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20 Most Bicycle-Friendly Countries in the World
In this article, we look at the 20 most bicycle-friendly countries in the world and talk about governments that are offering financial incentives to the public to switch their mode of transportation to biking. We also discuss measures taken by bicycle manufacturers and ride-sharing companies to reduce carbon footprint in geographies they operate in. You […] In this article, we look at the 20 most bicycle-friendly countries in the world and talk about governments that are offering financial incentives to the public to switch their mode of transportation to biking. We also discuss measures taken by bicycle manufacturers and ride-sharing companies to reduce carbon footprint in geographies they operate in. You can skip our detailed analysis on this subject and head over directly to the 5 Most Bicycle-friendly Countries in the World. Globally, the bicycle market size is estimated to be worth over $100 billion as of 2022, and is projected to grow at a CAGR of 11% to reach $229 billion by 2030, as noted by Fortune Business Insights. Much of the demand in cycling is being driven by an increased awareness of the health benefits associated with biking, as well as the growing realization of the threats posed by the global warming. A focus on developing bike-friendly infrastructure in major cities across the world has also encouraged citizens to switch their mode of transportation from vehicles to bicycles, which also presents them with an opportunity to escape from daily traffic congestions in larger metropolitans. A research in 2021 at the University of Oxford found that switching one car trip with a cycle ride per day can save an average person about 3.2 kg of carbon, which is equivalent to driving a car for 10km or sending 800 emails. Using a bicycle to commute even once a day can have a profound impact on the environment around us, which is why several governments across the world are taking initiatives to reduce carbon footprints. In some countries, you even get paid for cycling. Several businesses in the Netherlands reward bikers with tax credits of €0.19 per kilometer. The Italian city of Bari pays cyclists €0.21 for every kilometer they commute to work with a cap of €25 per month. The local government also offers contributing up to €155 to buy a new bike. Large corporations across the world are also aligning their offerings with environmental needs, with a key focus on sustainability. Uber Technologies, Inc. (NYSE:UBER), in 2018, announced to switch its focus from taxis to electric bikes and scooters. During the same year, Uber Technologies, Inc. (NYSE:UBER) launched e-bikes in US cities, and also acquired bike-sharing startup, JUMP, for $200 million. Besides that, Uber also invested $170 million in electric scooter company Lime in 2020. After launching e-bikes in cities across North America and Europe, Uber Technologies, Inc. (NYSE:UBER) entered Africa in August this year with its electric motorbike service in Kenya, in line with the company’s vision of an emissions-free globe by 2040. According to NASDAQ, Uber’s stocks have gained 3.7% since the launch, amid plans of expanding the e-biking service to other countries in the continent. The e-bikes industry has been thriving for some years now. American motorcycle manufacturer Harley-Davidson, Inc. (NYSE:HOG)’s financials stated that of the total electric based revenue it generated in 2019 and 2020, from both motorbikes and bicycles, about 50% of it came from selling kids e-bikes, which suggests an encouraging trend of biking among the youth of the US. Harley-Davidson, Inc. (NYSE:HOG) also has electric motorcycles in its product line, and was one of the first companies to launch the two-wheeler during the last decade. CEO Jochen Zeitz believes that Harley-Davidson, Inc. (NYSE:HOG) will become a 100% electric brand in the years to come. Methodology We have ranked the 20 most bicycle-friendly countries in the world using consensus methodology where we analyzed bikeability of countries and cities listed on Euro News, UCI World Rankings, Global Bicycle Index, and Expatify. We have assigned scores to countries depending on how often a country or its cities were listed on each of these websites. These scores were then aggregated to get an overall score. The most bike-friendly countries in the world are listed in this article in ascending order of those scores. tower-electric-bikes-ktIBQb_0G2g-unsplash Let’s now head over to the list of the most bicycle-friendly countries in the world. 20. China Score: 0.89 Bicycles have been a vital part of the Chinese lifestyle for several decades, until the 1990s after which the Chinese gradually shifted to more advanced modes of transportation. Having said that, still an estimated 20 million people use bicycles to commute in the country, according to VOA which quoted the Chinese Cycling Association. Hangzhou and Beijing were listed among the top 50 bike-friendly cities in Luko’s Global Bicycle Cities Index 2022. 19. Japan Score: 0.93 It is a common sight in Tokyo to see mothers riding a bike to pick their children up from kindergartens, kids cycling to school, as well as police officers on patrol. The bike-sharing industry in Japan is also growing. It was valued at $40 million in 2022 and is projected to increase in size to $57 million by 2029. 18. United Kingdom Score: 0.96 4% of the population in the UK bikes daily, while 10% ride a bike a few times every week, according to Euro News. The government has planned to spend more than 2.5 million pounds between 2020-2025 to upgrade infrastructure for cycling and walking across multiple cities of the UK. 17. Spain Score: 1.07 Barcelona has a successful bike-sharing program, called Bicing, which has an annual ridership of 30,000 people. A number of other cities are developing their bicycle infrastructure as well to encourage more people to use bikes. Valencia and Seville are other prominent cities of note besides Barcelona that are known for being bicycle-friendly in Spain. 16. New Zealand Score: 1.17 New Zealand is one of the most bicycle-friendly countries in the world due to a mix of its infrastructure, trails, and beautiful landscape. Mountain biking is very popular in the country, and about 80% of all bicycles sold are mountain bikes according to the Bicycle Industry Association of New Zealand. 15. Canada Score: 1.22 The 2022 survey by Ipsos reported that only 4% of Canadians use a bicycle to commute, however, encouragingly, 23% said that they bike regularly to exercise. 41% of the population believes that the government needs to prioritize spending on improving biking infrastructure in the country. 14. Italy Score: 1.22 About 60% of the Italian population does not use bicycles at all. However, the trend is gradually shifting towards more people using bikes to commute. An estimated 13% of the population bikes at least once a day. This figure is likely to increase in the coming years as the government works to enhance biking infrastructure. Italy, in 2022, announced construction of 1,800 kilometers of cycling routes to be built at a cost of 600 million euros. 13. United States Score: 1.44 Oregon, Colorado, Washington, Montana, and Wyoming are among the top bike-friendly states in the US. While just 0.6% of Americans use bikes to commute, the trend is gradually growing with the development of bicycle-friendly infrastructure in different cities of the United States. You can read more about this in our article, 15 Most Bike Friendly Cities in the US. 12. Norway Score: 1.59 Norway is one of the most bicycle-friendly countries in Europe and the world due to its infrastructure for cyclists. This year, the country opened Europe’s longest car-free tunnel, which is 2.9 km long, and aims to promote cycling and walking. The government announced in 2016 that it would spend $1 billion over the next decade or so to build bike-friendly infrastructure to achieve zero growth in car use by 2030. 11. Slovenia Score: 1.59 According to Euro News, about 12% of the population in Slovenia cycles daily, while 24% do so a few times in a week. The capital city Ljubljana boasts a biking route network of more than 300 kilometers and has reduced carbon emissions in the city by 70% over the last decade due to an increasing number of locals switching to bicycles to commute. 10. Switzerland Score: 1.60 Switzerland is home to over 8,500 kilometers of biking trails, and the government has been developing a network of routes since 1998 to encourage cyclists. Moreover, the country offers stunning landscapes that fascinate locals and tourists alike. The Swiss legislature in 2018 voted to enshrine biking and its infrastructure into the country’s constitution. The approval made federal authorities responsible to develop more cycling routes across Switzerland. 9. Colombia Score: 1.75 Colombia is leading the way for Latin American countries when it comes to promoting biking. Bogota, in particular, is known for its cycling infrastructure and hosts regular cycling events during which cars are barred from highways. Moreover, the city has reduced its carbon footprint by over 40% since 2010 by urging the public to use public transport or bikes instead of their personal cars. 8. Belgium Score: 1.78 Belgium is next on our list of the most bicycle-friendly countries. It has one of the oldest financial incentives programs for rewarding bikers, which started way back in 1999. About 12% of Belgians use cycle as their mode of daily transport. 7. Finland Score: 1.86 Finland is among the few countries that have a higher percentage of regular cyclists compared to the EU’s average. An estimated 28% of the population in Finland ride a bicycle daily, while 57% of the people cycle at least once a week. 6. Sweden Score: 1.87 According to a report in Euro News, 42% of the population in Sweden cycle at least once a week, while biking is the mode of transport for about 21% of the people. Uppsala, Orebro, and Gothenburg are considered to be among the most bike-friendly cities in the country. Click to continue reading and see the 5 Most Bicycle-friendly Countries in the World. Suggested Articles: 15 Biggest Bike Companies in the World 25 Most Environmentally Friendly Companies in the World 25 Countries that Produce the most Carbon Dioxide Emissions Disclosure: None. 20 Most Bicycle-friendly Countries in the World is originally published on Insider Monkey......»»
Gogoro Inc. (NASDAQ:GGR) Q2 2023 Earnings Call Transcript
Gogoro Inc. (NASDAQ:GGR) Q2 2023 Earnings Call Transcript August 10, 2023 Operator: Welcome to the Gogoro Inc. 2023 Q2 Earnings Call. This session will be recorded. I’d like to introduce Bruce Aitken, CFO of Gogoro who will kick us off. Bruce Aitken: Thanks, operator, and thanks to everyone for taking the time to join us […] Gogoro Inc. (NASDAQ:GGR) Q2 2023 Earnings Call Transcript August 10, 2023 Operator: Welcome to the Gogoro Inc. 2023 Q2 Earnings Call. This session will be recorded. I’d like to introduce Bruce Aitken, CFO of Gogoro who will kick us off. Bruce Aitken: Thanks, operator, and thanks to everyone for taking the time to join us today. I’m Bruce Aitken, CFO of Gogoro, and I’m pleased to welcome you to our second quarter 2023 earnings call. Hopefully, by now you’ve seen our earnings release. If you haven’t, it is available on the Investor Relations tab of our website, investor.gogoro.com. We will also be displaying the materials on the webcast screen as we go. We’re looking forward to sharing our Q2 results, as well as providing guidance on what we’re seeing as the outlook for 2023. But before our CEO, Horace Luke shares, I’d like to introduce Michael Bowen of ICR who will share the process for today’s call and provide some important disclosures. Michael? Michael Bowen: Thanks, Bruce. I’m sure you’re all looking forward to hearing from Horace and Bruce on behalf of Gogoro. But before that, allow me to remind you of a few things. You are all currently on mute. If you have a specific question, please use the chat function in the system to submit the questions and we’ll answer as many as time allows. After Horace has given a brief overview of Gogoro and some of the business highlights from Q2, Bruce will go a bit deeper into the Q2 financial results. During the call, we will make statements regarding our business that may be considered forward-looking within applicable securities laws, including statements regarding our second quarter 2023 results. Management’s expectations for our future financial and operational performance, the capabilities of our technology, projections of market opportunity and market share, our potential growth, statements relating to the expected impact of the COVID-19 pandemic, supply chain issues, and other headwinds facing the company; the company’s business plans including its expansion plans; the company’s expectations relating to its growth in overseas market; statements related to the potential of our strategic collaborations, partnerships and joint ventures; statements regarding regulatory developments and our plans, prospects and expectations. These statements are not promises or guarantees and are subject to risks and uncertainties, which could cause them to differ materially from actual results. Information concerning those risks is available in our earnings press release distributed prior to the market open today and in our SEC filings. We undertake no obligation to update forward-looking statements, except as required by law. Further, during the course of today’s call, we will refer to certain adjusted financial measures. These non-IFRS financial measures should be considered in addition to, not as a substitute for or in isolation from IFRS measures. Additional information about these non-IFRS measures, including reconciliation of non-IFRS to comparable IFRS is included in our press release and investor presentation provided today. Now, over to Horace. Horace Luke: Thanks Michael. Thanks for joining our call today. We’re pleased to have this opportunity to meet with you and provide an update on the second quarter 2023 results and guidance for the rest of 2023. As we mentioned last quarter, 2023 started off with a very challenging macroeconomic environment and set of economic data. While we continue to see strong overall interest in the markets that we serve, the macro environment in Taiwan remained relatively weak. We fully believe that the foundational work we are conducting will ultimately result in electric vehicle demand, but it’s always difficult to accurately predict the timing and degree of EV adoption – in which we compete already have a large installed base of ICE vehicles. Each market will transition to electric vehicles based on a combination of factors, government support, product availability, pricing, infrastructure readiness and customer willingness to adopt EVs. We believe that this shift in mindset will occur in conjunction with market awareness of our product and services. The long-term future remains bright in the face of some near-term challenges, and we remain excited for the future of vehicle and infrastructure electrification. We continue to see strong interest across the region and around the world for sustainable two-wheeler transportation. And when our products are reviewed and tested, our battery swapping hardware, platform technology, and our vehicles constantly are being chosen for both B2B and B2C deployment in a variety of countries and for a variety of business models. While hardware is critical, it is our end-to-end software ecosystem and our network optimization, security and integrated operating tools and platform, which really sets Gogoro apart. On track for market availability in India and the Philippines later this year. In India, we announced a strategic agreement, the first was kind with India state of Maharashtra to manufacture our smart scooter, smart batteries and GoStation in the state as well as deploy Gogoro battery swapping across the state – for Gogoro’s effort and investment to bring the new industry of battery swapping to the state, Gogoro has been offered unprecedented subsidies and financial support. The state of Maharashtra is leading India’s transition to electrification, and we are pleased to help. As we said in our earnings release, financial results for the second quarter and for the first half of 2023 are roughly tracking to our forecasts. We’ve managed cost effectively and have increased gross margin and adjusted EBITDA for the first half of 2023. We also continued our growth in battery swapping service revenue and saw a slight increase in our overall revenue on a consistent currency basis versus Q2 of last year. Despite these positive results, our Taiwan sales were slightly below the same quarter last year. And as Taiwan represents approximately 95% of our revenue, there is a direct correlation between Taiwan sales performance and our revenue. While standing still, we’re aggressively investing in our Taiwan marketing and retail channel expansion with the opening of 79 GoGo Xpress locations in addition to our existing locations, with lots more opening later this year. And we’ll continue to build out our product portfolio and have several important vehicle introductions in the coming quarters that will expand our product portfolio, increased sales and grow revenue in both Taiwan and our other markets that we’re entering. Taiwan vehicle registration in the first half of 2023 have exceeded those of both 2022 and 2021 and appears that total vehicle volume for 2023 could return to the pre-pandemic level of approximately 800,000 units [indiscernible] though that much of this uptick is in lower cost, more affordable ICE vehicles as consumers continue to exercise conservative financial decisions in light of the global economic situation. This consumer conservatism is highlighted by a very low consumer confidence index in Taiwan, which was at a 10-year low in Q1 2023. Electric two-wheel sales have not mirrored the growth in the overall market. It is not in our long-term financial interest to aggressively mark down our vehicle prices as ICE OEMs are doing today. To do so, we jeopardize our product experience and the quality of service that our customer enjoys today. We’re focused on maintaining our financial performance on important metrics, despite the strong short-term competition, and continue to believe that we are well positioned for the inevitable shift from ICE vehicles to now electric vehicles. Sadly, every ICE vehicle purchased now is likely to be in use and contributing to the substantial carbon emissions for the next 10 years or so. But given that Taiwan is effectively a replacement market, with approximately 700,000 to 800,000 vehicles replaced every year, we’re still optimistic about our opportunity to convert ICE owners to electric vehicle owners as we build more products to address even broader market segments. Getting consumers to feel they can personally and directly play a role in a cleaner environment is important. While purchasing an electric vehicle may be perceived as carrying a higher upfront cost, the total cost of ownership over time continues to favor electric vehicles and the other long-term benefits to health as well as to the environment, significantly outweigh any concern consumer, delivery riders, fleet operators, or government may have about electrification. All of these factors combined mean that despite achieving solid financial results so far in 2023, uncertainty in the market leads us to a conservative second-half outlook, and we are predicting a seasonality-driven second half. Given the potential for an ongoing softness in the Taiwan market, we’re updating our full-year guidance to a revenue forecast of $340 million to $370 million. Our India plans, while progressing, are not likely to result in substantial revenue in 2023. To address this reality, we’ve been actively developing multiple new vehicles that will be launched in the next several quarters, both at the high performance and at the affordable end of our product and price spectrum. We’re developing for product market fits, not just in Taiwan, but in other countries as well. We continue to learn valuable data and insights through our ongoing pilots. All of this information informs our upcoming vehicle designs and launches. While I can’t say much more about these vehicles, they’ll appeal to a variety of riders, continue to demonstrate and extend our technology leadership and offer increased versatility to riders. Additionally, we are testing ways to improve our battery packs, our battery swapping station, and our software capabilities and reduce costs for hardware and operations. International expansion is important as we seek to diversify our revenue base. We’ve been quietly making great progress behind the scene on our expansion into India and other countries. We’re localizing supply chains and manufacturing capabilities, increasing our team size, and continue to operate pilots which are receiving great feedback and inform our market launches, direction and plans. And perhaps most importantly, we have formalized our investment agreement with the government of the state of Maharashtra, a $1.5 billion investment by Gogoro and our partners which will enable the electrification of India’s largest state by GDP contribution and the second largest state by population with over 110 million people. In June, we announced Gogoro would be entering into an Ultra Mega Project agreement to manufacture vehicles, smart battery packs and battery swapping stations and deploy an open and accessible battery swapping infrastructure in the state of Maharashtra. This follows the MOU that was signed back in January 2023. This project is one of the largest EV investment in India’s history with a $1.5 billion investment plan to bring Gogoro’s ecosystem into India. Ultra Mega Project are strategic investment for over $500 million supported by financial incentives from the Maharashtra government. We are focused on creating a domestic supplier ecosystem that allows to massive [ph] growth in foreign market expansion. Our Swap & Go pilot has been live in India for an exciting three months. We’ve tallied some impressive numbers so far. The total distance travel has accumulated over 430,000 kilometer, which is equivalent to over 10 trips around the earth. Over 8,500 battery swaps, over 33,000 kilograms of CO2 saved. We are also happy to see that our swapping solution has helped delivery riders in India to increase delivery efficiency and in some cases, as much as doubling their monthly earnings. Perhaps the most compelling data collected during the pilot is that our battery packs and go stations are performing very well under high use, high temperature and unpredictable road condition. In addition, we are also proving that there is additional energy capacity available if the battery chemistry is consumed more quickly via high utilization. We can make that extra energy available to consumers at reduced cost or we can use the extra energy for second life use cases, and we believe we can extract additional value from packs by recycling them at the end of life. We’ve