Energy Vault Holdings, Inc.

Good morning, everybody. Welcome to Energy Vault's first Investor and Analyst Day. On stage, I'd like to welcome Bernie Coulson, who's going to take us through the Safe Harbor language.

Good morning. Welcome to Energy Vault's inaugural Investor and Analyst Day. Thanks for being here with us today, those here in New York, as well as those joining us virtually. The full Investor and Analyst Day presentation, first quarter financial results press release, and an abridged earnings presentation are all available now on our investor website. We will be referring to these materials throughout the day. A replay of this event will also be made available later today on the investor relations page of our website. The entirety of the Investor and Analyst Day is being recorded and broadcast virtually. Please note that Energy Vault's first quarter 2024 earnings release, as well as today's Investor and Analyst Day presentation, will contain forward-looking statements that are subject to risks and uncertainties. These forward-looking statements are only estimates and may differ materially from the actual future events or results due to a variety of factors. We caution everyone to be guided in their analysis of Energy Vault by referring to our SEC filings for a list of factors that may cause our results to differ from those anticipated in any forward-looking statement. We undertake no obligation to publicly update or revise any forward-looking statements except as required by law. In addition, please note that we will be presenting and discussing certain non-GAAP information. Please refer to the Safe Harbor Disclaimer and non-GAAP financial measures presented in our earnings release for more details, including a reconciliation to comparable GAAP measures.

History has shown us that true progress is the undertaking of the few, made by those that race towards the biggest challenges and tackle the unknown with conviction, fueled by the people that take on questions others deem impossible, unlocking opportunity with their answers. Today, together, we will unlock our vault and share with you all that it contains. Within it is our journey, one that's taking us to all four corners of the globe. Our energy storage technology is making clean power flourish, transforming it from a minor contributor to a major element of power grids, reliably powering homes, offices, businesses, communities in a way that's unique, safe, sustainable, and indigenous. What others see as the future, we're making happen right now, delivering projects that can be seen in real time, building infrastructure, and licensing our technology around the world. Within our vault is our hardware, with its short, long, and ultra-long duration capabilities, as well as our cutting-edge hybrid-enabled software that can seamlessly orchestrate and optimize the most ambitious operational needs. our unparalleled expertise is in the vault too with our dedicated global r d and engineering teams always looking to the future addressing the big challenges and answering our toughest questions ones that affect us all today and for generations to come our journey is only just beginning already it's accelerating the momentum of clean power is unstoppable And our storage is the essential driver for it happening better, faster, and quicker than anyone thought possible. We're in the right place at the right time. And we've opened the vault. Take a look and see what's inside.

I'm delighted to welcome to the stage Robert Piconi, our Chairman of the Board and Chief Executive Officer.

