Xos, Inc.

Good afternoon, and welcome to EXOS' third quarter 2021 earnings conference call. Today's call is being recorded, and we have allocated one hour for prepared remarks and Q&A. At this time, I would like to turn the conference over to Henry Kwan, Head of Investor Relations for EXOS. Thank you. You may begin.

Thank you, Operator, and thank you, everyone, for joining us today. Hosting the call today are EXOS' Co-Founder and Chief Executive Officer, Dakota Semler, co-founder and chief operating officer, Giordano Sordoni, and chief financial officer, Kingsley Atamiki. Ahead of this call, EXO has issued its third quarter 2021 earnings press release and presentation, which we will reference today. These can be found on the investor relations section of our website at investors.exostrucks.com. On this call, management will be making statements based on current expectations and assumptions, which are subject to risks and uncertainties. Actual results could differ materially from our forward-looking statements if any of our key assumptions are incorrect because of factors discussed in today's earnings news release, during this conference call, or in our latest reports and filings with the Securities and Exchange Commission. These documents can be found on our website at investors.exostrucks.com. We do not undertake any duty to update any forward-looking statements. Today's presentation also includes references to non-GAAP financial measures and performance metrics. You should refer to the information contained in the company's third quarter 2021 earnings press release for definitional information and reconciliation of historical non-GAAP measures to the comparable GAAP financial measures. With that, let me turn it over to Dakota.

