company to have successfully developed and integrated this breakthrough LiDAR on-chip technology. This LiDAR chip module is the final architecture that we plan to use for series production programs launching in 2024. This already provides us with a clear path to our final cost structure and enables our final form factor. We have also removed all fiber optics from our system with this LiDAR chip generation, which is a game changer for reliability and durability of any LiDAR system. And notably, this is already being produced at our production and test factory. In addition, our chip module is fully integrated, and we have completed key preliminary reliability testing for automotive. Turning to the next slide, our LiDAR integrates all core components onto a chip module, which solves the challenges limiting the scalability of LiDARs to the market. Specifically, we replaced the fiber-based laser with a semiconductor laser. Doing so, we deliver a solution that is more reliable, lower cost, and uses less power, all of which are critical factors to enable mass adoption. Similarly, we use common Penn diode detectors, which are manufactured in millions of units today and are a fraction of the cost of more expensive detectors, such as Avalanche photodetectors, which have low yields. Also, we utilize small aperture optics, which significantly reduces the size and the cost of our system. And by integrating all core components onto a silicon chip platform, we dramatically simplify the assembly process. By removing the need for active alignment, we significantly reduce manual assembly and bring down the overall complexity and cost for manufacturing. The end result is a high-performing LiDAR system that is more reliable and truly scalable at an affordable cost using proven semiconductor manufacturing processes. Turning to slide 18, we continue to expand our technology and performance leadership. AVA's unique 40 LiDAR now achieves beyond 500 meters of range, nearly doubling our previous performance by software updates on existing hardware. To our knowledge, AVA is the only perception company that can detect vehicles beyond 500 meters and pedestrians beyond 350 meters. But perhaps most importantly, an industry-first capability is to detect road drivable surface beyond 200 meters. This is a step change in capability from others highlighting max range, and we're not aware of other system providers being able to see the drivable surface at such long distances. Reliable detection at these distances provides the crucial ability to enhance the factor of safety for automated driving, especially in applications where sufficient braking distance is safety critical and challenging to achieve with existing technologies, including highway driving. The leading detection range is only possible by utilizing AVA's unique FMCW 40-lighter architecture that has superior sensitivity. And by leveraging our instant velocity information, we can measure such objects with higher confidence legacy tunnel slide LIDAR at hundreds of meters away. Now, moving to commercial development on slide 20. Today, we are excited to share a foundational agreement with an undisclosed large company to deploy a best-in-class LIDAR for their autonomous program. This is a landmark validation of AVA's unique approach. The decision by this company to utilize ABUS-40 LiDAR was driven by our proprietary FMCW capabilities that offer superior performance and our breakthroughs to integrate LiDAR onto a chip module at scale. Going forward, we will be working closely together through development and validation leading up to production. We are thrilled to collaborate together to bring ABUS-40 LiDAR to the market. Now turning to slide 25, I would like to share our priorities for 2021. This year, our focus is to continue investing in developing a world-class perception solution and supporting our key customers on their development milestones to bring our 4D LiDAR to market. First, we are working to bring our ARRI system, our LiDAR platform, towards production and are on schedule to complete our B-sample development by year end. And this iteration locks our final production architecture. Second, we will build on our strong commercial momentum with two additional programs towards production. This is on top of prior announcements made already in 2021, including our foundational agreement with the undisclosed company that we just announced. Third, we will accelerate our engagement in non-automotive applications, including industrial automation and beyond. We are seeing increased inbound interest in this area, and we plan to do this by leveraging our already developed LiDAR chip architecture. And fourth, we are laser-focused on building a clear pathway to commercialization. Well ahead of our targeted 2024 launch, we already have agreements with our key suppliers and partners, including world-class boundaries and contract manufacturers. This year, we will continue to strengthen our supply chain, including securing capacity and defining our dual-source strategy. And with that, I will turn the call over to Saurabh to discuss the financials.