Zapp Electric Vehicles Group Limited

Good day and thank you for standing by. Welcome to ZAP's Shareholder and Analyst Update conference call. At this time, all conference call participants are in a listen-only mode. After the speaker's presentation, there will be a question and answer session. If you are a conference call participant, to ask a question during the Q&A session, you will need to press star 1 and 1 on your telephone. You will then hear an automated message advising your hand is raised. To withdraw your question, please press star 1 and 1 again. Alternatively, written questions may also be submitted at any time via the webcast. Please be advised that today's presentation is being recorded. I'd now like to hand the conference over to Mark Kobol, Head of Investor Relations for ZAP. Please go ahead.

Thank you, Sarah, and welcome, everyone, to ZAP's shareholder and analyst update call and webcast. We'll start with some prepared remarks from Swin and Dave, and then Jeremy and David will join for the Q&A portion of the presentation. For participants joining us by phone, please note there is a slide deck available on our investor relations website, ir.zap.ev.com. During today's call, we will discuss our business outlook and make forward-looking statements. These comments are based on our estimates and expectations as of today. Actual results could vary materially due to a number of risks and uncertainties, including those described in our most recent filings with the SEC, which are also available on our website. Now I'd like to turn the call over to Swen Chatsawan, CEO of ZAP, for his opening remarks.

Swen Chatsawan Thank you, Mark, and thank you to everyone joining us on this call today. There's much for us to update today. The ZAP team took significant steps forward to reach many important milestones. Firstly, i300 won another coveted design award in 2024, the IF Design Award. This adds to the equally prestigious awards we won in 2023, the Red Dot and the German Design Awards. This brings the total to nine. These awards go a long way to validate i300 as a fit for purpose for the most valuable segment of the two-wheeler market, a market which is expected to reach $200 billion in the coming years and which is spread globally, including the high-growth emerging markets such as India, Thailand, and Indonesia, for which the i300 was designed. It's worth reminding that two-wheelers are largely toys in the US, but in the rest of the world, they are a consumer must. On top of which, global growth in electric two-wheelers is expected to significantly outpace that of the internal combustion engine two-wheelers. And unlike cars, it's expected to exceed half of all sales. We've also installed our proprietary microfactory system in our own standalone reference site. This serves to refresh our cost-effective, fast turnaround time manufacturing concepts and to showcase our technology to candidate contract manufacturers so that we can respond quickly and cost-effectively in Thailand, Indonesia, India, and elsewhere around the world. This reference site can assemble up to 21,500 i300s per year. I'll continue today with our most recent developments before recapping more highlights from 2024. And then we'll discuss our outlook for the rest of the fiscal year and beyond. As I mentioned, in Q4, we made a decision to open our own microfactory reference site. is in the export processing zone in Thailand called the Bangkok Free Trade Zone. It was completed on budget and on time in less than three months. It opened ahead of schedule in December, and it revalidates our proprietary, cost-effective, sustainable manufacturing concepts. This ISO 9001 certified microfactory is fully functional and can assemble up to 21,500 units per year, from less than 12,000 square feet of space. We'll produce bikes for Thai customers as well as for export to other key Asian and European markets. This site installation revalidates how quickly it can be replicated and on a modest capex budget as well as on a per unit install cost. Subsequent sites can be located within the same or other free trade zones in Thailand as well as any other country or regions with high two-wheeler demand but no free trade agreements with Thailand. This could include India, the Middle East and North Africa region, and South America. Our microfractories can be built by us and transferred to be operated by a contract manufacturer. This is commonly known as build, transfer, operate, or build, operate, and transfer, They can be built directly by a contract manufacturer, according to our reference site. Our proprietary assembly system has many benefits. It is highly incremental and it avoids the usual production line-based issues, such as restart costs and overruns. This means we can accurately track demand and eliminate goods in and goods out inventory costs. That has matured and is now seven years old. having survived COVID and listed on NASDAQ. Beyond the IP side mentioned earlier in the highlights and our micro factory reference site, we also achieved other important operating milestones in 2024. We completed the motorcycle single vehicle approval process in the United Kingdom and subsequently delivered our first vehicles from our experience center at Vista Motion in Oxfordshire. We also completed Thailand's Department of Land Transportation homologation in September. Thailand is the world's fifth largest two-wheeler market, where 84% of all households already owns at least one two-wheeler. Thailand shows the potential for penetration in all other emerging markets. A commercial rollout involves development across all fronts of our omni-channel approach. These include mono-brand concept stores, pop-up stores and department stores, appointment of authorized resellers, strategic collabs, and online activities. We developed a full-stack platform behind our website. Customers can order vehicles directly online. This stack includes a detailed personalization system as part of the ordering process. We've also developed a dropship direct-to-customer, or DSDTC system, which dovetails with the stack to make deliveries directly to customers' locations. This DSDTC system is a garageless, van-based, delivery and after-sales support customer experience model. Our first activation will be in the capital city of Thailand, Bangkok. This will be followed by a number of other cities. These activations should see many bikes hit the road in fiscal 2025. and we have yet to kick off our wider brand awareness campaign. ZAP is ready to scale rapidly to meet demand as we roll out globally to other key urban areas in Southeast Asia, Europe, and India. In November, our application for homologation in the EU was submitted to the Type Approval Agency in Ireland. We anticipate the requisite certificate will be issued in the coming weeks. In the meantime, we've been refining plans for commercial rollout in Europe as we've been doing in Thailand. As we receive the required certification, we plan to start marketing and deliveries of i300 in the European countries where two-wheelers sales are highest. We expect this to be France, then Italy. Since we launched in 2018, we've received more than 200 inquiries from potential resellers around the world. As we go back through this list, we believe there are many strategic partners globally that we can activate. India is the largest market for two wheelers in the world and is another priority for us. To put India in some perspective, the number of premium units sold in India is more than double the total number of all two wheelers sold in the US and Europe combined. Like everywhere, we believe I300 is perfectly positioned to capture share in this significant and valuable Indian premium sector opportunity. The receipt of the EU type approval permits that to start selling in India immediately afterwards, which we will do so. And we are now prepared to quickly and cost-effectively set up our micro factory in India to scale even before we begin shipping directly from our existing factory in Thailand. Altogether, we now have a stronger platform from which to launch commercially in a number of countries. It is good to remind ourselves that a removable, portable battery solution is not dependent on a dedicated charging infrastructure. Accordingly, any lack of such infrastructure does not limit our ability to scale, nor do we need to invest time or money on it. This means our team can focus solely on sales of our vehicles. portable solution also means that the user experience is essentially the same as charging a phone or a laptop. We've been meticulous and patient in our approach to commercial launch, and we're careful not to begin spending funds on marketing too early. I've already discussed the steps taken to improve our production capabilities. We always anticipated that sales would ramp up during this fiscal year, 2025. And now that the new facility is operational with a later start, but to a wider commercial rollout, means we can expect to sell 1,500 units in the next eight months. However, our focus on role is to more countries this year, which means that we continue to expect to sell more than 25,000 units per year starting in fiscal 2026. This volume of sales would equate to more than $200 million in revenues, meaning rapid growth in less than two years from where we stand today, making the most of the momentum in the two-wheeler market. It is important to note, however, that this represents only one-tenth of 1% of the expected global market. Our first product, i300, was designed specifically for the most valuable segment of that large and growing global market, which is concentrated in several emerging markets and is increasingly dominated by electric adoption. That was conceived to maximize shareholder value from these global megatrends. And we think there's an immense opportunity in front of us. With that, I'd like to hand the call over to Dave.