Lion Electric (LEVGQ) 8 May 242024 Q1 Earnings call transcript

Company Profile

Participants

Isabelle Adjahi	executive
Marc Bedard	executive
Nicolas Brunet	executive
Richard Coulombe	executive
Kevin Chiang	analyst
George Gianarikas	analyst
Benoit Poirier	analyst
Rupert Merer	analyst
Michael Shlisky	analyst
Christopher Souther	analyst

Call transcript

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Operator

Good morning, everyone, and welcome to Lion Electric's First Quarter 2024 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 First Lion's Results Call. Conference Welcome Quarter to XXXX discussion with our and forward-looking CEO, [Foreign that Coulombe, Language] differ Nicolas information statements. Bedard, from here I'm our note actual Officer.Please President; Today, and Founder; that and results such Marc Brunet, those Chief implied Financial include any our may estimates our could other Richard materially our in information earnings regarding to let review to factors, actual which the press this release you in MD&A, our and to invite Marc risks We contains me and language important various assumptions impact over that our in cautionary begin. turn could it that, results.With Marc?

Marc Bedard

XXX school increase manufactured we and application rest gradual our have equipped started our LionD facility. in been accomplish XXXX. have Good operational deliveries today at first LionX by trucks bolster of everyone. production our Electric's delivered in the the Lion we approved QX battery throughout you, ZETF you mostly as timing orders buses our fulfill for the our for me by related some of for fund certain the of challenges, morning, QX. in of a QX. sizable which significant to commercial and important We was for to start Isabelle. achievements subsidy XX our marked delivering the year, MD achievements programs.Let and Lion Canadian with discuss highlighting joining we to us LionX of despite performance Thank The buses, able anticipate quarter market the packs, buses started Thank Joliet we first presence.We

commercial summer, in LionX our We weeks. will its are in ACT Conference this commercialization the make at truck planning and introduction X the we Las Vegas Tractor of formal

the last with including that delays model our economic supply measures allowing end the batteries, Canada buses been recognized of XX summer revenues be that granting that cost that our program the Year to of continue battery our are us with honors equipped reduction.QX are report for funding made X the liquidities, Manufacturer truck deliveries road fully in in revenue challenges program, orders duty this a $X collectively million first significantly we and being in the our fraction new of was to program's in to but QX of no in in focused prestigious early news XXX pack. steady on our state-of-the-art kilowatt-hour almost rounds and of also LionX EPA we the date, result year, this transition to vehicle as integration these great LionX focused Lion between challenges being driven is program. of difficult step electric billion transit we increased last of for of of capitalize the pack, a necessary Lion the the the metrics Our timing safeguard rightsizing development, to U.S. improvements phase optimization, Chicago's make investment, the have ZETF were but and financial deliveries and cost organizations this year our annualized on of late measures, in are XX miles, represents the $XX this marks a The advancing medium to implementing remained only response decisions, our and optimization.Lastly, buses the demonstrate be front, proactively models LionD mHUB be the to commercialization new that in to award announced this the associated us savings and previous approval work.On and This on HD market. our including with previously largely our a a such potential.Revenues the and In margins subsidies our crucial has right growth. in impacted we QX definitely and with by proud additional heavy our manufacturers initial of with estimate cost direction, and approval these pleased tied will and vehicles is Tractor by for innovative and of LionX million. impacted Tractor be under expected the the Lion's initiatives CapEx timing related the To quarter the with process workforce.Combined related manufacturing electrification impacted our chain X,XXX over on investments communicated.While focusing on to expertise year-over-year, the ZETF control few leadership will program, introduction and electric and cost years within X factories fully this first allowing as to by continued with

Program, that managing our on programs, working recent diligently the of confident and of deliveries, are such a bus into new possibly including accelerating Ecocamionnage our book and Nicolas? our renewal we Clean the Grant the impact deliveries.For while insights forward, as crisis our allocation behind funding the now supply with costs, commercial Heavy-Duty the Quebec the school order Canadian the that and of billion growing will as of $X performance. along remains now such additional Vehicles the Going EPA's announcement rest orders liquidity provide subsidy under program us.Nicolas year, will chain improvement controlling is capital, significant focus and programs,