an Indian locally manufactured assembled a new vehicle ready for launch in the coming months and will begin deliveries to key customers soon. Locally manufactured battery packs will also begin production in late Q4 2023 or early 2024. To support these local operations, we have substantially increased our employee presence in India as well. We’re fully committed to the Indian market. Success in India depends on having vehicles, battery packs and go stations that meet aggressive cost target. Depending on factors like vehicle performance and range, our target pricing ranges will be very competitive to the local market. Photo by Kumpan Electric on Unsplash We’re aiming to introduce vehicles that meet these pricing thresholds and rival others ICE and electric products already available in the market by Q4 2023 or Q1 2024. Additionally, developing local supply chain for our battery packs and our go station means that we can reduce costs substantially on the order of 20% to 30%. This will also help us reduce operating costs overall. The issue of climate change has become even more urgent, pushing governments, businesses and individuals to prioritize sustainability and environmental responsibility. Sustainability and green mobility are Gogoro’s core value. And in Q2, we continue to make progress towards our objectives of making smart swappable energy available to urban consumers everywhere. Gogoro users have collectively reduced carbon emissions by over 680 million kilograms. We achieved sustainability by utilizing 100% recyclable polypropylene as the shell material for most of our Smart Scooters, promoting resource regeneration and eco-friendly recycling. Furthermore, since 2022, we incorporated 40% renewable energy in our factories and certain designated Gogoro stores now operate on 100% green electricity. These efforts marked a significant stride towards the ultimate goal of transitioning to 100% renewal energy usage by 2050. We’re the first amongst our peers to make such a commitment. We recently collaborated with Japanese designer Naoto Fukasawa, MUJI, the Tokyo-based consumer goods and lifestyle company on newly designed Gogoro Smart Scooters along with a range of merchandise and accessories. Using iconic MUJI design elements and recycled polypropylene plastic, the new Gogoro VIVA and VIVA MIX ME promotes simplicity and sustainability and is part of the joint recycle for — Good Sustainability Initiative. The Smart Scooter, under the personal creation of Fukasawa, presents minimalist design incorporating recycled polypropylene body components. This initiative aims to inspire consumers in Taiwan to engage in recycling polypropylene plastic waste at Gogoro and MUJI stores and empowers them to contribute small, but meaningful steps towards creating a more sustainable future. While we promote sustainability on the consumer side, the government was also taking actions. In Taiwan, government bureaus and agencies are taking an initiative to commit to sustainable energy and transportation, while implementing corresponding strategies to control pollution by replacing aged government-owned scooters with Gogoro Smart Scooters, which has accumulated over 8,000 vehicles since the program began. We thank various branches of the Taiwan government for their partnership and look forward to extending that partnership both in Taiwan and in other countries as well. Recently, a variety of state governments in India, including the government of Goa, Maharashtra, Delhi, Haryana, and Andhra Pradesh have made commitments to transition last-mile delivery fleets, last-mile connectivity fleets, and tourism fleets to electric vehicles. I’d like to invite Bruce to provide more detail on Taiwan and a few of our other international markets and financial update. Bruce Aitken: Thanks Horace. As Horace indicated, the Taiwan two-wheeler market has grown in the first half of 2023, but EV volume is slightly down. In Q2, the total number of registered scooters in Taiwan was 186,549, up 13.4% from Q2 of 2022. In the first half of 2023, the total number of registered scooters was 363,747, up 11.6% compared with the first half of 2022. The total number of registered electric scooters in Q2 in Taiwan was 20,118 units, down slightly from 21,195 in Q2 of last year. Of these electric scooters, approximately 16,400 were Gogoro and partner-branded vehicles and 14,118 were Gogoro branded. Despite the overall scooter market in Taiwan witnessing a slight uptrend, the pace of electrification has not mirrored the growth in ICE vehicle sales. This situation is largely driven by ICE competitors aggressively reducing prices to spur growth. Our retail sales strategies are unchanged. We continue to increase our presence via growing our store count from the current 91 to a planned 100 stores by the end of the year, and we believe that the products we have planned for the incoming quarters will improve our competitiveness versus ICE vehicles in the future. In addition, we’re targeting 150 Gogoro Quick and service community stores by the end of the year, up from approximately 79 such stores that are already operating with clearly many more to follow. We continue to make good progress in other international markets. In the Philippines, together with our partners, the Ayala Group, Globe Telecom and 917 Ventures, we expect to open a Gogoro Experience Center in the coming months, and our pilot is already up and running. In Korea, to support growth, our partner Bikebank has expanded the battery swapping network to seven additional cities beyond Soul and currently have over 84 GoStations operational across Korea. Our smart scooters and battery swapping solutions have been used for food deliveries in Seoul since 2019 and has received widespread attention and acceptance. We’ll continue to work closely with Bikebank to accelerate the transformation of urban mobility and promote sustainable transportation in Korea. Over the past four months, our pilot program in Singapore has achieved remarkable success, thanks to the support from our partners, Jardine Cycle & Carriage Singapore as well as Foodpanda Singapore. With over 10,000 kilograms of CO2 saved total distances of over 110,000 kilometers driven and over 2,700 battery swaps, we’re gathering lots of data from our pilot in Singapore. Extending the use of batteries through second life is important. We’ve deployed smart traffic lights at a number of major intersections in Taipei Q2 in partnership with Far East Tone Telecommunications, one of Taiwan’s leading mobile operators. We’re excited to work with Far East one on this project to address the risk of traffic signal failure due to sudden power outages in the city. Gogoro took the lead in partnering with Far EasTone to develop the smart traffic signal uninterruptible power system at the end of 2021. This system utilizes smart batteries to provide real-time power backup ensuring smooth traffic operations. After successfully testing for over a year in Taipei, Gogoro and Far East one have expanded the application and with plans to expand to nearly 200 critical intersections in Taipei by the end of the year, we’ve created an innovative model for sustainable smart city solutions. And more importantly, we’ve proven the thesis that there are a great number of second-life opportunities for our batteries. In April, we announced the commercial deployment of Gogoro battery-enabled virtual power plants with NLX. We have currently deployed a total of 967 locations with plans to increase the total to 2,500 swap station cabinets across 1,000 locations by the end of 2023 to serve both demand and frequency response. We’ve always believed that mobile energy plays a crucial role in facilitating sustainable transformation, not only in transportation, but also across diverse industries seeking to transition from fossil fuels to electric power or those requiring solutions beyond the limitations of fossil fuels. Leveraging the second life of our batteries, we are effectively addressing a wide range of smart city energy demands, generating new revenue streams and contributing to the advancement of sustainable urban development. In summary, despite some near-term market-driven volume shortfalls in Taiwan, we believe we’re on track to deliver real value to customers whether through our Smartscooters or Smart Batteries our second life and ancillary service capabilities. We’re working hard to deploy Gogoro battery swapping capability in international markets, to broaden our retail footprint and service level in Taiwan, and to continue innovating across our entire product portfolio, both in new products and in Second Life opportunities for fully depreciated batteries. To focus specifically on financial highlights for Q2 of 2023, we continue to see healthy increases in our Gogoro battery swapping revenue, and our performance against our key financial metrics for the first half of 2023 was solid. We saw a drop in our Taiwan-generated vehicle revenue this quarter, but our international expansion continues to demonstrate solid progress that we anticipate will turn into revenue by the end of 2023 and into the future. We expect to continue our investment in research and development, network infrastructure, and international production capacity into 2024 to lay the foundation for our international expansion. For the second quarter of 2023 operating revenue was $87.2 million down 3.8% year-over-year and up 0.2% year-over-year on a constant currency basis. Had foreign exchange rates remained constant with the average rate of the same quarter last year, revenue would have been up by an additional $3.7 million. Sales of hardware and other revenue for the quarter were $53.9 million, down 10.6% year over year, and down 6.8% year-over-year on a constant currency basis. For the entire powered two-wheeler market, sales in Taiwan in the second quarter were up 13.4% year-over-year, returning to roughly pre-pandemic levels, likely due to deferred purchasing. Sales of electric power two-wheel vehicles have not mirrored this growth. Sales were down 5.1% compared to the same quarter last year. Much of the growth in the power two-wheel market was driven by a very few specific internal combustion engine models that continue to appeal to price sensitive consumers at the expense of competing ICE and electric vehicles. Gogoro vehicle sales volume decreased by 8.1% compared to the same quarter last year, largely driven by Taiwan’s consumer confidence index being at a 10-year low at the beginning of 2023, and that typically translates into conservative purchase decisions when customers are refreshing their vehicles. This makes our second-half financial outlook difficult to predict. We view the second half conservatively, and we are expecting our performance in the second half of 2023 to track historical seasonality. Battery swapping service revenue for the second quarter was $33.3 million, up 9.6% year-over-year and up 14.2% year-over-year on a constant currency basis. Total subscribers at the end of the second quarter exceeded 552,000, up 14% from 484,000 subscribers at the end of the same quarter last year. This year-over-year increase in battery swapping service revenue was primarily due to our larger subscriber base compared to the same quarter last year, and also attributable to the high retention rate of our subscribers. We continue to see the strength of our subscription-based business model to accrue more customers to maximize our battery swapping network efficiency. For the second quarter, gross margin was 15.2%, up from 14% in the same quarter last year, and non-IFRS gross margin was 16%, up from 15.5% in the same quarter last year. The gross margin and non-IFRS gross margin increases were driven by the improved cost efficiencies of Gogoro’s battery swapping service operations and an increase in the average revenue per energy subscriber due to a combination of new subscription programs and longer riding distances post-pandemic. These increases were partially offset by the higher production cost per vehicle as a result of lower volumes and promotion expenditures on scooter sales this year, while some of the adverse impacts were mitigated by our favorable product portfolios. For the second quarter, net loss was $5.6 million, down $111.5 million from $121.1 million in the same quarter last year. This decrease in net loss was primarily due to $178.8 million decrease in listing expenses and a $24.4 million decrease in operating expenses, primarily consisting of an $18.5 million decrease in acquisition-related expense, a $3.2 million decrease in share-based compensation and our tight control on expenses, savings of $2.3 million in expenses for sales and marketing programs and $1.5 million in general and administrative expenses. These decreases were partially offset by an unfavorable change in the fair market value of financial liabilities of $88.5 million. For the second quarter, adjusted EBITDA was $12.9 million, up from $9.3 million in the same quarter last year. The increase was primarily due to a $2.3 million decrease in expenses for sales and marketing programs, as we implemented more efficient marketing campaigns and a $1.5 million decrease in general and administrative expenses, mainly as a result of cost savings initiatives. The increase was partially offset by a $1.1 million increase in research and development expenses for the development of new products and our international expansion. We reduced operating cash flow by $41 million compared to the same quarter last year, through tightening our business operations and reduced working capital. We borrowed $22.7 million and paid back $14.3 million in bank loans in the second quarter to finance our investing activities. With a $144 million cash balance at the end of the second quarter and additional credit facilities, we believe we have sufficient sources of funding to meet our near-term business growth objectives. Due to the soft demand in the Taiwan market and to reflect our current market outlook and the timing of the realization of our international projects, we are updating our 2023 revenue guidance to revenue of $340 million to $370 million. We estimate that we will generate approximately 95% of our 2023 full year revenue from the Taiwan market. With that financial update, I will hand things back over to Michael for Q&A. Michael? A – Michael Bowen: Thanks, Horace and Bruce for the business update, details on financial results and forward guidance. As attendees are formulating your questions, I will ask three questions, which I think are likely on everyone’s minds, given what you’ve just shared. With that said, question number one. You’ve updated your guidance for the full year. Can you shed a bit more light on why and what leads you to have confidence that you will meet your revised guidance for 2023? And what are your preliminary thoughts for 2024? Horace Luke: Thanks, Michael. Well, to be clear, we’re really bullish on the global transition from EV from traditional ICE vehicles. Individual markets, we transition at various time and speed based on a number of different factors: government policy, consumer awareness of environmental issues, cost of vehicle and energy, et cetera. We believe that in that transition, battery swapping will emerge as the best technology in terms of speed and convenience of swapping as well as the standpoint of helping power grids, which are increasingly pressure to manage and support the transition. We have clearly seen this in Taiwan and also through our pilots overseas. In any given quarter of the year, there will be external factors, which will impact that transition. In Taiwan at the moment, a mix of macroeconomic factors and aggressive pricing by ICE vehicle makers is creating some short-term headwinds for Gogoro. We don’t believe we’ve maxed up on Taiwan’s vehicle sales, but we did experience a slight drop in the unit sales in the first half. We have a lineup of vehicle we expect to launch this year and early next year that we believe will really help. As far as meeting our updated guidance, we’re working hard to grow our retail footprint and our customer touch points. We’re expecting normal seasonal uptick in sales in the second half, and we have vehicle launches planned. These factors combined make us confident we will hit these new targets. 95% of revenue is expected to be from Taiwan, but we should also start seeing more revenue from international markets in the second half as compared to last year. Michael Bowen: Okay. Thank you. We’ll move on to question number two. So, you talked about new vehicle launches in the second half and about ongoing improvements in your batteries and stations. Can you share a bit more detail, will these vehicles and improve battery swapping technology to be deployed in India and other places in addition to Taiwan? Thanks. Horace Luke: Sure. India is a critical market for us and getting products, partners and pricing right for India is really, really important. We’re fully committed to India. We’re localizing our supply chain and preparing for local manufacturing, both of which will create substantial cost reduction opportunities and qualifies for Indian subsidies. We’re always working to improve our battery and station technology. Safety and quality are always first on our mind. The cost, capacity, and other factor matters a lot also as well. We have a number of product improvements we’ll be introducing over the coming months. When we develop vehicles, we design for global markets. But at times, we need to localize for local market to meet pricing expectation, logo regulation, or other factors. The vehicles that we have slated for launch cater to the needs of a broad range of customers. We have vehicles, which will satisfy customer concern about affordability, we have vehicles which will appeal to an early adopter of technology, and also we have vehicles who had — to B2B and B2C customers as well. Michael Bowen: Okay. Thank you. Next question is despite a drop in hardware revenue, you mentioned as you’ve met a number of other financial metrics. What metrics are you tracking? And what are your expectations for the second half for margin, EBITDA and other metrics that you can share? Bruce Aitken: Thanks Michael. There are always external factors that are difficult for us to control. But what we’re trying to focus on is the internal cost structure, which we have control over. So, we’re continuing to invest for international expansion. But despite doing that, we’re really focused on cost savings opportunities. We’re keeping marketing cost per vehicle flat. We’re tightly controlling OpEx, we’re generating healthy EBITDA, and we’re tracking the healthy growth in battery swapping service revenue. We haven’t provided specific EBITDA or margin targets for the second half. We’re really focused on establishing solid financial discipline and a solid foundation such that both in Taiwan and as we begin our international expansion, we can continue on that solid financial grounding. Horace Luke: All right. Thank you, Bruce. Operator, at this point, let’s go ahead and open up the line for the Q&A session. Thank you. See also 12 Best Places to Retire in Guatemala and 30 Hungriest Countries In The World. Q&A Session Follow Geoglobal Resources Inc. (NYSEAMEX:GGR) Follow Geoglobal Resources Inc. (NYSEAMEX:GGR) We may use your email to send marketing emails about our services. Click here to read our privacy policy. Operator: Thank you. [Operator Instructions] Our first question comes from the line of Angelina Chen with JPMorgan. Your line is now open. Angelina Chen: Hello. Thank you, Horace and Bruce. I’m Angelina from JPMorgan, and I’m filling in for Bill. Can you hear me? Horace Luke: Yes, we can hear you, Angelina. Angelina Chen: Great. So just two questions from us. First of all, when does the company expect to turn operating profits profitable? And the second one is regarding international revenue exposure. What percentage of the revenue do you expect from overseas business in 2024 and beyond? Thank you. Horace Luke: I’ll take the second part first, Angelina. As you know, we’re saying that, this year we’re 95% of our revenue will be Taiwan-based. That leaves the small balance to come from international markets. We will be launching vehicles. We will be launching service in multiple markets in the second half of this year. So we do expect the 2024 percentage to increase pretty substantially. We’re not giving out targets on that quite yet. I guess, I can say stay tuned for the November call where we’ll try to provide some guidance on 2024. But we do expect substantial growth, specifically from India, but potentially from other markets as well. In terms of operating profit, again, as mentioned to Michael’s question just a minute ago, our goal is really to set ourselves up for a tight financial structure in Taiwan as we think about the future. All of our R&D costs are born in Taiwan. All of our corporate overhead is born in Taiwan. So when we add international business, it comes with very low overhead and should contribute to our being able to meet our operating profit goals more quickly. Angelina Chen: Thank you. Thank you. Operator: Thank you. [Operator Instructions] Michael Bowen: All right, operator. In the meantime, this is Michael Bowen again from ICR. We do have a write-in question from Daniel at UBS. I’ll start with the first one. There is a second one. But the first one is, could you please give us some color on the competitive landscape of electric two-wheelers in India and what are Gogoro’s strengths and weaknesses compared with the other brands? Horace Luke: Great, thanks. I’ll take that question, Michael. So, as we look at the landscape in India, one of the first thing we saw was it was clearly a play for a more sophisticated, proven, high-powered battery swapping technology to really help service at the very beginning the B2B segment. There’s a lot of vehicles today that are very, very low power with batteries that are what we call swap-outable instead of really swappable. They would have — lots of cables that actually connect with different connector where — a user would have to remove certain piece of the vehicle in order to swap out the battery to really mimic a swap-out experience. For us, with Gogoro, we’ve been really focused on swapping experience from ever since we founded the company. And that means of doing in just seconds has really blown away most of our — the people that have actually written and touched and swapped the battery without pilot. And I think there’s a huge opportunity for us when it comes to providing proper two-wheelers that is powerful, that is durable and then as well as very usable and cost effective in that market. So I think that as we look around, there really wasn’t too many direct comps, so to speak. But as we look at dollar for every kilometer, we certainly see that we have a very, very great opportunity ahead of us. Michael Bowen: All right. Thanks, Horace. And the second question from Daniel at UBS is as the network expansion might need significant CapEx. How does Gogoro convince local partners in the overseas markets to make such a move?.....»»