Okay. Good morning, afternoon, and evening to everybody. I appreciate all of you that have joined us here. in New York this morning. It is great to be back. I also want to welcome everybody that's dialing in. We have a few hundred people actually that have dialed in for this event, so welcome to all of you. Great to be back here where just over two years ago, we took the company public on Valentine's Day in 2022. Amazing the last two years and what it's been. And I think in terms of timing, and as I think about the timing of us having this dialogue and this concept of unlocking the vault, And what we've done in the last two years in different solutions all over the world, four corners of the world, different technologies. It is the right time to have this discussion. And why is that? This is now a discussion not about what will come or what needs to be proven or what we are going to do. It's building off a base of what we've already done, from turning over a gigawatt hour already in the United States, for example, in battery projects, getting our technology up and operating, for example, in China. It will be a very data-driven discussion today, as you would expect. This is an investor day, so I think there'll be a lot of transparency. We have a new CFO that I'll be introducing here in a minute that's going to be covering most of that. But it will also be a customer-driven discussion. meaning this is a discussion that's going to come from also testimonials from our customers that are operating the systems that we built and delivered. So in terms of us having a dialogue, I think, with investors now about what we've done in the last two years, but then very importantly, what we're going to be doing in the next few years as an investment thesis, it's quite a strong, compelling message we feel that we've put together today. And With what we're doing in the energy storage space and transforming how we deploy solutions, how we solve customer problems from a mentality and mindset, I hope you'll agree with me that we're really innovating in ways no one has ever done in energy storage and at a speed and velocity that has not been seen. On the agenda here, we've got, I think, a great portfolio of things to discuss. I'm going to spend some time up front talking about some of the state of the business. We are going to get into some numbers here right away and go over some of the things we are announcing new today. Part of This day is not only about getting into what we've done, getting into what we're going to be doing over the next few years, so we will be sharing some of that guidance, but today we're also announcing new customers, new products, new regions, and also sharing a little bit about our business model, opening up the kimono a little bit on how some of these things are going to flow over the next few years. We've got a great and deep set of discussions around our product portfolio. So I think that's fundamental and important. It's a great, I think, time for us to be talking about that technology given what's happening in the market. Uniquely, just in the last two weeks, I've spent 10 of those days going around the world. into China, also in Saudi Arabia that I'll talk about for the World Economic Forum, and then coming back here, actually flew back over the pole, so it was quite a round trip. I'm going to share some of those perspectives because there are some transformational things happening in energy, transformational in terms of the amount of just the pure terawatt demand that we're seeing and that the world is seeing, and a lot of questions of how we're going to meet that demand. Absolutely, I think what would be undisputed and not disputed at all is energy storage is going to play an important role. We're going to be finishing with Michael Beer, our new CFO. I think, what is this, your fourth week or third week, Michael, in the job? Fourth week in the job. Very excited to have Michael here and having him covering the bulk of what we're going to be going over financially, both in terms of the results we announced yesterday that hopefully many of you have seen, as well as, importantly, some guidance as we look and standing today over the next 18 months. So it's another, I think, unique time given we're progressed here in 2024. We have pretty good visibility, as you would expect, in terms of the rest of this year, but as well as what we have underway into 2025. So Michael's going to be covering that. We will insert some question and answer periods within this and a lot of very exciting content and videos directly from our customers. That's how we lead. That's what drives our company. At the end of the day, We can say, and you can believe what you want from what comes from our mouths, but at the end of the day, it's the customer that decides who's best. They're choosing us. That feels great, and we're going to share with you what that's going to look like over the next few years. Okay, we're gonna start with numbers, and let's first start by looking back over the last two years. We've built almost half a billion in revenue over the last two years. I think in energy storage is obviously a newer space from a technology perspective. But as an energy storage company, there are some that have been around for 10 to 15 years, pretty unprecedented in what we've done here in the first 24 months of revenue. And with a gross margin profile that is quite unusual in this space as well. So to have a blended double digit gross margin, a combination of businesses where we've been able to monetize, for example, our gravity energy storage in a long duration market that is still evolving. and still can be described as nascent. I think that's going to be changing more quickly than we thought. I'll share with you why in a little bit. But also built and built a very large funnel. Marco Tedizina is here, our chief product and commercial officer, that if you start from the left side, almost 10 gigawatt hours of things, it's either awarded or shortlisted. Very interestingly, over 60% of that that's awarded and shortlisted comes from either existing customers where we've already turned things over or strategic partners, investors. So obviously a high confidence there. We're going to talk about that a little later. Contracted of the two gigawatt hours, some of which we've seen in some of the revenue already, but a full gigawatt hour now in operation. And you're going to be hearing from our customers in that regard. But very importantly, in our first two years, All the projects we've delivered on time, on budget, safe. And again, no surprise the priority that is today, especially with some of the incidents that have occurred in some of the technologies. But with the team we've built, not a surprise to me that we're managing that very well and all with quality. Akshay was here and going to be talking a little bit about our software and our execution that he's driving for the company. And then I think very importantly for investors, Strong cash position. We have managed that and continue to manage that well. It's very important because that gives us the optionality and the flexibility as a company to do things like investing in our R&D centers and new customer centers that you're going to learn more about today. to make some strategic investments as we've done in key strategic partners and just keep the working capital going through a business that's been a tough last two years between the interest rate environment, what's happening on the geopolitical arena. So we have to continue to plan for the unexpected and continue to manage as the stewards of investor and shareholder money. No debt on the balance sheet. And I think importantly, we have not, nor do we have plans to do any dilutive type of financing. And I think if you look at a company of our size and scale and our growth, that's something quite unique, something we're proud of. But always looking now as we're growing more and more for continuing to look at ways to get growth capital into the company with some of the business models that we're going to be sharing with you today. If you look on the right side of that page, across our gravity, our battery and hydrogen portfolio, very interestingly monetizing in the business model in different ways. Gravity through licenses and in some of the biggest markets in the world like China. We are building out and have built out over a gigawatt hour of lithium ion batteries. And then another business model with the green hydrogen, the largest one in the U.S. announced with the largest California utility. We own that project. It's a 10 and a half year tolling agreement. So different technologies, different business models, all managed in a progression that we feel very good about. And with a customer said, as you read there, that. is really some of the largest players in their respective either states or in their category like IPPs. So China, if you follow us closely, which I think most of you either on the call or in the room do, we had some big announcements over the weekend. The first operation and testing successful of the system that's charging and discharging our first gravity system in rudong in china it was grid interconnected last year in december mechanically complete a little earlier in the q3 so everything's progressed despite two covid shutdowns in shanghai progressed in a very positive way with that and up to and including this past weekend i was just there the week before in shanghai i'll share a little bit more from that trip We also announced with China Taining an extension of another seven and a half years of our license agreement, which will bring future royalties. On the left hand side, some, again, top customers, Wellhead, one of the largest and oldest companies in California of gas peaker plants, but now going with hybridization. That came online in the summer at a very critical period. For those of you that know California, it's a tough market, especially if you're building things right in the middle of a neighborhood, which is where this was. So not a small achievement there at an important time for Wellhead. Nevada Energy, the largest energy company, largest utility in the state of Nevada. Completed a project in four months, 440 megawatt hour, never been done in that timeframe before to get them up and energized before the end of the year. Big accomplishment of the team putting that together and the partners we used. Jupiter Power, the largest IPP in ERCOT, BlackRock-backed. Another battery project brought online and energized just January last quarter and now brought to final completion here this quarter. So a lot happening that culminated in the Pacific Gas and Electric announcement we made about a year and a half ago and now building and delivering that project this summer. It was a great culmination if you look at the first 12 months we had of demonstrating our energy solution approach of addressing an ultra-long duration need that Pacific Gas and Electric thought could only be solved with gas. because of the nature of what was the requirement, they bring in DieselGen every year. We proposed a sustainable solution. We designed it, we architected it, we brought the best technology to the market to do it, and now we're deploying it. Again, another first, and we'll be one of the first ones operational. And it really solidifies our leadership globally in long-duration technology to have these technologies not only announced, not only being built, the gravity system now operating in China, and now this ultra-long-duration microgrid will be operating this year. All first, very excited. And everything I've just described and spending some time on it really starts with leadership and people. I'm talking about this up front. It's not just about The 10 people that you see on this chart, it's the 180 strong of our employees. That's not a large number, by the way. It shows the flexibility of our business model and also not only the CapEx light, but the resource light way we deal with technology development, but are very resourced to work with our customers in developing projects as well as executing those projects safely and on time. We've done it, so it's not something that I'm standing here saying we're going to do. We have been doing that. It is a strength and core value of this company to be known about delivery and execution. The other thing, if you look at this team from a leadership perspective, we are very global. This is not a US-centric team at all. Everyone you see here is here except Andrea Pedretti, our CTO, who's Swiss by birth but living now in California. And he's hosting a technology collaboration session with also some customers, hence he could not be here in person. Gonca Ikeren is here, our head of HR. They're in the back from Turkey originally, worked in Switzerland from the healthcare area, Pfizer, Amgen out in California. We were lucky to grab her when we were out there and avoided a move. But again, global, multinational, functionally excellent in the people function and has been a great partner as we've built this company very quickly. Lawrence Alexander is here. You heard from him a little bit earlier, based out of the UK and handles all of our marketing PR activity. Michael Beer, we announced a few weeks ago and is here there in the back of the room, our new CFO. And we'll be taking through a lot of the financial areas, but a lot of experience, no stranger to high growth and public companies. Josh McMorrow, who's based out of Germany, is also here, our chief legal officer of the company and just a wealth of experience dealing globally in all the parts of the world where we're strong and building and growing. Chris Wiese here also in the front. Chris, I've worked with for over 20 years across four companies. So we know each other. That's for the good and the bad, I guess you say. And that makes work very well and very lucky to have him. Pulled him out of retirement to come and help us out. He's in Texas there where we are announcing a new solution center for energy that's already being built in collaboration with Enel Green Power. Marco Terezin, our chief product and commercial officer, an Italian by birth, has worked all over the year, all over the world, including seven years in China after the Kyoto Protocol, looking at putting in place new carbon pricing models there. So just a wealth of experience. Akshay Ludwa from India originally. We're more experienced, I think, from an integration perspective than most in the world, having spent a lot of time at Greensmith Energy and integrating over 100 projects in 12 countries. There is a reason we've been able to commission these systems in the last 12 months, bring them up safely, bring them up at the quality customers expect. And it's not just about developing good technology. It starts with people and experience. Those customers that were on that prior stage do not give orders to new customers that present risks to them. Public utilities do not take risk. Companies like Wellhead, tried and true, very conservative company, they do not take risk. They do bet on people and they do bet on some of the best people in the industry. I feel very good about this team. Finishing here, Kevin Keough, who we crossed paths at Danaher, a company many of you in the financial community know and the corporate development side, and assisting us on development initiatives for the company. OK, starting off here to talk a little bit about what are we announcing today that's new. There is a lot new. I think with Energy Vault, you can always expect the unexpected. There's a lot that goes on behind the scenes. We get done with a very efficient team. With China, you saw that we announced the first operation of the system and the testing of the system, the discharging of the system for the first time. But we also announced an extension of that license agreement. And that's fundamental. You'll remember that they paid and prepaid $50 million up front to have that right to deploy the technology. Of course, what's the most exciting part for us is getting to deployments at volume. So having this first system up and running now, but already they had started six months ago a second system that was already out of the ground, obviously shows a lot of confidence from them, but already announced also 3.7 gigawatt hours of projects. in gravity. I mean, that's a number that is not announced by any other long-duration storage technology. Showing the flexibility of the technology, the mandate in China, four hours, they are using that system for four hours. So just tremendous in terms of the confidence in building that out. That is a long technical life asset. That's part of the reason they're deploying it initially for the four hours. Long duration will come in China as well. But I don't think we could have chosen a better place given it's the largest energy storage market in the world. Shortly, China will be deploying