Nicolas Brunet

Marc. Thank you,

the address discussing subsidy conclude update certain by start with me and Let programs. then an on order book delivery,

vehicles buses. school U.S. quarter, one a remaining for XXX these, approval the under program trucks. we ZETF of delivered of was Canada, XXX in the order to XXX which XX customers with this the delivered buses for Of were comprising funding delivered our total of and XX in the obtained includes During buses XX Notably, an XXX

look these government between the will processing deliveries funding rounds. in slowdown on accelerating as we milestone, a XX potential, moment. the positive a on represent a forward only is and to of fraction the we approval ZETF I experienced of are in this initial this deliveries currently a While applications.Additionally, elaborate EPA-related we program's

of purchase representing book Lion's the delivery. timing announced to combined in and orders buses yet the was rounds issue and the grant of order of by Clean earlier and able the the at are in vehicles, awardees funding May trucks, for approximately quarter stood Program.First, this majority of not Bus $X book terms vehicle deliveries School purchase and X,XXX round impacted XXX The orders, billion X, year EPA's order this X,XXX value order momentum In total consisting a vast accept vehicle million. of as XXXX, $XXX of purchase the

allocated in As EPA close reminder, the a announced for and to the the $X funding school grant of billion related infrastructure. buses round, awards which clean for January

for As $XX parties OEM XX% school we allocated part of awarded awards estimate are school that to the funding of this million that the or not XX dealership. with round, buses.Additionally, associated of bus Lion was were directly

directly. in expected the for the purchase are from XX. under EPA applied Applications filed number funding, which expected been of this the the are $XXX clients expected applicants behalf in proactively program, are over awardees potential to allowed round grant results potentially February in awaiting shortly number clients deliveries bus. month this of Awards on with them school past to and round imminently. have working advanced to is this number with and grant applications worked to Orders of of their allocation. XXXX.Second, round who of latest are a Lion were to round with this dialogue on still allocate are We program a year announced dialogue be also We file of rebate in of their later and we million a with the be EPA under

Just the order impacted funding grant not has as round, with yet our book. this

available $X.X school to So Program, to Bus for are electric further buses EPA's altogether, vehicle, program.Additionally, over launch and which in to EPA for recent be close expected districts of stimulate private million for buses. expected the to operators X buses, million allocates is School to billion purchase Clean X Heavy-Duty Class and the the $XXX school Vehicles specifically demand school purchase zero-emission including $XXX Clean soon

$X.X potential We believe customers, opening billion for the strong buses the just of or truck and purchase EPA over to for funding the purchases.On when and round side, well million charging allocates the school translates ZESBI program, to to the positions accelerates. LionX be infrastructure. Combined drive which from I are of discussed, continues $XXX Tractor serve available and for we and California to infrastructure school bus bus school shift into zero-emission EV electric in infrastructure, of the interest upcoming which LionX operators upcoming also this the excited with us platforms truck

attractive hopeful Canada, approved, would well ZETF from our removed for were existing truck Ecocamionnage under favorable the offer until now March and book. the of program our will Richard? it financial both for of that orders more to XX the applications the drive bus our to that which protection.In very order turn Program in the an book purchase a as school programs both remain discuss filed be Last, to creditor will subsidy clients subsidy.I momentum from as Finally, represents orders Quebec, upcoming trucks Quebec on both these deliveries PO impact extension development relating XXXX in we over Richard as performance. have program

Richard Coulombe

compared XXXX. position on QX provide was QX fewer results. start of will will million, for delivered, and year. of discuss in XXXX, In despite the Gross I negative compared vehicles Nicolas. margin to liquidity color XX.X% $XX.X XXXX. XXX X.X% recorded compared last you, QX QX, commenting I Thank X% negative rest our up by XXX revenue quarterly we to to then