15 Largest Companies In The Capital Goods Sector
When investment programs or publications refer to the capital goods or industrials sector, they are broadly describing industrial level manufacturing and distribution of heavy machinery products. The subcategories are diverse, but are generally broken down into the following: Aerospace and Defense Electrical Equipment Engineering Construction The reason why industrial companies are categorized into the “capital […] The post 15 Largest Companies In The Capital Goods Sector appeared first on 24/7 Wall St.. When investment programs or publications refer to the capital goods or industrials sector, they are broadly describing industrial level manufacturing and distribution of heavy machinery products. The subcategories are diverse, but are generally broken down into the following: Aerospace and Defense Electrical Equipment Engineering Construction The reason why industrial companies are categorized into the “capital goods” sector, is because heavy, engineered machines are usually described as “capital assets”. Given the functions of those machines to multiply the production capability of the workforce to benefit society on multiple levels, the level of expansion, upgrade, and replacement of capital assets is a reflection of economic demand and an indicator for a nation’s economic health. The following stocks are the top 15 largest public companies in the Capital Goods Sector by market capitalization size (in US dollars) at the time of this writing: International Holding Company PJSC International Holding Company PJSC is headquartered in Abu Dhabi, United Arab Emirates. 1. International Holding Company PJSC (ADX: IHC) – $237.89B Market Cap. Contrary to many stereotypical accounts of Arab oil wealth, savvy members of the various royal families have diversified their holdings to be able to grow their asset base beyond oil and gas. H.H. Sheikh Tahnoon bin Zayed Al Nahyan, chairman of Abu Dhabi, UAE based International Holding Company PJSC is a prime example. With over 400 holdings in agriculture, energy, entertainment, finance, food, healthcare, industrial manufacturing, IT and telecommunications, leisure and retail, maritime, and real estate & construction, IHC is one of the largest conglomerates on the planet, and its economic breadth could be considered a financial microcosm version to that of an independent industrialized nation. Starting only slightly over a quarter century ago, IHC’s rocketlike success has since spun off several public subsidiaries on the Abu Dhabi Exchange (ADX): Ghita, EasyLease, Palm Sports, ESG, Alpha Dhabi and AI Seer Marine. Ironically, despite IHC being the largest capital goods company by market capitalization on the globe, both BlackRock’s iShares and JP Morgan Betabuilders ETF categorize it for their “emerging market” funds. General Electric Company Founded by Thomas Edison in 1892, General Electric is known globally for its electric power generation, turbines, engines and other equipment. 2. General Electric Company (NYSE: GE) – $172.65B Market Cap. Founded by lightbulb inventor Thomas Edison in 1892, General Electric is a company that has continued to maintain its roots in electrical power in addition to its expansion into many other arenas. GE makes a wide range of hardware and software related to government and industrial power generation, from turbines for gas, wind and steam all the way to full power plant and grid components. Additionally, GE manufactures engines and other aerospace parts for both military and commercial aircraft. While former CEO Jack Welch, who led GE during from 1981 – 2001, was best known for building GE into a huge conglomerate at the time, the company has since pared back retail and credit cards years ago, although it has retained its insurance and finance divisions. Caterpillar Caterpillar heavy machinery has been the key fundamental reason for the existence of large scale urban building construction around the globe. 3. Caterpillar (NYSE: CAT) – $168.14B Market Cap. When it comes to heavy-duty earthmoving, construction and land infrastructure machinery, the Caterpillar name is one of the most universally recognized. Founded in 1925, Caterpillar bulldozers, asphalt pavers, excavators, tractors, locomotives, and other machines required for the aforementioned industries are ubiquitous in most industrialized nations. Additionally, Caterpillar also makes a wide range of support equipment, such as engines, compressors. drive trains, soil compactors, etc. Caterpillar is considered by a number of analysts to be the primary beneficiary of the bipartisan 2021 $1.2 trillion Infrastructure Bill that was passed by Congress. Therefore, its profit margins and growth may continue for the next few years purely on domestic infrastructure demand. Siemens Aktiengesellschaft Based in Munich, Germany, Siemens’ industrial reach includes nuclear power generation, computers and software, and MRI medical scanning machines. 4. Siemens Aktiengesellschaft (XTRA: SIE) – $143.19B Market Cap. Based in Munich, Germany, Siemens has been a stalwart of the German economy for 177 years. During its founding days in the telegraph industry, Siemens pioneered some of the world’s earliest underground and underwater telegraph lines as well as the invention of the first electric street light in London. Siemens has since expanded its businesses to encompass electric power generation, hydropower, nuclear power, computers, semiconductors, automation systems, information technology, greentech, and medical imaging and scanning machines. Its products are sold worldwide. Although the manufacturing sector is expected to contract in the near future, Siemens is poised to continue positive growth due to its diversification into digital technology. Its Smart Infrastructure and Digital Industries divisions are designed to interface with real world energy management and automation processes for industrial businesses, as well as work to incorporate and utilize new A.I. developments. Honeywell International, Inc. Honeywell technology can be found everywhere from satellites and building surveillance systems, to hazmat gear and HVAC systems. 5. Honeywell International Inc. (NASDAQ: HON) – $129.56B Market Cap. Honeywell is a textbook example of a conglomerate who has focussed on technology to become an indispensable provider of critical products for modern societies. Starting with some of the first automated heating systems designed near the end of the 19th century, Honeywell has expanded to four divisions: Aerospace (propulsion engines, avionics, navigation, radar, satellites, etc.) Building Automation (video surveillance, power controls, sensors, etc.) Performance Materials & Technology (body armor, instrument automation, nylon, etc.) Safety Solutions (protective gear, apparel and footwear, gas detection, switching systems, emergency alert systems, etc.) In anticipation of the increased requirements for temperature control in data centers and other locations where digital information can be compromised due to heat, Honeywell’s $1 billion Solstice refrigerant technology may become one of its biggest assets for the future. This can especially become the case as a result of the greater proliferation of A.I. Airbus SE Delta Airlines is just one of the passenger air transportation companies worldwide that supply their fleets with aircraft like the Airbus A320-200 passenger jet. 6. Airbus SE (ENXTPA: AIR) – $121.14B Market Cap. The history of Airbus SE is rooted in the formation of the European Union. In addition to creation of the Euro and the removal of visa requirements for traveling between EU member nations, these red tape hurdles paved the way for European industrial collaborations. Airbus SE was created jointly out of aerospace companies from: Germany (Daimler-Benz, Dornier Flugzeugwerke, Messerschmitt-Bölkow-Blohm, and MTU München) France (Aérospatiale and Matra) Spain (CASA – Construcciones Aeronáuticas) Airbus makes commercial passenger and freighter aircraft and military helicopters that are deployed worldwide. Additionally, Airbus Defence and Space creates and supports missile and space launch systems, telecommunications, navigation, cybersecurity, and other critical services for military and civilian defense applications. As part of the global commercial passenger jet airline manufacturing duopoly with The Boeing Company, (see #7 below), Airbus has pulled ahead of Boeing, who had been the dominant player for decades. Many analysts believe this is due to Boeing’s recent problems with their 737 MAX aircraft quality control and inspection disasters, more than from any superiority over engineering design. The Boeing Company Boeing’s aircraft exports have made it consistently one of the top US exporters by total revenue sales for decades. 7. The Boeing Company (NYSE: BA) – $122.03B Market Cap. As one of the largest US exporters, the name of aerospace and defense titan Boeing has become synonymous with aviation and space exploration. While best known for commercial jet airliners, Boeing is also one of the largest defense contractors in the world. The company’s technological and engineering expertise contribute not only to military aircraft, but also to drones, satellites, strategic missile and defense systems, weapons systems, and to NASA space exploration projects. Less publicized are Boeing’s Global Services division, which supplies logistics and supply chain management, data analytics, and other related services. In addition to Boeing’s 737 MAX series woes, China’s COMAC (Commercial Aircraft Corporation of China, Inc.) is looking to break up the Boeing/Airbus duopoly in the commercial passenger jet airliner market. COMAC’s C919 is viewed by many aerospace analysts as a ”Boeing 737 knock-off”, but its lower price tag and China’s economic clout in the PacRim can potentially steal market share and billions of dollars of sales away from both companies, so newer innovations and marketing should be expected in the pipeline for the future. RTX Corporation Raytheon’s military tactical weapons are a critical component of national defense in 21st century. 8. RTX Corporation (NYSE: RTX) – $119.15B Market Cap. While its products have a lower profile than Boeing or Airbus, those supplied by aerospace defense contractor RTX (formerly Raytheon) are no less essential for their success. Its Collins Aerospace division designs and produces plane cabin equipment, oxygen systems, food and beverage galley systems, and lavatory systems for commercial aircraft. On the military side, battlespace testing and training systems, crew escape systems, and a host of technical and engineering support and spare parts supplies. The Pratt and Whitney division builds military and commercial aircraft engines and power units. The Raytheon division supplies military threat detection and both defensive and offensive armament (missile, torpedo, etc.) responses. Eaton Corporation plc Electric systems giant Eaton Corporation plc is headquartered in Dublin, Ireland. 9. Eaton Corporation plc (NYSE:ETN) – $117.27B Market Cap. Founded just prior to World War I, Dublin, Ireland based Eaton Corporation plc specializes in electrical power management engineering systems for municipalities, vehicles, and aircraft. Eaton Corporation’s power distribution systems include utility power, circuit protections, fire detection, emergency lighting, and hazardous duty equipment. For vehicles, Eaton electrical transmissions, hybrid power, engine valves, and EV critical components are among its high demand products. For the aviation industry, Eaton supplies essential systems for electronically controlled power, pumps, hydraulics, fueling systems, wing flap controls, and a panoply of other aircraft operations. Of particular note is Eaton Corp.’s embrace of Industry 4.0. The Internet of Things (IoT), additive manufacturing, robotics, factory simulation, and virtual reality are all aspects of Industry 4.0. The technologies are used to optimize factory processes, increase efficiency, improve quality control, and reduce the factory’s environmental footprint. Eaton recently announced Industry 4.0 equipped smart factories for its Chinese and Mexican plants. Schneider Electric SE France-based Schneider Electric S.E. supplies its world-class electic management systems to many industries and facilities, including data centers. 10. Schneider Electric SE (ENXTPA: SU) – $117.19B Market Cap. Founded in 1836 France, Schneider Electric S.E. originally was named Schneider-Creusot, and was entrenched in the iron foundry and heavy machinery business. The aftermath of the Franco-Prussian War led to Schneider’s efforts into both shipbuilding and weapons design and manufacturing. This continued though both World Wars until the 1960s, when Schneider divested itself of heavy machinery and weaponry to focus on electronics, eventually renaming itself Schneider Electric in 1999. Presently one of Europe’s premier electric and digital technology companies, Schneider’s specialty products are used around the world in public transportation, building electric utilities management, security, surge protection, power grid automation, environmental monitoring, software, relays, robotics, RFID, controllers, and a panoply of other products and services. Schneider recently announced a $3 billion contract to supply electrical equipment to Texas-based Compass Datacenters, whose expanding electricity requirements from A.I. demand has increased 10-fold. Lockheed Martin Corporation Lockheed Martin’s RQ-170 Stealth UAV plays a crucial role in national aerial defense. 11. Lockheed Martin Corporation (NYSE: LMT) – $103.05B Market Cap. Fans of the blockbuster film, Top Gun:Maverick sat enthralled as Tom Cruise’s “need for speed” pushed the hypersonic “Darkstar” fighter jet beyond its engineering tolerances. The Darkstar is a conceptual design (perhaps for future production as the SR-72, according to military analysts) created by Lockheed Martin, the world’s largest defense contractor, and best known for its military aircraft. Founded in Bethesda, MD in 1912, Lockheed Martin has four divisions: Aeronautics – In addition to building fixed-wing combat jets like the F-35 and F-22, Lockheed’s Aeronautics division focuses on aerial battlespace. Hypersonic technology development, unmanned aircraft (UAV), and Lockheed’s famed Skunk Works designs are all part of this segment. Missiles and Fire Control – MFC houses Lockheed’s defense division which includes advanced combat missiles, rockets, and other weapons systems. Rotary and Mission Systems – In addition to both military and commercial helicopters, maritime and surface missile defense, radar, combat systems, training systems, and cybersecurity solutions. Space – This segment houses Lockheed’s space transportation and satellite operations, as well as strategic, advanced strike, and defensive systems for national security platforms. Deere & Company Heavy duty agricultural equipment from Deere and Co. has been essential for large scale farm production to feed people around the planet. 12. Deere & Company (NYSE: DE) – $102.99B Market Cap. In much the same way as Caterpillar machinery is ubiquitous with heavy construction and infrastructure, Moline, Illinois headquartered Deere & Company is synonymous with heavy machinery in the agriculture and landscaping arenas. Deere’s Production and Precision Agriculture is its highest profile division. Its harvesters, loafers, cotton pickers, large tractors, seeding equipment, and other equipment are essential for the agricultural food and fiber products that feed and clothe people worldwide. The Small Agriculture and Turf division supplies tractors, large mowers, snow and debris management, and foraging gear for landscaping, golf course construction and maintenance, and also for the dairy and livestock industries. The Construction and Forestry Division provides, loaders, excavation gear, logging equipment, dump trucks, road building machines and assorted equipment for private, municipal and federal lands. Contemporary Amperex Technology Co., Ltd. Contemporary Amerex supplies batteries of all type and configurations from 2-wheeled vehicles to battery powered earthmoving and heavy construction equipment. 13. Contemporary Amperex Technology Co., Ltd. (SZSE:300750) – $100.59B Market Cap. Better known as CATL, Contemporary Amperex Technology, Ltd. is based in Ningde, China. The company designs, manufactures and services a wide range of batteries for all types of motorized vehicles and equipment. The long list of CATL battery users stretches from electric bicycles and motorcycles, passenger and commercial vehicles, trucks of all sizes, and large public transportation vehicles. Industrial machinery includes, but are not limited to: road cleaning trucks, forklifts, excavators, and other construction or other electric powered heavy machinery. Though founded only in 2011, CATL’s production capabilities and its focus on batteries and all of their applications and potential improvements have garnered international respect in the field. Elon Musk’s Tesla Inc. (NASDAQ: TSLA) apparently holds CATL in high enough regard to select their battery technology for the forthcoming Tesla EV battery plant to be constructed in Nevada. Mitsubishi Corporation Tokyo headquartered conglomerate Mitsubishi Corp. is Japan’s largest trading company. 14. Mitsubishi Corporation (TSE:8058) – $89.67B Market Cap. Mitsubishi Corporation is the conglomerate branch of Japan’s Mitsubishi Group (est. 1870) and Japan’s largest trading company.. The other three branches are: MUFG Bank (Japan’s largest bank), Mitsubishi Electric, and Mitsubishi Heavy Industries. While ostensibly established for cooperation, each one is formally independently run and considered a separate entity. Mitsubishi Corporation’s areas of operations extend to: Infrastructure and Industrial Materials Natural Gas Mineral Resources Petroleum and Chemicals Automotive and Mobility Power Consumer Industry Food Industry Urban Development Safran SA French aerospace company Safran SA has been in operation since 1896. 15) Safran SA (ENXTPA: SAF) – $88.62B Market Cap. Founded in 1896 in Paris, Safran SA supplies a wide array of aerospace and defense products and services to both civilian and military customers. Safran jet propulsion and transmission systems are used in training and commercial aircraft, helicopters, drones and satellites. The company designs and builds landing gear, control panels, avionics, navigation systems, oxygen supplies, and other operation and cockpit equipment. Safran’s Aircraft Interiors division designs and supplies the entire range of aircraft cabin and cargo storage gear, including, but not limited to crew and passenger seats, storage bins, lavatory and galley equipment, dividers, in-flight entertainment systems, etc. As capital goods represent the majority of companies involved with contributing to key aspects of modern, industrialized societies, their respective sizes makes them less likely to exhibit the same kind of volatility that other sectors, like technology, for example, might exhibit. 247WallSt.com has a range of other articles about large cap stocks that are followed by Warren Buffett and other successful investors. ALERT: 5.25% Yield Is 8x National Average (Sponsored) Robinhood Gold just rolled out a wild 5.25% APY yield for members, a whopping 8x the national average and way better than treasuries. Earn an eye watering amount of money while you sleep. Sign up today — click here to start earning today. The post 15 Largest Companies In The Capital Goods Sector appeared first on 24/7 Wall St.......»»
Blink Charging Co. (NASDAQ:BLNK) Q4 2023 Earnings Call Transcript
