Canoo Inc.

Greetings and welcome to the CANOE fourth quarter 2020 and full year earnings release conference call. At this time all participants are in a listen only mode. A question and answer session will follow the presentation. If anyone should require operator assistance during the conference, please press star zero on your telephone keypad. 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.

Welcome to Canoe's fourth quarter and full year 2020 earnings conference call. My name is Kamal Hamid, VP of Investor Relations at Canoe. With me today is Tony Aquila, Canoe's Executive Chairman, and Renato Giger, Canoe's Interim Chief Financial Officer and Principal Accounting Officer. Renato has worked with Tony as public company CFO for many years. He brings more than 30 years of leadership experience with a proven track record in complex global organizations where he was responsible for leading global teams supporting multi-billion dollar operations. He will be invaluable to us as we build out our finance function at Canoe. During this call, we may make forward-looking statements based on current expectations. These are subject to a number of significant risks and uncertainties, and our actual results may differ materially. For discussion of factors that could affect our future financial results in business, please refer to the disclosure in today's earnings release, our most recent Forms 10-K and 10-Q, and the reports that we may file on Form 8-K with the Securities and Exchange Commission. All our statements are made as of today, March 29, 2021, based on information that is currently available to us. except as required by law, we assume no obligation to update any such statements. For those of you who are new to the Canoes story, our mission is to bring EVs to everyone and we are led by our executive chairman, Tony Aquila. Tony is a visionary entrepreneur and public market leader who has consistently created significant value for his shareholders. He recognized the importance software would play in a connected auto ecosystem decades before anyone else. He built several marquee businesses in both the public and private domains from the ground up, including Ansara and Solera. He brings deep experience in building high-growth companies that are focused on technology, data, and productivity. With that, I'll turn the call over to Tony.

Thank you, Kunal. I invested in Canoo because of the technology associated with the multi-purpose platform and the market opportunity it created. enabling our mission to bring EVs to everyone. Since taking on the role of executive chairman, working with a team and leading industry consultants, we've done a deep dive to determine how to optimize our growth opportunities and maximize our shareholder value. First, we built out a world-class board of directors and are now building out our C-suite. Shortly after I joined, we brought on Pete Sivajan as our Chief Technology Officer, Automotive. Pete has many years of experience in bringing EVs to market and has been a very valuable add to our team. Today, we announced that Renato Giger, who I have worked with and known for many years, joined us as our interim CFO. He, along with Ramesh Murthy, our new Chief Accounting Officer, and Hector Ruiz, our new VP of Global Strategy, Tax Counsel, and Treasury, will drive the necessary finance process, infrastructure, and systems to transition us from a private company to a public company, or as we say, move from little P to big P. To guide our brand and develop our commercialization and go-to-market strategy, we have brought in Mark Aikman as our Chief Marketing Officer Automotive. Over the next four to six quarters, we will be focused on completing the build out of our executive team in a disciplined manner. Second, we have decided to shift our manufacturing into two phases. Phase one, as previously announced, we will use contract manufacturing to launch production of the MPP1 LV derivative. We will announce the selection of our partner shortly. Phase two, we will move forward on our mega micro factory where we will build our MPP1 and certain high volume derivatives. We are in deep discussions with a number of governors and their teams and we will shortly down select to a final group of states. We have brought in an experienced world class team who have negotiated billions of dollars in incentives for high tech companies, including automotive manufacturing. We issued an RFI RFP focused on the areas of geography, labor force, educational systems, for supporting infrastructure and their desire to build out an EV infrastructure in their states. And third, many investors have asked if we will be reporting on the industry impact of COVID-19, i.e. chips, battery, other shortages, collaboration effects, and design impacts, et cetera. The answer is simply yes, we will be reporting on this starting with our next quarterly report. Due to the expansion of our derivatives and the best return on capital, it was decided by our board to