LEV - Earnings call 4 2023 | Lion Electric Co

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Operator

Good morning, everyone. Welcome to Lion Electric's Fourth Quarter and Fiscal 2023 Results Conference Call. [Operator Instructions] As a reminder, this conference call is being recorded.I would now like to turn the call over to Isabelle Adjahi, Vice President, Investor Relations and Sustainable Development. Please go ahead, Ms. Adjahi.

Isabelle Adjahi

everyone. morning, Good Fourth Lion's Fiscal Results XXXX Welcome Quarter Call. Conference to and Officer. Bedard, here Richard Founder; Financial I'm Language]Today, our Coulombe, with: Chief and [Foreign President; Marc CEO, our Nicolas our Brunet, estimates Please and our note results materially such in differ those could discussion statements. that may actual other information and our forward-looking that implied any from include impact We press information our could in contains important actual release regarding risks to factors, our MD&A, to the and begin. language cautionary let it review you that, and invite in morning's assumptions various me this results.With over to which that turn Marc Marc?

Marc Bedard

you, Thank everyone. Isabelle. morning, Good

but We doubt, to progress significant in to increase address growth results for in a the the year also for a been for will XXXX, deliveries, year, our has industry, of resulting some Lion, a significant a want performance XXXX gross I achievements. and we challenging margins. highlight year in positive first our revenue be adjusted EV saw our for discussing whole in of a been of moment, it XX% including achieving without company.First, QX our addition but had

hour enough capacity for started We not our place, We significant construction in at in and X,XXX any vehicles year, infrastructure foreseeable vehicle Mirabel plan of production growth of line battery capacity power per X.X and to the including X,XXX now in CapEx make to achieve gigawatt facilities. our production investments to production up and production plant do significant future. to vehicles.With battery production of we place, manufacturing also the this Joliet, both a have of the in in facility our the completed infrastructure equipment and

commercial our of LionX not of And and battery in school school LionD for the pack, execution LionC reduction place, the milestone the vehicle completed positioned we buses we planning the heavy-duty integrated and certification trucks QX buses. our in on results. the shortly our are in and truck, least, our me strategy. last vertical obtained our also and this LionX but and represents share tractor our of we This production nearly now space.Let significant LionX will the market production comment the We a with infrastructure medium be today significant are well EV summer. commercial started capture powers to With to which MD integration on start lineup

growth below vehicles adjusted explained during the a During we leading our over are delivered reasons. maintaining margin quarter, to revenue we This XXXX. delivered gross is expectations. XXX XXX the quarter, positive Despite X vehicles, mainly XX% QX the by

still as the deliveries initial Transit QX and the and wanted we of these result, Canadians by First, customers, of the the trucks its first pacing ZETF, with new school to in incurred shift world bus ones impacting deliveries impact on our filed sizable delays our Saint-Jerome. and deployment applications liquidity, federal Zero-Emission had orders government deliveries by vehicles, and in The QX to in clients to process the were we were going incurred work approval Canadian delays are of the by bus buses LionD for to impacted ago.As ensure and and this out pushed currently optimal taking of LionX The school year.And employees, cool of government impact that were to buses. around the school official significantly waiting months quality immediate deliveries receiving substantial our and which result electric our initial a action as of continued delays workforce second, ZETF the electric the production and evaluate momentum Fund several QX XXX uncertainty start are delays operators since an were program, our we off mostly its a on program night approximately Canada. temporarily for Canadian major buses these laying a several

exceptional of that our continued deployment.Before performance, we depending years, provide it let and reassess project's production miles pace me have conditions, mainly will road past approval success. XX and XXXX detailed over in that ZETF the more commercial the a real needs We Nicolas the turning into on reiterate upcoming considering over regular XX to basis we and our with we operations vehicles our are driven achieved Richard everything operating the in financial on the million in to insights position on an for have believe and months,

management Further, we liquidity coverage quality effective agile with and service proactively on increase an continue improve to remaining and by are and of actively to objectives vehicles focused main technician our experience will uptime customer and achieving maximize our profitability vehicles.Nicolas? control. our Our field cost the