Blink Charging Co. (NASDAQ:BLNK) Q4 2023 Earnings Call Transcript March 14, 2024 Blink Charging Co. misses on earnings expectations. Reported EPS is $ EPS, expectations were $-0.4. BLNK isn’t one of the 30 most popular stocks among hedge funds at the end of the third quarter (see the details here). Operator: Good day ladies and […] Blink Charging Co. (NASDAQ:BLNK) Q4 2023 Earnings Call Transcript March 14, 2024 Blink Charging Co. misses on earnings expectations. Reported EPS is $ EPS, expectations were $-0.4. BLNK isn’t one of the 30 most popular stocks among hedge funds at the end of the third quarter (see the details here). Operator: Good day ladies and gentlemen and welcome to the Blink Charging Co. Fourth Quarter and Year End 2023 Earnings Conference Call. At this time, all participants have been placed in a listen-only mode and the floor will be open for questions and comments following the presentation. It is now my pleasure to turn the floor over to your host, Vitalie Stelea, Vice President of Investor Relations. Sir, the floor is yours. Vitalie Stelea: Thank you, Ollie. Welcome to Blink’s fourth quarter 2023 earnings call. On this call today we have Brendan Jones, President and Chief Executive Officer; and Michael Rama, Chief Financial Officer. Today’s discussions today will include non-GAAP references. These are reconciled to the most comparable U.S. GAAP measures in the appendix of our earnings deck. You may find the deck along with the rest of our earnings materials and other important content on Blink’s Investor Relations website. Today’s discussions may also include forward-looking statements about our expectations. Actual results may be different from those stated. The most significant factors that could cause actual results to differ are included on Page 2 of the fourth quarter 2023 earnings deck. Unless otherwise noted, all comparisons are year-over-year. Now, regarding the Investor Relations calendar, Blink will be participating and taking one-on-one investor meetings at investor meetings at a few upcoming conferences. The first one will be the Roth MKM Investor Conference in Dana Point, California on the 17th of March. The second one will be JPMorgan Energy Conference on the 17th of June in New York City. Please follow our announcements and the investor relations website for additional events that we will book in the future. I will turn the call now over to Brendan Jones, President and CEO of Blink Charging. Go ahead, Brendan. Brendan Jones: Thanks Vitalie and good afternoon everyone. Thank you for joining us on this call today. Well, to sum it up, 2023 was a historic year for Blink. It was marked by significant achievements and exponential growth. Now, as some of you know, blink over the past four years has successfully integrated six strategic acquisitions and in 2023 we began to demonstrate the powerful consolidated potential of the Blink enterprises. Now, not only did we leverage our advanced product portfolio and services, but we also began to see tangible benefits from our newly enhanced network launched in 2022. Organizationally, we are emphasizing a culture of continuous improvement and have begun to observe synergies and efficiencies that positively impacted 2023 results across all of our businesses. Operationally, we streamlined our sales, engineering, logistics and distribution while expanding our manufacturing footprint near Washington, DC to capitalize on additional synergies and opportunities for cost optimization and a little more on that later in this presentation. Now, if we move to the numbers as illustrated on Slides 4 and 5, our total revenues were $140.6 million, marking an impressive year-over-year growth of 130% and a remarkable seven fold increase compared to 2020 revenues. Now let’s talk about that again. Seven fold increase in just two years. Our fourth quarter 2023 revenues were a Q4 record of $42.7 million, representing a year-over-year increase of 89%. Our 2023 service revenues grew 111% year-over-year, amounting to $26.4 million. Now, within this figure, network fees grew 71% to $7.5 million and Q4 2023 service revenue reached $7.9 million. Now, in even better news from a financing perspective, if you flip to Slide 6, we previously discussed raising additional funds to guide Blink towards profitability. I am pleased to announce that we substantially strengthened Blink’s balance sheet by raising $113 million in gross proceeds via our existing ATM facility. We took advantage of favorable market conditions and did it opportunistically at scale and in a very, very cost effective way. As a result, we delevered our balance sheet and significantly reduced our interest expense by paying off promissory notes and accrued interest of $45.5 million. With our current visibility, we anticipate that our existing cash balance will be sufficient to reach our positive EBITDA adjusted rate target in December of 2004 and beyond. If we now look at Slide 7 for full year 2024, we are targeting revenues between $165 million to $175 million and a gross margin of approximately 33%. We are also reconfirming our target of achieving positive adjusted EBITDA run rate by December of 2024. Now let’s jump over to Slide 8, we show the different actions that will continue to materialize, in 2024, to achieve our adjusted EBITDA target. First, solid revenue growth is expected to contribute significantly to adjusted EBITDA. We emphasize not only the sales quantity, but also the quality of new customers, especially fleets, as they play a crucial role in financing our company’s growth. During 2023, we saw important fleet wins in the United States, including the Post Office and Mac trucks, just to name a few. We also prioritized revenue generated from our existing customers as an optimal way to finance growth. Second, we anticipate gross margin improvement as we continue to insource a large portion of our product mix. Our decision to expand our Bowie, Maryland facility aligns perfectly with our growth strategy and we are very pleased to have that facility open with production underway. Third, expense management and cost avoidance are currently underway throughout the entire company. We’ve also implemented a leading software tool to assist in the planning and monitoring expenses at all levels of the company. We are pleased with this capability as it enables robust scenario planning and accountability for every department. And finally, we anticipate the EV market to maintain its recent momentum, benefiting not only Blink, but more importantly the entire industry. If we move on to page 9, despite various media stories, we remain very optimistic about the EV market and the continued growth. This optimism is fueled by the decreasing cost of electric vehicles and the continuous expansion and improvement of charging infrastructure. The network effect is now taking hold. Now look at the numbers. In 2023, EVs accounted for one of every five vehicles sold globally. In the U.S. in 2023, we saw an increase in EV adoption, accounting for 8% of all new cars sold within the United States. Now, if we look at California, EVs represented 25% of all new car sales. To provide context, Bloomberg New Energy Finance anticipates EV penetration in the U.S. to reach approximately 13% in 2023, marking a significant 500 basis points expansion in just one year. Now, in Europe, another region where we are active and have three different offices, the EV penetration rate throughout the entire European continent stood at 18% of car sales. But if you start to split this up and look at various countries, France, UK, Ireland, Germany, the Netherlands and Belgium, the percent is much higher. This figure is projected to rise across both western and eastern Europe to about 22% in 2024, with a target of 80% by 2030. And we know that’s a big number, but it’s really not that farfetched. As many of you may know, about 90% of all cars sold in Norway are EVs. Several larger European countries are closely monitoring this trend, and we at Blink are actively studying and adapting to this evolving landscape. Mackenzie’s: McKinsey,: Now on to Slide 12. You will see images of our advanced product portfolio. Today we can satisfy the demands of any customer from the product and software perspective. Our versatile Level 2 chargers are used in multiple commercial, residential and fleet applications. At the same time we have made significant strides with our DC fast chargers as you can see on the lower left section of the slide. And importantly our chargers already support the North American charging standard or NAX which we believe will only benefit Blink as more drivers will be able to easily access Blink chargers and charge on our chargers. And of a particular note, just this week we celebrated the grand opening of our new manufacturing facility near Washington, DC, which will further drive our gross margin expansion while improving product quality and reliability. Federal, State and local government officials were present to celebrate with us this significant milestone. And if you look at Slide 13, we look forward to supporting government programs when it comes to electrifying their fleets and providing EV charging infrastructure in their jurisdictions. Now, the production that is underway at the facility embodies the latest lean manufacturing practices, focusing on efficiency and continuous improvement. We anticipate that it will support an annual production capacity of up to 50,000 chargers and has been designed for flexibility to adapt to our future products and manufacturing needs. Now I have a new announcement. In addition to the manufacturing facility, we have established our global headquarters at the same location near the nation’s capital. We believe this offers multiple benefits. It brings us closer to our manufacturing operations, allows for better team engagement and brings us closer to some of our largest customers. Furthermore, being located near policymakers involved in shaping the federal government’s transition to electric vehicles is advantageous as we continue to play a pivotal role in this transformative journey. Now if we go to Slide 14 over the years, Blink was able to acquire a number of prominent customers and collaborations with some of the largest fleets globally, automotive companies, commercial and multifamily real estate enterprises, as well as prominent hospitality venues. In 2024 and beyond we will be adding to this list of prominent customers. Now with this I’m going to turn the presentation now over to our CFO, Michael Rama to give you some additional financial detail. Michael? PricewaterhouseCoopers: Now on to Slide 12. You will see images of our advanced product portfolio. Today we can satisfy the demands of any customer from the product and software perspective. Our versatile Level 2 chargers are used in multiple commercial, residential and fleet applications. At the same time we have made significant strides with our DC fast chargers as you can see on the lower left section of the slide. And importantly our chargers already support the North American charging standard or NAX which we believe will only benefit Blink as more drivers will be able to easily access Blink chargers and charge on our chargers. And of a particular note, just this week we celebrated the grand opening of our new manufacturing facility near Washington, DC, which will further drive our gross margin expansion while improving product quality and reliability. Federal, State and local government officials were present to celebrate with us this significant milestone. And if you look at Slide 13, we look forward to supporting government programs when it comes to electrifying their fleets and providing EV charging infrastructure in their jurisdictions. Now, the production that is underway at the facility embodies the latest lean manufacturing practices, focusing on efficiency and continuous improvement. We anticipate that it will support an annual production capacity of up to 50,000 chargers and has been designed for flexibility to adapt to our future products and manufacturing needs. Now I have a new announcement. In addition to the manufacturing facility, we have established our global headquarters at the same location near the nation’s capital. We believe this offers multiple benefits. It brings us closer to our manufacturing operations, allows for better team engagement and brings us closer to some of our largest customers. Furthermore, being located near policymakers involved in shaping the federal government’s transition to electric vehicles is advantageous as we continue to play a pivotal role in this transformative journey. Now if we go to Slide 14 over the years, Blink was able to acquire a number of prominent customers and collaborations with some of the largest fleets globally, automotive companies, commercial and multifamily real estate enterprises, as well as prominent hospitality venues. In 2024 and beyond we will be adding to this list of prominent customers. Now with this I’m going to turn the presentation now over to our CFO, Michael Rama to give you some additional financial detail. Michael? Michael Rama: Thank you Brendan and good afternoon everyone. Now turning to Slide 16, our Q4 2023 revenues grew 89% year-over-year to $42.7 million, another record fourth quarter for Blink. Total revenues for 2023 was an absolute record at $140.6 million, a 130% increase compared to $61.1 million for the full year of 2022. As Brendan mentioned earlier, only two years ago, our 2021 full year revenues were nearly $21 million, which represents about 15% of current 2023 full year revenues of $140.6 million. Now, product revenues for the fourth quarter of 2023 were $33.4 million, an increase of 112% over the same period in 2022. Product revenues for the full year of 2023 were $109.4 million, an increase of 138% when compared with full year 2022. These increases were driven by strong demand for our commercial Level 2 chargers and DC fast chargers as well as our ability to satisfy increasing levels of demand. Fourth quarter 2023 service revenues, which consist of charging service revenues, network fees, car sharing revenues were $7.9 million, an increase of 40% compared to the fourth quarter of 2022. Full year 2023 service revenues more than doubled to $26.4 million, representing a year-over-year growth of 111% driven by greater utilization of our chargers, increased number of chargers on Blink networks and revenues associated with the Blink Mobility car share program. We break out these service revenue lines to differentiate between products and service businesses more accurately. Now turning to gross profit. Gross profit increased 63% to $10.6 million or 25% of revenues in the fourth quarter of 2023 compared to gross profit of $6.5 million or 29% of revenues in the fourth quarter of 2022. Gross margin decreased in the fourth quarter of 2023 when compared sequentially to the third quarter 2023 due to increased year end warranty and maintenance expenditures as well as adjustments related to discontinued components. Now, excluding the impact of these items, the gross margin for Q4 2023 would have been approximately 30%. Gross profit for the full year of 2023 increased by 172% to $40.2 million or 29% of revenues, compared to gross profit of $14.8 million or 24% in the full year of 2022. Gross margin for the full year of 2023 increased when compared to the full year of 2022, primarily due to higher mix of in-house manufactured units which carry a higher margin and increased utilization of charging. Now turning to operating expenses. Operating expenses in the fourth quarter of 2023 decreased 16% to $28.7 million compared to $34.2 million in the fourth quarter of 2022, while we grew quarterly revenues by 89% year-over-year. Most of the decrease in operating expenses was driven by 27% reduction in year-over-year compensation expense for 2023. Operating expenses for the full year of 2023 was $239.9 million compared to $104.1 million for the full year of 2022. The increase in operating expenses for the full year is primarily driven by $105.9 million related to a noncash goodwill and intangible assets impairment charge, as well as the impact of a one-time nonrecurring payment to our former CEO and a nonrecurring bonus related to the performance milestones achieved by our CTO related to the design and launch of Blink’s recently implemented new network. It is very important to mention here that these impairment charges are noncash and they do not impact our operations in any way, shape or form. Excluding the impact of the $105.9 million noncash impairment charge and one-time compensation related items, the operating expense for full year 2023 would have been $134 million. Now, as a percentage of revenues, this amount represents a reduction of approximately 7500 basis points, while revenues increased by 130% year-over-year. Of note, 2023 operating expenses include $3 million of expenses for our 2023 acquisition of Envoy. Now adjusted EBITDA for the fourth quarter of 2023 was a loss of $14 million compared to a $14.8 million in the prior year period. As a percentage of revenues, our adjusted EBITDA metric improved nearly 3200 basis points compared to Q4 2022. This is a 50% improvement year-over-year, reinforcing our trajectory to positive adjusted EBITDA run rate by December of this year. Now, adjusted EBITDA for the full year of 2023 was a loss of $57 million compared to an adjusted EBITDA loss of $60.3 million in the full year of 2022. The adjusted EBITDA for the three and 12 months periods ended December 31, 2023 exclude the impact of stock-based compensation, acquisition related costs, one-time nonrecurring expenses, noncash impairment charges and noncash loss on extinguisher of notes payable. As Brendan mentioned earlier, several factors are expected to get us to positive adjusted EBITDA run rate by the end of this year, including revenue growth, expense management and cost avoidance actions that are materialized based on our actions to rationalize our operations, consolidate facilities and support functions, and build scale into our manufacturing and sales processes. Earnings per share for the fourth quarter of 2023 was a loss of $0.28 per share compared to a loss of $0.55 per share in the prior year period. For the full year 2023, earnings per share was a loss of $3.21 per share compared to a loss of $1.95 per share for the full year of 2022. Please note that the impact of the non-cash accounting adjustments to our goodwill and intangible assets, combined with the one-time compensation charges to our CTO and former CEO negatively impacted year-to-date earnings per share by a $1.67. Now adjusted earnings per share for the fourth quarter of 2023 was a loss of $0.28 compared to adjusted earnings per share loss of $0.41 in the fourth quarter of 2022. Adjusted earnings per share for the full year 2023 was a loss of $1.42 compared to an adjusted EPS loss of $1.65 in the full year of 2022. Non-GAAP adjusted earnings per share is defined as adjusted net income, which excludes the impact of stock-based compensation, acquisition related costs, one-time nonrecurring expenses, noncash impairment charges and noncash loss on extinguisher notes payable divided by the weighted average shares outstanding. Now turning to Slide 17, you could see that Blink has made tremendous progress in growing our revenue base over the last two years. Our revenues grew 671% in just two years. At the same time, we have more than doubled our gross margin from 14% in 2021% to 29% in 2023, and currently targeting our gross margin of approximately 33% for 2024. Now moving to our cash position. As of December 31, 2023, cash and cash equivalents totaled $121.7 million, an increase of $85 million compared to December 31, 2022 and $55 million compared to the $66.7 million on September 30, 2023. In the fourth quarter of 2023, we raised $88 million in gross proceeds via the existing ATM. Furthermore, during the first quarter of 2024, we raised gross proceeds of an additional $25 million via the ATM. In total, between November 20, 2023 and February 12, 2024, Blink raised $113 million in gross proceeds via the existing ATM. We accessed the market opportunistically, at scale and at a very cost effective terms for Blink. As a result, we were able to pay off promissory notes and accrued interest in the amount of $45.5 million, which delevered the balance sheet to avoid significant ongoing interest costs, as well as accelerate Blink’s path towards profitability. We are very pleased to have closed fiscal 2023 with record fourth quarter and record full year results. We believe the charging infrastructure industry is at an inflection point and we’re building a solid foundation for Blink’s continued and more importantly, profitable growth. I will turn the call back over to Brendan for his final commentary. Go ahead, Brendan. Brendan Jones: Well, thank you Michael. So I think you all can see that without a doubt, 2023 marked a truly transformative year for Blink. We couldn’t be prouder of our team and the accomplishments for the year of 2023. But we’ve said a lot today, so let’s recap really quickly here and get to the more salient points. Our revenues surged to over $140 million accompanied by an industry leading gross margin of 29% in 2023. Additionally, as Michael just iterated, we took advantage of favorable market conditions and capitalized Blink by raising $113 million in cost effective financing. We significantly reduced our debt obligation and the burden of interest expense on free cash flow. Now, we didn’t just do that, but then when you go further at the operational level, if you look at Slide 19, in 2023, we materially expanded our U.S. manufacturing with the recent grand opening of our facility near the nation’s capital disallowed and disallowing Blink to consolidate five of our U. S. facilities down to two, while increasing production. From an operating and logistics and networks perspective, we further consolidated. We also consolidated sales, back office functions to reduce operating expenses and improve efficiencies. And then the last one is we have integrated and rebranded our legacy companies of Electric Blue and Blue Corner, who are now Blink UK and Blink Belgium and we’re not done yet. As we move into 2024, the team is laser focused on the targets we have laid out in front, and the number one target is achieving adjusted EBITDA run rate by the end of 2024. Now, if we look at what else we’re going to do in 2024, is all listed out on slide 20. We will continue to drive global efficiencies through optimized manufacturing, logistics, distribution and facilities and back office consolidation. We will execute our cost reductions and avoidance strategies, leverage expanded manufacturing facilities to support growth, reduce COGS, and enhance international product portfolio. We will launch a new multimarket maintenance and service and proactive monitoring network to improve uptime and charger quality and reliability and we will continue to invest in innovative technologies to improve efficiency and promote continued growth. These tactical and strategic moves will provide Blink with the necessary flexibility to achieve our positive adjusted EBITDA run rate by December of 2024. And this is fundamental to Blink’s long-term success. Finally, our success in 2023 wouldn’t be possible without the outstanding team we have in place and we thank each and every one of them across the entire organization, for their tremendous effort this year. As you might imagine, the team is excited about Blink’s future, and we look forward to updating you throughout 2024 as we continue to make progress. With that, the call is now open for questions. See also 15 Best NASDAQ Dividend Stocks To Buy and 15 Best ETFs To Buy Now. Q&A Session Follow Blink Charging Co. (NASDAQ:BLNK) Follow Blink Charging Co. (NASDAQ:BLNK) or Subscribe with Google We may use your email to send marketing emails about our services. Click here to read our privacy policy. Operator: Thank you. [Operator Instructions] Our first question is coming from Chris Pierce with Needham. Sir, your line is live. Chris Pierce: Hey, just two from me. We had an industry leader on the earnings call a couple of weeks back talk about seeing their customers thinking about moving towards a dual sourcing model and kind of having multiple chargers from multiple brands on site. Is that something that gives you confidence in the growth to triple your production capacity in Bowie? Had that already been contemplated in the model, or is that something new that’s additive to kind of how you’re thinking about the future? Brendan Jones: Yes, it’s an enhancement, so it wasn’t in the original math when we agreed to expand Bowie, but certainly now we’re calculating it in. So we see that as added benefit over time. Chris Pierce: Okay. And then you’re guiding at the midpoint to roughly 20% revenue growth. How do we square that with the tripling of the capacity, kind of one seems a little more aggressive, one seems a little more conservative. What’s the right way to think about that? Brendan Jones: Michael, do you want to handle that one? Michael Rama: Sure. We built our budgets from the ground up and we’re factoring in. Obviously, we’re a bit conservative. As you know, we’re conservative in nature and as we head into 2024, as we navigate through some noise, but we feel confident that that range is most appropriate for what we feel is to start out the year. Chris Pierce: Okay. Thank you. Operator: Thank you. Our next question is coming from Stephen Gengaro with Stifel. Your line is live. Stephen Gengaro: Thanks. Good afternoon, everybody. Two from me and one to follow up on question Chris just asked. When we think about the revenue guide for 2024 and we think about kind of