deemphasize the originally stated contract engineering services line. This will further accelerate the creation of IP and the launch of our derivatives, which enhance our opportunity for the highest return on capital. Once this is complete, this will allow us to commercialize the three vehicles we have announced, our pickup truck, our multi-purpose delivery vehicle, or MPBV1, and our lifestyle vehicle, all of which sit on our multi-purpose platform, which we call MPP1. I'm excited about these enhancements to our business models. and now let me tell you what attracted me to Canoe. First as an investor and now as an executive chairman and the market opportunity we see. Freed from legacy thinking, we took an inside out approach, designing from the bottom up to deliver the full potential of an electric vehicle. Our platform design gave us a cab forward vehicle that maximizes interior space and cargo capacity while reducing part count and simplifying manufacturing. Bifurcating the mechanical propulsion elements of a vehicle from the cabin gave us a blank canvas to create functional productivity solutions customized to use cases. Industry-wide today, OEMs focus only on the first owner sale, which represents only a small profit potential associated with the entire lifecycle of a vehicle. Instead, we will focus on the 70% to 80% of profitability generated across the multiple owner lifecycle of a vehicle. We built in revenue touchpoints for all owners throughout the vehicle lifecycle through the aftermarket and customization. No other OEM, whether ICE or EV, has done or is doing that today. As a tech-first, industry-second company, our software and hardware are a connected platform that can capitalize on the full multi-owner lifecycle of a vehicle. Let me give you some context about our addressable market. Big picture, today, there are about 1.5 billion light vehicles on the road globally. We believe that 80% of those will be replaced by EV over the next four to five car generations, which means the market will add more than 1 billion new EV and efficient fuel cell technology driven vehicles over that time period. Driven by climate concerns, governments are legislating the phase out of sales of ICE vehicles in the coming decades. Fourteen countries have set to phase out the sale of new ICE vehicles from 2025 to 2050. As part of ESG, Fortune 500 and other companies around the world are increasingly laying out aggressive goals of carbon reduction. some all the way to being carbon neutral. Given that within the US, the transportation sector contributes 28% of all greenhouse gases, switching to EVs is the quickest, most impactful way to achieve their carbon reduction goals. Providing a further tailwind, the Biden administration has announced plans put the United States on a path to achieve net zero emissions by no later than 2050. Just as major innovations in the auto industry such as mass production, safety updates, and the quest for improved fuel economy represents major turning points, we believe that we are at a super pivot point today. expected growth and adoption in the EB market will drive billions of dollars in private and public investment with a multiplier of four to seven new jobs for every new EB job. And these jobs will carry higher than average salaries due to the advanced manufacturing nature of EBs. Beyond that, there will be educational investments. Ramesh Murthy, Sean Yan, Ramesh Murthy, Sean Yan to 8% of the global car park. We don't have to wait for EV technology to become economic for consumers. It already is, and we are doing it, which is why our business model and our design is the EV for the trade and delivery class professionals, mobility working people, the people who rely on their vehicles for work. In fact, it is these tradespeople who are putting on the mileage that makes the total cost of ownership of an electric vehicle favorable compared to an ICE vehicle. The average commercial vehicle travels 23,000 miles per year. According to our estimates, after 9,000 miles of driving, an EV breaks even compared to an ICE vehicle on a TCO basis. and others. Our MPDB-1 provides over 35% TCO savings on a volumetric capacity basis over eight years when compared to a leading commercial ICE vehicle or similar cargo capacity, directly benefiting the return on capital to the mobility working people. There are 123 million commercial and Mobility Working People vehicles on the road today that would have economic benefit from switching to an EV. And of course, we are focused on fleets with our low TCO and high volume metric to our footprint. Given the imperative to reduce greenhouse gas emissions and the need to lower per mile cost of delivery in the bring it to me market, it is clear that the EV market opportunity is huge. It is not surprising that OEMs, EV players and others such as technology companies are positioning themselves to compete in the massive shift to EVs. In our view, many of the competitors have drawbacks that we do