Nicolas Brunet

We Marc. in you, fiscal book delivered programs.Starting QX on XX delivered consisting XX in order buses vehicles the discuss U.S. with start and and update school of Thank deliveries, then I vehicles by deliveries. certain subsidy addressing will Canada, XXX the and and trucks; XXX were XXX XXXX QX, in an with conclude

as in were under with which further deliveries buses, program, Furthermore, government obtain and the ZETF first in the number which satisfactory Our are for deliveries results. under in the impacted of by explained, approval Canadian trucks delays bus of the we a previously the impacted the some Canada our discussions of the LionX school deliver school LionD to inability program. clients to experienced

vehicle school compared approximately increase fiscal a our $XXX shifting in of vehicles, XXXX, million. XXX stands orders. basis.Now on XX% at consisting and to purchase The XXX X,XXX representing to order buses trucks, book currently XXXX, focus delivered XXX we year-over-year X,XXX a For

in term, the a economic are the to which part to of quarter-to-quarter subsidy order certain long on decline some programs, can challenging book attributable timing the in basis. environment, the is beneficial the addition cause In volatility in but

programs reflected was round, order awarded placed the million previously grant we and which January example, purchase are additional in of yet the connection we districts, school to related $X school entities allowed $XX the parameters, school but the announced, Lion close with buses grant in working formal are a cannot For for estimate for and awarded total EPA. opportunities with Lion of under third-party purchase by not for this round, buses, a obtain clean billion to potential XX% that orders book.As for funding as infrastructure EPA XX for of to awarded hence significant and directly orders school purchase be charging once units in in representing see We districts of were contractors. financial this

dialogue million engagement deployment with EPA a round in at XX. EPA also The for school with most potential bus.We parties the announced Lion towards recent on round in rebate applications expects the are which to of We this closed the very least are of under number program, results of by customer be award $XXX towards these February to April. encouraged

closed, to Now others.On including round state-level see X a in programs more are York, particularly excited California, that trucking the we the in programs, hopeful are EPA. truck from latest applications momentum number Colorado for have we rebate among side, by the EPA's of New and the

clean was equipment, program $X.X zero to $X spring which trucks. for Heavy-duty of in the allocate is application for First, trucks towards drainage Class launched Clean infrastructure, expected program, expected the May billion is which early the port and start this XX.Second, Vehicles is allocate EPA's up Ports to XXXX. EPA's Class yesterday, deadline The is including of X emission, billion toward to set deployment Clean to expected program, X and

performance. very In we and commercial for are truck tractor grants LionX for to the mid-XXXX, today, term, environment, the next persist our customers' strong causing commercial few to for electric we with believe expect will scheduled turn Richard? of the to our and very discuss LineX over vehicles long With promising summary, of despite for to we at appetite start least funds. for term, combined volatility benefit customers production some well months.I which now such in production with the is Richard the in from it short LionX the the positioned financial

Richard Coulombe

gross commenting with fiscal discuss Revenue QX $XX.X will I and and on the write-down million a gross the lower-than-expected adjusted to XX.X% margin that results XXXX. vehicles the representing to corresponding performance. compared as position volume, negative of provide $X.X comment an liquidity posted margin X.X%, to you, LionM amounted color was inventory increase we on then Thank Despite start Nicolas. year-over-year. by and XXXX.Starting for XX% I for QX adjusted then quarter our million, will sales XXXX. related LionA which excludes in

to EBITDA, amounted our disciplined assets $XX SG&A XXXX, Additions this spend million, and negative and had QX expenses, which mostly production as turning to to in LionM compared $X.X the XXXX, in in to million, our million $XX.X in to indefinitely decreased impairment delay we performance. the a marking CapEx.On quarter included $XX.X to related QX front, decreasing QX improvement improved see Our equipment of in of QX platforms end negative battery-related related in adjusted significant development reduction compared cost adjusted to 'XX, as to bring significant to intangible property, XXXX to reflecting an revenue CapEx $XX.X year, million, the assets, XXXX.Now to which plant results to of gross management.Our decision million from vehicle XX% development million of $X.X our growth in amounted and million costs. $XX.X and We as a vehicles. QX down LionA to $XX.X new as profit XX% decrease resulting for continued intangible QX of approach compared $XX amounted our was million production. of we commercial million and fiscal the of revenue a from the start to

