Arrival

Hello everyone and welcome to Arrival's first quarter 2021 earnings call. My name is Megan and I will be your operator today. Before I hand the call over to the Arrival team, I'd like to go over just a few housekeeping notes for the program. As a reminder, this webinar is being recorded. After the speaker's remarks, there will be a question and answer session. If you would like to ask a question during this time, please use the raise hand function located at the bottom of your screen. If you plan to ask a question, please ensure you've set your Zoom name to display your full name and firm. Thank you for your attendance today. I will now turn the call over to Mitesh Soni, Investor Relations for Arrival.

Good morning, and thank you all for joining us today to discuss Arrival's first quarter 2021 update. Before we begin, I'd like to remind everyone that certain statements made on this call today are forward-looking statements. These statements are subject to various risks and uncertainties. and reflect our current expectations based on our beliefs, assumptions, and the information currently available to us. Although we believe these expectations are reasonable, we undertake no obligation to revise any statements to reflect changes that occur after this call. Descriptions of these factors and other risks that could cause actual results to differ materially from these forward-looking statements are discussed in more detail in our filings with the SEC. During the call, we also may refer to certain non-IFRS financial measures. This should be considered in addition to and not as a substitute for or in isolation from our IFRS results. For further information, please refer to our investor relations website at investors.arrival.com. With that in mind, I'll turn it over to Dennis.

Thank you, Mitesh, and thanks to everyone for joining our webcast this morning. The main message today, our business plan remains unchanged. And we are making great progress towards team milestones. Just to remind, Arrival was founded in 2015 with a vision to revolutionize the electric vehicle space, accelerate the transition to zero-emission vehicles globally, and bring cleaner air to our cities by using unique powerful technologies developed in-house. So why Arrival is different to any other automotive company? First of all, we invented radical new methods to design and produce vehicles using microfactories. So we use no stamping, no welding, no paint shop, and this method is protected by patents. The new method creates best-in-class EVs with attractive value proposition for fleet operators. Our zero-emission buses, vans, and cars are competitively priced to fossil fuel vehicles and offer up to 50% lower cost of operation. The hardware and software are upgradable, Our composites are lighter and more durable than steel, decreasing maintenance costs and increasing the lifespan of the vehicles itself. Our micro factories are hyperlocal. They're rapidly scalable with low CapEx. For example, our van factory is 1150 million for 10K vehicles a year. We are vertically integrated, developing tech and components in-house with a very strong IP portfolio. Arrival is a low CapEx and high margin business enabled by hardware, software, and next-gen robotics. We have strong demand and $1.2 billion of orders. We have unique culture and top team of more than 1,900 people capable to execute this business plan. And we believe that the purpose of Rival is to make radical impact. So let's focus on the results of Q1. First of all, we successfully completed our merger and lifted our shares on Nasdaq in Q1 as planned. Next, a very important part of our business are microfactories. So we made good progress preparing our microfactories. To date, we announced and started to equip micro factories in Charlotte, North Carolina, Rock Hill, South Carolina, Beecher in UK, and we announced the fourth of our factory in Madrid, in Spain. Mike will talk about this a bit later today. In terms of products, we have four vehicle designs expected in market by the end of 2023. The start of production of buses is scheduled for Q4 2021 as planned. The start of production of vans, both variants, small and big, is planned for second half of 2022, and the arrival car is scheduled for the end of 2023. In terms of our clients, we have orders to date of approximately $1.2 billion. The largest order is from our strategic partner, UPS, who have committed to purchase up to 10,000 vans with an option to purchase another 10,000 units. UPS is our long-term partner and has also invested in Arrival alongside other key strategic partners. We know the commercial VF opportunity is huge. with a total restable market for commercial vans and buses of $430 billion. And we see the commercial segment will move to EV much faster than retail outlets. This migration is supported by local, state, and national government policies around the world. For example, EV infrastructure is a clear priority for the Biden administration, who just this past month announced a $174 billion plan to ignite the adoption of EV with a particular emphasis on transit and school buses. We have advanced our work on vehicles production and digital platforms to begin customer public road trials later this year. This includes bus trials in the autumn with First Bus, one of the UK's largest transport operators, who recently announced their commitment to purchase no-diesel buses after 2022 and to upgrade a fully zero-emission fleet by 2035. And I'm pleased to announce our exciting partnership with Uber. We're designing an arrival car for the ride-hailing together which we expect to take into production in the end of 2023. Why is it important? Market today is 30 million ride-hailing vehicles worldwide.