Lordstown Motors Corp.

Greetings. Welcome to Lordstown Motors' fourth quarter of fiscal year 2021 earnings call. At this time, all participants are in listen-only mode. A question-and-answer session will follow the formal presentation. If anyone should require operator assistance during the conference, please press star zero from your telephone keypad. Please note that this conference is being recorded. At this time, I'll turn the conference over to Carter Driscoll, Vice President, Corporate Development, Capital Markets, and Investor Relations. Carter, you may now begin.

Thank you, Operator. Good morning, and thank you to all for joining Lordstown Motors' fourth quarter and fiscal year-end 2021 earnings conference call. To supplement today's discussion, please go to our IR website to view our press release and investor deck. Before we begin, I want to call your attention to our Safe Harbor provision for forward-looking statements that is posted on our website and is part of our quarterly update. The Safe Harbor provision identifies risk factors that may cause actual results to differ materially from the content of our forward-looking statements for the reasons that we cite in our Form 10-K and other SEC filings, including uncertainties posed by the difficulty in predicting future outcomes. Joining us today will be Lordstown Motors CEO, Dan Dinobagi, President Edward Hightower, and CFO, Adam Kroll. With that, I'd like to turn the call over to Dan.

Thank you, Carter, and welcome, everyone. To begin with, I'd like to thank the entire Lordstown team for their extraordinary efforts in Q4. I'm pleased with the progress we've made towards launching the Endurance and our financial results for the quarter. Our number one priority, of course, remains the successful launch of the Endurance full-size pickup truck. While we've experienced some supply chain challenges in building our pre-production vehicles, or PPVs, I'm pleased to report that final engineering design validation and testing are underway. and we continue to target start of commercial production and sales in the third quarter of 2022. Ed will provide more detail on where we are and what remains to be done to achieve full homologation. In terms of customer demand, we continue to see strong interest in the commercial fleet market for electric vehicles of all types, including pickup trucks. Despite the acceleration in competitors' EV pickup truck product plans, we believe the market will be underserved for the foreseeable future and will continue to grow. We believe that demand will be particularly strong among commercial fleet customers, given their focus on total cost of ownership and specific work requirements. The Endurance, with its in-wheel hub motor design, is truly unique and will offer a superior combination of handling, traction control, torque, and turning radius that hardworking fleet customers will really appreciate. With fewer moving parts than more conventional propulsion systems, we also believe the Endurance will have advantages in overall maintenance costs. Our commercial sales plan will be driven primarily by our expected production volumes. We'll undertake limited production this year, balancing the importance of getting the endurance into customers' hands with the need to manage our balance sheet, as our bill of material costs at launch will be significantly higher than our anticipated selling price. Our BOM will improve over time as the benefits of hard tooling, moving from prototype to production suppliers, the Foxconn transaction, and other initiatives kick in. As a result, at least initially, we'll be focused on selling vehicles to a relatively small number of strategic fleet partners who offer the best opportunities for long-term relationships. While the exact number of vehicles we produce will depend on several factors, including the timing of our bond cost reduction actions and future financings, I would expect production to be limited to about 500 units in 2022 and up to 2,500 units in 2023. For post-sales support, as mentioned on our last earnings call, we're continuing to work with Cox Automotive. Cox Automotive's service marketplace has more than 6,000 service centers, 3,000 partner locations, and 800 mobile technicians nationwide. Now turning to our long-term strategy. As I mentioned on our last earnings call, the conversion The electrified powertrains presents OEM startups like LMC with a very unusual opportunity to penetrate the automotive market and gain meaningful share, particularly in certain underserved segments. But success requires that we deliver scale, a differentiated commercial plan, an innovative product, a competitive cost structure, and a vehicle development platform that brings products quickly and efficiently to market. I believe a partnership with Foxconn can help us achieve each of these objectives. Foxconn has ambitions to capture a significant share of the global EV market, not just in contract manufacturing, but in key components as well. In addition to other strategic benefits, the Foxconn partnership would unlock the full potential of the Lordstown plant by getting it to scale faster. At 6.2 million square feet and 640 acres, The Lordstown complex is one of the largest internal combustion automotive plants in North America that is being converted to a state-of-the-art EV manufacturing facility. Foxconn has an excellent opportunity to fill the plant, having already announced that the Fisker-Pair program is intended to be manufactured in Lordstown. LMC and all OEMs whose vehicles are built at the plant will benefit from the increased capacity utilization, use of common components, and lower overhead costs. Scale in automotive manufacturing matters a lot. Use of shared space together with mobility in harmony or MIH open source platform that Foxconn has developed provides smaller, more specialized OEMs the opportunity to achieve the benefits of scale without being a large, fully integrated automaker. Partnership with Foxconn should also significantly reduce our raw material component and other input costs over time. As the largest contract manufacturer in the world, Foxconn has significantly better purchasing power than we would have on our own, as well as a global integrated supply chain network and the logistics capabilities necessary to help us reduce vehicle production costs and minimize our supply chain risks. We also stand to benefit from Foxconn's expertise in hardware and software integration, critical to EVs, given their expertise as a multinational electronics manufacturer. As we grow together, these benefits should only improve over time. Finally, a partnership with Foxconn could extend beyond a contract manufacturing agreement. When we announced the transaction, we stated that Foxconn and LMC would explore a joint venture arrangement for the development of new electric vehicles utilizing Foxconn's MIH common platform. This was an important part of the deal because, in our view, LMC would greatly benefit over the long term from a scalable vehicle development platform for future vehicles that will allow us to compete with much larger vertically integrated OEMs. The use of common vehicle architecture systems and components off of MIH provides us that opportunity. In addition, a commercial relationship with Foxconn could open up opportunities to utilize LMC-developed vehicles for markets outside of North America for both MIH vehicles and potentially endurance-based vehicles. Since our last earnings call, we have made substantial progress on the terms of a contract manufacturing agreement with Foxconn. We have also had ongoing discussions regarding a joint product development agreement under which we would develop new vehicles in collaboration with Foxconn off the MIH platform. In connection with the joint development agreement, we have considered capital raising alternatives and made a specific proposal to Foxconn. While our discussions with Foxconn have been constructive and are ongoing, at this stage, no definitive product development agreement and funding arrangement has been reached. We and I believe Foxconn understand that reaching a conclusion as soon as possible on this element of the transaction is important for the overall success of our partnership. I also believe that a joint product development agreement with an appropriate funding structure would greatly enhance our ability to raise the additional capital necessary to not only fund new vehicles, but to bring the endurance into production in Q3. Clearly, we in Foxconn have more work to do. In closing, Notwithstanding the challenges in front of us, I am pleased with the progress we have made on moving the endurance towards launch readiness and building our relationship with Foxconn. We have a unique vehicle, and our entire team remains totally energized by the compelling market opportunity. With that, I'll turn the call over to our president, Edward Hightower. Edward joined the team shortly after our last earnings call. He has 30 years' experience serving in product development, engineering, manufacturing, commercial, and senior executive roles between Ford, BMW, and GM, including leading GM's $15 billion global crossovers business as the executive chief engineer and vehicle line executive. Ed?