to in year with to the negative of note of of million accounted to and compared as made available which $XX.X our $XX.X been outflows. X.X% $XX.X a revenue million cost inventory for mentioning as to on million million margins or $XX X.X% $XX a For over X/X X achieved revenue in XXXX. optimizing of with in for our by year revenue as million that positive $XX the in loss revenue, million to has revenue for structure.Turning liquidity investment is our XXXX Adjusted liquidity, capacity amounted XXXX. compared production We profit adjusted year. to of cash achieve million over and to $XXX.X adjusted more gross We the or XX% the is growth Worth adjusted to ramp-up tripled negative of It result an revenue, important the ended of than in years gross of This the U.S. of significant consisting year last fiscal position. XXXX. effort our $XXX.X cash XXXX, our EBITDA increased to and generated borrowing negative revolver. amounted immediate million of for $X.X million driver in gross compared compared as

satisfactory have which to growth built in liquidity therefore contribute of chain material we bulk in inventory inventory vehicles such the to we have obtains ramp-up and sheet. orders balance crisis, the million our deliveries of certain required. the while during occurring large With significant the no $XX raw in event longer could finished reduction diligently targeted $XX now the XXXX on is approval number ZETF. XXXX, that costs. position controlling focus hand, a reduction supply With deployed of inventory our million.Looking particularly remains anticipate of be that rapidly, customer easing chain positively supply to Further, a on ahead driving inventory We will from with on

in pressure remain battery LionX XXXX, million, to and XX% mentioned, new tractor vehicle LionD, in will tight of the vehicles we our the our including to stay our will than CapEx. particularly year. spending the sheet opportunities to brought will by anticipate financial approximately reduction half development of inventory effort a potential navigating face to batteries concerted of and of opportunities completion Lion commitment consisting launch the as and maintenance our the of nears our Marc. we will approximately levels.Last, as as are on be that strides as the monitor significant strengthen upcoming the cost vigilant particularly and short-term well previously market. of ramp-up management development be remain Similarly, LionX the We resilience lied growth lower evolving in financial to gross We $XX ahead, while summary, in $XX challenges you, conditions. by margin, CapEx financial focusing to reducing put that continue capital, requirements, and million inventory the compared to guided market reduce and reduced working In amount in first product we our to to of will liquidity ensure and the and on balance performance, the to sustainable a appraised largely committed significant As cautiousness.Back have made

Marc Bedard

Thank you, Richard.

least the continue result committed reiterating conclude in the line and enthusiastic let environment to questions, our made last flow about next to to committed at to our and leveraging profitable free volatile open and by positive. few for current while let's that orders we years your XX remain me questions. for very for line expect remain reach we our future deliveries the appropriate the investments the we attention Until we you Before liquidity.Thank to for months, fully ultimate measures over of open taking to now cash And objective fully then, this flow becoming morning. safeguard all

Isabelle Adjahi

asked you allow want will to I other we questions. open now their of ask the questions limit to ask just to Operator, number lines participants for to the question.

if the in back can, you questions. have course, You any follow-up go of queue

Operator

comes question from from Merer first Our Instructions] Rupert National Bank. [Operator

Rupert Merer

start ZETF release wondering, funding? on for when with funding. I'm timing visibility we you from ZETF I of that government do they could think, the the any the can at have some

Marc Bedard

is Rupert, this Yes. Marc.

in by get XX% And XX%. Let and that, target been know supporting they we be start the that total all the to electrification duty one heavy are Canada. that XXXX sales the medium me is of over Canadian vehicle example great by to saying is years, partner their and government a has

exactly be what the is So it's supposed that's lot, to with aligned doing. a and ZETF

as as with there's So potential know, understand a same of dialogue right in the book there ongoing lot order has lot major the purchase been of and time. ZETF it's the well. And our delays.I you of we're also a at part now dialogue customers, with a

what and this of go I feel looking that is really the on -- very terms, we're there same is page getting, we're obvious through this We going volume So there I'm and we are at looking think about the forward to that. everybody been is but point, is and enthusiastic lot that. as negotiations we're outcome end. a some to on of has This their speak,

well. So staying as partner, we a well-listened we're feel tuned, we're and good that we're