margins for $XX.X million We to CapEx XXXX, relates the including QX compared of approximately guidance continue on million, borrowing to XXXX as and $X significant negative QX, and and share-based capacity introduction previously, increased XXXX Lion at of amounted of million, XX% million in excluding the battery by million revenue XXXX. to $XX.X SG&A expenses and stood costs, in adjusted $XX.X previously $XX CapEx. At $X to net be to communicated compensation. delivering million investments mostly was available had million, end manufacturing $X.X from XX% LionD intangible the R&D mostly CapEx.Now our represents to to $X.X XXXX cash EBITDA Total million significantly down we decreased LionX initial non-cash XXXX.Our for revolver. in This million moving negative $XX.X immediate the QX in $XXX,XXX of packs.Our related mostly maintenance communicated compared in in million to initial In we compared QX vehicles of As QX QX were in expect now $XX.X on to milestones. QX, in CapEx assets of incurred lowering million due to $XX production to impacted development liquidity liquidity. on

we inventory continue in this with amounts million management.Second, CapEx payments During driven plan were by progress to as remaining QX, reduction. achieving our working our overdue puts increased purchases to working plan, to owed on mostly of $XX by inventory approximately our us in $X collected in million, not suppliers reduction, This resulted suppliers largely anticipate of we million our accounts specific quarter. incurred impacted Substantial inventory to We and $XX on this government attributed launch capital made accounts by $XX Despite we payable made million made for for a approximately amounts the payments good decreased deliver XXXX, $XX supply inventory our reduction million the $XX active million, year. discussions with since, objective this strategic expedite which prior and payments. QX trend do negative factors to closely were by receivable million.First, of reduction $XX agencies. a several to optimizing in and for are nonrecurring reduction chain persist to track

therefore, reduction for current Third, regards currently grant compared to on million our provides million assets to $XXX EPA quarter of are we liabilities, to March the current $XXX rounds.We XXst, net balance the XXXX, represented unearned of liquidity. as revenue important a includes optimizing at unlock focused are balance between sheet, and program which, opportunities EPA million with $X of as

liquidity implementing term. position to February in ensure April and to million.As XXst relative in is some result significant subsidy initiatives. decisions additional measures expected also we Combined encountered XXXX sustainability unchanged necessary of annualized our workforce quarter, considering savings programs. were $XX ahead, the and in liquidity reduction March anticipate delays of initiatives short the cost the made are we with largely volatility difficult announced by safeguard These position.During to cost our we decisions streamline other long-term the these look our operations the XX, As and persistent our of our November XXXX, in approximately to

stay inventory and remain over in liquidity, order and on market driving financial balance conditions.I our our overall and sheet growing remarks. to of the controlling evolving we face closely Marc? while will costs. potential plan managing for book concluding will our our our focus strengthen to Marc ensure In appraised accelerating deliveries, now Our reduction parallel, pass it opportunities resilience of

Marc Bedard

Thank you, Richard.

for by conclude by the some delays Lion is granting but electrification programs, navigate through a that taken the remain playing confident are the making very stability will school it company, part having the role we might of market.While me demonstrated and momentum, of longer is DNA. and our key short happening, in to to excited which than many our as the that clearly and have Let we we electric subsidy shift forward opportunities it, lie decisions proactive The ahead. expected, bus volatility agile our and to is the are in initially we reiterating despite leadership expect a little are we term, in in by in maintain

also of for our ultimate being objective We to on generate focus stability and this flow, you our costs, milestones and liquidity maintain free morning. and financial controlling actively cash sustainable steadfast key our managing EBITDA growth.Thank your attention will

the open now for Let's questions. line

Isabelle Adjahi

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

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

Operator

Kevin [Operator CIBC. Chiang first from question comes Instructions] from The

Kevin Chiang

the liquidity months. the available CapEx of at have of you $XX on moving some million If million this million I'll due due of lease is of liquidity. $XX over parts, start million. debt $X next look $X front, I Maybe about the XX year, liabilities

I million in the think spending year. range on R&D this is $XX probably

kind whether just spend help losses. about you from at Just that operating year? it's me capital deliveries. this as of accounting finer to the delivery $XX for on bridge anything million up maybe With how we to you how can if million before to if look here working as you ramp manage that through that's you tailwinds maybe ramp liquidity -- forward, maybe up, $XX all gap, some So add manage get provide points potential an you the

Marc Bedard

I'll take that one.