and has been at a pace of renewables greater than the rest of the world combined. And that's not a light statement with a mandate of 20% of storage at power times four, what's going to probably become six hours. Those are big numbers. You can do the math on that. You've seen the numbers on China. There's a reason we went there to get the technology developed in a way that positions us well. And a lot of confidence. I hope it gives the investor community the fact that when I was there 10 days ago, signing a doubling of the time of the license agreement around our core EVX technology there. So not a lot of companies doing that. I think in China these days, we've worked very well with our partner, China Taiyan Ying. The other thing to mention, and we announced already, is another license agreement for gravity in South Africa. That's not just South Africa, that's the SADC region, so that includes 16 member states. Very excited about the potential there. I'll mention, and it's with one of the largest the largest publicly traded EPC in South Africa, WBHO. The company is called Guessle itself, which is the partnership that was created to build out the technology. What's not on here is Aqua Power. So this is public already, but Aqua Power, which is a $35 billion-plus company, desalination plant player, one of the largest in the world. They're also one of the largest EPCs backed by the Public Investment Fund in Saudi Arabia. They did a competition of 20 different companies for long-duration energy storage to look at helping the needs in particular in South Africa with projects and energy storage to combine with renewables. And we were one of the two companies selected. So that was released, I believe, in March by AquaPower directly. And we are moving on that partnership and now looking at locations, not just in Africa, with them. So very excited about that, given what that brings. And then very excitingly, just to move down the page to the left, we announced this this morning. The entry into Australia and an entry into what is not just a country but a continent, I think one of the most important growth markets for energy storage in the world. They're looking at some fascinating things in that continent, including building out massive solar to leverage that sun, looking at building out subsea DC cables to go to places like Singapore, for example, or into Southeast Asia to power solar. some of the largest cities in the world, but also a very strong utility and IPP environment in and of itself. A lot of companies there, like one of our investment partners, Korea Zinc, big strategies there to make green hydrogen. To make green hydrogen with the sun, you need long-duration storage to drive electrolysis. We're essentially splitting water, making green hydrogen. So that's going to be very important. But to have a market entry where we have what we announced this morning with ASIN, which is – based in Southeast Asia, but is an IPP in operations in Australia. It's one of the owners of one of the largest solar plants, the New England Solar Plant in Australia, 720 megawatts. So this 400 megawatt hour that we announced this morning with ASIN is going to be coupling to that solar development for storage. So very excited. There's actually two projects that's a part of that 400 megawatt hour. We will be getting started on that the second half of this year and having it deployed through 2025. Another very large project we developed that's listed here is and will be the largest battery project in the world developed there in Australia. Working on that, and you'll be hearing more about that project, but suffice to say, we have other things going on in here in Australia as well in our in our very near-term pipeline and funnel. But a lot going on in a country that we've always represented is a strategic growth priority for us. You'll remember that we appointed our first non-US-based board member last quarter, Stephanie Unwin. She's the CEO of Horizon Power. So there was no coincidence there in terms of the timing as we have been developing in the Australian market since even back to the IPO. Recall that Korea Zinc invested $50 million in the company in January just before the IPO. So Korea Zinc based in, obviously in Korea, but Australia. They're the largest non-ferrous metals produced in the world. So that's not only zinc, that's silver, that's lead, a soft metal called indium, which is a rare earth metal. So all of that core ore operations is in Australia. And they have publicly stated global aspirations there around green hydrogen, the development of that and being one of the largest net exporters from Australia into Southeast Asia, into Korea with that. I'm very excited to have them as a strategic partner and supporting what their plans are. They want to have the first 100% green zinc production facility. Really, I can't speak enough about them and their And not only setting goals, but putting wood behind the arrow with investment and build out. So with their subsidiary, Arc Energy, they acquired over nine gigawatts of wind and solar projects. So this was all publicly announced in the last 18 months. So they are moving and developing and real excited about that partnership. On the right side there, some of the new portfolio things that we're announcing. And if you look at those pictures and the development of what's behind that that we're going to share in some detail today, we're announcing many new applications of our gravity. those applications are focused on, first of all, economics, so really achieving the lowest levelized cost over time. As you know, gravity is not new. It's actually the law in some aspects and something that's the basis of what today is about 95% of all energy storage, which are pumped hydroelectric dams. So we are leveraging those applications, continuing to innovate. You're going to hear from some of our innovation leaders on this today. You'll see their EV0, EVY. Some of these things are also expanding our total addressable market. So this will be new. We're very excited today to be announcing a new strategic partnership with Skidmore, Owings, and Merrill. Because they have a large office here in New York, for the people in the room, you may know them. So they're one of the most renowned engineering and architectural firms. Bill Baker is here. He will be up on stage with me today. He, as a part of SOM, was the lead designer and architect around the Burj Khalifa, the largest building in the world, 820 meters tall. There are going to be many large superstructures built, many, many over the next 10, 20, 30 years. We can do it very efficiently now. But most importantly, we are going to be mandated and it will be required to look at things like carbon payback on these buildings. And we've been innovating around integrating energy storage and in particular gravity energy storage. in the design of superstructures and tall buildings. So very excited to share that. It does introduce a whole new addressable market for us that I think from a financial or analyst perspective would not have been included in how you've been thinking about some of the things that are addressable to us. I think one of the Hopefully the confidence we've earned is that we are no stranger to taking technology and applying it to solve either customer problems or environmental problems in a very strong way. This is another example of that. We're also going to have Dr. Jose Andrade that's been working with Energy Vault since the beginning, Chair of Mechanical and Civil Engineering at Caltech. which probably has one of the most world-renowned seismic studies in the world. So we're going to be talking about and sharing a little bit about what we're doing on that technology side and what that means in terms of how we're thinking about the evolution of the company and the evolution of the gravity technology. And then finally, we're going to be talking about some other projects that are known, I think, to the community in terms of the PG&E project with Calistoga. That is one that we are keeping on our balance sheet and have a 10 and a half year tolling agreement In Snyder, Texas, we also acquired a 57-megawatt interconnect. That's another project we are going to be owning, keeping on our balance sheet. We are and will be doing project financing. So from just a cash perspective, there's pretty attractive models out there to project finance these, given all of these projects are low double-digit, unlevered IRRs. We're going to talk a little bit more about this market and how we see it evolving, but we see a very attractive space here for attractive assets to own them. We don't have to own them for their life. There's obviously a lot of companies where we can flip those out to for cash as needed, but they are assets and a part of our business model that we will be continuing to evolve as we want to become, as a public company, much more predictable a bit in our cash flows as our revenues go every year. I think one of the things you've seen with us is The nature of being a young company and in a new growth space, and I don't want to apologize for this, but we have lumpy cash flows and lumpy type of revenue. It's a nature of being in a new growth area. I'm personally no stranger to it from 33 years working across both public companies, some of the largest, and new startup and innovative companies that are growing fast. But I think incumbent upon us as we do our planning to look at our business models, look at the leverage of our team, today, look at how we spend our CapEx and our OpEx and putting in place something that is going to be a very strong business model for shareholders and excited to share a little bit more about that with you today. And then finally... We have an R&D center that we've been building out, a customer solution center that's a part of the initial collaboration with Enel Green Power in Texas. We acquired an interconnect from them there. We have a research and development collaboration agreement with them that initially started with a project we're going to turn over. Enel has a lot of global aspirations. They're in 33 countries, Enel Green Power. In addition, they want to see a lot of our newer technologies proven out at a commercial scale. And so this isn't just about one application of gravity, but as you're going to hear, it's about some of these new applications of gravity, for example, taking advantage of slopes that exist. And there are many, meaning in each country, there are thousands of places where instead of building a structure and that cost to build a structure like an EVX, we can leverage existing terrain, leverage, for example, our same technology with our composite blocks, or as you're going to learn today, even with water. in a modular pump hydro solution, which is what we received the award from AquaPower for, that achieves economics that have not been achieved in long duration or projected. And that's because we're limiting that construction cost and leveraging some of the terrain. So a lot of those new technologies are going to be built out in this solution center. It's underway. It's happening this year. We will have technologies shown and demonstrated within this year and some of these new things we're going to learn about today. So very excited. This will consume, I think, a good chunk of even some of the product in the portfolio discussion that we're going to have with some of the leaders. And we're going to sprinkle in direct customer testimonials. There is no substitute. And as much as I think about my team, as you can tell, you all will be the judge of me in the end. However, there is no substitute to hearing directly from our customers where we build projects, turn them over, they're live and operating, and listen to them talk about how we've executed together. Return from this trip, two things to highlight here, and I'll start in China in the bottom right. That was the beginning of the trip that led to the announcement of the new agreement and no coincidence, but the full operation of the system and as witnessed by some of the government officials locally. This was an important milestone for us, not only all the milestones that were achieved the last six months as we brought that system up and going through what's a complex process in China and a government mandated and controlled environment even at each province level and achieving what we did in terms of showing that operation. A lot of discussion on, hey, how is gravity doing? How is the first system coming? Is everything on work as planned? CNBC was there, CNBC Asia, they did a 30-minute video. We're translating it for you. One of the key outputs of that is the performance above expectations. We're going to be sharing more of that as our local partner puts that data together, so you'll be seeing some more updates on that. Very exciting, very exciting, also the extension of the agreement. The other trip we had was in Riyadh, and I was accompanied by Bill Gross, who's a co-founder of Energy Vault, also the founder of Idealab. Really interested to be a part of that meeting. It was called a global meeting looking at collaboration, development, and energy. And the energy topics we all know, not only renewables, but getting into the equity of energy and energy development. And as well, the fundamental question coming out of those sessions that had a breakout group that's advanced energy solutions. There's multiple CEOs from across the world a part of that, both new technology and existing. So I've been a part of that for about 18 months. We signed a new collaboration agreement with the World Economic Forum, as you see there. The main question coming out of there are fundamental. With all the growth that's coming, and even well above the projections, I'm going to share some data. How are we going to meet that demand for energy? And do we have this pending energy crisis coming? It got a lot of dialogue. Interesting. Nuclears come strong back into an SMR, strong back into this discussion. And this coexistence that's going to be what I believe will be for a long time, especially with some of the new technologies that make even fossil fuel more efficient and less GHG emitting. We're going to need all the power we can get. Absolutely, renewables and storage will play a key component of that, but it really is massive. And if you look at some of the data out here, and this is just I'll start with on the left-hand side, what you're looking at in 2023 is about under a trillion of investments that have been made versus by 2030. So that's not a 2050 number. That is a 2030 growth of the investment that would be required. It's, I think, $4 trillion to $5 trillion. So we would be on track for 2050 net carbon neutral. So this is definitely a weft. We're looking at a foreign type of topic because it puts things front and center on what are countries doing to try to increase that spending. It is a large gap, I think, in what we see today. But the other thing is the more, I think, impressive in a way is this chart on the right-hand side, which we're looking at is just in two years and what was forecast in 2022 versus the light blue was forecast in 2023. So in just one year, the forecasts have massively ramped in terms of what that worldwide energy storage demand outlook in gigawatt hours is going to be. And that's just in one year. And what is not a surprise, I know, to all of you of why is that happening? This isn't only about this part on the left here, this demand growth and what's happening with electric vehicles and electrification. But think about the last three to six months, what's been so topical. So this is about now generative AI and just pure processing, hyperscalers, Bitcoin. But with all of that productivity that AI is intended to enable, that is going to suck a lot of power. And a lot of people are now thinking about how are we going to meet that demand. A lot of that with the wind and solar build out, you see their supply variability. That will create more intermittency and therefore a higher demand. And I know this is no surprise to anybody here. Storage will continue to be a strong imperative for that. And and as you look at this with that same chart on the left, this breaks it out a little bit by segment. You know, we typically and as a company and I think just as an industry, it's hard to go out more than, you know, three, five, eight years just because things change so much. If you go back to when we founded the company, if I go back to that 2018, 2017. We had a view of the world then that thought long duration would be here and be even half of the market of new deployments right now. And it's actually still developing, still developing. We uniquely are monetizing our long duration technology through licensing. No one else is. and doing that in a very highly profitable way that will bring future royalties with volume when it comes, and it will come. But this gives you a