what the industry seems to be going through right now, just from an adoption rate, all the data points have been a little more negative. But notwithstanding that and your comments on the guide, how would you classify like 2024, 2025, 2026? Should we think about that underlying CAGR that you illustrated in the presentation in the mid-20s as kind of a baseline? Is that a good place to start? And if so, how should we think about that impact overhead and margin progression? Brendan Jones: It’s a good place to start. Now you’re going to see different accelerations in different places we operate, especially outside the United States. We see — we want a game for larger numbers. We want to make sure we have the capacity to take care of what is going to happen in this space, and not just the capacity, but the ability to produce at a high margin. So we’re going to be, as Michael said, we’re going to be a little conservative in numbers, but we’re basing those off of real data. We don’t make a decision that without looking at what the analysts are saying, whether that analyst McKinsey or another analyst looking at what they see as industry growth. Then we cross apply that with where we’re active, and then we look at the segmentation and see, okay, where’s our greatest opportunity to expand revenue? And then thirdly, the other leg of that is when we’re looking at our own internal functions. It’s what are our other revenue opportunities as we continue to grow and scale the industry? But we think 165 to 175 is healthy, and that is we’re going to have a lot of work to do in that, and it’s going to enable us to grow our margins as well. Stephen Gengaro: Thanks. And then as a follow-up, we got to see the new facility this week. When you think about that facility ramping, and I think you’ve consolidated and you’ve centralized the warehouse and production, et cetera, how should that impact underlying product margins over the next two years? Brendan Jones: Yes, it’s going to have a positive impact. As you imagine, we’ve done a couple of different things. Right. So we had five facilities, one in Miami, we had actually four in the greater Washington, DC metro area. We’ve now consolidated all those to two. And with that, we’ve also been able to reduce overhead across the board at all those. So we’re anticipating a positive margin impact for that. But we haven’t crystallized those numbers yet, so we have it at a range. And that’s something that you’re going to see manifest in the Q1 report, which is looking really good, and the Q2 and Q4. Stephen Gengaro: Okay, thank you for the details. Brendan Jones: Operator, the next question please? Operator: Sorry, sir, my line was muted by mistake. The next question is from Craig Irwin with ROTH MKM. Your line is live, sir. Craig Irwin: Hi. Good evening, and thanks for taking my questions. More on the housekeeping side, can you maybe update us on your DC Fast Charger portfolio? You know, where are we at as far as the new product introductions that you were planning? And can you maybe breakout for us what the contribution was in 2023 and whether or not there was, again a margin drag potentially in the fourth quarter? Brendan Jones: Yes. So our DC Fast Charging strategy is threefold right now. First, we have our own products that are already in the market, which are predominantly fleet applications. And that’s our DC 9, which is actually the best seller DC project product we have. And it comes in 30 kW and 40 kW. It’s being primarily used at dealerships fleets across the nation. Then we have what we call our third party outsourced, where we have contracting manufacturing on a Blink, look and feel charger. And that charger takes up where the DC 9 leaves off and fills our orders, whether those orders are to dealerships, fleet companies or municipalities. The last piece of the strategy is our own designed DC 240, which the design is done on the charger......»»
CBAK Energy Technology, Inc. (NASDAQ:CBAT) Q4 2023 Earnings Call Transcript
CBAK Energy Technology, Inc. (NASDAQ:CBAT) Q4 2023 Earnings Call Transcript March 15, 2024 CBAK Energy Technology, Inc. isn’t one of the 30 most popular stocks among hedge funds at the end of the third quarter (see the details here). Operator: Good day, ladies and gentlemen. Thank you for standing by. Welcome to CBAT Energy Technology’s […] CBAK Energy Technology, Inc. (NASDAQ:CBAT) Q4 2023 Earnings Call Transcript March 15, 2024 CBAK Energy Technology, Inc. isn’t one of the 30 most popular stocks among hedge funds at the end of the third quarter (see the details here). Operator: Good day, ladies and gentlemen. Thank you for standing by. Welcome to CBAT Energy Technology’s Fourth Quarter and Full-Year of 2023 Earnings Conference Call. Currently, all participants are in listen-only mode. Later we will conduct a question-and-answer session and instructions will follow at that time. As a reminder, we are recording today’s call. If you have any objections, you may disconnect at this time. Now, I will turn the call over to Thierry Li, CFO and Secretary of the Board of CBAK Energy. Mr. Li, please proceed. Thierry Li: Thank you, operator. And hello, everyone. Welcome to CBAT Energy’s fourth quarter and full-year of 2023 earnings conference call. Joining us today are Mr. Yunfei Li, Chief Executive Officer of CBAT Energy, myself, Chief Financial Officer and Secretary of the Board; and Jennifer, our interpreter. [Technical Difficulty] Before we continue, please note that today’s discussion will contain forward-looking statements made under the Safe Harbor provisions of the U.S. Private Securities Litigation Reform Act of 1995. Forward-looking statements involve inherent risks and uncertainties as such, the company’s actual results may be materially different from the expectations expressed today. Further information regarding these and other risks and uncertainties is included in the company’s public filings with the SEC. The company doesn’t assume any obligations to update any forward-looking statements except as required under applicable laws. Also, please note that, unless otherwise stated, all figures mentioned during the conference call are in U.S. dollars. With that, let me now turn the call over to our CEO, Mr. Yunfei Li. Mr. Li will speak in Chinese and I will translate his comments into English. Go ahead, Mr. Li. Yunfei Li: [Foreign Language] [Interpreted] Hello, everyone, thank you for joining our fourth quarter and full-year 2023 earnings conference call. We are pleased to announce another quarter of solid growth, routing off fiscal year 2023 on a high note. With sustained orders from key clients including Viessmann Group, Anker Innovations and Hello Tech. Our battery business maintained its growth momentum from the previous quarter with fourth quarter revenues, up 30.9% year-over-year to reach $36.83 million. Of these revenues $34.93 million came from batteries used in energy storage applications, a surge of 84.3% year-over-year, while $0.52 million came from batteries used in electric vehicles, down 88.8% year-over-year. Moreover revenues from batteries used in light electric vehicles were $1.38 million, a decline of 69.5% year-over-year, primarily attributable to [Technical Difficulty] 12 month. Accordingly, we will strategically monitor both sectors, while further expanding our sales in energy storage sector. In terms of profitability, our battery business’s gross margin rose to a historic high of 36% in the fourth quarter of 2023, up 27.7 percentage points year-over-year. Moreover, we achieved a second consecutive quarter of net income from battery business. Recording a net income of $6.62 million in the fourth quarter of 2023, a notable improvement compared to a net loss in the same period last year. In full-year 2023, our battery business generated revenues of $133 million, soaring by 40.4% year-over-year. We delivered a full-year operating income of $10.44 million with a net income of $13.37 million from the battery business based on addition. In 2023, we made significant strides in our business operations on all fronts, achieving progress at various stages. Through consistent requirement of battery technologies and production ramp-up, we effectively fulfill customer orders and have nurtured a lower, stable client base. We have fostered deep and robust partnerships with industry leaders worldwide, including Viessmann Group, a leading provider of residential energy storage application in Europe and one of the world’s largest manufacturers of heating and cooling systems. Anker Innovations, the largest third-party accessory supplier for Apple Incorporated products. Hello Tech, the largest supplier of outdoor portable energy storage globally and parent company of Jackery. PowerOAK, the world’s leading portable power station manufacturer and the parent company of top-rated portable power supply brand, Blue TTI and India-based NSURE Energy, among others. We have also forged a partnership with the largest battery manufacturer in Europe. However, due to confidential [Indiscernible] obligations, we cannot disclose their identity for now. In addition, we have been negotiating with key stakeholders in Canada’s electric vehicle industry, exploring potential collaborations with the intention of formalizing agreements. We will keep our shareholders and investors in form of these developments after securing consent from our clients. Furthermore, we expect to establish a partnership with a leading India-based scooter manufacturers in 2024. These partnerships and potential alliances demonstrate the broad recognition of our battery technologies and product excellence by top-tier players in the global battery sector. Moving forward, we will remain committed to technological innovation to bolster our product competitiveness, delighting customers with safe and reliable products. Turning to our order demand. As of March 8, 2024, we have recorded RMB771 million or approximately $107 million in the combined value of orders we have received, but have yet to fulfill across our two main production facilities in [Technical Difficulty] and Nanjing and [Technical Difficulty]. Additionally, we have made substantial strength in our previously disclosed client initiatives. As of March 8, 2024, our collaboration with PowerOAK has brought us orders amounting to roughly RMB61.6 million or approximately $8.57 million. Our partnership with Viessmann Group has generated orders totaling EUR213 million or approximately $195 million. Furthermore, our [Technical Difficulty] Next, let me walk you through our latest R&D developments. In the second quarter of 2023, we successfully commenced mass production of large surgical sodium ion batteries, emerging as one of the few companies worldwide with the capacity to mass-produce sodium ion batteries. Our sodium ion battery production lines are currently located at our Nanjing facility, which features a 0.5 gigawatt hour capacity. Since we commenced mass production demand for our sodium ion battery has out straight supply. As a result, we have been actively engaging with PE investors to ramp up sodium ion battery production capacity. In the meantime, we have also been developing large synergical lithium ion battery models, including model 40140 and 46120. Model 40140 is in prototype A sample stage and model 46120 is already in prototype B sample stage. We expect model 46120 to complete prototype B sample stage and become ready for mass production by the latter half of 2024. We will continue to finetune these models in response to market demand dynamics, potentially leading to modifications before the start of production. We have also strategically optimized our production capacity with a well-coordinated production line layout, currently at our Dalian facility, we operate three production lines, primarily manufacturing model 26650 lithium-ion phosphate batteries with a total annual production capacity of 1 gigawatt hour, to better address customer needs and mitigate supply shortages at our Dalian facility caused by excessive demand. In 2023, we leased a battery plant located in Changzhou Hunan for producing model 26700 batteries. Today, our Changzhou facility is equipped with a production capacity of 0.5 gigawatt hour sufficient to fulfill part of our customer demand. This strategic move further boosted our production capacity, ensuring a more stable and reliable supply of products to clients. Regarding our Nanjing facility, the Nanjing Phase 1 project consists of two production lines, one dedicated to [Technical Difficulty] product model 32140 synergical lithium ion batteries and the other outfit should produce either synergical lithium batteries or synergical sodium ion batteries. The project’s capacity is up to 2 gigawatt hours when both lines are producing lithium ion batteries or up to 1.5 gigawatt hours when one production line is dedicated to sodium ion battery production. Furthermore, construction of our Nanjing Phase 2 project is in full swing with three large factories in the pipeline. Once all three are completed and operational, the total capacity of Nanjing Phase 2 project is expected to be up to 18 gigawatt hours. Thus far, the first factory has been routed and interior decoration is underway. We will determine whether to outfit this factory with production lines for sodium ion or lithium-ion batteries based on customer demand. Moving forward, we will further optimize our production line layout to enhance production efficiency, ensuring that we can respond swiftly to market shifts and order fluctuations. In summary, despite the tepid macroeconomic environment and downward pressures across the battery sector, our battery business consistently demonstrated robust growth momentum and resilience in the full-year 2023. The vitality was reflected both in our strong financial metrics and in the stability of our client base and the wealth of orders in our pipeline. More importantly, the company’s industry leadership and technological age have been fully acknowledged by across the industry evidenced by the adoption of our products by the most advanced battery facility in Europe. As a pioneer in the sodium ion battery production, we possessed the immense potential and competitive advantages in the renewable energy field. Looking ahead to 2024, we will further increase our investments in research, development and production capacity. Also, by fostering more and deeper collaborations with global renowned clients, we will further augment our market share and elevate the company’s global influence and visibility. We are confident that these synchronized endeavors will segment our position as a frontrunner in the competitive industry for years to come. Now, let me turn the call over to our [CFO] (ph), Mr. Li, who will provide details on our financial performance. Thierry Li: Thank you, everyone, for making the time to join our earnings conference call today. As our CEO mentioned earlier, we concluded the year with a robust fourth quarter financial performance from our battery business, where we achieved a double-digit increase in net revenues and positive income for the second consecutive quarter. We are pleased to see continued growth momentum in our battery business. Building on our solid fundamentals, we remain confident in our growth transitory through 2024 and anticipate a full-year net profit for our battery business. We will provide more details on our net income guidance at the appropriate time. Turning now to Hitrans, our current battery material unit, which we strategically acquired in 2021, at the time of the acquisition, Hitrans boosted a strong client base and a higher level of revenue. Following the acquisition we maintain Hitrans core management team and refrain from interfering in its day-to-day operations. We have no addition, no financial obligations to Hitrans and its financial health will not materially affect the financial standing of our [Technical Difficulty] as is only reflected in our consolidated financial statements. That’s why we have focused on reporting financial results solely from our battery business in our earnings release and earnings conference call to provide investors and shareholders with a clear understanding of our performance. We are currently talking with private equity investors for Hitrans and sodium ion battery business, and we hope to complete a private placement financing to support the development of our business. These investors, whether they are interested in Hitrans or the sodium ion battery business, a consistently valuing the individual businesses materials and sodium ion batteries and more than the current market capitalization of our entire public company. Notably, their valuations do not take into account our core lithium battery business, indicating that our market value is currently significantly underestimated. I will now provide an overview of our 2023 fourth quarter financial results. In the interest of time, I will be presenting abbreviated highlights only. We encourage you to refer to our press release issued earlier today for complete details. In the fourth quarter, our total net revenues increased by 3.2% year-over-year to $56.2 million. Net revenues from sales of batteries reached $36.8 million, a year-over-year increase of 30.9%. Our total gross profit grew 235.3% year-over-year to $12.7 million resulting in a gross margin of 22.6%, compared to 7% in the prior year period. Gross profit for the battery business increased by 470.8% year-over-year to $13.2 million, with gross margin climbing to 36% from 8.3% in the prior year period. Our total operating loss amounted to $5.9 million, compared to an operating loss of $8.8 million in the prior year period. Net loss attributable to shareholders of CBAK Energy after deducting the change in the fair value of warrants was $4.8 million, compared to a net loss of $11.7 million in the prior year period. Net income from the battery business was $6.6 million, compared to a net loss of $6.4 million in the same period of 2022. As we mentioned earlier, we have a large number of prestigious clients around the world. However, due to confidentiality of agreements, we cannot disclose their names without their consent. Going forward, we will actively communicate with them as part of our customer disclosure. We hope to be able to disclose more client names to our shareholders in 2024. In conclusion, our solid fundamentals will continue to provide a solid foundation for our business going forward, enabling us to strike a healthy balance between growth and profitability. That concludes our prepared remarks. Let’s now open the call for questions. Operator go ahead. See also 25 Most Racially Diverse States in the US and Forget Magnificent Seven: Jim Cramer Likes These ‘Super 7’ European Stocks. Q&A Session Follow Cbak Energy Technology Inc. (NASDAQ:CBAT) Follow Cbak Energy Technology Inc. (NASDAQ:CBAT) or Subscribe with Google We may use your email to send marketing emails about our services. Click here to read our privacy policy. Operator: Thank you. We will now begin the question-and-answer session. [Operator Instructions] First question comes from Brian Lantier from Zacks Small Cap Research. Please go ahead. Brian Lantier: Good evening, gentlemen. I just wanted to hone in a little bit on the gross margin. Do you feel like the gross margin in the fourth quarter was — is that going to be a sustainable gross margin going forward? And was it principally driven by pricing on your products and some of the new contracts or was it more on the input side as costs have come down for some of your inputs? Unidentified Company Representative: [Foreign Language] Thierry Li: Let me respond to your question, Brain. I think as you may be aware that the current competition in the battery market is very intense and key players in this industry keep lowering down their price to gain much more orders and customers. We are completely different our batteries boosted a feature of highly stable and high safe characteristics and our biggest clients up to three years testing completely satisfied by the performance of our battery products. That’s why they’re willing to keep us a high price at this market condition. Coming back to your question, we believe that being affected by the current market condition, the price will also go down in the long-term, but we are still confident that the gross margin that we will present to you in the coming reporting period will still be higher than the market average. Thanks. Brian Lantier: Great. Thank you. And I know we’ve talked in the past about long-term capacity goals, and I know that’s a little bit influx right now, because it will be based upon whether you’re producing lithium batteries or sodium batteries. But do you have any long-term capacity goals for 2024, 2025 that you can share with us at this point? Unidentified Company Representative: [Foreign Language] Thierry Li: [Foreign Language] Yunfei Li: [Foreign Language] [Interpreted] Yes. Well, so in terms of capacity growth, well, we have steadily increased our capacity based on our cooperation with our clients and also we increase it according to the needs of our clients. So that is why in the past years, we have steadily ramped up our capacity in different production facilities. And as you can see from our 2024 to 2025 reports, we have introduced a lot of big customers in the past year and the introduction of the big customers will also boost our — will require us to boost our production capacity, so that we can well meet their demand. So in the future, we are going to continue to increase our production capacity. And when it comes to the sodium battery, well, I have to say this is a battery that enjoys a great future. For sodium ion battery, it has some good features that lithium ion battery cannot compete. For example, it is suitable to be used in low temperature condition [Indiscernible]. So in the future, we believe that we will also substantially increase and expand the production capacity of sodium ion battery, and we have a good expectation for that. Thierry Li: Let me add one point. As we mentioned in our report that we have three major factories under construction for Nanjing Phase 2 and the first factory has been ruled. So we are doing interior construction at this moment, if everything goes well, we will have one production line for this factory in 2024. But if it’s — we cannot determine if it will be producing a sodium ion batteries or lithium ion batteries is up to client demand. And also, we are also talking to private equity investors about financing on the sodium ion project. So that would also affect our decision-making. So it’s a decision that we will make in this year and a lot of the factors affect this decision-making......»»