right consisting now, now especially we in our $X facility. million $XX liquidity million of $XXX as of liquidity-wise, like, earlier, stated of terms liquidity So now I our versus key $XX have is driving million, right, The I sheet, really and $XXX available our borrowing on liabilities. for a right us guess, of of balance position is cash element our cash short-term assets. current million Right million

and across worked to a We with our was quarter focusing we the So current key order ratio adjusted inventory really kind cadences a driver that of very board that's is QX. kind the on.Our and closely this. book. in reduce can inventory to supply X.X, a And able transition what that we're is align happy really plan this of were tell our of million. $XX I'm chain and reduction I by it quarter, our

to really reduction. confident So achieve we're that our going inventory

very commit and to stated, not this right only you to ], a As with. We million we're contributor, now very company going necessarily going year-over-year. to number that. And be now, like a CapEx, right can, $XXX,XXX disciplined to down that as going we're another disciplined we again, spent [ we work really there. We're $X significantly remain believe quarter, is there.R&D,

continue going the of quarters percent trend as So And revenue. as over down in see last several well. SG&A very is be we'll to really you disciplined the a

that a to team, are management looking opportunities driving really capital continue year. the market I But working So our sheet. And say navigate at elements as focus us will our help balance now, we obviously, through right those strengthen the would our initiative. is

Kevin Chiang

be any orders And the a sense. changing some based appreciate or seems growing experience vehicle maybe dependent book maybe moving Okay. of and to here uncertainty how of just question. seem That couple second parts strategy over on order weigh at had change these out in the some high of these how you've just with get given to that years, I sales these any thoughts activity? maybe subsidies more drive near-term experience grants. past makes level, to that and of rolled But the subsidies your your my government government sales strategy purchases order given guess accelerate some to order in in on your on your sometimes timing I the activity.

Nicolas Brunet

Kevin, this out be Nick access as -- you attractive, products that take are to the for it, and would able they course. are obviously, out are subsidy I'll the there one. of want funding when there, and Look, here. buyers that expect to there programs

We unique particularly I'll is a right just a of there step take back. in are in the position, actually, where somewhat -- now, U.S.

to You'll EPA school back February. for billion round late is and but Clean bus awards all the the under program, awarded, program, purchase grant the not in third School infrastructure has $X some round $X -- been year And recall the -- of EPA the February, assets, discount filed the that Program.And allowed. the that the first was last then, of which announced the orders were $X billion yet for in for in applications are billion

the hasn't very applications following its known. materialized the just it's were the order just activity. yet. This second results is selling the book tranche not $XXX into our for course. just So then filed And of attractive all million, yet are and It

imminently. be round, then known we for discount as the to be expect that grant round, the allocations the For imminently expect will orders we And purchase allowed well.

the on there simulated can a cause from it's order at course, well, yes, book, a but snapshot lot demand these programs. when volatility, given quarter, there's programs out look enormous that's a you you those So coming.Of take

I so changing we have applications strategy, now -- both some -- these we directly programs. had terms in guess, that's so the of on filed And sales of

for were XX discount of on us own. awarded that filed directly to round. as also round. sector a million recall in And a clients $XX You'll lot grant for their applications the The we the of our applications had filed I lot mentioned, units in we whole

is that's of put new program from expect California. are which the million the to programs of That's $XXX place, school on the $XXX in Heavy-Duty Program Clean ZESBI these shortly that EPA the to programs.Add in allocates coming for both shortly. just state California being that So demand buses, we million opening very that

So the certainly, to yes, our believe. subsidies clients The will of a a lot get of that Canada, of is and you a -- of buy. bring appeal those in to lot lot well, potential to subsidy it's of wait specific that natural generate demand ZETF if incentives lot programs.Now results purchase of vehicle, prepared the his for And a buyers a as as $XXX,XXX much Marc the it course, we those remarks. a alluded know can of program to

half We was customers order units applications of first approval. number of order had interesting. a filed XXX ZETF for is that our book on approved, very been have for that our that have of a which well. as We've parties that contingent over we is have one know And

and a selling programs if it's take programs -- is a does strategy things, with can on look the I bit we right it But of very one. we volatility longer said, like So attractive some demand the think these a these quarter-to-quarter basis. create at