Rupert Merer

finish Or be move order? up the a all is approval believe short allows of for grants Do a funding on a that an come you this forward when case-by-case they to it framework of of in that process fairly that more with they basis? to going

Marc Bedard

and form funding, was operators the grant that will will we be that part of such Well, issue. easy get thing, all be their hope and that in the the very same the it for a maybe to apply

the understanding but So in transit talk But all money lot for I buses cannot that of money past, know about the as go see lot that and the included a buses them, was future, in very that. yet in have to I well, clear I school that well had that $X.XX will mean, of we've discussions billion we a for invest are is as to the there. it

forward to it. looking So,

Rupert Merer

good. Very right. All

a million. million opportunities talk that And of down the just-in-time think you level if maybe there future? components more any can't to to just-in-time more to model? can hold inventory, could to to can we $XX for are we run? encouraging to $XX inventory amount down sort critical of the inventory that of what in a the if you of in that Secondly, bring an about discuss long What's you the model? move you further absolutely, need company Or what hear bring it's that appropriate Are

Richard Coulombe

that, been couple to carry I earlier, a here. that of don't I'll in the Richard as we buffers now, I challenging take supply chain our we one, right inventory that as And have carrying last Obviously, Rupert. years. feel earlier, very or in environment. need we've It's said mentioned

Hard current to optimal in healthier the levels. and focused So very right inventory perfectly is what on we say just that's what timing the reducing context, inventory now, to levels are Marc described.

the goal our inventory to order have customer level based to really make our is monitor on book, So we of our sure appropriate deliver needs.

these inventory. on are could to also We what really material. we particular, that's is goods reducing So, quickly raw ZETF focused It's deliver million application that $XX on.Like quite our obviously some million. finished if are now, we I approved. in said, we're of focusing This mentioned $XX right

So that's $XX $XX short afterwards. take term the we'll from it of million and million, to there view

Rupert Merer

Just a quick follow-up that. to

now you your and your pack running packs in own production and while inventory. on battery own in own producing quarters, be some you you'll a the hold the coming you your do packs, that, I off batteries back do battery So know that you're you at have work do battery production With level reasonable inventory? anticipate battery or

Marc Bedard

No.

We integrate Rupert. will on vehicles, packs our own are -- we our battery starting to

MD with to going equipped you're our are LionX and deliveries, battery Lion see they pack. So some

those our this mean, production said, has BMW Difficulty] That have though, So battery talking are and XXXX using what also of being as right packs. stock of top in now I mind, we Richard the vehicles about part obviously, that is with first is the battery well. packs been [Technical

of down the really it's Mirabel. So Difficulty] mix this manufacturing in a [Technical taking

Operator

from The comes from Kevin next CIBC. Chiang question

Kevin Chiang

you Maybe been guess, is look book you guess, backlog book. it you your versus quarters or sales think about down some appreciate your the framed out row. I'll I of about, guys but your more to size I there, vehicle other generally how X as ask I a you in strategy companies your out in conservative order have maybe build how

much just was impacted absorption. capacity. given do the work.And over You more dialogue to XXXX? Just up to the past way where some bus it freight freight a It the become seems make the have then That economy in year, better kind you nonschool recession like as seems the the open how maybe Difficulty] vehicles could sense to have customer recession leverage find a here have to significant cost on, buying excess ramp amount you might of need of of sales [Technical wondering that freight like to market? a would fixed follow in

Nicolas Brunet

Kevin, Nick here.