sense just by technology, the types of numbers that are going to be spent. We're very focused in this next You know, two, four, six years that drives our technologies that we're bringing to market today for that future. And even with hydrogen, the development of hydrogen, you know, we don't believe it's any silver bullet out there, I think, for the world, but it will have a place in some key applications. As the microgrid backup that we developed, it was the only way to sustainably backup a city of 5000 residents, turn off the diesel gen that they have to roll in there every year during the fire season. So the numbers are all there. I know we see them, but it is when you step back and look at just in the last 12 months, what's been developed, it's pretty staggering and it has It continues to, I would say, adapt my perspective and our country's perspective on things that we may accelerate a bit more to deal with it. And if you start with the regions of the world where those opportunities are, 90 percent are in five countries. So I want to simplify this a bit for investors. This is part of unlocking the vault and opening up a bit how we look at the world. All of this, of course, information will be public and online here, but this will give you some of the data that's behind what we're doing. Why are we an energy solutions provider? Why are we unique in that? We are the only energy storage provider in the world that's providing short, long, and these new ultra-long duration solutions. Clearly, it has to prove out with investors of they believe that will be valuable. Obviously, that's not reflected in the stock price today. But as we focus on it, just to get into the data a bit, These countries represent where we have a lot of focus. I would not rule out, and especially from what I've learned the last three months, India is doing a lot of things with some of the biggest industrial customers in the world that are based out of India, are looking at big initiatives that are looking at 24-7 renewal. And if you think about 24-7 renewable for industrial, think about what I mentioned about this generative AI and more data centers and that need, because that is absolutely a 24-7 need that today cannot be met in a renewable way for 24-7. That's economic. It's economic. So I think very exciting there. I would add that South Africa... is also a very interesting and developing market. It won't have the numbers yet, just like India doesn't today. But suffice to say, the things that do get done there, and I'd say in particular India, when they're done, they will be large. They will be large. Nothing will be done small as those things come and catch up. So focused on those high-growth technologies and focused here in the highest-growth geographies, we have not only infrastructure all over the world, but a lot of our initial customer deployments are in these same spaces. As I said, I think southern Africa and Africa as a continent and developing countries as typical like they did in telecommunications, skipping generations of tech and jumping right to wireless. I think they're going to skip some earlier generations of tech and go right to the most efficient storage coupled with renewables. As we move on then, and I think as we're developing out in the regions, just to remind everyone a bit on what helps inform our perspectives as a company is our strategic advisory board. That's made up of the people that have invested in the company along the way. That's not only our founding investor, Idealab, which is the longest running technology incubator in the U.S., arguably the most prominent company. for sure. They're looking at technologies five to ten years out. That's interesting. Cemex, one of the top material companies, material science is fundamental to what we do. SoftBank, known to everyone in terms of the largest VC side. Aramco, the largest energy company in the world. We spent the whole week there. The WEF was two days, but my entire executive team was there for meetings with Aramco. There are many tentacles to Aramco. They have tremendous global aspirations. They're an investor in us, and we will be playing a role in supporting them and helping them achieve that strategy. And then moving forward, the mining sector has a lot of decarbonization to do, hence investments from BHP, largest mining player, Caritas Inc., as I mentioned, the largest non-ferrous group, and then CNDY, which is environmental waste remediation in China. These things inform us, and L Green Power, as 33 countries based in Italy, another important player there. We do a lot of collaboration with them. All of this is an asset that we carry that helps inform where we're putting in our R&D and to make sure it's customer focused and customer centric. So if you look at this, the aspect in our You know, our chief commercial officer, Marco Terezin, talks about this all the time, which is we don't approach the customers and just try to shove our products down their throat. We listen, we understand what their problems are, and we bring the technology to market to help solve it. It's fundamental. From calls with customers in Australia with new customers, from the meetings with Saudi Aramco to the customers in the U.S., the feedback on this strategy is very positive. It is very unique, and that's what's leading to some of these massive deals. I mean, entering a continent like Australia With 2.6 gigawatt hour as you enter, you know, that doesn't happen by accident. And that's why we're very excited about what that future is going to hold from a long duration perspective in what we're doing. And I've talked about these things. We've booked business. We've monetized, received cash on royalties at 95 percent gross margins. I think no question, globally, we're bringing things to market in long duration faster than anyone else with multiple technologies that is live in 24. No one else can say that. That will inform us and help us learn, as you do in new tech, to help optimize, optimize for economics, learn from customers, continue to build out. Going to the short duration market, you're going to hear from Akshay Ludva. I know this was a surprise a few years ago or even a year ago to investors when we started announcing battery projects. We built and invested in a few years before a software platform to give us flexibility to manage the coexistence of generation tech. By the way, that's not just renewable. That's also fossil fuel based. Various storage technologies, not just our own. and manage that in a way that also enables new applications around optimization of charging and discharging, asset management. That is why we're getting selected. As I said, it starts with the experience of the team to do it. We've done that well in the initial projects, been a big part of the revenue number and even all positive unit economics. I know that was something that as we started to announce those things, a lot of questions, hey, are you buying those projects or bidding them low because you want revenue? Or how are you going to operate? You have a new software system. How are you going to turn that over? Well, aren't you going to get exposed to liquidated damages? The numbers speak for themselves. I've covered them. As I said, that starts with the people, most of whom are not in this room, that are from Energy Vault and bring that experience. Strategically, then, to start to begin to bring it home here and summarize before we turn it over and take a break, largest market and growth regions, that's what we're focused on addressing from a market perspective, and we're going to be sharing more about that portfolio today, as I mentioned. This theme of becoming more predictable in terms of our cash flows and therefore how we project our revenue, as I said, we've had two years. We're in our third year, still young in an emerging growth area. Obviously, that is a high bar as a public company, but something we do not take lightly, hence our management of cash, the fact that we have no debt, but also looking at and really getting perspectives on where are the profit pools in this ecosystem of energy storage. So we've done a lot of work here in looking at where those profit pools come from and how we look at more recurring revenue streams. The license and royalty model will be a big part of that. We're going to be sharing numbers, but the numbers are not small. The bookings are not only 100 million in the licenses alone, of which 60 million or so we've recognized. The cash payments are over 10 years. We're going to share, Michael will be sharing more about that. But the royalty potential, very conservatively, is at $200 million plus over this same next 8 to 10 year period. So excited as these things get deployed out. You've seen the numbers in terms of the demand requirement. That's going to be very exciting. And then we're very focused, as hopefully you understand and see, on the profit potential of this portfolio and how it evolves. And you're going to see that in what we're going to be guiding on gross margins. Not only what we achieved in the first two years, we had a little higher hardware content, hence the single-digit gross margin in 23 alone. But as you're going to see, as you saw in our first quarter, 26% on pure battery projects, so no licensing revenue in there. And as we're going to guide 24 and 25, you'll see they are double digit unit economics, which, again, at this stage as a company, I think is is meeting our expectation. We'll do better as we build this company. Just a few minutes on our business model here. We've talked about our licensing and how that's been playing. You see some of the numbers there. We've been building and turning over projects that carries an EPC component, which tends to have about a 10% type of margin, 5% to 10%, depending on how the project goes. Because you're responsible for another supply chain. We will continue to do that potentially more on what's called an EEQ or an engineered equipment basis where we may not do the EPC but provide the integrated solution. That's something we're looking at at every project. As you've seen in our numbers, they've always been positive unit economics. It will continue and it will increase as you're going to see in our projections. But there's also another segment that you're going to learn more about today in the own and operate. And these are things where we have existing projects today on our balance sheet. We believe there's going to be more opportunity for that. We believe there's going to be more volatility in pricing in the market. The severe weather events are not going to stop. I think they're going to continue and potentially accelerate, which is unfortunate. We need to continue. really focus on cooling down the planet. So we're going to continue to see things that we haven't seen before. And I think this demand for energy, the variability, the volatility in those markets and for the pricing plays well into how we're positioned, especially with the strategic partners that I mentioned and the investors and what some of their aspirations are. In terms of how that manifests itself across a portfolio, we've got our product portfolio on the left side there in the different business models. No surprise, gravity in our software. We can and will continue to license that, so you can expect more from us there. The build and transfer we can do across everything. It just depends on the region of the world. We didn't go set up shop in a big way in China for obvious reasons. South Africa, certain regions of the world, there's no reason for us to go spend that money in cash and tie up cash sometimes in those countries. The license model works, but we can also build in certain developing places. And from an own and operate can really do that anywhere across our technologies. Obviously, we own the software and can do the asset management. We have bid optimization. Akshay Lobo is going to talk a little bit more about this. So all the tools we need to operate, operate efficiently, and really achieve differentiated results in that market, we have them and have developed them in-house. Going forward, and I'll wrap up here in the next few minutes, Grouted, we've talked about continuing licensing. It's operating now. We have a lot of new applications, a lot of which we will be building out, taking advantage of topology or taking advantage of new designs and structures. That's not only going to be higher profit, higher revenue, but that introduces new addressable markets in the building sector that probably people weren't thinking about us applying Gravity to. So that's exciting. The market today is conventional battery. 95% of everything is getting deployed globally. Again, we're going to be doing more in longer duration going forward. This 24-7 need is becoming more prominent with the terawatt growth, but we will continue to build on this core power. You're going to see a testimonial there. That's an investment we made, if you recall, in a domestic provider for domestic content for lithium-ion batteries. We have very special advantages with that investment that the CEO himself, Lindsey Gorel, is going to be sharing with you on a video today. And in green hydrogen and these microgrids, we see a lot of opportunities to replicate what we're doing in Calistoga for Pacific Gas and Electric. Craig Horn, who's here today, will be sharing more about that with you. And then the own and operate model, which I think will continue to become a bigger part of our portfolio, given the amount of capital that's interested in facilitating and financing these, and financing these in an attractive way, and how those economics and IRRs work. Those projects, just to give you a little preview, Owning those projects come with somewhere around 70% EBITDA streams through the life with an assumed type of project financing model. So attractive where we're going to do it and I think helpful as we evolve the company. So I'll finish here. Like we started with data, I'm giving you a little preview of what Michael Beer is going to be covering, of what the next two years are going to look like. So from what we see today, and we also, Michael's going to be sharing a little more simplified way we talk about our sales funnel in terms of what's contracted, what's actually booked, so what's in our backlog, and then what's that near-term 12 to 24-month either project awards, and short listings or advanced short listings. So we've simplified that by one phase of the funnel as far as what we report publicly. I think that will be more clear and more near term. Obviously, the numbers are large anyway, but really pulling that a little closer in terms of the timeframe of converting awards, for example, to bookings is something we're trying to improve upon as we build the company. But if you look at this next two years, we're looking at a range of 500 to 700 million of revenue. The reason that range is a little wide, you can imagine, is as I've shared, there are some large projects that we work on. We don't try to be everything to everyone and all customers. We focus on the largest opportunities in the largest regions. It's worth it. And always with customers that... aren't one-trick ponies. They're customers that have a portfolio of things that they're going to be doing over the next 10 plus years. It's about building those relationships, delivering and delivering with quality so there's the confidence for them to want to do more with you. That's why we focused on the large ones and hence over 60% of that that's in this near-term awards and and short listings for conversion, over 60% of that today, as we look at 2025, are with existing customers or with strategic investors, for example. So that's a high level of confidence that gives us in putting these numbers out and forecasting gross margins of 15% to 20% in that period, reaffirming what I said last quarter, so adjusted EBITDA positive in 2025. So I think that's a... something that I hope gives a lot of confidence given what we're looking at and some of the things we're going to talk about in the portfolio today. Okay, that completes my section. I want to call up and introduce Akshay Laudwa here, and I'll turn this over to you, Akshay. Akshay joined the company in 2021. I already mentioned some of his background. He has a background even before he joined Greensmith in, I think, 2011. You joined Greensmith? That's correct. Okay. Here, I'm going to pass the baton here to you, but it's been great to work with Akshay. He's been the architect behind our software that got brought to market very quickly that's enabled not only our battery portfolio, but our ability to do these hybrid architectures for customers. Interestingly, of the 100 projects that he did when he was at Greensmith, 100% safety record. So, that's key and part and parcel to how we built the company and attribute to that experience that I mentioned. So, I'll turn it over to you.