Tesla (TSLA) to Produce Semi Truck at Gigafactory Berlin
Tesla (TSLA) plans to manufacture its electric semi truck at Gigafactory Berlin. Tesla, Inc. TSLA plans to produce Tesla Semi, its electric semi truck, at Gigafactory Berlin. Elon Musk, CEO of TSLA, revealed this plan during his visit to Gigafactory Berlin following an arson attack on the factory, which resulted in a halt in production.Tesla is currently manufacturing Model Y at Gigafactory Berlin.Musk did not provide a specific timeline for the project. The company had not yet unveiled any new vehicle production programs for the factory beyond the Model Y.The automaker’s announcement to produce the Tesla Semi at Gigafactory Berlin reflects Elon Musk’s commitment to expanding the European factory despite facing massive resistance from Grünheide locals.Per the expansion plan, Gigafactory Berlin aims to build another plant to increase the annual production capacity of the factory to 1 million units from the current capacity of 500,000 units. Although Tesla Semi's contribution to Gigafactory Berlin’s 1 million unit goal would be limited, it suggests progress in the right direction.Lars Moravy, the company's vice president of vehicle engineering, confirmed that the fleet of Tesla Semi has increased to around 100 units.Per Moravy, TSLA has partnered with Pepsico, which is using Tesla Semi for delivery to monitor the durability of Class-8 trucks. The data provided by PepsiCo is crucial to enable the volume production of the Semis scheduled to commence this year.Currently, Tesla Semi is in low-volume production in a plant outside Gigafactory Nevada. In January 2023, the EV pioneer announced its plan to expand Gigafactory Nevada to integrate the production of Tesla Semi trucks and 4,680 battery cells. The company also announced its plan to develop the factory to its originally intended size. However, there was no progress reported on the expansion plan of Gigafactory Nevada for a year. In January 2024, the company started working on the project but is yet to start the volume production of semi trucks in the United States.Regulatory Requirements to Make Semi Truck an OutlierIn Europe, regulations do not endorse big trucks. Long-nose trucks have been wiped out of European roads due to a current length limit of 18.75 meters. Utilizing valuable cargo space for the truck's engine is not productive, so cab over truck dominates the European market. Tesla Semi would be considered as an outlier, given the regulatory requirement unless the legislation states otherwise. Discussion is in progress to allow longer and more aerodynamic cabs without compromising cargo volume in case of electric trucks.Per an ING report dated December 2023, the composition of European truck sales is set to transform in the next 10 years. Europe has been pushing auto manufacturers to decarbonize the continent’s fleet quickly because of which the manufacturers are scaling up the production of electric trucks.Considering Europe’s efforts to decarbonize the auto sector, Tesla Semi would be a perfect choice for the continent. However, there’s no clarity on whether the automaker would revamp Tesla Semi for the European market.Zacks Rank & Key PicksTSLA currently carries a Zacks Rank #3 (Hold).Some better-ranked players in the auto space are Modine Manufacturing Company MOD, General Motors Company GM and Allison Transmission Holdings, Inc. ALSN, each sporting a Zacks Rank #1 (Strong Buy) at present. You can see the complete list of today’s Zacks #1 Rank stocks here.The Zacks Consensus Estimate for MOD’s 2024 sales and earnings per share (EPS) suggests year-over-year growth of 4% and 67.2%, respectively. The EPS estimates for 2024 have improved 22 cents in the past 60 days. The EPS estimates for 2025 have improved 12 cents in the past 30 days.The Zacks Consensus Estimate for GM’s 2024 sales and earnings suggests year-over-year growth of 1.8% and 17.2%, respectively. The EPS estimates for 2024 and 2025 have improved 17 cents and 32 cents, respectively, in the past 30 days.The Zacks Consensus Estimate for ALSN’s 2024 sales and earnings suggests year-over-year growth of 2.1% and 3.2%, respectively. The EPS estimates for 2024 and 2025 have improved 67 cents and 71 cents, respectively, in the past 30 days. 7 Best Stocks for the Next 30 Days Just released: Experts distill 7 elite stocks from the current list of 220 Zacks Rank #1 Strong Buys. They deem these tickers "Most Likely for Early Price Pops." Since 1988, the full list has beaten the market more than 2X over with an average gain of +24.2% per year. So be sure to give these hand-picked 7 your immediate attention. See them now >>Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report General Motors Company (GM): Free Stock Analysis Report Tesla, Inc. (TSLA): Free Stock Analysis Report Allison Transmission Holdings, Inc. (ALSN): Free Stock Analysis Report Modine Manufacturing Company (MOD): Free Stock Analysis ReportTo read this article on Zacks.com click here.Zacks Investment Research.....»»
Workhorse Group Inc. (NASDAQ:WKHS) Q4 2023 Earnings Call Transcript
Workhorse Group Inc. (NASDAQ:WKHS) Q4 2023 Earnings Call Transcript March 12, 2024 Workhorse Group Inc. isn’t one of the 30 most popular stocks among hedge funds at the end of the third quarter (see the details here). Operator: Ladies and gentlemen, greetings and welcome to Workhorse Group’s Fourth Quarter 2023 Investor Call. As a reminder, […] Workhorse Group Inc. (NASDAQ:WKHS) Q4 2023 Earnings Call Transcript March 12, 2024 Workhorse Group Inc. isn’t one of the 30 most popular stocks among hedge funds at the end of the third quarter (see the details here). Operator: Ladies and gentlemen, greetings and welcome to Workhorse Group’s Fourth Quarter 2023 Investor Call. As a reminder, this conference is being recorded. It is now my pleasure to introduce your host, Workhorse Group’s Vice President of Corporate Development and Communications, Stan March. Sir, you may begin. Stan March : Thank you, Donna. Good afternoon, and thanks to all of you for joining us for the fourth quarter and full-year 2023 results call. Before we begin, I’d like to note that we have posted our results for the fourth quarter and full year ended December 30, 2023, via press release as well as filed our 2023 10-K. You can find both these documents, as well as the accompanying presentation that will form the basis of today’s conversation in the Investor Relations section of the website. We track it along with the presentation during the call. Joining me on today’s call are Rick Dauch, our CEO; and Bob Ginnan, our CFO. After my opening remarks on Slide 3, you’ll see the agenda for today’s call. I’ll turn it over to Rick for an update on our strategic and operational priorities throughout 2023 and during the fourth quarter, and Bob will walk us through the financial results for the fourth quarter and full year and provide our outlook for 2024. Then we’ll take any questions. On Slide 4, you’ll see our forward-looking statement. As you know, some of the comments that we’ve made today are forward-looking and therefore are subject to certain provisions, and as a result are subject to risks and uncertainties. You can find the full disclaimer statement in our 10-K, which was filed today, as well as in today’s press release. And with that, I’ll now turn the call over to Rick. Rick Dauch : Thanks, Stan. Good afternoon, everyone. We appreciate you taking the time to call in today and thank you for your continued support of Workhorse. Today we’re going to discuss our fourth quarter and full-year 2023 results and also cover the actions we’re taking to position the company for success. During the year, we rolled out our first W56 step vans, signed up our first W56 fleet customers and increased our production capabilities for our W4CC and W750 vehicles. We also expanded our commercial network, adding key dealers and partners in multiple states. At the same time, we’ve taken actions to strengthen our financial positions so that we can continue delivering on our commitment to advancing our commercial EV product roadmap, building, demand, and selling our trucks. As we disclosed today in our 10-K, we are in the process of completing negotiations on a financing transaction that along with our pending sale lease back transaction and aggressive cost cutting actions we are taking will position our business to have the financial runway necessary to execute on our business plans. As part of the cost saving actions, we are reducing head count across the organization, deferring executive compensation and suspending drone design and manufacturing in our aero business, which I’ll discuss in more detail later in my comments. From a manufacturing and customer service demand perspective, we have built strong capabilities. We have had initial successes last year and this year and have had key demonstrations with several large last mile fleet operators, as well as state and municipal fleets, which are either already underway or plan to begin in early 2024. We’ll talk about all of this in detail in a moment, but I want to pause and acknowledge that I’m extremely proud of the hard work and dedication of our outstanding team here at Workhorse. Our team has overcome every obstacle place in our path, and I know that every one of us is deeply and passionately committed to success. I’m incredibly proud of the Workhorse team and great for those for contributions of all of our employees, including those whose jobs are impacted by the difficult but necessary actions we are taking to reduce our operating costs. Moving to Slide 5, let me take a few minutes to address the state of the commercial EV industry from our perspective. The Workhorse leadership and sales team spent the majority of last week at the Industry Trade show, the NTA Trade show in Indianapolis. Every OEM and the major Upfitters proudly display their future zero emission Class 3 to 7 commercial vehicle product lineups. There’s no question that the transition to a new generation of powertrain technology is coming. The question is really when will it come? The new CARB Clean Fleet mandate took effect on January 1 out in California, but is not yet being enforced. The commercial truck industry is uncertain on how to proceed with the transition to EVs. Most fleets, both big and small, are reluctant to make large investments on the necessary infrastructure to make the shift to either natural gas or electric power vehicles if the CARB mandates might get delayed or revised. Several OEMs are hedging their product development investments and supplier investments plans for EVs pushing out some time in. Here at Workhorse, after 2.5 years of backbreaking work, we feel that we are on the precise of success that we can and we will find a path forward. We have the products, supplier and dealer partners, engineering capabilities, business systems, and manufacturing processes in place to emerge as a winner in the Class 4 to 6 segment. But that only happens if fleet customers both large and small start buying our products in 2024. In 2023, we continue to advance our product roadmap, all while navigating and solving challenges both internal and external to the company. Progress in this nascent commercial EV industry is not linear, and we know we will need to continue to address challenges as they pop up. And while our results for the year were affected by issues that slowed us down, we never stopped driving forward to create a viable and profitable EV OEM company. During the year, we rolled out our first W56 step van, signed up our first fleet customers and established our production capabilities for the W4CC and W750 vehicles. We also expanded our commercial dealer network, adding new dealers and up bidding partners in multiple states. In our aero business, we continue to expand our relationship with key government agencies and partners. Let’s review the key accomplishments and successes we achieved at Workhorse in 2023. We will have four distinct commercial EV products in production and we have four distinct commercial EV products in production. We received important HVIP certification for both our Class 4 and our Class 5,6 vehicles. We secured initial fleet orders for the W56 step vans and strip chassis, and we organically grew the stables business. Additionally, we completed the overhaul of our Union City manufacturing complex. The Workhorse Ranch is now capable of building 5,000 and painting 3,000 vehicles per year on one shift. Our lean, highly flexible production facility can ramp up staffing and production in line with future market demand. At our Aero business, we sold our first units. We are on track for FA certification in first quarter this year, landed several government funded grants all while we continue to evaluate alternatives for the business. Moving to Slide 6. We have stabilized production of both the W4CC and W750 miles and handed those production over to the plant, while continuing dealer programs and field demonstrations for both of these vehicles. Notably, we successfully overcame unexpected issues with California’s HVIP program and worked with the California Air Resources Board to list the W4CC and the W750 in the HVIP program in a first of its kind program for intermediate vehicle manufacturers. We were able to do this by demonstrating the strength of our service, warranty and delivery network and complete care options for customers purchasing any Workhorse badge product. With enough finished inventory in place, we have temporarily paused production of these products, shifting our workforce over to focus on the ramp-up of the W56 production in the first quarter. As orders materialize, we will add the necessary hourly workforce to meet future customer demand for all of our products. Moving to Slide 7. We received final HVIP certification approval for the W56 step van in Q4. The final critical milestones delivering these vehicles to the important California market in advance of advanced clean fleet regulation. We continue to increase our dealer network in California and have adjusted staffing and production aligned with market demand over the last few months accordingly. Turning to Slide 8. I want to share a few pictures with you of what really is being done at the Union City plant to produce our industry game-changing step van, which went from concept to production, including passing more than 250,000 miles of validation in less than 22 months. And just in case you are wondering, this is a robust and I mean a really robust vehicle based on the comments we are hearing back from our customers on these field demonstrations. I do not know of any start-up OEM that could have delivered this type of product in less than two years. Chassis units are moving down the line on a consistent basis. And by the end of 2024, there will be four variants of the W56 in production. We now have our fixtures and lift assist tools in place for both the chassis line as well as the body line shown in the middle of the slide. Finally, we are now painting the step vans in 1 of 3 colors. The Workhorse Ranch is ready to roll and fulfill future customer orders. On Slide 9, we continue to have strong customer interest in the W56. This is demonstrated by the receipt of our first 215 vehicle unit orders for the step van that we expect to deliver in 2024. As we like to say here at Workhorse, we’re 2 for 2. We also intend to introduce a longer wheel-based version of the W56 in the second half of ’24 based on the direct request of several of our fleet customers, specifically in the linen and industrial supply segments. The company has multiple product demonstrations already underway or set to begin in early ’24 with several large last-mile fleet operators as well as state and municipal fleets and other smaller fleet operators. Based on the demos we’ve had to date, we are optimistic about the prospects for the W56 as well as our W750 and W4CC products. We are able to go from order to delivery of a finished step van in 5 to 6 weeks. The shortest lead time for the Class 5, 6 step van market in North America, including custom upfit, paint and branding. We have received extremely positive driver and fleet manager feedback reflecting the vehicle’s strong performance in the field, as recently as last week, at the NTA show and from one of the largest package delivery companies in the country. According to customers, the W56 is a superior truck with innovative technology. Turning to Slide 10. We continue to build out our commercial dealer and service capabilities to capitalize on our product roadmap. I’m particularly excited by the significant expansion of our dealer network using our strict selection criteria. We continue to expand our dealer network with a focus on those regions where CARB clean fleet and clean track mandates will be adopted in ‘24 through 2027. We successfully added new certified dealers, bringing our network to 11 dealers nationwide with a twelfth pending and soon to be announced. As we continue to actively expand, we have a target number of 15 to 20 deals by the end of 2024. In addition, we have added 21 upfitting partners in the past nine months. As we recently shared, we also established progresses with W.W. Williams and Zeem Solutions to expand service and support options for customers in the field. On Slide 11, within our stable operations, we continue to electrify our delivery fleet, which is operating multiple delivery routes here in the Cincinnati area for FedEx Ground, organically gaining new route assignments due to our superior performance. We now have 7 Class 4 EV units in the delivery fleet and expect the whole fleet to be electrified in 2024. We executed peak season extremely well with Q4 ’23 revenue up more than 90% compared to Q4 of ’22, including the benefit of organically adding 20% of our signed routes at the request of FedEx. The lessons we are learning at stables are invaluable and give us tremendous credibility of fleets, not only FedEx but all the fleets we meet with. Moving to our Aero business on Slide 12. We achieved important progress in the last year on drone deployment and delivery to customers. First, we launched production, sold and delivered our first units of the HorseFly unmanned aerial vehicle or UAV. Nevertheless, during the first quarter of ’24, we have decided to suspend drone design and manufacturing and exclusively focused on less capital-intensive drones as a service model, and further develop our DAAS products and services in this area, where we see near-term profitable growth opportunities continuing to expand. Driving this decision was Aero’s continued ability to win additional grant awards from the USDA to support National Resources Conservation service. What we do for the USDA? Flying drones equipped with sensors and delivering actionable data is what our drones as a service model is all about. This service has continued to grow over the last two years as we first pioneered this capability with the USDA. In January, Workhorse received an additional $500,000 grant. And in February, we received a separate $350,000 grant to provide actionable data from sensor scanning to increase the efficiency of underserved farmers and ranchers land use. We are in advanced discussions with additional government agencies on future scanning and service opportunities at a significant potential grant or contract level. More broadly, our strategic view for the Aero business remains underway to ensure we are unlocking the most value for Workhorse shareholders while also best positioning our Aero business to capture and fund future growth opportunities as they see them. With that, I’ll turn it over to Bob to discuss our financial results. Bob Ginnan : Thanks, Rick. Let’s turn to Slide 13, we will cover our full year results. For the year, sales increased $8.1 million to $13.1 million for the full-year 2023 compared to $5 million in 2022, primarily resulting from the increase in W4CC sales and volumes. The W750,W56 products, which launched in the second of 2023 as well as stables by Workhorse and our Drone as-a-service offering also contributed to the increase in revenue. . Cost of sales for the full-year 2023 increased $0.7 million to $38.4 million compared to $37.7 million in 2022. The increase was primarily due to increased production and overhead costs to support higher sales volumes related to the new vehicle platforms and an increase in employee compensation related expenses compared to 2022 levels. This increase was partially offset by a decrease in inventory reserves, adjustments and disposals, which were driven by the disposition of C Series inventory in 2022. SG&A expenses for the full-year 2023 were $55.6 million, a decrease of $17.6 million compared to $73.2 million in 2022. The decrease was driven by a $25.2 million reduction in legal expenses and expenses attributable to the securities and derivative litigation settlements recognized in the prior year. This decrease was partially offset by a $3 million increase in employee compensation-related expenses, including non-cash stock-based compensation expense, a $2.1 million increase in professional and other services expense and a $0.6 million increase in corporate insurance expenses. R&D expenses for the full-year 2023 were $24.5 million, an increase of $1.3 million compared to $23.2 million in 2022. The increase was primarily driven by an increase of $1.4 million in employee compensation-related expenses and a $0.8 million increase in development expenses for new products. These increases were partially offset by a $1.4 million decrease in consulting expense. Other loss for the full-year 2023 was $10 million compared to $13.6 million income in 2022. Although loss in 2023 represent the impairment of our investment tropos. Other income in 2022 represented proceeds from the sale of C Series inventory that was previously fully reserved. Net interest expense in the current year was driven by a fair value adjustment of our convertible notes and warrants of $8.3 million and $2.1 million fees applied in connection with the securities purchase agreement and the equity line of credit purchase agreement offset by interest earned on cash balances in our money market investment accounts. Net interest expense in the prior year was primarily related to a $1.4 million of fair value adjustments, $0.3 million of contractual interest expense and $0.4 million on loss on conversion of former convertible notes, which were exchanged for common shares during 2022. For the years ended December 31, 2023, and 2022, we incurred taxable losses and thus no provisions for income tax benefits have been recorded. Net loss for the full-year 2023 was $124.6 million compared to a net loss of $117.3 million in 2022. Loss from operations for the full-year 2023 was $105.3 million compared to $129 million in 2022. Turning to Slide 14 to discuss our balance sheet. As of December 31, 2023, we had net inventory of $45 million as well as $35.8 million in cash, which includes $10 million in restricted cash. We are operating efficiently and selectively resizing our team here at Workhorse, while maintaining the necessary resources and skills on the team to continue to design, test and build world-class commercial trucks. Importantly, we are taking major strengths to strengthen our financial position. We entered into a sale-leaseback improvement for Union City manufacturing complex in January. The agreement we entered strengthens Workhorse’s financial position reflects the investments and work our team has put into refurbishing the plant and turning it into a first-class manufacturing facility. Workforce continues to support the activities of the purchaser and closing is expected in May of 2024. Turning to Slide 15 and our 2024 overview. Given the number of key customer demonstrations underway in Q1 and Q2, we intend to report on progress when it occurs. As a result, we will not be providing specific annual revenue or unit guidance at this time. Workhorse is entering 2024 with the strong production and delivery capabilities as well as a keen focus on financial discipline and cost control. As we speak, we are working hard to resolve our short-term liquidity issues described in our 10-K. Over the year, we will maintain our focus on operational excellence and cost reduction as we increase production, expand delivery of our commercial vehicles to meet our financial targets for 2024. At the same time, we will continue to evaluate opportunities to strengthen our financial position. With that, I’ll turn it back to Rick now to conclude. Rick Dauch: Thanks, Bob. To wrap up the call, I want to discuss our key near-term priorities, which are on Slide 16. Our focus is on strengthening our financial position, while we continue advancing our product roadmaps and ramp-up production as we secure orders for our commercial EVs. In plain in simple terms, we want to make sure we have the financial runway to build and sell trucks and provide drone services to our customers. Achieving our goal of pioneering the transition to zero-emission commercial vehicle is no easy feat, and it’s definitely not for the fainted heart. We believe we can. We believe we will emerge as a segment winner in this once-in-a-generation powertrain technology transition. The pace of the transition to EVs is unpredictable, and we cannot predict the speed at which the transition will occur. What we can control is to ensure we are 100% ready to meet the needs of our customers. We are prepared for the transition from every touch point of the delivery process. We have the people, products, processes, supplier and commercial business partners to meet the needs of the market when this EV transition hits its stride. We need our customers to start ramping up their own transition to EVpowered vehicles and believe that two or three of the largest fleets here in North America are ready to do so, hopefully soon. Our team’s perseverance in the face of market and regulatory challenges is commendable, and we remain determined and optimistic. The groundwork is done, and the foundations are in place for us to be in the Class 4, 6 segment leader in the commercial EV segment. We expect to emerge a winner in the space, and we look forward to continuing to do the work to get ourselves there. Now we’ll open the call for questions. Donna, I’ll turn it back over to you. See also 10 Best Semiconductor ETFs and Top 20 Mineral Importing Countries in the World. Q&A Session Follow Workhorse Group Inc. (OTCMKTS:WKHS) Follow Workhorse Group Inc. (OTCMKTS:WKHS) or Subscribe with Google We may use your email to send marketing emails about our services. Click here to read our privacy policy. Operator: [Operator Instructions] Today’s first question is coming from Sherif Elmaghrabi of BTIG. Sherif Elmaghrabi: So first, I want to start with how do you prioritize orders between the W56, W750 and the W4CC this year? How are you managing that capacity? Rick Dauch: We have two separate lines — we actually have three separate lines. We have a dedicated chassis line for the W56, which has a corresponding cab and box line. So that’s a separate line, and we can do about 5,000 vehicles a year there. We talk to our suppliers and they can ramp up at that level as well. We then have two separate lines. We have the W4CC line, which we were building at about 4 a week — 4 a day, sorry, before we put it on pause. And that leads into a separate W750 line, which we can build 1 or 2 a day there, okay? So if you add our plant, you’d see very distinct assembly lines. And it still leaves about a third of the plant open for future products if we want to do something there. Sherif Elmaghrabi: That’s helpful. And then on the CARB mandate, can you tell us what you’re hearing regarding its enforcement or revision? Rick Dauch: That’s like the million dollar question. We’ve heard both sides of the equation in terms of the California Trucking Association taken exception with CARB. And CARB saying that they’re very firm and they’re going to put it in place this year. We just don’t know the timing. I’d be guessing if I try to guess right now. So we hope sooner rather than later. And we’ve talked to many fleets. And many fleets in California, they have a very good handle on how many trucks they have in the state. They know what they have to do to meet the CARB mandate by the end of the year. And that gets kicked in. It’s a significant demand. And we’re not sure there’s a whole lot of people left to fulfill that demand. We want to be one of them. Operator: [Operator Instructions] At this time, I would like to turn it back over to Mr. Dauch for closing comments. Rick Dauch: Well, it must be lunchtime on the East Coast, and we appreciate it. Hopefully, if you have any questions, reach out to Stan, and we’ll do that. And hopefully, we’ll be able to report some good news on our demos and turn into orders. We’ll get our plant working, staying busy. Thanks a lot for your interest in Workhorse. Thanks. Bye. Operator: Ladies and gentlemen, thank you for your participation. This concludes today’s event. You may disconnect your lines or log off the webcast at this time, and enjoy the rest of your day. Follow Workhorse Group Inc. (OTCMKTS:WKHS) Follow Workhorse Group Inc. (OTCMKTS:WKHS) or Subscribe with Google We may use your email to send marketing emails about our services. Click here to read our privacy policy......»»
Ballard Power Systems Inc. (NASDAQ:BLDP) Q4 2023 Earnings Call Transcript