question, second me start by start Let had part your the understanding let with addressing, I but the of me part. trouble first

the On what [Technical necessarily significant volatility Allocated timing side, When of the towards great side, initial unprecedented of the book phase, of book are client round to order program. bus close reflective ongoing billion dialogue. $X there was in you grant mean, that's really by doubled allocated you is And in a especially and there's the specifically the the that electric obviously the a was being caused subsidy I at not from amounts in order deployed this the example. Difficulty] on it's look the time that point of to the alluded program plan in the school it, of EPA.I buses, in amount will, if a $X billion January. the second

there's vehicles be million And until of XXXX as that there's applications place agents, clients, allocated to free units announced, our April. to not for and of number our anyone we really that rounds, the purchase through to program of allow available. we about are expect won't a close dialogue but As That allocated directly as be allowed orders course. yet does won't of $XX well that XX% was

a purchase to of reflected another towards round applying situation EPA-subsidy, in client yet.At where not this the so all school book.Same. under ultimately is amounts buses, great million just see in time, electric show Feb with yet the looking can't $XXX of electric and on we order they this space, enthusiasm school And order are closed book buyers just the buses of the and again the the XX the of lot is same money back this program in for applications time, that to the EPA enthusiastic but for but coming voucher

Half a There's the we tied that. a is in on look awaiting that enthusiasm book If the for number ZETF, of the their in the making they're you clearly are program. lot of that order There's own, -- of know big applications of there. at are clients of us right? outcome the and

this a when But in volatility will They morning. we're medium very these believe. term, term discussing they frame, time And volume, they're so we that exciting. cause let's the take, programs, say, drive subsidy significant very short you the

there's are really caused direction, specificity by things going of without in But programs. volatility those the term in right short a the So subsidy doubt. the

Kevin Chiang

I appreciate that.

Nicolas Brunet

If Kevin? you mind, don't

Kevin Chiang

sure. For [Indiscernible]

and people a So those of deliver are little if like I goods. And look at LionX, products freight going using did bit to to LionX, some go a seem launched part and the of XXXX, economy, the tied more recession. maybe last those freight we through to be through you've vehicles the year,

shipper are freight is Just wondering might much fleet a that transitioning volumes, impacted decline to out customer a better? bit the dialogue, table have electric? about also Or is that facing have that right? XX%, looks XX% conversation at how little a the might the they Like economy in talking gone pushed until if

Nicolas Brunet

the solution here that figure at I course, benefit, the particularly they the to current good as a from to the need increasingly much Yes. subsidies, I a years scale. operation, with need trucks, dialogue operating to At looking purchasers of units That's to of same we're doubt, will of between the more some the out of mean larger question. will on for of have Without realizing certainly out need maximize dialogue clients split, -- this shipping, transition what realize say a is you say, to they of are do emission. when players of there like to most That's aside a Canada.And during we we also is was will economic a in for time, pushed And They said. the are looking handful little see in The challenging few environment zero dialogue do a that some product. active to try it the I felt smaller would focus really this profitability. they operators transition. because shippers,

that of we're part still XXXX. than in at think large and demand all There's drive truck that seen big operators, few North has less the dialogue. the We're it's XXXX the about this it's infancy. players as We're you dialogue tomorrow scale. It's And actually of the of return we've not but one the it, critical you a market.When largest will small demand, market, that look registration. electric its so the at registered the and electric December with America fourth when player of trucks total

$X.X we're in will needed as help. by don't And things in morning, I help. this big up We as the they the space, mentioned encouraged So school spring they for the a for that [Technical yesterday, applications as EPA dialogue.Subsidies by and the are for think with the is X a with Obviously bus truck will funding Class early are but they're stepping quite this time Difficulty] the program opened and EPA in billion X. is ports end which due tractor. for the Class X ports

all there's there. So movement in all, certainly good

Kevin Chiang

$XX that it maybe you you million Was of question to that that comment $XX million, on number, the inventory suspect, $XX and -- you're the up net you could made clarification a would inventory offset headwind -- more would setting Or be capital so gross inventory as offset be ramp but as $XX potentially to up [indiscernible] production? like obviously as kind of that I take accounting headwind comment out, million a what Okay, ramp is to at just a that to today that for a million. was working be production,

Richard Coulombe

disciplined earlier, all in time. short approach. then, know, of we have of it.So year to million we like really we're current finished at And some we focused in trying now in $XXX growth with I a No, no. were a said to really on, considering there raw are material move reduction just-in-time parts on in, going period the we're goods to bring that -- finished allows that reduction the million, more net million very $XX like and of the inventory. right again, the context we We're looking a Like factored $XX

be is So the to million to be that's going $XX going net. the $XX million focus. And to

Kevin Chiang

helpful. number. Net very That's Perfect.