Thanks, Rob. Good morning, everybody. My name is Akshay Ladwa. I run and manage the Energy Vault Solutions at Energy Vault. Here's a quick recap of the last two years. Started at the end of 2021. We immediately got into action, developed our software suite of products. Then we expanded ourselves into the lithium-ion battery energy storage space. And finally, the theme that you will see as I talk about the different solutions we offer, short, long, and ultra-long, and finally the software, it's focused around hybrids as we walk through these different type of assets that needs to be orchestrated. the underlying theme is being able to have a hybrid power plant. All of that is enabled by our software suite of products, which we will look at a little bit later on today. As quoted in the BNEF, the world needs a lot of energy storage. The numbers are big, and the suite of products that we offer here

Thursday, April 24 marked a significant milestone in Nevada's energy landscape with the official ribbon-cutting ceremony of the Reed Gardner Battery Energy Storage System. The event celebrated the transformation of one of Nevada's former coal sites into a stand-alone battery facility storing up to 220 megawatts of power generated from renewable sources. The project, which was completed in a record four months, is a testament to what can be achieved with strong leadership and a commitment to sustainable energy practices.

This site really represents an incredible illustration of the energy transition that's happening in the U.S. Think back to 1965 and on this site sat a brand new coal-fired power plant. It was 550 megawatts and it was the power to start to grow Las Vegas. Here we are today. today, no smokestacks up in the air, and instead behind us is a battery. And it really reflects the ability that exists today to capture this fantastic solar energy that exists here in Nevada and use it when our customers need it most.

NV Energy is the state's regulated utility. So we are the largest energy provider in Nevada. Our strategy is to continue to grow our solar and storage. Less reliance on market purchases, primarily from California, but other states as well. And to achieve renewable goals. So we're trying to be 50% renewable by 2030. Six months to a year would be a reasonable timeframe for a project like this. We broke ground in August and finished in December. Four months, really, to build a project like this is just incredible. And I think that's a testament to the partnership between NV Energy and Energy Vault and just the talented people involved all around on this.

Our challenge right from the outset was to figure out how to do more with less, working with our vendors both in the supply side and on the construction side to ensure that everything that needed to come together at the right timeline could come together.