Operator

Canaccord Gianarikas from George next comes question Our Genuity. from

George Gianarikas

we to follow-up us will cadence of understand surface, momentum throughout underneath sounds question the how you Maybe X about and you started deliveries help of over it point. maybe visibility vehicle think think a last the as just be programs bit low color last quarters to progress what little you QX and a just should the Obviously, a just these the you Maybe year. can the as year? see this like at the of

Nicolas Brunet

in visibility. the of Nick look George, well we were we the we of units here But have that awarded are at again. you X delivering advanced Look, round perfect don't EPA as part it, very program. when

for buses We infrastructure. -- to with There's well place obviously from purchase for order about time I purchase the be next available to to orders required as rounds. -- we mentioned billion expect for the certain of X as planned formal a school the are the as before, that's now, $X.X clients that's

for the the so driven short pride are the window We the in under clients second the up Typically, -- by cadence in that alluded And there's a fast. in the X-year about being in the of half those pick part deliveries receive to is term that.What for will program some EPA that able that of relatively year. in we deliver volatility to is ourselves we to hoping order vehicle.

the will And and cadence continue second so, hope again, we pick up XXXX. of year the half and that the in expect throughout

George Gianarikas

Any with on update Amazon Great. question just And had the market you've any on maybe a second commercial the relationship them? discussions opportunity. and

Nicolas Brunet

zero-emissions vehicles. the bus numerous got continued -- trucks is about XXx behind more by think the -- There presumably? mean favorable. the has commercial, significantly you some market, behind is market is that times, the of developments, market. school that promoting that the school course. interesting TCO are it truck regulation the see said, we've Look, where market the bus market is dynamics truck But Look, is.We significantly said been of potential It's the we

Amazon. You mentioned

deploying up form as are with truck they news. And business our trucks. into scale and get to this some to this another and picks the market a they and view party fleets We tractor our that deliver up. product industry that saw very so is is And You appreciate truck. quality product then relationships large the that with adopt positive goal as can

Operator

Poirier Our from comes Benoit next Desjardins. from question

Benoit Poirier

Yes.

didn't any funding we the mentioned in Just of in Canadian funding, program, see new to budget. come delays on the back ZETF you terms some and

the it currently as of funding with customers the there dialogue lot funding the or milestone U.S. I've going heard with thoughts you the billion EPA. different customers now? dialogue forward? pipeline And a How whether upcoming bidding influenced agencies? also obviously, of with any your should have word would waiting, that election, And are about we monitor $X.X qualify any come So to the you the the also, for

Marc Bedard

the This is ZETF. one I'll the on Marc. take

years know you for going now, I probably X ago. years that some started X on and operators -- As almost process mean, almost been it's

So seeing right I buses XXX are the bit little approval think a first now. a good is process is we step. complicated, the major And obviously movements the but for

at very XX momentum are this with satisfied we We approval to ZETF, well. to as see this with this with now. good respect buses order, the were point So obviously of we we of those deliver see right able well.So and the good dialogue as

you though, you, operators, we're step. great they are that thing to As ZETF. down operators from their looking the diesel to supporting a is fleet. waiting green are I that with can And operators to their trying the purchases discussing forward in ZETF. mean, this the offer right now electrify their they tell know, we the One is slow are And receive operators basically ZETF, the the are for the from and the waiting request. I some know still formal light

EPA. that we very this turn So is with to about the it ZETF, Nick respect good -- the I'll to talk to see as now.And right news

Nicolas Brunet

possible. very I Yes, states subsidy the when in highest, as much Look, of EPA to first all bidding pipeline, were Ben, spread across the round the out the the amounts it was this as program was terms of described announced, as objective healthy.

into served districts better scale I plays amounts which the view, lowering. about by sort more think and larger But gradually our at Now in operators very our deployment, and selling selling more larger remain, of attractive. school more They activities. are into it's

factory We that's and we also in course, showcase. can have, running the up of that now Joliet

is healthy.In a I'd course, know $XXX on from the I'd that that's being and approved, out. see, what something $X.X $X Clean So mentioned Heavy-Duty pipeline question I very elections, terms now your know. point program that's quite we few don't the we of rapidly Program. The million of as don't billion can on describe as But just you of third the the EPA the deployed, top billion facts

under in this there this the somewhere another year program. expect round We fall funding be will

opinion the case buses rapidly.And eliminated. but in so that emissions of are that also pretty a should buses deployed be speaking. buses, sense, health dollars in for in children, that view the a school that use both And in add terms makes operationally a school -- getting we'd societal our terms of school It's lot of it's

And so in see space Program, there federal the that. we are other that in the money ZESBI in add mentioned, we California, the $XXX feel And like about million I'll I on pretty good Colorado, that Texas, in top examples of Illinois. coming in

for there's so state buses level. mandatory number at And states quite also over making a are of regulation there's that of be it lot top subsidies, And a with the on school to time electric.