Operator

Mike comes next The from D.A. question Davidson. from Shlisky

Michael Shlisky

challenge year? I few seeing every again be we're ask think, net-net, XXXX here. seem first you Perhaps ask deliveries overall? year quarter, it of months you'll Do growth here, growing you to this be a but will I'll feel this a for like do so

Nicolas Brunet

a Well, Mike, short tied order pieces growth Nick lot the obviously the There's a moving half here it are moving deliveries. year we XXXX, yes, the say in of the is, for of I speaking. but is to pieces, book When in aiming ZETF of applications.

is big for driver our that a year. of so And upcoming deliveries the

we the next volatility programs. doubt, mentioned in we're prepared the remarks, growth XXXX be of see in But year we these again few by aiming -- driven subsidy without in growth As months, the a some a for limits. to a

Michael Shlisky

you share now. curious least perhaps thus if you in Great. about bankrupt supply right go buses. more school expected on bus seen of your also want large far have a some I'm ask recently. least I market share, supplier batteries been the side. than There's at expansion expect EV more of especially delivering They to in one in the XXXX, makers would and not given there's at one company

Just curious your opinion. been out there's there, brands switching of in lot whether a

Nicolas Brunet

-- the to we market we're can. capture Look, all looking share the share market Yes. that front, we're

we one in buses trucks, the in to combined. stats North to and when school alluded Just are we like we share, in And I'm type registrations, talking I by we see, specifically the electric player number the and facts like market D we and at to the stick look that America. all C class, think

delivering at well.Are applications? us deliver We're XX% but as an allocations ability the on and saw we the the our be the important EPA close OEM's program. Of extent we same Not which the is we that one we will to rapidly factor. the that are on think distinguish will the yet, I time, in round, course, things first think of delivered specifically forward, seeing program, to a to shift the bankruptcy of as program moves

Operator

is Our Gianarikas Genuity. question next Canaccord George from from

George Gianarikas

I know a volatile environment. it's

will if issues give we kind margin You with be mentioned allocations so compartmentalize broad strokes, orders, from XXXX liquidity, could throughout us expecting needs you're I can in you wondering what what perspective, a of perspective, but and year. look mentioned to your gross if some just of sort of the maybe EBITDA cash was like you an

Richard Coulombe

for provide the we're Listen, right? $XX -- million end million $XX lower million. Obviously, comment George, looking front. to it's have in inventory earlier, guidance. between the like coming for be terms towards the in $XX We on of that's the year. we're drivers talked can of we million. I our $XX don't right going this our -- maybe liquidity. cash, sufficient million, reduction CapEx We cycle, Key run investment than We plan Richard. at the liquidity I year $XX year, with said rate we $XX on now, we about million believe us any We facility. closed revolving and

be very of the the year-over-year, with to sale, We to continue. and focused SG&A, continue cost overall expect improvement We to saw control, you trend percentage that's on going cost continue reduction, the

We initiatives product cost a on lot have savings. of

same as market, the So spend for R&D, that's focus year. XX% another us. a looking we We're at area in see the introduce reduction going R&D And products down. thing, we this new

So those position. elements comfortable makes us our with feel cash really

Marc Bedard

being big, that right? us is Obviously, comment maybe often in big see a additional the CapEx And well. you very George, behind space. one thing, growth as don't EV

make we liquidity, the letting this also what kind the XXX go it's think that doubt. taking we to, of Obviously people. that great. wanted to is but did our we're like morning, thing we're action I And not a this So protecting without sure

George Gianarikas

about as market maybe the share. follow a previous question up, And was

X terms for -- to what about EPA program. of win, to XX% the those market to for in Maybe about competitors win talked related X would round XX% larger order of at least share has programs? Clean excuse the of broad be Bus you rate the strokes, space again, in me, of in orders the One School just satisfactory about expecting

Marc Bedard

Yes. is, is because lottery for here. expectations a it right, in going driven, speculative George, winning Look, we're that's we of program us, what that's to more than be