Ballard Power Systems Inc. (NASDAQ:BLDP) Q4 2023 Earnings Call Transcript March 11, 2024 Ballard Power Systems Inc. isn’t one of the 30 most popular stocks among hedge funds at the end of the third quarter (see the details here). Operator: Thank you for standing by. This is the conference operator. Welcome to the Ballard Power […] Ballard Power Systems Inc. (NASDAQ:BLDP) Q4 2023 Earnings Call Transcript March 11, 2024 Ballard Power Systems Inc. isn’t one of the 30 most popular stocks among hedge funds at the end of the third quarter (see the details here). Operator: Thank you for standing by. This is the conference operator. Welcome to the Ballard Power Systems’ Fourth Quarter 2023 Results Conference Call. As a reminder, all participants are in listen-only mode and the conference is being recorded. [Operator Instructions] I would now like to turn the conference over to Kate Charlton, Vice President, Investor Relations. Please go ahead. Kate Charlton: Thank you, operator, and good morning. Welcome to Ballard’s fourth quarter year and end 2023 financial and operating results conference call. With us on today’s call are Randy MacEwen, Ballard’s CEO; and Paul Dobson, Chief Financial Officer. We will be making forward-looking statements that are based on management’s current expectations, beliefs and assumptions concerning future events. Actual results could be materially different. Please refer to our most recent annual information form and other public filings for our complete disclaimer and related information. I will now turn the call over to Randy. Randy MacEwen: Thank you Kate and welcome everyone to today’s conference call. Our Q4 and full year results demonstrated measured progress against the 2023 milestones we outlined for investors in our 2023 Capital Market’s Day. Let me share a few highlights from the year. We shipped 74 megawatts of product in 2023 including 540 fuel cell engines. We grew revenues on a year-over-year and quarter-over-quarter basis by 25% and 130% respectively. We made good progress on gross margins and cash burn which Paul will discuss. We supported numerous customers in maturing their fuel cell platforms while also securing new customer platform wins across our verticals. We’ve increased our diversification across our business. We launched our next generation bipolar plate project to enable further cost reduction and production scaling. We signed the UN Global Compact affirming our commitment to integrate universal sustained principles of environment, labor, human rights and anti-corruption in our business and we’re now sourcing 100% of the hydrogen used at our Denmark facility from green sources. We’ll now zoom-in on our key market verticals for a brief update on each. Activity in our bus vertical indicates increasing acceptance of fuel cell buses for transit operators as a viable option to de-carbonize their fleets. Revenues from bus customers for the year were up almost 20% compared to the year 2022. Even more encouraging, order backlog for bus customers is up 134% compared to the same period last year. Our growth in this market is highlighted by the success of our bus OEM customers including Solaris in Europe and New Flyer in North America. To illustrate just how far these customers have come in maturing their fuel cell platforms, I’ll provide a brief overview of some of the evolution of these relationships. Solaris started its relationship with Ballard in 2013 when it ordered two fuel cell modules. For the next 10 years, Solaris ordered an aggregate of 213 modules or roughly 20 per year. In 2023, Solaris ordered 365 modules from Ballard, more than three times the 98 modules it ordered in 2022. Solaris has developed a strong global position in the hydrogen fuel cell bus market and we believe Solaris is just getting started. For New Flyer from 2014 to 2022, New Flyer ordered a total of 103 engines from Ballard. In 2023, New Flyer ordered 141 modules, surpassing the entire cumulative total of modules ordered prior to the year and also up more than four times the previous year’s total. Similarly, we believe New Flyer is only beginning to scratch the surface of potential in the North American transit bus market. We continue to see growth in the deployment of fuel cell buses in our key regions. According to our recent CALSTART survey on zero-emission buses, the number of hydrogen buses either ordered or deployed in the US increased 76% in 2023. Turning to the truck market, we continue to emphasize the need for patients in this market vertical while tier one OEMs develop truck platforms to bring to the market. However, in the interim, we establish a new partnership with Ford Trucks for the European heavy duty truck platform along with another engine manufacturer in Europe. We believe these partnerships offer routes to scaled commercial volumes in this segment. We have a double lane focus for the truck vertical. We’ll continue to work towards establishing new relationships with truck OEMs and support them through the development phase of their fuel cell truck platforms and on to scale deployment. At the same time, we’ll continue to be proactive in working with vehicle integrators and up-fitters and end-users to bring fuel cell truck platforms to the market in advance of the major OEMs. Given an increasingly supportive national and state policy complex in the US for zero-emission trucks and fleets, we believe the US will be a key market for the adoption of hydrogen-powered fuel cell trucks. 2023 was an important year for our rail vertical. Revenues for the segment were up nearly four times from the prior year, and our order book is also up. We’re delighted to see growing market interest from our customers, CPKC, Siemens, and Stadler. We believe that interest from operators in using fuel cell engines to de-carbonize rail lines continues to grow, given the market requirements for high power and long distances and the avoided cost of catenary wire infrastructure. We experienced significant growth in our marine vertical, with revenues in 2023, while still relatively modest, up roughly three times greater than the prior year. We’re also pleased with the performance of Norled’s MF Hydra Ferry, the world’s first liquid hydrogen-fueled powered ferry, as it has now accumulated 4,000 hours of run time in real operation with excellent reliability. Our order backlog for marine customers also experienced growth, has now doubled from the same period in 2022. The order backlog, combined with our purpose-built marine fuel cell engine that has two type approvals, positions us well to work with an increasing number of customers that want to de-carbonize their marine operations. In our stationary power market, we saw revenue grow by 15% in 2023. Revenue growth was driven by shipments to an increasing number of applications that use fuel cells for stationary power. For example, we saw megawatt-scale deliveries for customers using fuel cells to power data centers, EV charging stations, and even to support grid balancing in renewable power projects. We’ve also seen the emergence of medium power applications, where fuel cells are deployed to power construction sites, TV and film production sites, EV charging, and smaller data centers as well. Our backlog from stationary power customers declined 36% year-over-year, reflecting the lumping nature of this business. However, subsequent to the quarter, we received an order for 15 megawatts of fuel cell systems from a UK-based company that specializes in renewable off-grid power generation. We’re particularly excited about this repeat customer, as 15 megawatts is more than triple the cumulative amount of fuel cells ordered by this customer previously. This demonstrates substantial momentum with this customer’s platform and emerging opportunities for hydrogen fuel cells as a solution in the stationary power markets. In 2023, we completed a successful demonstration of our fuel cell technology, where it provided back-up power for a data center over 48 hours with 99.999% uptime, in partnership with Caterpillar and Microsoft. This project provides substantial learnings that position us to capitalize on the growing power demand of data centers. The data center market offers considerable opportunities to deploy our products as backup power. As of 2022, data centers consumed 84,000 gigawatt hours of power. To meet future power requirements of data centers, it’s estimated that a further 70 gigawatts of renewable power capacity will be needed and added by 2027, and 21 gigawatts of fuel cell power will be needed over the same period. In our emerging markets vertical, revenue declined 27% year-over-year, driven primarily by the conclusion of certain technology solutions programs and lower shipments to customers in the material handling and off-road segments. Our order book was also modestly lower at the end of the year compared to the prior year. Similar to the truck market, the adoption of fuel cells in key heavy-duty markets like off-road vehicles and construction equipment is still in the early innings. In the near term, we’ll continue supporting customers like First Mode as they plan deployments of their new gen solution to power ultra-class mining haul trucks with Ballard fuel cell engines at Anglo-American mining sites. We’re also excited to see our customer-applied hydrogen deploy our fuel cell in a 30-ton excavator platform that will begin demonstrations in 2024. Now, looking at our key geographic regions, European revenue grew close to 30% year-over-year and now account for more than 50% of our total order backlog. We continue to see important hydrogen policy developments in Europe. The EU has agreed on CO2 emission standards for heavy-duty vehicles that will require emissions to be reduced by 45% by 2030 for all vehicles above 7.5 tons and for city buses to be reduced by 45% by 2030. The EU has also unveiled a target to reduce carbon emissions by 90% by 2040 as part of its Fit for 55 legislation, a target we expect will drive further interest in hydrogen fuel cells. Lastly, EU launched its first auction for hydrogen production subsidies valued EUR 800 million in the fall of 2023 and will launch an auction for further EUR 2.2 billion of support in spring 2024. In North America, we see momentum for hydrogen and hydrogen fuel cells accelerating over the past year. Revenue from the region increased by more than 30% in 2023, while the order backlog for North American customers has more than doubled over the past year. For the US in particular, 2023 was a milestone year from a policy perspective, as seven hubs were awarded $7 billion to support the adoption of hydrogen across the value chain, while the IRS provided guidance for the 45B green hydrogen production tax credit. These policies, combined with electric grid limitations, will provide favorable tailwinds to our industry through 2032. We’re also encouraged by continued support at the state level, with California recently announcing close to $2 billion of funding that will be available to support the build-out of hydrogen refueling infrastructure, another key unlock for greater adoption of fuel cell vehicles. We now turn to provide an update on China. And as a reminder, we have a joint venture with Weichai Power based in Weifang, Shandong province that addresses the bus, truck and forklift markets in China. The JV was established in 2018 as 51% owned by Weichai and 49% by Ballard. Since that time, we built a new production facility in Weifang to manufacture bipolar plates, assemble stacks and manufacture fuel cell engines, all based on Ballard stack designs. Ballard supplies MEAs to the JV and the JV facility has approximately 225,000 square feet, including manufacturing lines for annual production capacity of 34,000 fuel cell stacks and 20,000 fuel cell engines, representing 2 gigawatts of fuel cells. Over the past few years, the Weichai Ballard JV has developed a product suite of fuel cell engines for the China bus and truck market with nominal power ranges of 50 kilowatts, 80 kilowatts, 110 kilowatts, 160 kilowatts and 200 kilowatts. In terms of market adoption, we note that the hydrogen fuel cell industry struggled during the three years of various lockdowns during COVID-19 in 2020 through 2022 and with constrained local government funding coming out of COVID. We’re also seeing a very challenging macro-economic environment in China as well as continued challenges related to the hydrogen fuel cell electric vehicle policy landscape. Notwithstanding these challenges, the market made measured progress in 2023. For full year ’23, there were approximately 7,500 fuel cell electric vehicles sold in China, bringing total deployments to approximately 21,000 fuel cell electric vehicles, including approximately 7,300 fuel cell buses and 13,700 fuel cell trucks. Now, given that our Weichai Ballard joint venture doesn’t have a strong exposure to five cluster regions under the National Fuel Cell Policy Program, our market share was adversely impacted in 2023. Our Weichai Ballard JV sold approximately 200 modules in ’23, primarily for the Shandong bus and truck market. Importantly, there’s been continued investment in hydrogen refueling stations in China. At the end of 2023, 320 HRSs have been completed in China, which is almost 100 more than the end of 2022. There’s also an additional 140 HRS currently under construction, which would bring the total HRSs to 460 in China. In Shandong province, there are 29 HRSs in operation, with another 9 under construction. In a recent important policy development, which we believe is quite favourable to the Weichai Ballard joint venture, the Shandong government issued a new policy on February 29th that hydrogen fuel cell trucks will be exempted from paying highway tolls in Shandong for two years. This is expected to provide about a 20% TCO cost savings for truck operators, and should be an important catalyst for the adoption of fuel cell trucks in Shandong. The market is expecting other provinces to follow suit later in 2024. Our JV is still assessing this new policy. Our JV is still assessing this new policy, including implications for 2024 and 2025. Based on current sales activities and this new policy, we’re expecting growth in the fuel cell engine sales in 2024 at the Weichai Ballard JV. We’re encouraged to see our business in China recover in 2023, as revenue grew by 30% year-over-year in-line with our key geographic markets. With that review of the verticals and the regions, we note that consolidated market activity rolled up to a record new order intake of $64.7 million in Q4. Let me repeat that. We achieved record new order intake of $64.7 million in Q4. Now when we look at our order backlog, it stood at $130.5 million at the end of the year, down 3.3% compared to the end of Q3. There’s some important context here. This new record order intake of $64.7 million in Q4 was more than offset by a reduction of $47.1 million, resulting from record engine shipments during the quarter, and the removal of $21.7 million from our order backlog of previously booked orders from a specific customer now experiencing financing and related program delays. We believe this was a prudent approach at this time. We’re working closely with this customer as they finalize their financing plans to enable a return of orders to the order book and a resumption of shipments in later 2024. Notably, we highlight that orders from power products represent more than 80% of the order backlog, while orders from customers in Europe and North America represent almost 80% of the order backlog. With that, I’ll turn it over to Paul to discuss our financials. Paul Dobson: Thanks, Randy. In Q4, Ballard delivered $46.8 million in revenue, a record level of quarterly revenues for Ballard, and an increase of 132% compared to the same period in the previous year, driven by strong growth in the bus, rail, and marine verticals. Ballard reported a gross margin of negative 22%, although this figure was negatively impacted by non-cash inventory provisions. Adjusting for this non-cash inventory charge underlying gross margins in Q4 were negative 1%, or very close to break even, driven by revenue scaling across fixed manufacturing costs and success with our product cost down initiatives. Our activity levels and product shipments in Q4 demonstrate our ability to successfully ramp and scale our production volumes, proving that we have the capabilities to meet growing customer demand. For the full year of 2023, Ballard delivered revenues of $102.4 million, equating to a 25% annual growth. As we discussed at the Capital Markets Day earlier in the year, we projected margin improvement as revenue scaled and cost reduction initiatives were brought to fruition. Reported gross margins of negative 21% were impacted by non-cash inventory charges, which when adjusted for, lead to a full year margin of negative 9%, compared to negative 10% in 2022, demonstrating progress in achieving gross margin break even as our revenue scales. We do not expect the same level of inventory adjustments to persist in 2024, given confidence in our ability to achieve our gross margin targets. However, as revenues move up and down by quarter, gross margins will vary due to our fixed manufacturing costs. We reported total operating expenses of $149 million, including expenses for BMS, at the upper middle range of our guidance, and capital expenditures of $41.4 million at the bottom end of our guidance. Our total cash used in the business decreased by close to $48 million to approximately $163 million. We ended the year in a strong financial position with $751 million of cash. Our financial results were materially impacted by a number of non-cash charges in the year. As noted previously, we recorded $12.6 million of non-cash charges in our cost of goods sold as a result of impairments to inventory of previous generations of products. Our net income was impacted by an equity investment impairment charge of $12.9 million, reflecting the compression of general market valuations for zero-emission vehicle manufacturers in our portfolio of long-term financial investments and intangible asset and goodwill impairments of $2.3 million and $24 million, respectively, as a result of our decision to wind up the Ballard Motive Solutions business. Consistent with last year, we are now providing our guidance for total operating expense and capital expenditure in 2024. We anticipate total operating expense to be between $145 and $165 million, and for capital expenditures to be between $50 and $70 million. The increase in total operating expense guidance reflects inflationary increases and an acceleration of Ballard’s efforts to develop a family of next generation products for small, medium, and large power requirements to streamline our product portfolio, thereby advancing product cost down initiatives and improving revenue scale benefits for our gross margins. The increase in capital expenditure guidance reflects a deferral of spending related to Ballard’s next manufacturing facility from 2023 to 2024. Given the macroeconomic outlook and in the context of our 2024 annual operating plan, we continue to review our spend carefully to ensure we are appropriately investing in our growth strategy, while maintaining a strong balance sheet. We expect that revenues in 2024 will be back-end weighted on a roughly 30-70 basis for H1 and H2, similar to 2023. We also expect that underlying gross margins will follow a similar path in 2024 as they did in 2023 as revenues scale through the year. We expect gross margins will break even or turn positive in Q4. With that, I’ll turn it over to Randy to wrap up the call before Q&A. Randy MacEwen: Thanks, Paul. In the context of heightened geopolitical risks and continued de-globalization, we want to provide an update on our global manufacturing strategy, which we refer to as Local for Local. This is a plan to ensure we have the appropriate manufacturing footprint and assets in each of our three key markets, North America, Europe, and China, to support expected regional market demand growth through 2030. In 2023, given an increasingly constructive hydrogen policy landscape and increased market activity in the U.S. and Europe, and given the continued hydrogen fuel cell policy uncertainties and market delays in China, as well as geopolitical risks, we decided to suspend our MEA localization plan in China while we completed a comparative analysis on manufacturing capacity expansion options and possible sequencing prioritization in the U.S. and or European markets. We’ve concluded our comparative review and have prioritized the U.S. as the highest priority market for our next manufacturing facility. We have selected a site and are negotiating our land acquisition agreement. As an important part of this process, in 2023, we also submitted certain applications for government funding support in the U.S. when we expect to receive definitive feedback in the near-term. Looking forward, we believe the transition of hydrogen policy announcements to implementation will provide mid-term momentum with availability of low-cost, low-carbon hydrogen, enabling accelerated adoption of fuel cells. In the context of an increasingly constructive policy environment, a growing sales pipeline and order book, along with our continued investment in product cost reduction and advanced manufacturing, we’re well positioned for strong, long-term market share. Finally, we expect 2024 will be marked by continued growth in our order backlog, major order announcements from customers in our bus and stationary power verticals, and the announcement of our next manufacturing facility, each of which will serve as important milestones on our journey to scaled adoption of hydrogen fuel cells. Ballard is well positioned with a growing product order backlog, industry-leading fuel cell technology for our market applications, key customers and partnerships across our target markets, industry-leading deployment experience, and a strong balance sheet. We’re confident we can deliver long-term shareholder value while making a meaningful impact by providing zero-emission fuel cell power for a sustainable planet. With that, I’ll turn the call back over to the operator for questions. Operator: Thank you. We will now begin the question-and-answer session. [Operator instructions] Our first question comes from Rob Brown of Lake Street Capital Markets. Please go ahead. See also 30 Unhappiest Cities in America and Jim Cramer Does Not Like These 10 Stocks. Q&A Session Follow Ballard Power Systems Inc (NASDAQ:BLDP) Follow Ballard Power Systems Inc (NASDAQ:BLDP) or Subscribe with Google We may use your email to send marketing emails about our services. Click here to read our privacy policy. Rob Brown: Good morning. Just wanted to follow-up on the stationary market and some of the orders you’ve gotten there. I think pretty strong demand. Could you just give us some color on how the order activities looking in that market and maybe what’s driving that bigger order in the UK? Randy MacEwen: Yes, Rob, I’d say a couple of things about the stationary power market. One is that we’re still learning a lot about this market and particularly where the value proposition for fuel, PEM fuel cells particularly express themselves most strongly. And we’re seeing that it’s actually a diversity of different market applications of interest and this 150 megawatt order is a very good example. It’s not specific to one market segment, but actually stationary power markets overall. And I would say where you’re seeing grid reliability issues or off-grid issues, certainly an area where PEM is in some cases primary, but in many cases as backup power is seeing interest. The market that I’m particularly interested in is the data center market. We all know about the growth occurring in the data center market. Hyperscalers are looking at 10 times, 20 times type growth here in the next handful of years. And the number one barrier to adoption of new data centers is access to power. So there’s a lot of work going on with the Hyperscalers looking at renewable energy PPAs at I would say record scale. In addition to that, they’re also looking at their stationary power requirements for backup. And we do see that zero-emission continues to be an important piece of the puzzle there as many of these Hyperscalers really do have very strong de-carbonization mandates. So that’s a market that we’re seeing a lot of interest and obviously made some work, some important progress last year with Caterpillar and Microsoft. That’s a market we continue to learn on and I think will be one that will be providing updates as we go forward as well. Operator: Our next question comes from Aaron MacNeil of TD Cowen. Please go ahead. Aaron MacNeil: Morning all. Thanks for taking my questions. Randy, I can appreciate that this doesn’t directly impact Ballard, but many saw the hourly matching requirement for green hydrogen production subsidies under the IRA as a potential negative for production levels in the U.S. I guess how did that impact your calculus and how do you ultimately get beyond that issue as you select the U.S. as the key market? Randy MacEwen: Yes, so Aaron, thanks for the question. I do think that as you rewind the tape say six or nine months ago, there was a lot of optimism for the interpretation of the hydrogen PTC, which for clean hydrogen, the cleanest hydrogen is three dollars per kilogram. So we do have obviously some guidance issued in late December. There’s a lot of work going on in the industry. Ballard is participating along with associations submitting responses. The three the three pillars as referred to that have been added, additionality, time matching as well as regionality all have some challenges associated with them. In my opinion, if they’re all accepted consistent with current guidance, we still have a very robust market for hydrogen, the access to low cost green hydrogen moving forward. My view is that some of them I think we’ll see some difference in the final iterations. And I think the hourly matching one in my opinion is the most challenging of all of these. I think from a technical perspective, it’s not viable to satisfy that one. So that’s what I expect that we’ll see that pushed back. I think the concept of hourly will continue but the implementation time will likely be deferred. So whether that’s 2028, 2030, 2032, not sure what the time frame will be but I do expect that one to be deferred. Aaron MacNeil: Got it. And then maybe I’ll just stick with this since we’re already on the topic, but what’s the sort of timeline for investment ramp up of the facility and you mentioned subsidies, so cost estimates both gross and net of those subsidies? Randy MacEwen: Yes, we’ll expect to be making announcement fairly imminently on kind of our US facility. We do see that there are opportunities to put some capital to work here and position us strongly in this market. So we will see in 2024 as part of the CAPEX that Paul already described in our guidance, we’ll see contribution of that CAPEX coming from work for a new US facility. But I think you’re going to have to wait a little bit, Aaron, fairly soon though. Operator: Our next question comes from Sonia Jane of UPS. Please go ahead. Sonia Jane: Hi, you guys mentioned your Next Generation Bipolar Plate Project as part of a cost reduction program. How do you see future development with this opportunity and could you provide more color and cost reduction initiatives in 2024 and 2025? Randy MacEwen: Yes, thanks for the question. And you’ll recall during the Capital Markets Day last year, we announced this new Bipolar Plate Initiative. And previously we’d announced what we call our 3×3 stack cost reduction program to achieve a 70% cost reduction of our stacks, which, at last year we had achieved at least 55% of that and well on our way, in my opinion, to exceed the 70%, probably moving closer to 75%, by the end of this year. Incremental, not included in that, incremental to that was this new Bipolar Plate Project. And, when you look at this project, it’s really about looking at the five workstations we have in our process flow for plate production and introducing new equipment and production processes that will dramatically reduce the cost. Part of that is effectively eliminating all labor. So this will be 100% fully automated as well as importantly, dramatically improving yields and reducing scrap rates and reducing tack time. So it’s a very important initiative and we should see substantially complete that initiative by late this year with implications for a cost structure hitting in the 2025 time frame. Operator: Our next question comes from Dushyant Ailiani of Jefferies. Please go ahead. Dushyant Ailani: Hi, thank you for taking my questions. I think my first one is on just trying to understand, for 2024 growth within your sub-segments, where are you going to see the most? I think you talked about bus and stationary, but what about the others if you could kind of just break it down? Randy MacEwen: Yes, thanks for the question. I think one of the things that we’re really happy about is the diversification we’re seeing across our revenue base from a vertical perspective, from a geographic market perspective, from a customer perspective. We’re seeing that play out in our order book. We’re seeing that play out in our sales pipeline. I do think in the very near term, the next few years, bus will continue to be the largest market. We’re seeing a lot of activity there in the European and North American bus market. Thousands of buses are currently being quoted in the marketplace. So I think there’s a very significant transition there. I think one of the key drivers there, by the way, is really not just moving past the advantages, the operational advantages of range and refuel time, but also the challenges seen with scaling of recharging infrastructure. And I think the ability to scale hydrogen refueling infrastructure showing significant CapEx advantages. So the bus market is clearly one we’re going to see grow in the coming years. You did mention stationary. Stationary, rail and marine, I would highlight all very similar in that there are larger power requirements for these markets. And it means particularly in early stages of market adoption, you’ll see lumpiness from quarter to quarter. We’ve mentioned a few times that the rail market is surprised to the upside. We have I think some good news coming in the U.S. market for rail as well. But I would highlight that, of those markets, the one market that I think will continue to see some delays on is the truck market. But long-term, in my opinion, the truck market is very compelling, particularly in the U.S. commercial vehicle market where transportation is now displaced, electric power generation as the largest contributor to GHG emissions, and where Class 7 and Class 8 trucks disproportionately contribute almost half of GHG emissions and NOx emissions in the U.S. marketplace. And when you look at the policies that are in place at the federal level, we just talked about, for example, the production tax credit for hydrogen. There’s also some incentives in place for zero-emission battery electric and fuel cell electric trucks. And then you move to the state level, and particularly you’ve got the advanced clean trucks regulations in California, the advanced clean fleets. Those are, by the way, for regulating truck OEMs. You’ve got advanced clean fleets, which are regulating fleet operators. When you put all these together, I think from 2024 through 2035, there is a massive change coming in the U.S. market from diesel to zero-emission. And I think hydrogen fuel cells will play a very important role. And I just want to highlight again here, we’re seeing that in the truck market, particularly heavier trucks, the barriers for recharging infrastructure and the capacity requirements for large fleets of large trucks and the implications and costs and availability of power as well as the lead times for feeder upgrades and substation upgrades ranging from anywhere from 12 to 48 months. We see this as a very large market opportunity for hydrogen. So while we won’t see, coming back to your question, near-term growth in the truck market, we’re fairly bullish about the long-term growth market for trucks in our three key regions, but I’m just profiling there the US in particular. Dushyant Ailani: Brilliant. Thank you so much for the detailed response. And my next question was just, I think you talked about some project delays from one of your customers. Are you hearing similar conversations from other customers or was this just a one-off thing? Could you give a little bit more details around that and where that kind of falls in within the segment? Randy MacEwen: Yes, this is, I characterize very much as a one-off, many of the customers we have, we’ve got good visibility into their plans, good visibility into their balance sheet, etc. So this is a situation that is unfortunate, but we are working with that customer expecting to get back on track here in 2024. Operator: Our next question comes from Jordan Levy of Truist Securities. Please go ahead. Jordan Levy: Morning, all. Thanks for all the details. I just wanted to get a sense, I know that you said that kind of toward the end of the year, a similar trajectory on gross margins as you get toward the end of the year, kind of getting to that break even a positive gross margin. So I just wanted to get a sense, is sort of that 4Q level we saw of volumes or maybe slightly higher sort of the break-even level right now, adjusting for inventory impairments and that sort of thing? And should we expect that to continue kind of this year? Paul Dobson: Yes, it’s a Paul here, Jordan. Thanks for the question. Yes, I’d say that that sort of level of revenue and scaling possibly a little bit higher is indicative of where we think gross margin break-even is. You know what, we have to bear in mind though that our revenue has been shifting as well, more towards in favor of products. Product sales versus our technology solutions and product sales has a lower contribution margin. So that shift is going to have an impact as well. But as we said in the comments, we don’t expect the level of inventory provision that we took and I think we were being somewhat conservative in Q4 on our inventory provisions. We don’t expect that same level to continue every year or every certainly at the end of year or fourth quarter. More historically, our inventory provisions have been in kind of a 6% range or six points of margin and we would see it sort of being in the 3% to 5% range going forward. Just for inventory provisions subject to scaling of revenues. So we do expect with our 30%, 70% revenue split, that gross margins will go down again in Q1 and Q2 because of lower revenues and scaling effect but should be higher than H1 of 2023. Similarly, H2 in 2024 should be higher than 2023, adjusting for the inventory provision. Operator: Our next question comes from Kashy Harrison of Piper Sandler. Please go ahead. Kashy Harrison: Good morning, everybody, and thank you for taking my questions. So first one for me, Randy, in the closing section of your prepared remarks, you said that you expect the order book to grow in 2024 and that we should look out for some major announcements as well. And so I’m just wondering, is this 6060 million dollar order intake quarter, is that indicative of the new run rate moving forward? I’m just trying to get a sense of how you’re thinking about your year-end ’24 backlog under conservative assumptions. Randy MacEwen: Yes, Kashy, what I’d say is that, when you look at our revenue, as Paul alluded to last year and this year, typically 70% weighted in the second half of the year and I think it was around 45% in Q4, we see a similar pattern on order intake as well, where order intake is typically weighted to the back part of the year. And there are a couple of reasons for that. But so I don’t think you can expect to see a $60 million run rate, particularly early in the year. Kashy Harrison: Got it. Got it. But is there any way, can you give us maybe a conservative view on how much order growth we should be looking for in 2024? Randy MacEwen: Yes, no, I think right now with where we are, it’s probably not prudent for us to do that. We’ll kind of report the quarter intake quarter to quarter and if we have good visibility on that later in the year, we can revisit that. Kashy Harrison: Fair enough. And then my follow-up question, just a simple one. Is there a simple way to reconcile the year-end order book, whether it’s the 12-month one or the total one to the next 12 months of revenues? Like do you have a simple rule of thumb for how we should be thinking about translating the order book into revenues? And that’s it for me. Thank you. Randy MacEwen: Yes, I think you could probably use 2023 as a bit of a guide, where in 2023 our order book was roughly 60-65% of the revenue that we actually recognized. So in other words, we had order book support coming into the year of in that 60-65% range for full year revenue. Operator: Our next question comes from Vikram Bagri of Citi Capital. Please go ahead. Vikram Bagri: Hi there. I was wondering if you could just share a bit more detail on the orders that you received in 4Q. Was there anything that kind of surprised to the upside there or maybe was even below what you could have expected? And then as you look out into the pipeline of orders, you had given some color on gross margin throughout the year, but just any color on kind of the margin profile of those potential orders that you see coming in would be helpful. Randy MacEwen: Yes, I don’t think there’s anything that was surprising because, when we’re working on sales opportunities, they typically don’t come into the pipeline and get converted within a month. They’re typically anywhere from 6 to 18 months of lead time and work with the customers. So and many of the customers, while we had some new customers, a lot of this is repeat business with customers that we have good customer intimacy and have visibility on where their plans are. But I do think the stationary power market was probably the big surprise in terms of the aggregate order entry, not just in Q4, but obviously here in Q1 as well. If you went back a year or two, I probably wouldn’t have been as bullish on the stationary power market showing that level of support. And by contrast, in fairness, I would say the truck market is probably where it’s been slower than what I would have expected. And then in terms of gross margins, when we look at pricing and look at our costs, I think Paul kind of profiled that we expect H1 2024 to be a modest improvement over H1 2023 and similar for the back half of 2024 compared to the back half of 2023 on an underlying basis. Operator: Our next question comes from Brett Castelli of Morningstar. Please go ahead. Brett Castelli: Hi, thank you. Just on the stationary market, I wanted to get your thoughts on what do you think is a realistic timeline for orders from data center customers specifically? Thank you......»»