We were able to work collaboratively with our partners and the customer to actually go online a couple of days ahead of schedule towards the end of last year, which really served the customer and the utility and what they were trying to achieve out of this project. It also is a testament to the flexibility of the business model that Energy Vault has in terms of picking the right ecosystem that makes sense for the end customer. And we continue to employ that method, listening to the customer first and understanding how we devise the right solution to serve their needs and their purpose.

Energy Vault proved themselves on this project. It's the first project we did of this size. I see Energy Vault doing projects for us in the future.

There is more battery storage development in our future, and it will become a critical part of our grid. There aren't a lot of utilities in the country that can say, over the course of 2024, our rates are going down. It's projects like this that allow us to capture that sun and use it at times they need it the most to be able to deliver that critical energy to our customers. so again i want to thank everybody for pulling this project off the nv energy team just did a remarkable job and and again our partners at eci and energy fault thank you our partners at vibw couldn't have happened without you an honor to have you here an honor to show off what something that we're very proud of that's going to be a tremendous benefit for our customers for decades to come

This is a recognition of the opening of the Reed Gardner Battery Energy Storage System. I commend you for your unwavering commitment to building energy solutions that support Nevada's residents and green energy initiatives. May this new facility inspire further energy innovation. Congratulations.

That was a really nice video for our 440 megawatt hour project in Nevada. Out of the 100 plus projects I've been part of, I think this one is probably in the top five. It takes a lot of dedication and a really talented team to be able to execute a project of this scale in the really short amount of time. I remember spending my turning 40 on the site. I brought my family over for Thanksgiving, and we had a lunch event on site, and also Christmas night is a very important night. That's the evening of Christmas. We ran full capacity, 220 megawatts. As we get into the short-duration battery storage systems, The products that we are building here at Energy Vault are anchored around three separate fundamentals. The first one is we do not believe in having a very prescriptive, well-defined, and a constrained product. We rather believe in having a platform allowing our customers, giving them the flexibility because every each of these projects is very unique. every customer is trying to solve for different constraints. The second one is the economics. Economics is at the heart and it's right in the center of how these projects pencil out. Spending my time back before Energy World, I was over at Bright Night Power, which is a large IPP and a project developer. with the understanding of how the projects need to be penciled out so they can actually get to reality. Economics is right in the middle. Finally, as we just saw the video of being able to deliver the projects, execution is super important. The lithium ion battery storage project at Energy Vault is called B-Vault. The B-Vault comes in two separate output options. We have the DC and the AC output option. It gives the flexibility for our customers, not only with regards to the selection of the supply chain and equipment, but also different options. contracting mechanisms. We can offer them, just as Rob mentioned, either an EEQ or an EPC as a full wrap. But also, as we've seen in the last two years, there is significant amount of new entrance into the market. The battery suppliers are now going vertically integrated, which means they're not only manufacturing cells and packs, but they're also starting to manufacture these 20-foot battery enclosures. Some of our customers we work with, we find they have MSAs with such suppliers where they'd like to use that, and NV Energy is a real good example of that. Finally, looking at our portfolio, we often come across projects where the customer has constraints around land or around permitting. So the standard off-the-shelf available equipment is not able to fit the site, fit the need of the customer, and Wellhead is a real good example of that. 2023 was a big execution year for us. We delivered design, built, engineered, delivered these three projects. As you look across the chart here, we've got the first picture for Wellhead, which is 68 megawatts. In Kaizo, second one for NV Energy, 220 megawatts. In Nevada, regulated utility. The last one in ERCOT, 100 megawatt, 200 megawatt hours. Different equipment, different states, different equipment, different application. The only thing that is able to tie them together is the integration expertise from Energy Vault. the underlying integration and engineering expertise, which is how do we integrate this variety of different technology into the application that the customer is trying to solve for and the execution capability. All of that is enabled by our Vault OS software platform, which we have a section on later on today. The bVault battery energy storage product is built around the DC as well as the AC output options. We have a supply chain that we have established partnerships with in Asia. Again, we're not really prescriptive with the battery that gets integrated, but rather we have a suite of different options that our customers can choose from based on the needs of the project. The speed at which this product was built, design, build, certified, This is fully certified for UL9540 as well as all the NFPA safety requirements. And we built our first project in ERCOT using the exact product. The speed at which this was able to come together was possible because of the expertise of our team. We're on to the second generation of our product. Between the first generation and the second one, we've improved energy density by over 35%. And with that improvement, we were also able to improve the cost, drop the cost of integration, excluding the batteries, by about 25%. Four main pillars as we designed and built the product. Flexibility, flexibility around the architecture, flexibility around the supply chain. Second one is availability. As we look at these more severe weather events, energy storage system monetizes the maximum revenue around such events. The price and the volatility in the electricity market is higher during such events. So the product that we've designed is able to function at negative 40 C all the way to 45 C without taking any D rate. It's able to function in higher seismic areas, wind gusts. So the product is available to the customer. And most importantly, which I will talk about, this is not a me too product, but there was a unique feature, which is the AC architecture. On the supply chain flexibility, We saw the three projects from last year. First one is using NMC batteries from Samsung. The second one is using the BYD cubes, which is LFP, large format LFP. And finally, the last one is using LFP from REPT. We have different batteries that can be easily integrated into the B-World platform product. Further, we find customers that have already made interconnection application. Like I was in Australia last week, we are working with ASIN that has logged in a particular inverter into the interconnection application. Such customers will require a solution that can work with that very specific power electronics. For them, we have the DC world option, which allows, again, integration of different type of batteries into that. Further, to increase our energy density, we are developing a stacking solution, and this will instantly double the amount of energy density which is possible into the projects. What's unique about our B-Walt is the AC-Walt architecture. If you look at the way most of the lithium-ion battery storage is being built today is mostly around two separate architectures. You have a DC wall architecture, which is you have a central storage inverter between three and five megawatts. Behind those inverters, you have multiple different enclosures, which is building up your AC cluster. And you keep duplicating that as you want to build a larger project. Then you have products such as the Tesla Megapack and SunGrow Titan, where it's still the same architecture where the battery is connected with the inverter. You have a string of battery connected with one single inverter. In both of these architectures you will notice the power and energy is always coupled, which means if I would like to add additional inverter to get more power. I always have to have additional batteries. Should we lose an inverter, we also lose the energy behind it. And to overcome this issue, what the industry does today is they add additional inverters. They're not able to optimize the capex. If I go sign up for a project with 98, 99% availability, with such architecture, there is a need to add additional inverters, additional batteries. The cost of the project goes up. The architecture that we have developed at Energy Vault, we have decoupled power and energy. We've broken the relation between them, the coupling between the power and the energy. What happens in our architecture is all of the batteries are always connected with all inverters. We use modular inverters. We don't use string inverters or the central storage in our AC vault. We use modular inverters. With the modular inverters, all inverters always connected with all batteries. So if we lose an inverter, the battery is still available. If you lose a battery, the inverter is still available. This allows us by default to have a product, to have a project with a higher availability. Because should we lose an inverter, we only lose a couple hundred kilowatts. This allows us to also be very optimized with the way we can size our projects. We don't have to always move in increments of multiple megawatts. We can move in smaller chunks, which means the cost of the project is much more optimized. Furthermore, as we look at augmentation, as we're now starting to see in California, projects moving from four hours to six hours, eight hours, augmentation is very easy. To do the augmentation, we can simply move these inverters into additional newer battery enclosures. Because they are decoupled, we can mix batteries as well. You can bring a different type of technologies because they're not coupled together. Supply chain is a big element of the battery energy storage industry. The optionality that we like to bring to our customers. We have the strategic partnerships with manufacturing of the lithium ion batteries over in Asia, both China as well as outside of China. And finally, the contracting structure. This is a important one, BYOB, which is a bring your own battery. And again, the NV Energy, I think, is a really good example of this. We are looking at customers which have a particular MSA they are trying to bring to the table, but they're looking for integration partners, somebody who understands how to design and build the energy storage system using that particular battery. This is a A contracting mechanism, also quite popular from the solar side, where the developers themselves provide with the solar modules, but they're looking for an EPC to do the full wrap. There's a lot of momentum behind IRA, which is important to us, and we would like to have our customers access to domestic content, and with that we made a strategic decision to invest into core power. This is very important to us, and let's hear from Core Power.