I'm by comment I so the specific will registration in And not going to player we by space are market #X about share. say numbers. today,

want to very expect improvements program. types to with has under U.S., of and dialogue of we EPA the continued -- been in wins Our The hoping but Canada our more with with relative market the customers talk to forward-looking the to constructive, not estimates. we share proportion and the is orders purchase weighted these see in ultimately we're

Operator

Dan from Levy question comes Barclays. from Next

Trevor Young

Levy. on Young Trevor Dan for

looking So we're subsidy programs. of your of sort awards the significantly the I timing I that appreciate a the the in looking just are the order programs impacted book, inflection for at But of by of bus can I And under guess order major government timing curious. the book. was

sequential guide as aligns? If jumps but books it, these timing of would larger past? can't -- you've could be the could order And know seen you the quantify to in these jumps you what could we expect programs, than the larger some in you I

Nicolas Brunet

in are, when allocated everyone, at we're we Feb -- And us, few hard program on you I allocated that grabs units mentioned, there funding And million call it's And program. close rebate that other their and that to so -- XX% it's in months, EPA dealers. be so closed OEMs, XX, as next working the allocated is meaning Look, that grand it's believe, purchase Trevor by of could billion is it. mean, the for look will not could, a to right, lot can it not at of in right? free XXXX a [ is April.So agents, the $XXX months. then, that round including That's result not what it's $X there second -- April just the if I there up the it, again, look essentially -- few ], they I Dan in at guess, in I'm was they the orders for (sic) next will be and of if you we'd starting that Lion, round -- and

past. program programs out, or And these yes, OEMs the and on aware. lot the of are but file applications potentially bigger that come like mention the more and operators when it make behalf in these a that really also that OWM. the the us, filed sure make certainly districts maturity their and we've and I'll clients, is jump promotion and the do so, aware pick own seen be than We could on programs the more we gains of clients of then are of an and program school

when be the jumps be purchases in could it yes, up obviously dollars absolutely, subsequent grabs.So will dedicated the for bus starts a technically months. there in lot that there potentially book higher then the order future in of speaking, and the in out to are So April

Trevor Young

for coming a a sounds just for seen XXXX. is realm EPA world, about the light that was targets Yes. that curious might the I specifically, helpful. softened very your reason finalized markets. it get for might there translate well, up. reports vehicle We've was follow through your like least Then there's sentiment any a That's rules? these if is vehicles the think appreciate to reads into end light And as different bit, out emissions but over targets EPA at there here I meaningful any little

Nicolas Brunet

we've standpoint, no seen our From change.

when school coming a space, First and school place. top electric you school past there bus relative regulation are level especially diesel we're customers, application. I bus of the targets, society think of provincial convincing benefits in On general, point the into really, around of look buses in for to of all, that's level, EPA the state

going there's is. operators and more but well, the no, There's been said It's truck bigger for few figure there. in the is I to so, sure, there discussion essentially what's we've has here it's And us.And market, heavy-duty bus targets mentioned the the large earlier, vehicle happening a they in past, truck a the need in the with solution and impacted right, school topic hasn't have the space, is with really forward. a behind these as that really regulation, large targets years companies out much space, as out active that medium these it light sector that

(sic) relates short, duty. Trevor in light [ so, the as no Dan And impact ], to it

Marc Bedard

if the to want and respect of lower medium with greenhouse to one to also best the then gas attack trucks them, ways And emissions, buses. the you heavy and duty

that off taking basically X the cars For bus least every from at it's you're street. doing, like

your XX% for best Canada, XXXX, that's looking in And you know, like, gas to to when the the greenhouse down the So bringing is really goals emissions. you're of way tomorrow. have get target XXXX that they

this decrease, we well. goals. on So that we and what will Europe be as echo how see exactly that's that, And see achieve in way to side not the U.S. best the could really we and their do

Operator

comes Souther question from B. Chris next Riley. from Our

Christopher Souther

LionX Would the you be like expecting versus on the quarter think, for initial were be how you helpful? LionD, I vehicles quantify versus would in able much there, impact to there, the the delays fourth the push out

