Lordstown Motors Corp.

Good morning, and thank you to all for joining Lordstown Motors' second quarter 2022 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, forward-looking statements that is posted on our website as part of our quarterly update and included in our earnings release. The safe harbor provision identifies risk factors and uncertainties that may cause actual results to differ materially and the content of our forward-looking statements with the reasons that we cite in our Form 10-K and other SEC plans, including uncertainties posed by the difficulty in predicting future outcomes. Also, during this conference call, we were presenting certain financial information on an adjusted basis. An explanation of our use of a non-GAAP financial measure and reconciliation to the most directly comparable GAAP measure appear in our earnings release and on our website. Joining us today will be Lordstown Motors Executive Chairman, Dan Inabage, CEO and 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, I'd like to thank the entire Lordstown team for their extraordinary efforts in Q2. Q2 was a very busy quarter, and we made significant progress in achieving our strategic and operational objectives. Edward and Adam will review the quarter in detail later in the call. I'd like to begin, though, with a few highlights for the quarter and review where we stand on several key priorities. First, two weeks ago, we announced three additional senior management appointments and that Edward Hightower, our president, would take on the additional role of CEO. This announcement was the culmination of almost a year of recruiting and developing manufacturing, engineering, commercial, and corporate talent in the industry. Edward and our three most recent hires alone collectively have over 100 years of experience in the automotive industry and are truly exceptional leaders. Second, in Q2, we closed our transactions with Foxconn, providing us with a flexible and less capital-intensive business model, a world-class contract manufacturing partner, and a more scalable vehicle development platform, as well as additional capital. Over the past year, our team has implemented a rigorous and disciplined program management process that has significantly improved operational execution. During the second quarter and into July, we conducted a number of constructive and largely positive gateway reviews to assess launch readiness. Fourth, our business strategy requires strong partnerships. Smaller OEMs can't do without them, in my view. In addition to further developing our broad partnership with Foxconn and the MIH Consortium, we're actively seeking partners, including other OEMs, to jointly scale the Endurance. As one of the very few full-size all-electric pickup trucks that will be in the market, the Endurance offers other OEMs the opportunity to enter the market quickly and at relatively low cost, since our development work is substantially complete. We're also seeking strategic fleet partners for the Endurance, and a limited number of anchor customers for the first vehicle to be produced with Foxconn through our joint venture. Finally, we live in a very difficult capital markets environment and are clearly capital constrained. We will continue to be disciplined in our spending and manage our liquidity through what we can control. As Adam will discuss later in the call, our efforts have lengthened our runway and cut our near-term capital needs somewhat. However, we must continue to pursue capital investments, including through strategic partnerships or other transactions, to execute our business plan. In closing, I'm excited about the progress we've made during the quarter, but also recognize the significant work we still have ahead of us. In my new role, I look forward to continuing to work with and support our outstanding leadership team to bring it home. With that, I'll turn it over to our CEO, Edward Hightower.

Good morning. I'm delighted to speak with you today in my added capacity as CEO of Lordstown Motors and CEO of our joint venture with Foxconn. I continue to be inspired by our company's mission to accelerate the transition towards electrification. Today, I would like to discuss three topics. One, the status of the endurance launch. Two, our product development joint venture with Foxconn. And three, our growing and strengthened teams. First, the endurance launch. As I've said in previous earnings calls, engineering readiness, quality, and part availability will govern the speed of our launch. We have completed our pre-production vehicle build on the production line at the now Foxconn plant in Lordstown, Ohio, and I am pleased to report that we remain on track to start commercial release production in the third quarter of this year, initially at a very slow rate. Sales to our commercial fleet customers are planned in Q4 after full homologation and certification. Our final powertrain calibration is complete, and we are in the first phases of EPA certification testing. Since our last earnings call in May, we have completed all pre-certification tests for emissions, non-crash certification, body and white testing, and vehicle level testing. We have also successfully completed all preliminary crash tests during the development and will conduct our certified crash testing this month. Our embedded and cloud-based software integration has progressed, and we are able to monitor the diagnostics of our endurance test vehicles from the cloud. We are also scheduled to conduct our final round of hot weather testing this month in Death Valley which has been experiencing especially high temperatures this summer. You might ask, what is still to be done and what are the risks? Consistent with our management team's emphasis on transparency, I will say that we have made significant progress, but we are not 100% done. The impact of the supply chain issues on the timing of our PPV bills, as discussed on previous earnings calls, has had a downstream impact on the completion of our vehicle testing. The more miles we accumulate on our vehicles, the more we learn to be able to deliver