Down the road in Buckeye, Core Power is making lithium-ion batteries. It's a $1.2 billion investment. It's going to create thousands of good manufacturing jobs, 90% of which don't require a college degree, and yet you get a good wage.

My name is Lindsey Goral. I'm the founder and CEO of Core Power. I was heavily involved in the supply chain of lithium batteries for a number of years. How do I bring all the knowledge I have on lithium ion cells to the United States? Mother Nature provides energy when it wants to. Energy storage is a thing that will finally make green energy 24-7. So you've got all this money being spent on, say, solar in California, but people are seeing their energy costs go up. And that's a problem. What storage brings a community is reliability, but also should be economics. One of the main reasons why you want to build batteries in the United States and sells the United States is the supply chain from the upstream, which is from mineral to chemical and on the downstream to companies like energy. With domestic manufacturing, there's no issue with the Suez Canal being shut down or something like that or backed up containers. We can move a product to a job site in North America in two days. We bought about 215 acres of land in Buckeye, Arizona. That plant will be up and running with cell production in the early part of 2026. We're building something today that we're going to look back five years from now and say, holy cow, look what we did. I want everybody to be part of that. We want to make sure we're tied to a company that we believe in because they're using our product. Energy Volt has not only entered into a major opting agreement with Core, but also made a significant early stage investment in Core. And what we want to do is we want to support Energy Volt the best way we can. Number one, we're going to build a high quality product with a very good price in North America, supported by the Infrastructure Act and the IRA. So what IRA gives you is it gives a company like core basically a tax credit on production. And then on top of that, the products that we produce that we are going to ship and make for energy volt, they can take a tax credit, be it 30% or 50%. On top of that, we can work with EnergyVault on developing products for them. And because we produce the cells, the modules, and the energy storage box, we can build anything we want. So if we see something that EnergyVault is doing that we can help them do it better and they can win, we want to do that. We know that we can produce a product that's going to make EnergyVote successful, and EnergyVote has a platform that will help us be successful. The combination of Core and EnergyVote allows us to go after almost every type of storage market. Being able to do everything from sales to solutions to development and that kind of stuff, it becomes a combination that's unprecedented.

The job is not done until the electrons pass across the meter and our customers realize the acceptance of the asset into the market. I think that's why execution is very important to us. We talked about the product, we can build a great product, but until the system is into the market, that's when the customer starts to realize the economic benefit. We've built a great team around execution. As I said, my personal experience is over 100 projects, but everything we've built here with the team behind us The software, the hardware, everything was built in the last 12 months. The first project that we turned on in Wellhead, which was our first instance of our EMS, was commissioned in less than two weeks. It was one of the fastest commissioning that we had seen in the Kaiser region. 2023, where we delivered the projects, the gross margins were between 5 and 10%. As we look at 2024 and 2025, we believe we will be in the double-digit margin. And how do we get there is by, first and most important, is the supply chain. Being able to have access to domestic content, being able to have the strategic MSAs, The second one is the unique product architecture, the one I mentioned about our bVault, which allows us to be very optimized with our system sizing, being able to go and execute projects which are much more cost competitive. Finally, it's about the projects that we are looking at. We're not looking at cookie-cutter style projects. We're looking at portfolios which the customer has a problem that they're trying to solve for. And to be able to solve those issues, being able to listen to the customer, work around the constraints they have, that requires us to be creative, bring out solutions which naturally demand higher margins. To summarize our battery strategy, number one, not be prescriptive and confined with a standard product, but rather have a platform which enables our customers to have the degrees of freedom and the flexibility to pick and choose solutions which work for them. The second one is focus on the economics, focus on the problem that the customer is trying to solve for, and work around a solution that enables that. And finally, it's the execution. With that, we'll take the next few minutes for questions.

Thank you. We've got time for a couple of questions from the audience. If there are no questions, we'll move on. Thank you, Akshay. Okay, I'd like to welcome on stage for our fireside chat, Rob Piconi, Bill Baker, who is the consulting partner SOM, and Dr. Andrea Jose from Energy Vault.

Right. We're going to be back up here. This is actually one of the most exciting things that I've been a part of and to be able to talk about here today and announce it here today. I have Bill Baker up here with me from SOM, who really needs no introduction from a global perspective in the things he's done. You can read there above of some of the superstructures Bill has designed and architected, all still standing and all still doing well. I know. by all accounts, and just amazing, I think, because of the things that we're taking on in gravity and the types of structures that, you know, the 150-meter structure in China getting built for our first system, but actually really opening our eyes to the art of the possible, what can be done in superstructures. And as you all are probably aware, to make gravity work, higher is better. It's better for economics. It's better for energy density. And you look at some of these structures and think about these designs and how does that withstand the elements? How does that withstand wind, hurricanes, things like this in these zones? Very excited on that. And also Dr. Jose Andrade here, who's been working with Energy Vault from the very beginning with Idea Lab. Dr. Andrade is very well known in the areas of civil and mechanical engineering. The chair at Caltech in Pasadena there in Southern California. Also in their seismic studies, which I think Caltech probably one of the best in the world given California and generally looking at how to make our structures more safe. So very excited to have both of you here. And maybe, Bill, I'll start with you. And, you know, we've gotten to know each other here a little bit, and I know actually through meeting Jose and being a part of some forums with him, got you interested here in Energy Vault. But would love to maybe just a little bit of introduction of what you've been doing with SOM and then – Sort of the why behind and the interest in working with Energy Vault.

Well, you know, I've been with SOM since 1981, so over 40 years. And SOM is a unique architectural engineering firm because you have both architects and engineers inside the same firm. And we've been doing tall buildings ever since. ever since, even before I became. We did, in the 1960s, we did the world's, the tallest building built in the 1960s. We built the tallest building that was built in the decade of the 70s. We had the tallest building that was built in the decade of the 80s. And then, of course, in 2010, we had the Burj Khalifa go up. And Burj Khalifa, it's over a half mile tall. And so we had this integration of architecture and engineering where we can do tall. But we're also in the middle of an energy crisis, an environmental crisis. And in my world of architecture and engineering, We know that 40% of the carbon in the world comes from our buildings, either through the construction or the operations. So the hottest topic in architecture is how do you build in a sustainable way? There's a huge urbanization going on. In 2010, for the first time, half the people in the world lived in cities. And we're on our way going from 8 billion people in the world to going to be up to 10 billion people in the world in the not too distant future. And all this stuff has to get built. And there's two kinds of carbon that we worry very much about, which is operational carbon, the carbon it takes to run the buildings, and embodied carbon, the carbon it takes to build the buildings. And so I met Andre, I met Jose at Caltech, you know, at some lectures there, and he got me involved, and we got very, very, very excited about the technology that Energy Vault was creating, because we saw it as a huge opportunity to address both of those issues. You know, I tell you, all the young architects and engineers, they all want to work on this project. And all of my partners at Skidmore are all over this thing. We're looking for ways to do this to bring this into the built environment, both as either individual batteries, just standalone batteries, and higher is better, okay? I'm holding this up. This has potential energy. I've stored energy by, say I'm a solar, I pull it up on the ground, I've stored energy. If I store it twice as high, twice the energy. If I go 10 times as high, 10 times the energy. So height makes a big difference. It makes a big difference in the energy that we can store and the efficiency. And so that's where we're all going and excited about.

Great. Well, thanks for sharing that. Jose, maybe I can ask you, you've been involved in Energy Vault really since the beginning when we met and as we chose to create a company and looking at gravity initially as we looked at the long duration storage market, the thesis behind as renewables become a greater part of the grid, And that introduces more intermittency. And therefore, as that percentage goes up, the need for long duration storage. But talk a little bit about your journey with Energy Vault and then come back to how you met Bill and why that's, let's say, interesting, exciting for you in this combination. Right.