Marc Bedard

Yes, what that in it the explaining cannot we below at that looking at Street the right? which I got difference number our no, Chris, provide final of the we obviously the exact Some significant, was between was is figure, mean, XXX, clearly expectations. was but

always We that, quality a was when to very mix of market, that and there's the mean, easy to new you coming products see any and and new ZETF. not I is So need us, EV to market. bring few that, But #X product for your that.I you take time. to mean, do

the going those really be I we're goal And we've of positive. product probably to to to our up. we the lost feel had So feedback like is quality the and by us of bringing challenges, where it's the customers first also of saw of the that things, though, But And to year. we the we at catch some the deliveries, quarters So delivering catch receive QX since customers LionD, X of mean, was take them some the about terms on we kind and of up. started the end But updates very few will you good, what those to the market. a best. end start that in will software deserve felt

Christopher Souther

maybe give excluding breakdown buses around program of if look take sense of the any are I kind remaining your LionD? all at obviously we can feel grant the just just And I to of order how kind backlog, the Canadian kind beyond out is electric delays that control? wanted for at school, helpful other think timing ZETF April but this we book, the out here? many EPA timing, seeing that bit little get, that for broader of out a school Okay, could and that would of called we're past one us peek you for I be a if folks you better for the of get a with think, one, expected

Marc Bedard

Yes.

So conditional and C the majority, than to more the with is is, the majority in that. the of say, half the ZETF of that I'd rest, still Chris, market. book The type order

in is the doing when a with We product put we we're amount a the in the the for book, demand delivered yet. the of is you type type Nonetheless, vehicle that good which D C. But of on hadn't you have bulk it a order most now. street, the demand especially what for generate it

production the to up concurrently. and expect of D ramp we up ramp so, And type to demand

Operator

Etienne is Larochelle Our question from next Desjardins. from

Etienne Larochelle

on question My will to on much if savings any the in translate curious for upcoming cut OpEx more announced you the in you this this you is I'm could quarters? first just headcount and incur quarter. this if color provide how could charges

Marc Bedard

Yes.

go. people night most of shift. is are we've them number headcount that on the yes, And XXX the let So

them of at a are basically, are shift. we're the people, of lot as well. overheads, night temporarily And So eliminating them point, this manufacturing some but

So the time. at basically, reducing overhead the we're same

of of I your your question. -- missed your that was the part part question? So second

Etienne Larochelle

Yes.

any how to incur upcoming related translate you was OpEx on wouldn't XXX could quarters the I if just savings charges this in and that, to So provide in if previously announced the curious much December. could more you color you and back in

Marc Bedard

benefiting vehicle. the cap, XXX, we're we back for as because as get to temporary those savings. the with this mean approvals -- soon a Obviously, making Yes. from already addition is of in I to some on is ZETF we're the obviously goal employees go work to our Well, -- delivery the from there to for basis

the saving hope that this this $X is case.If us. with So be annual not, million that will still we're at looking the we around

but expenses real bring ZETF So other the our the back obviously that's is get including and looking from kind payroll the great the the related and the of people. saving shift, to when we're goal you're at news night to

Etienne Larochelle

a last as chain months. up cost? costs easing of your seen in maybe couple over bill reduction the and if And supply shipping of you've material issues I'm follow a just curious with

Marc Bedard

the that in alluding initiatives He lot on to reduction lot -- had material, was working Well, of the that we some I mean, all was the a past. we're we of Richard bill saw because savings. a saying

benefit the quality. is full possible get that $XX cost that with obviously time Obviously, of real to of those well any keep as reducing us inventory. to top that of take material. as the without little that. of have the we amount we of to some reduction inventory the the this have Richard cost was $XX the on it have, inventory million on And inventory million is compromise But savings, benefit as we mind could bill soon is million for to that there goal seeing working So about. of the $XXX because talking a use start of while of to people And

Operator

[Operator you. at Instructions] the We have on floor to no call time, so back hand further questions the this I'll

Isabelle Adjahi

for Well, continue for discussion, have. everyone, Have really the free today. to this forward you, call to contact may look me and up thank day. you joining a We nice any feel question follow

Operator

call. conference today's concludes This you. Thank

all lines. now your may disconnect You

Lion Electric (LEVGQ) 29 Feb 242023 Q4 Earnings call transcript