Thanks, Henry, and thank you everyone for joining us. In today's presentation, we will refer to the slides that were posted to the investor relations section of our website earlier this afternoon. Before we proceed with our earnings call, I would like to remind everyone that today is Veterans Day. I want to take a moment on behalf of everyone at EXOS to honor and express gratitude to all veterans and those who serve our country. This is our first earnings call since the closing of the business combination with NextGen in August. I'd like to start by thanking our partners and employees for their contributions to Exos' ongoing success and to thank our shareholders for their continued support during this pivotal year. Listing as a public company was an important milestone, and we are excited about the new opportunities it creates for us. The year 2021 has been filled with milestones for Exos. but it has also presented challenges. The well-known disruptions in the global supply chain and new logistical complexities caused by the pandemic have had a negative impact on our business. Many of our efforts this year have been directed towards ameliorating and better forecasting the downstream impact of these challenges. We are confident in our path forward, but we must also acknowledge that aforementioned delays will impact our deliveries for the next few months as we continue to ramp up production and automation and solidify alternative suppliers and solutions. Turning to the next slide, my co-founder Gio and I founded Exos to address the unique problems faced by fleets. As former fleet operators, we know firsthand the challenges of managing a fleet while confronting rising maintenance costs, supply chain complexities, and rapidly changing emissions regulations. Exos was born out of the revelation that a customer-centric approach to last mile commercial vehicles is the best path to both address the challenges of fleet operators and to decarbonize commercial transportation, which makes up over a third of global CO2 emissions. Since our inception five years ago, Exos has grown from an original equipment manufacturer into a production and support ecosystem that enables the electrification and adoption of commercial vehicles. The heart of our business comes down to three primary offerings, fundamental to transitioning fleets to zero emissions fleets. We build electric commercial vehicles featuring our own proprietary battery systems. We build software and tools to optimize the use of those commercial electric vehicles. And finally, we provide charging infrastructure and financing tools to enable the rapid adoption of commercial electric vehicles. We focus on building medium and heavy duty regional haul trucks in Classes 5 through 8. 90% of vehicles in these segments operate on daily routes under 200 miles, known as last mile routes. These vehicles use fixed fleet depots as bases where they can plug into dedicated charging infrastructure. The predictable nature of the routes and return to base model makes such vehicles ideal for electrification. Years spent as fleet operators, combined with feedback that we've gathered from our customers and partners, have taught us that the two most important considerations in deciding to electrify a fleet are durability and a lower total cost of ownership. These considerations are what drive our design philosophy for vehicles. Turning to the next slide, three compelling reasons drive our excitement about Axos' long-term outlook despite the recent headwinds. First, our proprietary EV powertrain technology has been validated through actual on-the-road fleet usage and provides compelling TCO savings for fleet operators. Second, we've curated a world-class team of R&D and engineering leaders instrumental in building leading commercial and electric vehicle OEMs. And last but not least, the total addressable market size of the class five through eight medium and heavy duty regional truck market is an estimated $34 billion, over 90% of which is in the last mile routes and growing at a compounded annual growth rate of 35%. Now turning to the next slide, I'll now provide an overview of our business and vision with a focus on how we have evolved within the last year. Following that, GEO will provide a detailed operational update. Finally, Kingsley will provide a detailed review of our third quarter results and outlook for the rest of 2021. While Exos has been impacted over the quarter by the pandemic and supply chain related challenges faced by all manufacturing companies, Exos has still achieved key milestones. Notable achievements include important product launches, including the Exos Hub and our new line of batteries, the Lyra series. Headcount growth increased headcount by 42% with the addition of 75 full-time employees during the quarter, plus expansion of our two flex manufacturing facilities. Additional orders from Keystone customers including over 200 trucks from FedEx ISPs and growing our dealership and distribution networks. Turning to the next slide, I'd like to discuss our new battery system. The modularity of the X platform allows us to accommodate a wide range of last mile applications and enables us to offer clients industry-leading vehicle costs and total cost of ownership savings. This customer-driven approach, combined with our available financing and energy solutions, are fundamental to making an electric fleet a good business decision. We are incredibly proud to unveil our new Lyra battery series, which represents a significant improvement in our design. Exos focuses on battery designs that withstand the rigors of commercial use without sacrificing modularity and efficiency. The Lyra series is the second series of proprietary battery systems designed and manufactured by Exos and features a system level 52% improvement in gravimetric energy density and a 45% improvement in volumetric energy density, offering a lighter overall pack that is more compact with the same or more net payload capability. The batteries come in two sizes. 30 kilowatt hours and 60 kilowatt hours and a single pack provides an average of 25 and 50 miles of range respectively each battery system features individual recirculated air cooling and an independent battery management system providing fleet operators true modularity and improved reliability it is worth noting that the development process did not come without challenges We began production of the new battery pack design in Q3 and experienced issues with scaling production as well as delays in design validation and the delivery of battery automation equipment. These temporary setbacks led to output delays and as a result, we will not be able to meet our 116 unit delivery target for 2021. We're confident we've overcome the initial delays in production and are proud to announce resumed production of our next generation battery packs. Turning to the next slide, the global supply chain disruption has led to uncertainties on the availability of components at all levels, including semiconductors, raw materials for chassis and body components, and battery cells. With rising freight costs on both land and sea, trying to achieve our target margins for 2021 has been challenging. While we have not been immune to the added working capital and margin pressure faced by all of our competitors, I am extremely proud of our team's collective effort to continue building the foundation for our future growth as a leading solution provider. Our next generation battery pack system, the Lyra series, is a critical part of our product suite going forward and a direct product of dedicated and world-class personnel. Our team's efforts were aided immensely by the closing of our business combination with NextGen during the quarter. While we fell short of our initial capital raising goals, the closing of the combination provided us with capital to continue investing in product development, capacity growth, and key talent. Turning to the next slide, our increase in orders reflects continued robust demand for XS Zero Emissions solutions. Our contracted customers include a number of parcel delivery and e-commerce fleets. We also secured contracts with FedEx ground operators to deliver 120 zero emission electric trucks across 35 different FedEx ground operators in California, New York, New Jersey, Massachusetts, and Texas. Delivery of these vehicles is expected to occur in Q4 2021 and 2022. Exos' growth in order volume and continued production ramp is the direct result of our robust business development department group and key partnerships with distributors. In summary, while the quarter has not been without challenges, the fundamentals of strong market position remain strong. We continue to build great product with a great team in a thriving market. With that, I'll turn it over to Gio.