Lightning eMotors, Inc

Good afternoon, and welcome to the Lightning eMotors third quarter 2021 earnings conference call. Today's call is being recorded, and we've allocated one hour for prepared remarks and Q&A. At this time, I'd like to turn the conference over to Nick Bettis, Director of Marketing and Sales Operations for Lightning eMotors. Thank you, Nick. You may begin.

Thank you, Operator, and thank you, everyone, for joining us. Hosting the call today are Lightning's co-founder and CEO, Tim Reeser, Chief Revenue Officer, Cash Sethi, and CFO Theresa Covington. Ahead of this call, Lightning issued its third quarter 2021 earnings press release and presentation, which we will reference today. These can be found on the investor relations section of our website at lightningemotors.com. On this call, management will be making statements based on current expectations and assumptions, which are subject to risk and uncertainties. Actual results could differ materially from our forward-looking statements if any of our key assumptions are incorrect, because of factors discussed in today's earnings news release, during this conference call, or in our latest reports and filings with the Securities and Exchange Commission. These documents can be found on our website at lightningemotors.com. We do not take any responsibility or duty to update any forward-looking statements. Today's presentation also includes references to non-GAAP financial measures. You should refer to the information contained in the company's third quarter 2021 earnings press release for definitional information and reconciliations of historical non-GAAP measures to the comparable financial statements. With that, let me turn it over to Tim.

Thank you, Nick, and thanks to everyone for joining us today. For today's presentation, we will be referring to the slides that were posted to the investor relations section of our website earlier this afternoon. I'll start off on slide five with today's agenda. I'll begin with an overview of Lightning and our recent product releases, discuss the impact of the new infrastructure bill signed today into law, by President Biden and provide a supply chain update and discuss our manufacturing progress. Cash will then provide an update on our order backlog and sales pipeline, and Teresa will wrap it up with a financial overview. Moving to slide seven, we founded Lightning to create purpose-built hybrid and electric specialty commercial vehicles for urban medium duty fleets to reduce carbon emissions. Today, Lightning eMotors is the only full range manufacturer of class three through seven battery electric, and fuel cell electric vehicles in the market, including ambulances, shuttle buses, utility trucks, school buses, and motor coaches. In addition to full vehicles, we sell powertrain systems to vocational and commercial vehicle OEMs, as well as to partners like ABC Companies, who install the powertrain systems in repower applications. Moving to slide eight, we have built a modular software and hardware architecture that allows us to serve a highly segmented and customized market with a cost effective and scalable solution. Our high level of software and hardware customization is something that legacy OEMs have not historically performed and are not well suited for. Companies like Ford and GM are building trucks in high volumes and do not have a business model that supports manufacturing for the medium duty segment. Moving to slide nine. Our team again this quarter leveraged our modularity and customization toolboxes and released two new exciting products. Our zero emission type A school bus and our zero-emission Class A double-decker motor coach, one of the largest zero-emission vehicles in the world today with over 200 miles of range. I continue to be impressed with the speed at which our team has been able to deliver new, compelling products that are seeing immediate customer uptake, as you can see in slide 9. Moving to slide 10, we're pleased with the passing of the U.S. infrastructure bill and the signing of it today into law by President Biden. We believe we are well-positioned to immediately benefit from four of the initiatives funded by this legislation. The legislation provides $39 billion for public transit, including more than $4 billion of funding that's dedicated to zero-emission transit buses over five years, something we expect to create more demand for our Forest River shuttle buses. It also funds $5 billion for school buses, expected to create more demand for our new school bus partnership offerings with Collins, as well as Lightning's Repower products. It funds $7.5 billion for charging infrastructure, something we expect to accelerate our Lightning energy growth and provide support for our fleets who use public charging to augment their depot charging requirements. And it provides $8 billion for new hydrogen hub construction, expected to provide funding for many of our customers and our hydrogen fuel cell partner, Plug Power, who demand the longer range and higher payload capacity of Lightning's hydrogen fuel cell powered powertrains. We expect this federal investment to encourage additional purchasing and investment by state and local governments, as well as corporations in each of these areas, further accelerating the electrification of fleets. Moving to slide 11, let's discuss the supply chain landscape. We are experiencing strong and growing product demand. However, supply chain disruptions continue to serve as obstacles for our business. Major OEMs like Ford and GM have publicly spoken to their limited chassis availability, which is expected to continue for the next few quarters. Limited chassis availability has been impacting both traditional ICE vehicles as well as electric vehicles, exasperated by a lack of transparency from the legacy OEMs on when chassis will ship. Our manufacturing and supply chain teams have been taking measures to adapt to these circumstances. Additionally, as previously announced, we are working on a path for addressing the industry chassis shortage with our own Lightning-branded strip chassis and cab chassis products. We'll be providing further details on our e-chassis in the coming months. Regarding the battery shortage, we've been working for the last several months to remedy supply chain disruptions through the technical and commercial validation of additional suppliers. We're pleased with the work we've done to strengthen our positioning, recently signing a four-year supply arrangement with Proterra, securing long-term supply of quality and road-tested, Buy America-compliant battery packs for several of our key platforms. In fact, we expect to deliver vehicles powered by Proterra in the fourth quarter. We continue to work to validate new battery suppliers and secure long-term battery contracts for all of our platforms and believe that the progress we have made with our battery suppliers will help mitigate our battery supply constraints in 2022 and beyond. Although our Q3 revenue was constrained by chassis availability, battery and accessory component deliveries, We were able to help mitigate several other supply chain constrictions and sell 43 complete zero-emission vehicles. It is important to note that we have not lost any sales due to the supply chain delays. Rather, revenue is being pushed to future quarters. Moving to slide 12, let me now provide an update on our manufacturing capacity expansion plans. Recall we signed a lease amendment in November 2020 for an additional 107,000 square feet at our Loveland, Colorado campus. This additional space will be used to expand our manufacturing square footage and provide additional space for our growing team. In October of this year, we completed the first phase of that facility expansion that increased our manufacturing space to over 100,000 square feet. The next phase of the expansion will deliver another 40,000 square feet of manufacturing space in the first half of 2022. We've been working in parallel on capital investments and other factory improvements to reduce the labor cost per unit and improve efficiency and reliability as we drive towards an expected factory capacity of up to 3,000 vehicles and powertrain systems. We were able to expand this quickly with a light CapEx investment as we don't build vehicle bodies or interiors, which eliminates many of the higher costs and long lead item capital spending items. Notably, we believe we can readily expand and add the additional square footage needed on our 1 million square foot campus. And with our OEM customers installation capacities, That will allow us to support capacity for up to 20,000 powertrain systems and complete vehicles per year. We believe we are one of the very few companies in the U.S. zero-emission vehicle commercial vehicle market with a fully operational factory. Our three years of experience building vehicles and powertrains in this factory, and now our experience scaling it up, has provided us with unique insights on manufacturing quality control and cost, and we believe we are now well-positioned to reduce costs, increase automation increase automation and digitization, and scale further. And now I'll turn it to Kash to provide an overview of the order backlog, sales pipeline, and key partnerships.