Operator

question next Our comes Bank. Merer from National from Rupert

Rupert Merer

drop back Coming be biggest the seems looking that have quarters opportunities you're to this to moving of needed. like be do loaded $XX level the million next that $XX can million of inventory the it liquidity, the couple to going by inventory. the reduce more reduction front-end to if in of at, talk in level over year? is part Can you inventory? that And about cadence the you That than

Richard Coulombe

kind quarter one, for was said base, and we from where a our a to Listen, I'll take as realigned supplier we that approach worked with I build-to-stock of shifting and us earlier, build-to-order QX approach. really Rupert. our

was QX a like So quarter. transition

Some had of materials. our suppliers had us, built some raw some already already bought for inventory

occurred So that, despite that we million. phase. all managed just exchange again, -- of say, all transition through of And we during in for let's to to, inventory the that say, inventory and some alignment on the so get QX by terms payment $XX reduce despite, quarter, I that would accepted

inventory I improvement So of anticipate that QX, reduction. that QX, continue will seeing an we

higher the from we're as to see secure Nick a driving connected around, sure, a few So how it things the number. to going the out, in the of order how numbers and pointed EPA increasing and book we're ZETF. lot internally, I Obviously, orders do for next play We'll many quarters.And out. is see

million. there's but good But I QX parts, different to in with terms of numbers. talk a see this very to $XX set So another be I'm $XX feel lot of moving And confident -- inventory a to for expecting we should at reduction. the about quarter me of it's hard point million

Marc Bedard

is we Also $XXX Marc. I that this liabilities. -- million current Rupert, earlier, to have mean respect Richard current referred million to with of the The current -- assets assets, and $XXX of

coming gives unlock of as inventory, we of it's there also well. there's receivable accounts $XXX of just from can unlock a account receivable. obviously, of So lot it's in Richard as us almost mentioned, and receivable There's -- mostly that a accounts that liquidity And the lot but million government.

timing just getting where And will be forward. unlock of unlock So will an a -- to area we And we it's liquidities good accounts we receivable. those. will will some sorry, going -- it's before be we able unlock we matter -- then will

Rupert Merer

So at the all liquidity, Do March. the of end it at have with forecast where that was the today of could say, that you're you end initiatives at? as looking the of of up a same you it's QX end

Richard Coulombe

into Listen, tell cash on highly flows. I'm to working you get capital our not I forecasting initiatives. focused going can just we're

the earlier, be balance or our a is less at same contributor initiatives, confidence March. And more key out is for pointed liquidity. I as as April drive As XXth we to our going

Marc Bedard

and in of We rightsizing necessary from from And the keep mind, million to lot coming done. And $XX as need this feel Rupert, us. we I very was savings. also overhead mean, responsible that in is the we've was well. a annualized this that

which major the quarter. obviously, decrease, there add result start $XXX,XXX, $X going in the -- mean, XX and what in to respect the doing first you is rightsizing can year this been we've burn will also rate.And forward, was the to CapEx, for see with to million of whole a this but you I So

year, million. QX we our QX, mind of $XX.X had Just we in during year R&D $X.X last keep last $XX and million. CapEx And had of was R&D in that million -- of in

all the I So this in think of going is right direction.