the highest quality vehicle to our customers. We intend to complete more test miles and resolve open issues before starting to deliver vehicles to our customers in Q4. In addition to vehicle testing, we also continue to test our software to ensure robustness. As you may know, advanced electric vehicles like the Endurance have dozens of computing modules controlling the various subsystems, like powertrain, chassis, safety, HVAC, infotainment, et cetera. These modules must communicate with each other and work together for the proper functioning of the vehicle. While we may be able to accept software glitches and bugs in our smartphones, the standard for vehicles is much higher. We continue to test all software at the component, subsystem, and at the fully integrated vehicle level. Our testing is aligned with the top software protocols, including the Motor Industry Software Reliability Association, or MISRA, and ASPICE. As we have previously disclosed, the BOM cost of the endurance is materially higher than our anticipated selling price. We are therefore limiting production of our first batch of endurances to approximately 500 vehicles. We have a plan to reduce our BOM costs over time through investments in hard tooling, building scale with production suppliers, and BABE initiatives. However, we have held off on the larger hard tooling and other investments in order to manage our balance sheet and limit the amount of new capital needed to achieve our initial production targets. Our timeline for scaling endurance production will be tied to our strategic partnership in capital raising actions that Adam will discuss later. Our experienced and capable purchasing team continues to address part availability, part quantity, and part pedigree issues that have impacted our supply chain. With approximately 1,500 parts in an endurance, it is important to complete each build with the proper pedigree of parts. Completing the build of a vehicle and then having to retrofit it or add a missing or replace an incorrect part can have a negative impact on quality. Our supply chain team must manage the weakest links. Our manufacturing partners at the Foxconn plant in Ohio are ready for launch. While we are starting commercial release production of the first batch of Endurances in Q3, we are ramping up slowly to mitigate these issues. We expect production to accelerate in Q4 with the majority of the initial 500 vehicles built in the first part of 2023. Our sales strategy remains focused on the commercial fleet market. The Endurance will be one of the few full-size BEV pickup trucks in the market this fall, and we expect over the next several years. We cannot wait to get the Endurance into the hands of our customers With its in-wheel hub motor design, impressive connectivity, agile responsive handling, and lower total cost of ownership, we think they're going to love it. We have interest from several fleet management companies and commercial fleets and plan to concentrate sales of this initial batch of vehicles in strategic markets where we have centers of expertise, including California, Michigan, and Ohio. Our service strategy for the initial batch will align with this customer geography focused sales strategy. I'd now like to discuss our growing relationship with Foxconn and our product development joint venture. Our 55-45 joint venture announced in mid-May in which Foxconn committed an additional $100 million in capital is another action in support of the EV ambitions of both companies. Of this $100 million commitment, the first $30 million was funded at the end of Q2. As Foxconn's primary commercial vehicle development partner in North America, the JV will collaborate with Foxconn's growing global EV ecosystem, including the MIH Consortium, to co-develop new EV programs for Lordstown's commercial fleet customers and potentially for other OEMs. These new vehicles would be built for North America at Foxconn's Lordstown, Ohio facility and at other Foxconn contract manufacturing locations around the world. Under this innovative business model, utilizing a more flexible development platform and manufacturing footprint, smaller OEMs have the opportunity to achieve the benefits of scale with lower volumes and reduced costs and experience a faster time to market. As I also serve as CEO of the Foxconn Joint Venture, I recently spent two weeks in Taiwan with Foxconn Chairman Young Leo and his team. While in country, we had several meetings on how to best operationalize the JV and leverage our concept through launch vehicle development capabilities in concert with the Foxconn EV ecosystem. We also had several discussions about the first vehicle program of the JV, which we hope to announce in the coming months. I'm also very excited about the latest senior management appointments as we continue to strengthen our leadership team. Dr. Donna Bell, Executive Vice President for Product Creation, Engineering, and Supply Chain, joins us with nearly 30 years experience in product development and technology innovation leadership, primarily at Ford Motor Company. Donna's leadership and expertise will be especially valuable as electric vehicle attributes and features become increasingly defined by software. Andrew Wrenches, Senior Vice President for Sales, Service, and Marketing, is a 30-year veteran of the automotive commercial fleet business from both the OEM and upfitter side. Andrew's leadership will help our team put the customer at the center of our business's decision-making. Jill Coniglio-Kirk, Vice President for People and Culture, joins us with over 20 years of experience in human resources roles and creating high-performance work cultures for leading automotive suppliers. These new leaders will play key roles in our team's drive to become a world-class commercial fleet-focused EV OEM. I would also like to thank Jane Ritson Parsons for her many contributions to the company across functions, and I look forward to her continued support as an advisor to the company. I will now turn the floor over to our CFO, Adam Kroll, to present our Q2 performance and financial outlook. Adam?