not. Because of the large capital investment legacy automotive companies have already incurred, they will first focus on modifying existing ICE platforms, which puts pressure on the bill of materials, or as we call bomb cost, and the total cost of ownership, TCO, leading to suboptimal design, performance, and user experience, and therefore leaving the long-term residual value of the vehicle at great risk and volatility, where our competitors have experienced inefficiencies with a proliferation of models and platforms that often don't meet the market needs. We have a streamlined approach to meeting all use cases with our multi-purpose platform, our MPP. So far, we have announced three derivatives from our MPP, our pickup truck, our multi-purpose delivery vehicle, MPDV, and our lifestyle vehicle. Our MPP approach lets us provide choice and optionality to all owners, allowing us to target use cases instead of segments. We designed and engineered a true native EV platform without legacy baggage, paving the way for our expansive 20 million PAM and business model with multiple revenue pillars. This resulted in over 300 miles in estimated range, over 13% greater power density in our e-motor compared to leading competitors, 50 to 65% common parts across products, larger cargo space, equaling nearly 30% greater cargo space than leading competitor commercial vehicles, which means we are not B2B. We're not B2C, but we are B2ALL, setting us apart from any other OEM. Just like the pickup truck redefined the US auto market, in fact, doubling in sales from 2010 to 2020, We will redefine the EV market with a single pickup truck that meets the needs of multiple use cases. With the turning radius of a Prius, the size of a Ford Ranger, and a payload of a full-size pickup, our vehicles cater to a variety of markets and use cases and are designed to economically benefit the driving enthusiast and the trade and delivery professionals. Our unique design and ability to satisfy specific use cases has resulted in significant customer interest and press coverage, highlighting our vehicles as the future of the delivery van and the Swiss Army knife of pickups. We take the modular concept to the next level and beyond the initial vehicle sale. with revenue and value to customers across all generations of owners through customization and upfitting to meet the new owner's use case. In this example, you can see how a delivery vehicle can be repurposed as a refrigerated truck, a pop-up retail shop, and then a food truck as it goes from one owner to the next. This makes our vehicles feel new and customized to each owner Ramesh Murthy, Ramesh Murthy, Ramesh Murthy, Ramesh Murthy, our software IP will fundamentally alter the value proposition across a vehicle's lifecycle. Three, our aftermarket and customization strategy will drive revenue streams across generations of owners of the vehicle with accessories, add-ons, or upgrades. Going into our engineering IP further, our MPP1 was designed to support as much as 75% of the most popular vehicles on the road today and provide improved manufacturability. We are excited that Canoo will be the first to market with many innovations, including steer-by-wire, our proprietary leaf spring technology, our patented battery performance and thermal performance management, and the most intelligent truck bed coupled with a deep focus on worker and driver ergonomics. We develop our software in-house, which allows us to rapidly develop and integrate new vehicle features and performance enhancements, security updates, and respond to issues on an individual vehicle or on a fleet-wide basis, allowing us to future-proof our vehicles. We designed our electrical to support the power and communication requirements necessary for advanced sensors and processing for autonomous driving. These solutions are brought to market. All of our proprietary electronic control units support over-the-air updating and data collection via our hardware and software stack. as we continue to be validated both internally and externally by third parties. To date, our test vehicles have accumulated almost 500,000 testing and validation miles, providing us with important data for our gamma build. By targeting use cases and customers across all generations of owners, we continue to build throughout the lifecycle of the vehicle across multiple owners. For example, our recently revealed pickup could include a front gate, an extendable bed, step storage solutions, and more, which could all be added with the second, third, or fourth owner. We demonstrated the effectiveness of this approach by recently revealing two new models. In Q4, we announced our MPDD, our multi-purpose delivery vehicle. and then shortly after in Q1, we revealed our pickup truck. With the lifestyle vehicle previously announced, this brings us to three derivatives on our MPP-1. This ethos applies to all of our vehicles and will help us drive strong brand equity. With that, I'll turn the call over to Renato. Renato?