Rupert Merer

then seeing parts? the cells And Great. battery chain prices on like for supply Are supply critical a talk follow-up as how chain, progressing? is can any items relief key or about further your on you you other

Marc Bedard

see mind for question. us at point, point. a reduction mean, -- Yes. we top evolving. down. results bringing is start absolutely I Well, the cost those inventory. But at some some is that's the good to will is costs of the and with mean, down some What going some we obviously, in technology see I

we on thing forward, and will short-term a absolutely, mean, down, consuming would -- it absolutely going expecting are term, I the some mean, are But inventory. because medium there So I the I right not we now. say yes. yes, going of costs be

Richard Coulombe

introduction And saw our there I to going be pressure see battery. some a coming on is and of the We own like was can maybe new add, the in on -- our platform, from production, the LionX right, QX. of margins you it LionD, lot

continue obviously, see growing of those see building we to we're down. going as costs going batteries, So on as more and platforms own we volume our definitely

front. on effort So lot of there's that a

Operator

The at next Daniel from Lai comes question Barclays.

Unknown Analyst

of? aware gross This should we on future quarter. dynamics launches visibility were in margin product puts of start provide a some to off, sort be is help the margins drag on us QX? product To in on Daniel headwinds the with us gross and and how understand for takes launch any Dan. And Could you much of your color other

Richard Coulombe

in communicated volatility the we there would Well, some previously introduce as term be gross some that listen, short the of on platforms. we margin, new already

this We a was relatively platform. it own -- started quarter our and introducing our things, batteries on definitely, couple introduced the we -- volume. LionX, was There of quarter -- started low So a with LionD right? well,

we expecting was back negative were margin to quarter, quarters again of go all will we term we half impacted what in positive in volatility in So platforms, And And up quarter. the bit I be as continue picking and a possible. and second don't maturity as obviously, this again, mentioned. again, see volumes said, this to just those ramping as several into see new as in we And I as as short go there we territory continue the had up of on positive. to plan where our given we the soon platforms.But is back the the territory margin those

looking effect out, as did And out rounds there. annual on start restructuring. million the feeling Marc a going lot the to over pointed lot of a an of savings basis. of savings. full and take at those costs of we efforts So We're We're $XX of X

$XX a to it's QX. be say, in about million quarter Let's going

in million of seen in see tailwind full impact QX, QX. roughly we be So will should then QX and $X the

So that's forward. to our help going also margin going

Unknown Analyst

workforce reduce on you What of are of your reduction. your offsets And there on currently headcount, sorts current the the commentary quick to are workforce? workforce? just a size with follow-up And comfortable your

Marc Bedard

Daniel, we adjustment the I Basically, respect are. Yes. to yes, done overhead. was mean, most we've -- the of with

also recent in second that basically was you taking the probably this move there second February we've out now. of no And with was year that for almost So the wave shift remember the done. labor direct

at to have adapt good we But for foreseeable the pretty mostly for was right feel of point. size reality we can the that late. incentives But direct labor some what seeing to we the expect we that that what now, this are were future. we So had

XXXX in the a really And of within we've So few years.And Tractor. HD LionD, year LionX those a LionX, of the new the conditions. also growing of been is the batteries, year and batteries, the to QX lot last MD the products, adapting it's a this year, Lion Lion launching

development, all time.So the impact very of feel back question, of after and behind same great I over margin. as CapEx last like those to behind that only going bring I investing because time, be the an drive about amazing. projects mean, will investing obviously, a not volume well. is of year, we very we're with at this a feel costs the this but to that R&D rightsizing done your been good this we've has go controlling And this But growth within will And the us. good that matter on market, that product lineup going any forward. years the of few is it's to are we're is also which us, And down, going new money, mean, products, all gross the the So I to with we doing. obviously, QX

the go at earlier, to said goal, free about is real on as I focus. generating what cash is So focused everybody and is positive this growing And flow. on. And EBITDA Lion focused our pipeline. all We're it's very back to a having

Operator

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

Michael Shlisky

couple that's brand's LionX has I another update one EVs, so? for differentiators gun over some I us the as just with on here. and you'll of LionX what Nick, this Class the to the as ask jump or your coming to maybe value for I order think at of of kind don't XX -- the get are wanted other But the point soon. placed Amazon of EVs us the the are in already X models market use next, of give out let's comments you like could of for to an sense a Class that what months guess think XX want about to earlier, there ports. you X I say,

Marc Bedard

feel I good No, -- feel in as the But I many I there. market. space, EV every Nick EV there news the good we're -- this news there's that a is Yes. Mike, time was mean, saying there's differences earlier, whole for is