Yeah, so I'll be happy to do that. So, yes, you said, Rob, I've been with Energy Vault since 2017, and the concept really captivated me, because back at that time, we were looking at EV1, right? This idea of moving these masses up and stacking them up to create potential energy, the kind of energy that Bill just described, right? And yes, height is your friend. And so I've been interested in seismic studies of complex systems, and this was a very complex, discontinuous problem that happened to have the potential for energy storage. So I fell in love with the project right off the bat, met Rob, met Andrea Pedretti, and just started to simulate and model the systems to try and understand their mechanics, their behavior. And in that path, in that journey, EVX came along and the challenge there for that product was to optimize construction, create new materials that we could deploy faster, cheaper, better for customers. And we did tremendous work there and tremendous innovation that we're very proud of and we see the results in China. And, but EVX is 150 meter tall structure, and it has some degree of ability to store energy, but if you could go taller, and you know, when you look around here in Manhattan, you have plenty of inspiration, right? There's plenty of tall structures. You start to think that there is something that you can do beyond an EVX, beyond 150 meters. You could reach much higher altitude, and you could, kill two birds with one stone by bringing storage where demand is. Because the bulk of the demand, as Bill said, as we migrate to cities, is coming from cities. And so that is the journey. And when we started to think about going taller and becoming more effective and efficient, I knew Bill from 10 years ago. He had come to Caltech to give a lecture and we hit it off. And so the first person I called when we thought about going taller was Bill Baker, you know, the father of the tallest building in the world. And here we are.

Yeah, it's exciting. I think in this collaboration, what I've seen, and you have a firm, Skidmore, Merrill Owens, and Bill Baker himself that have built structures, as you said, since the 60s, the tallest structures in the world, and the integration of a technology that we've developed combined with that practicality of what it takes to build and permit these structures where the economics get crazy when you get to the you know 300 400 500 meter uh and and bill coming back to you i just on a question we we've designed for example a structure of a thousand meters one kilometer tall for certain parts of the world and looked at different integrations of both our block technology and a modular pump hydro using water technology talk to me a bit about carbon payback And how you in first traditionally in these structures like the Burj Khalifa, but was there even one? And then as you look at looking at our block technology and then maybe the hydro type of technology in that one kilometer structure to talk a little bit about how carbon payback works.

What's what's. In the world of architecture engineering, we need to build these things, but we feel bad because we're creating a carbon problem in the process. Because there is no carbon payback on an office building or a residential skyscraper. You have to spend carbon to build them. And so we have this deficit that we have to deal with. So here's this opportunity to do this in such a very tall structure. It's a structure that you build locally. It will never catch on fire. You can be dense in a downtown location. They'll last for a long time. There are 100-year-old skyscrapers in this town. You know, the Woolworth Building just down the street here is over 100 years old. The Empire State Building soon is gonna be 100 years old. These structures, if you maintain them, last essentially forever. And so we're looking at these, we're working with Jose, we're looking at these towers. You know, we can get up to a kilometer, a tower store way over a gigawatt hour of energy, and the carbon payback is between two and four years. Think about that. You can do such a massive structure, but the carbon that you're offsetting We'll pay for it, you know, and the structure itself, it's actually kind of around two years. Just, you know, and this is the work, we have a sustainable engineering group in the office, and so they ran the calcs on there, you know, how much embodied carbon is in the concrete and the rebar, and there's a little bit of steel, but not much. And so then what is the, and then how, then every day, you can fully charge and fully discharge this battery. And so how many cycles do you do? Because right now, my understanding, this is not my world, this is your world, batteries are generally used as a transition for the duck curve or whatever that is. But at night, all the energy is fossil fuel, or most of it's fossil fuel. And if we're really going to go sustainable and where people live you know, on renewable energy, you've got to store enough to carry you through the night. And this is, if you assume that there's like 30 kilowatt hours per household in the U.S., okay, and you have, and say half of it's during the daytime you get from solar and another half from a battery. A gigawatt hour battery could take 60 to 70,000 households off of fossil fuel, which is huge. You can do whole cities if one were strategic about this.

Yeah, the potential's amazing. Very excited about making that a reality. One last question for you. A lot of people to the general public, the general eye, and probably a lot of people in the room, when they think about a building 1,000 meters tall, The Burj Khalifa is 820. I know you said we can go to 1,500, and you uniquely can say that, Bill. But in a 1,000-meter building, what, I mean, people think about generally like wind and these things, especially at that height, and this structure, one of the ones that we've been working on actually is a cylindrical shape. How does that work? Why is that the best shape, for example, at that height? Explain just a little bit for the layperson.

Yeah.

How can you build it that tall, and how can you support, whether it's our hydro, our modular pumped hydro, the water solution is interesting, or even the blocks. How does that work?

Well, I mean, it's a very stable shape. And what's quite interesting about this whole technology, yes, you have a lot of weight very high in the air, because that's what you're trying to do, trying to put a lot of weight very high in the air. But in the process of that, it helps you proportion the structure that is very, very stable. And the advantage of a cylinder is that it's really robust and stiff. And we're actually seeing that there's very, very little, in some cases, no premium for wind load. or minor seismic because of the structure you need to hold up the weight if it's properly configured and easily built. I mean, one of the reasons that the British Cleve got built is because we designed it for how it was going to be built. And the construction technologies that we're looking at with Jose, totally conventional, very fast, easily done, anywhere in the world, that it can be built quickly and efficiently. And there's almost like a moral obligation to do this because if you could start, in a few years we could build one of these things and take those people off the fossil fuel grid, it would be tremendous. And if we don't, the sooner we do it, the sooner we can start having people completely on renewable energy.

Well, look, moving from moral obligation or moral imperative, let's say, to mandate, and just to put this in perspective for investors, so what does it mean? First of all, we have a segment of the market in terms of the building of superstructures in dense locations where there's a lot of energy, so New York's a great example. share a stat with you that i learned yesterday by visiting uh the skidmore office um every month up to 2060 which is longer than i mean it doesn't make sense going past that in the world we're going to build what is the equivalent of new york city every month in structures so you think about doing that across the world and that that massive build And as of now, people thinking about that traditionally, you heard Bill talk about it's not only carbon footprint when you use a building, it's carbon footprint just in what you build, in the structure itself. Moving from... moral imperative to mandate here, given what's happening in the world with the heating up the planet and things. It's clear to me that there are going to be changes. Countries have already, for example, in energy storage, China's done it, they mandated 20 at power for every renewable asset that gets built i envision a world where there will be changes in permitting and policy relative to ensuring there's integration of more sustainable aspects of the building itself integration of either how buildings are powered how they're using and there's technologies Using software to make, for example, HVAC and the systems operate more efficiently through using AI. But in the building materials itself, and for example, carbon sequestration in those building materials and absorbing carbon, that we're involved with a lot of research with that. So it's a... It's a from our perspective as a company, we feel the imperative is we're building things with gravity as you build these out. And even in all of our energy solutions, we're building because everything needs a foundation. It really behooves us to ensure it's done sustainably. But we believe from an investment thesis perspective, this is going to be a requirement. As is our culture, we're getting in front of this. We believe we bring a lot of technology and have a lot of ability to leverage how we think about leveraging material science and structural and civil engineering, just like with our gravity system that came together with those two things plus AI software. to create an energy storage breakthrough, I think it's going to be the same here. And very excited about the partnership. Adam, Scott, a lot of the partners that I know couldn't be here, they're at a partner meeting upstate, but very excited about building that together.

And we see this changing architecture. Because if you're going to build a building that's both a building for occupants and it's going to be a battery, you want them both to go tall. And with this huge urbanization of this Manhattan every month, I think it's going to have a big change in the energy world, but also a big change in architecture.

Well, thank you, Bill and Jose. And everyone will be seeing an announcement about our partnership. It is exclusive. So meaning it is something we're going to do together for the world. You've seen the footprint of the buildings, Jakarta in China. I know I had the list of 15 of them that I looked at before going there. But literally every region of the world and excited given that coexistence we're going to have in Jakarta. and innovating together there. So thank you, Bill and Jose. Thank you. Thank you. I think we have a video we're going to play here.

Thank you. We have a, we actually. Before the gravity. There you go. I think it should be up. so so so so so so so so Thank you.

Great. Okay, with that and that glimpse of the future there, let me call up Marco Titicin, our chief product and commercial author. They'll join us after the 10-minute break, I see.

Yeah, we're just going to go for a 10-minute break. We'll keep to 10 minutes, so if they all can be back in the room, please, that would be great.

We're doing a Q&A now here.

We're good.

No Q&A here, right?

Okay, cool. Okay, we'll take a little break, everyone.