ICE market. I is think more battle now the the EV against right about

than be a markets, there resistance else. to change could anything So some in

very this adding trucks. about though, school having So news our mean, the whole we We said, really purpose-built And we're good and our for is EV DNA glad being the well. market.That are about I other products. good purpose-built feel good is feel when companies buses as

mind we So started thinking -- day were those operator the the first trucks had in we those. about

for And generate savings going this to cost going operator. that's of great the forward. lot a So is

can cost I So ACT changer. good.And Those Tractor we really the this well. will momentum operators. is mean, show. a Vegas And at the in to And I one you mean, needs as ownership the Las all LionX is the that the X this with we launched, feel the LionX. we of driving feel in as game very And total is see matters. the weeks be started will know. trucks The respond, great are that deliveries, people LionX of We we feel the

from real are have been X also all that purpose-built. quality fully and selling EV all And bus great well. we've products, years the So the tools EV school benefit the that products space communication in last we as that software the

a trucks those that putting market changer feel in we're that great we space. be EV the to So game will

Michael Shlisky

the real QX question just follow-up on quick my then numbers one. a here, was And Great.

year is in all to revenues other Just purely the quarter? function bit from things the aware there a should just over last I'm vehicle Is of that figure buses credit we kind it just average price any mix between where environmental there per and credits year. vehicles Or trucks? that higher out was a this of be trying of? this or

Nicolas Brunet

-- No, unusual infrastructure. charging there. no nothing and vehicles All

Michael Shlisky

So -- reason was mix, it's for the or just pricing? the average

Nicolas Brunet

Correct. mix. Yes, yes,

Operator

question next B. The Chris from from Souther is Riley.

Christopher Souther

order pieces it Can during it were what the during book, you the like the the there? was just on sales were reduced beyond truck on moving Maybe quarter. comment quarter what looked the

Nicolas Brunet

Yes.

had I filed of an that in XX remarks, As truck prepared book for client mentioned in the we units protection. that a was order for order the creditor

in order bulk it, is from light of the units out so we book. Chris. And the of those That XX that, took

Christopher Souther

the Okay. that. subsidy some on missed pieces moving programs. Got And obviously, I a of of it. lot then,

and other the As ZETF, on a you it current that stands less and order are the constricted could maybe on visibility book today, give delivery times? that EPA, at timing refresh book are the us orders orders the if we're order on on between current deliveries, looking the customer-dependent

Nicolas Brunet

Yes. Over approval. on half is Chris, ZETF the of book, the conditional order

As we and approval the obtained for first mentioned on this started that. an we XXX delivering order morning, of units was

As in And as the first to very encouraging it book But there order billion client imminently relates very, in and EPA, what remains relates dialogue mentioned, we only to the for very little expect to is the a it healthy that $X.X that. the from there's there, available there will I is nothing for EPA. close orders, having as be we're round.

Christopher Souther

Yes.

see of as sense And just book? like? XXX the with the that the and you any piece can order if last are wanted I the sense order of that little tape process? red stand orders other of far similar we where better the more And where to just get clarity we then that some the subsequent orders. bus Do as rest like the it. as Got all maybe through you on process get a recently Okay. have made get what to ZETF one, received to

Marc Bedard

Yes.

of the in respect discussion XXX putting delivering with orders, and Gap] buses. operators. Well, the a those the [Audio infrastructure are in it's we and So matter to with

make of X years that please a there we as good I now see and deliver earlier, sure coordinating we're So between and ZETF. them Many soon more with we we obviously the said the those and mean, to But momentum are right that I the of approval see it's discussion steps, operator operators we where in a into have is been to than also this getting those will from very kids willingness which see deliveries But to we year, the right be of a for steps. dialogue the and the last their with them many as a possible.As ZETF. will operators electric an lot good and to great. now conclude school, files. are there many hopefully, process of to the And get buses carry

sign good So where we buses and it's XXX is this of feel of order a very that this approval going.

Operator

call, to the the to back on no have We will questions further management hand floor I so conclude.

Isabelle Adjahi

us the thank you, discussion Well, with to for you. everyone, today. We with continuing look forward joining

you may Have have. nice to me day. any for free So a feel contact questions follow-up

Operator

you conference call. for Thank very today's much joining. concludes This all

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