13 Most Advanced Countries in Logistics
In this article, we will be taking a look at the 13 Most Advanced Countries in Logistics. You can also take a detailed look at the 5 Most Advanced Countries in Logistics. The logistics industry plays a critical role in facilitating global trade and commerce, encompassing the planning, implementation, and control of the movement and […] In this article, we will be taking a look at the 13 Most Advanced Countries in Logistics. You can also take a detailed look at the 5 Most Advanced Countries in Logistics. The logistics industry plays a critical role in facilitating global trade and commerce, encompassing the planning, implementation, and control of the movement and storage of goods and services. A comprehensive market analysis of the logistics industry worldwide involves examining key trends, drivers, challenges, and opportunities shaping the sector’s landscape. Logistics Industry – Market Analysis According to Precedence Research, the global logistics market size stood at $7.98 trillion in 2022 and it is expected to be reach a value of $18.23 trillion by 2030 with a CAGR of 10.7% from 2023 to 2030. North America logistics market was valued at $1.9 trillion in 2022. Their report highlights that not only is Asia-Pacific the largest logistics market ($3.4 trillion in 2022), but its also the fastest-growing one (CAGR 11.9% over the forecast period). The rise of e-commerce has revolutionized the logistics landscape, leading to a surge in demand for last-mile delivery services. In 2020 alone, global e-commerce sales amounted to approximately $4.28 trillion, representing a 27.6% increase compared to the previous year. Companies like Amazon.com, Inc. (NASDAQ:AMZN) have played a pivotal role in driving this growth, with its Prime program offering fast and reliable delivery to millions of customers worldwide. To meet the rising demand for last-mile delivery, logistics companies are investing in innovative solutions such as electric delivery vans, drones, and autonomous vehicles. Moreover, technological innovations are transforming the logistics industry, enhancing operational efficiency and customer experience. Deutsche Post AG (XETRA:DHL.DE) leverages IoT sensors to monitor temperature-sensitive shipments in real-time, ensuring the integrity of pharmaceutical and perishable goods during transit. Similarly, FedEx Corporation (NYSE:FDX) uses AI-powered route optimization algorithms to minimize delivery times and fuel consumption. The global logistics automation market is expected to reach $95.9 billion by 2027, driven by increased adoption of automation solutions across warehouses, distribution centers, and transportation fleets. Plus, environmental sustainability has become a top priority for the logistics industry, with companies implementing green initiatives to reduce carbon emissions and minimize environmental impact. For example, FedEx Corporation (NYSE:FDX) has adopted a “Reduce, Replace, Revolutionize” strategy to mitigate its environmental impact. This approach focuses on reducing emissions through fuel-efficient aircraft and vehicles, replacing traditional fuel with alternative fuels like biofuels and electricity, and revolutionizing the logistics industry through innovation and technology adoption. FedEx aims to achieve carbon-neutral operations globally by 2040. Additionally, the COVID-19 pandemic exposed vulnerabilities in global supply chains, prompting companies to reassess their supply chain strategies and invest in resilience measures. According to a survey by the Institute for Supply Management, 75% of companies experienced supply chain disruptions due to the pandemic. To enhance supply chain resilience, companies are adopting technologies such as blockchain and AI to improve visibility and mitigate risks. For example, Deutsche Post AG (XETRA:DHL.DE) uses AI-based fraud detection algorithms to identify and prevent fraudulent activities, such as identity theft, credit card fraud, and cargo theft, within the logistics supply chain. By analyzing transactional data, behavioral patterns, and anomalies, AI algorithms can detect suspicious activities and alert security personnel to take appropriate action promptly. This proactive approach helps mitigate the risk of financial losses, reputational damage, and security breaches in logistics operations. The logistics industry operates within a complex regulatory environment influenced by trade agreements, customs regulations, and geopolitical factors. For example, the implementation of the European Union’s Union Customs Code aims to modernize and streamline customs procedures, facilitating trade flows within the EU. Additionally, the United States-Mexico-Canada Agreement (USMCA) introduced new rules for trade between the three countries, impacting logistics operations and supply chain strategies. Emerging markets present lucrative opportunities for logistics companies seeking to expand their global footprint. According to the World Economic Forum, Africa’s logistics market is projected to reach $19.9 billion by 2023, driven by rapid urbanization and infrastructure development. Companies like Deutsche Post AG (XETRA:DHL.DE) and FedEx Corporation (NYSE:FDX) are investing in expanding their presence in these markets to capitalize on growing consumer demand. Moreover, the rise of digital platforms and on-demand logistics services presents new avenues for innovation and market disruption, offering opportunities for startups and established players alike to transform the industry landscape. Methodology To shortlist the 13 Most Advanced Countries in Logistics, we consulted credible sources like Conception Etude Realization Logistique and World Bank to learn about the Logistics Performance Index of different countries and to explore the 13 Most Advanced Countries in Logistics. We used Conception Etude Realization Logistique’s latest list (from 2023) to determine rankings of all the countries on the basis of their Logistics Performance Index. The list of 13 Most Advanced Countries in Logistics has been ranked in ascending order – from countries with lowest LPI score to the highest. By the way, Insider Monkey is an investing website that tracks the movements of corporate insiders and hedge funds. By using a similar consensus approach, we identify the best stock picks of more than 900 hedge funds investing in US stocks. The top 10 consensus stock picks of hedge funds outperformed the S&P 500 Index by more than 140 percentage points over the last 10 years. Whether you are a beginner investor or a professional one looking for the best stocks to buy, you can benefit from the wisdom of hedge funds and corporate insiders – check details here. 13 Most Advanced Countries in Logistics 13. France Logistics Performance Index: 3.9 France shows a strong logistical infrastructure supported by its central location in Europe, extensive transportation networks, and diverse economy. Its strategic position as a gateway to Europe, combined with its well-developed road, rail, and waterway networks, facilitates the smooth movement of goods domestically and internationally. Major ports like Marseille and Le Havre serve as key maritime hubs, while airports such as Charles de Gaulle International Airport handle significant air cargo traffic. France’s efficient customs procedures and commitment to digitalization streamline cross-border trade, contributing to its role as a major player in global logistics. Moreover, France’s focus on innovation, sustainability, and investment in green logistics initiatives ensures continuous improvement and competitiveness in the logistics sector. 12. United Arab Emirates Logistics Performance Index: 4.0 The United Arab Emirates (UAE) emerges as a prominent logistics hub in the Middle East, leveraging its strategic location, modern infrastructure, and business-friendly environment. Situated among the major trade routes between Asia, Europe, and Africa, the UAE serves as a pivotal link in global supply chains. The country’s world-class logistics infrastructure, including ports like Jebel Ali Port, one of the busiest in the world, and Dubai International Airport, a major air cargo hub, facilitates seamless trade and connectivity with international markets. Additionally, the UAE’s efficient customs procedures, supported by digitalization and automation, streamline cross-border trade and enhance supply chain efficiency. The country’s commitment to innovation and technology adoption in logistics, exemplified by initiatives such as Dubai’s Smart City vision and investments in blockchain and artificial intelligence, ensures continuous improvement and competitiveness in the sector. Furthermore, the UAE’s business-friendly regulatory environment, tax incentives, and free trade zones attract international businesses and foster a thriving logistics industry. 11. Sweden Logistics Performance Index: 4.0 Sweden demonstrates excellence in logistics efficiency and innovation, supported by its strategic location, advanced infrastructure, and commitment to sustainability. Situated in Northern Europe, Sweden serves as a vital logistics gateway to the region, connecting Scandinavia with the rest of Europe and beyond. Its well-developed transportation networks, including modern ports like Gothenburg and efficient rail and road systems, enable seamless connectivity and efficient movement of goods domestically and internationally. Sweden’s efficient customs procedures and commitment to digitalization contribute to streamlined cross-border trade, enhancing supply chain efficiency. Moreover, Sweden’s focus on sustainability in logistics, evidenced by initiatives such as the promotion of eco-friendly transport modes and green logistics practices, aligns with global efforts to reduce carbon emissions. At large, Sweden’s strategic positioning, advanced infrastructure, and commitment to sustainability and innovation position it as a key logistics hub in Northern Europe, facilitating efficient and reliable trade flows across the region and beyond. 10. Hong Kong Logistics Performance Index: 4.0 Hong Kong emerges as a key player in global logistics, owing to its strategic location, efficient infrastructure, and business-friendly environment. Situated at the heart of Asia, Hong Kong serves as a vital gateway for trade between East and West. The city’s world-class facilities, including the Port of Hong Kong and Hong Kong International Airport, facilitate the seamless movement of goods across the globe. Hong Kong’s streamlined customs procedures and advanced logistics technologies ensure swift and efficient clearance processes, contributing to its reputation for reliability and speed in logistics operations. Additionally, Hong Kong’s strong financial and legal frameworks, coupled with its status as a major financial center, attract international businesses and facilitate smooth transactions within the logistics sector. Overall, Hong Kong’s commitment to excellence, innovation, and connectivity reinforces its position as a leading logistics hub in the Asia-Pacific region. 9. Canada Logistics Performance Index: 4.0 Canada showcases a robust logistics ecosystem supported by its vast geography, modern infrastructure, and strong trade relationships. As one of the world’s largest countries, Canada’s extensive network of roads, railways, and ports facilitates the movement of goods domestically and internationally. Ports such as Vancouver, Montreal, and Halifax serve as critical gateways for maritime trade, while major airports like Toronto Pearson International Airport facilitate air cargo operations. Canada’s efficient customs procedures, bolstered by initiatives such as the Canada Border Services Agency’s (CBSA) electronic clearance system, streamline cross-border trade with the United States and other trading partners. Furthermore, Canada’s commitment to sustainability and innovation in logistics, including investments in green transportation technologies and supply chain optimisation, enhances the country’s competitiveness on the global stage. 8. Belgium Logistics Performance Index: 4.0 Belgium stands out as a logistical hub in Europe, leveraging its central location, advanced infrastructure, and efficient customs procedures. Situated at the crossroads of major European trade routes, Belgium serves as a crucial link connecting Northern and Southern Europe. Ports such as Antwerp and Zeebrugge are among the busiest in Europe, facilitating maritime trade with global partners. Belgium’s extensive rail and road networks further enhance connectivity, enabling seamless transportation of goods within Europe and beyond. Moreover, Belgium’s business-friendly environment, supported by transparent regulations and strong governance, attracts international businesses and fosters a thriving logistics sector. Overall, Belgium’s strategic location, advanced infrastructure, and focus on innovation position it as a key logistics hub in Europe, facilitating the smooth flow of goods across the continent and beyond. 7. Austria Logistics Performance Index: 4.0 Austria demonstrates excellence in logistics efficiency, underpinned by its strategic location, modern infrastructure, and strong commitment to sustainability. Situated at the crossroads of major European trade routes, Austria serves as a vital link connecting Eastern and Western Europe. The country’s efficient transport networks, including well-developed road and rail systems, facilitate the seamless movement of goods within Europe and beyond. Additionally, Austria’s central location and efficient customs procedures contribute to its role as a key logistics gateway for international trade. Austria’s dedication to sustainability in logistics is evident through initiatives such as the expansion of eco-friendly transport modes and the adoption of green logistics practices, aligning with global efforts to reduce carbon emissions. Furthermore, Austria’s strategic positioning, advanced infrastructure, and commitment to sustainability reinforce its status as a leading logistics hub in Europe, facilitating efficient and sustainable trade flows across the continent. 6. Switzerland Logistics Performance Index: 4.1 Switzerland demonstrates excellence in logistics efficiency and innovation, supported by its strategic location, advanced infrastructure, and strong business environment. Despite being landlocked, Switzerland’s central location in Europe positions it as a crucial logistics hub, facilitating trade between major European markets. The country’s efficient transport networks, including well-developed roads, railways, and access to major European ports, enable seamless connectivity and efficient movement of goods. Switzerland’s efficient customs procedures, supported by digitalization and automation, further streamline cross-border trade and enhance supply chain efficiency. Additionally, Switzerland’s commitment to innovation and technology adoption in logistics, including investments in areas such as blockchain and digitalization, ensures continuous improvement and competitiveness. Click to continue reading and see the 5 Most Advanced Countries in Logistics. Suggested Articles: 11 Best Logistics Stocks to Buy Biggest Logistics and Shipping Companies in the World Top Logistics Companies in the US Disclosure: none. 13 Most Advanced Countries in Logistics is originally published on Insider Monkey......»»
America has descended into a new Red Scare
China is opening a battery plant in Michigan. Locals say it's a plot to overthrow America. The backlash in Green Charter represents something seldom seen since the Red Scare: a quasi-militant, homegrown resistance to the perceived threat of communism at home.Matt Harrison Clough for BIWhen Jeff Peticolas was a boy, he wondered how his dad could stomach owning Japanese cameras. Sam Peticolas had survived Pearl Harbor. He'd flown 52 missions against Imperial Japan. He'd nearly drowned after crashing a B-17 into the Pacific and received two Purple Hearts. What was he doing using products like Nikon that were made by his former enemy? Jeez, those are the guys who were shootin' at you, Peticolas thought, and here you are buying their stuff.Now 66, Peticolas is tall and sturdy for his age, with gray hair, a gray mustache, and deep-set wrinkles. He feels guilty about having never served. The draft ended two years before he was eligible, not that he particularly wanted to go fight in Vietnam. Instead, Peticolas trained to become an auto mechanic at Ferris State University, where his father taught, in Mecosta County, Michigan, in and around which he has always lived.But in September 2022, when the county announced that an electric-vehicle-parts manufacturer was coming to town, Peticolas decided it was time to serve his country. The company, Gotion, is the American subsidiary of the world's second-largest EV-battery maker, a Chinese conglomerate called Gotion High-Tech. The $2.4 billion battery plant promised to bring nearly 2,500 jobs to Michigan's fifth-poorest county. But as Peticolas saw it, not only was America's most powerful adversary setting up shop in his hometown, but local officials in Green Charter Township had committed something close to treason by inviting the enemy in. This was nothing short of a communist invasion, in his eyes, and the patriots of Green Charter needed to rise up and confront the Red Peril."Yes, I have Chinese stuff in my house all over the place," Peticolas says. "But it's way better that they build it in China and sell it here than to build it here and be here. It's called embedding with the enemy. It's an age-old military tactic."Peticolas and his neighbors formed a rebel coalition, christening themselves the "No-Gos." They began to see conspiracies around every corner. How long had this Chinese project been in the works? Who among the town's leaders was on Beijing's payroll? In rowdy droves, the No-Gos started attending town-hall meetings in search of answers. They unleashed a barrage of Freedom of Information Act requests, sifting through the emails of Green Charter's township board for signs of "corruption" and other shady dealings with the Chinese. To them, the Gotion project was a Trojan horse en route with communist spies. Some even speculated that Chinese missiles might be concealed in the factory's water tanks.To the No-Gos, the battery plant was a Trojan horse filled with communist spies. Chinese missiles would even be concealed in the factory's water tanks.Matt Harrison Clough for BIGreen Charter, population 3,200, is the kind of quiet Midwestern town where everybody knows everybody. But communal civility quickly gave way to suspicion and ridicule. The township supervisor, a dour ex-cop and vocal Gotion supporter named Jim Chapman, became one of the No-Gos' prime targets. "I've gotten death threats," Chapman says. The calls were frightening. I'm willing to end this with my Second Amendment rights. Or We'll bring the Michigan militia over there. The hostility got so intense that Chapman began attending meetings of the township board armed and wearing a bulletproof vest.Americans feel increasingly threatened by China. In a Pew survey conducted last year, 84% of respondents said they viewed Beijing's military strength as a somewhat or very serious problem. Last year Montana became the first state to issue a sweeping ban on TikTok, owned by the Beijing-based company ByteDance, and Arkansas ordered a Chinese-owned company to divest itself of farmland it had owned in the state since 1988. The town of Reedley, California, freaked out after discovering that a derelict medical manufacturing facility was owned by a Chinese man, who they imagined was building "bioweapons," possibly to deploy on a nearby naval base. And in Manteno, Illinois, residents are mobilizing against another Gotion project, a $2 billion battery plant that opponents have deemed "un-American."The growing anxiety is shared by leading figures in Washington, whom the No-Gos often cite. Rush Doshi, President Joe Biden's point man on China, believes China is seeking to supplant America as the world's sole superpower. "China now poses a challenge unlike any the United States has ever faced," Doshi declares in his influential book, "The Long Game." Donald Trump, meanwhile, is fond of railing against China's "rape" of America and has pushed conspiracy theories about the Chinese Communist Party directing "military-age men" to illegally immigrate to the United States. Both parties routinely portray China as a sinister affront to American values and American jobs. In the Republican response to Biden's State of the Union address on March 7, Sen. Katie Britt of Alabama said, "The CCP knows that if it conquers the minds of our next generation, it conquers America."But the backlash in Green Charter represents something seldom seen since the Red Scare: a quasi-militant, homegrown resistance to the perceived threat of communism at home. Early last year, the No-Gos established a command base in a Facebook group they called No Gotion, which soon amassed more than 1,500 members. Peticolas became a frequent poster. "Pro-Gotion people, wake up!" he urged. "Why would you sell out America?" As the group became a bona fide grassroots force, the Michigan Republican Party took notice. In March 2023, a Green Charter resident named Lori Brock whose horse farm lies near the proposed Gotion site hosted a "Save My Farm" rally. The event was attended by Kristina Karamo, the chair of the Michigan GOP and a 2020 election denier, and state Sen. Lana Theis. Posters peppered the property with signs that read "CHOOSE FREEDOM, NO GO ON GOTION!" and "NO CCP. WE WILL NOT BE SILENCED." The county's Republican congressman, Rep. John Moolenaar, gave a rousing speech. "The CCP is not right for Mecosta County, and it's not right for Michigan," he declared.But to the No-Gos' ire, the Green Charter township board, whose seven members were all Republicans, remained unmoved in their support for Gotion. They argued that not only would the battery plant be an economic godsend, but the board didn't even have the power to deny the project. Gotion had purchased private property that was zoned for industrial use. It had largely completed the permitting process. It had voluntarily submitted information to the Treasury Department, which determined that any risk Gotion might pose to national security was too low to require a full audit. Legally, Gotion was free to build in Green Charter. All that remained was to sort out the details of construction and hiring.Such realities hardly mattered to Peticolas and the No-Gos. To them, the board's acquiescence amounted to a kind of treason. John Holdsworth, a local factory worker, began performing anti-Gotion protest songs at town-hall meetings. (One was set to "American Pie": "A long, long time ago, I can still remember how democracy used to make me smile.") To "piss off" Gotion supporters, Peticolas began parading around town in one of his trucks, a ramshackle 1956 Willys, with a giant sign protruding from the bed like a monstrous shark fin: "STOP! THE CHINESE LAND GRAB!""I've gotten death threats," says Green Charter Township supervisor Jim Chapman, a vocal Gotion supporter. The calls were frightening. "I'm willing to end this with my Second Amendment rights," said one caller.Matt Harrison Clough for BIBy April, town-hall meetings had devolved into standing-room-only shouting matches. Speakers railed at Chapman and the board as if they were the CCP politburo. "It makes me sick that every time we stand up to pledge allegiance to that beautiful flag," one resident fumed. "Your allegiance is to China!" Another seethed, "My family members fought communism, and you're bringing it to our backyard!" No-Gos warned that Chinese spies would infiltrate the town. They pointed to a line in Gotion's parent company's articles of association: "The Company shall set up a Party organization and carry out Party activities in accordance with the Constitution of the Communist Party of China." As the rhetoric escalated, police began attending the town halls, hovering uneasily between the board and its irate constituents, exuding all the confusion of border collies caught between two warring flocks of sheep.Like many locals, Tracy Ruell was overjoyed when she heard about Gotion. Ruell, who works part time as an administrator for her husband's insulation company, grew up in Mecosta County. Her great-great-grandfather migrated from Sweden in the 1800s, and her mother, Carlleen Rose, owns a gift store in Big Rapids, the county seat. Ruell says she has no illusions about China or its efforts to nettle America. But the No-Gos' concerns struck her as "nut-job" nonsense, and the accusations of corruption within the town board seemed like senseless smears. Over 200 Chinese companies operate in Michigan: SAIC Motor, AVIC, Nexteer Automotive. Where was all the malfeasance? Where was the threat to national security?In June, enervated by the conspiracy theories, Ruell launched a rival Facebook group called Only Things Gotion. She envisioned the page, which attracted 1,300 members, as a place where supporters could post in peace, free from "brainwashed" agitators. Ruell spent hours each day painstakingly rebutting No-Go talking points. She prided herself on her commitment to citing her sources, often sharing official documents such as leasing agreements and other Gotion-related contracts to prove a point or challenge a claim. By the end of the summer, she'd become the undisputed leader of the Pro-Gos. "In my opinion, whatever she says is gospel," says a local named Suzi, who requested I use her first name only because of the intensity of the conflict. "She knows her shit."But Ruell's support for the battery plant made her a prime target. The No-Gos wondered why she was so gung ho for Gotion. Surely she was jockeying for an HR position at the company. Surely she was being paid to rally support. People began posting memes featuring her likeness. Several times, walking down the street or at the grocery store, she was called a "commie." Her 69-year-old mother, who often spoke in favor of Gotion at town-hall meetings, became similarly despised. Some No-Gos organized a boycott of local businesses deemed pro-Gotion, including Rose's gift shop. Afterward, Peticolas began loitering outside the shop at a picnic table, which the Pro-Gos saw as a form of intimidation (Peticolas denies this, saying he just enjoys "sitting in the shade for a while" as part of his daily routine.) Over 200 Chinese companies operate in Michigan. Where was all the malfeasance? Where was the threat to national security? But Peticolas made no secret of his disgust over the Pro-Gos. For over a decade he'd been friendly with Tim Hahn, a sales manager at the Big Rapids Pioneer, a local newspaper. Peticolas had attended Hahn's annual barbecues and invited Hahn to parties in a saloon he built in his backyard. But the years of goodwill were wiped away when Hahn sided with the Pro-Gos. Indignant exchanges in Ruell's Facebook group led to testy debates via text. After months of private quarrels, Hahn was exhausted."At this point it would be pointless to engage with you, so I have stopped," Hahn texted Peticolas last spring, pointing to the No-Gos' penchant for unfounded conspiracy theories. "If you can't be honest, you should stop engaging with me too."Peticolas refused to back down. "I find you repulsive lately," he texted Hahn later. "Love your use of the Laffy face when you just gotta be a dick."After that, Hahn blocked Peticolas from texting. "I was starting to become afraid of Jeff," he said. "Of what he might do."Before Gotion came to town, Corri Riebow had never cared for politics. She'd worked in a Big Rapids veterinarian's office and volunteered at an animal hospital. On the side, she made jewelry, some of which she sold at Carlleen Rose's gift shop. But as the war over Gotion began to consume Green Charter, Riebow began to feel that the township board was behaving "too secretly." It should've polled the community before approving Gotion's permits. It should have been more up front about the potential for pollution and other downsides. And like her father, Jeff Peticolas, Riebow worried about the national security threat Gotion seemed to pose."The Chinese government wants to take us out," she says. "They have said it straight up without trying to hide it. It just blows my mind that anybody in any sort of leadership position would not have a problem with that."She decided to join the movement. In October, Green Charter residents began receiving flyers featuring Riebow and four other candidates seeking to replace the township board. The No-Gos had organized a recall election, to be held the following month. They called themselves the "CHOOSE FREEDOM Candidates."Much of the community seemed to support them. In 20 days of canvassing, they said, they collected 630 signatures opposing the Gotion project. This, they proclaimed, was democracy in action: a movement of engaged citizens punishing an elected body that had betrayed its oath. Local radio stations ran ads of support, including some paid for by Moolenaar and a conservative group called Stand Up Michigan. Right-wing media outlets like Fox News, Breitbart, and the Daily Mail covered the campaign. A flyer mailed to residents declared, "It's the Battle to Preserve Our Way of Life."The No-Gos were convinced of an orchestrated plot surrounding Gotion's coming. But Ruell and her Pro-Go allies became similarly convinced that the recall campaign was being mounted by a shadowy network of far-right operators. In their view, the Michigan GOP and right-wing media outlets, in conjunction with the "petroleum lobby," were coordinating the attack to dampen support for electric vehicles and to undercut Gov. Gretchen Whitmer, who had hailed Gotion as "the biggest ever economic development project in Northern Michigan." For both sides, it was dirty politics and dark money all the way down.Gotion's $2.4 billion battery plant promised to bring nearly 2,500 jobs to Michigan's fifth-poorest county.Matt Harrison Clough for BIStill, Ruell and her Pro-Go followers shrugged off the recall as a hopeless stunt that was certain to fail. The No-Gos, they were convinced, were nothing more than a loud MAGA-like minority. So it came as a shock on November 7 when the Choose Freedom candidates won in a landslide, recalling five of the township's seven board members. Each candidate won more than 50% of the vote. In only a few months, the perceived threat of communism — one of the hardiest of American boogeymen — had reconfigured a small town's political landscape. (Two other board members had resigned prior to the election.)The No-Gos were rapturous. "The vocal MAJORITY has won!" Riebow posted in No Gotion. "We are now one step closer to removing the CCP from the USA." Soon after the No-Gos' victory, I attended Green Charter's first town-hall meeting with the new board. Residents I met there and elsewhere in town wondered about my own position: Whose side was I on? When I told interviewees the truth — that I was mainly interested in why people thought the way they did — they often seemed disappointed. It was as if they were so deeply entrenched in their divisions that they couldn’t imagine not holding a strong position either way. Soon after my arrival, when I posted a call for interviews on the No Gotion Facebook page, the backlash was instantaneous. "Something is fishy with you," one member wrote in a string of paranoid replies. Another suggested, "We need to 'vet' a trusted/patriotic writer." But at the town-hall meeting, there was an air of great accomplishment. Some in the crowd wore No Gotion hats. Others brandished signs: "Thy will is done, we've just begun!!" Several residents came forward to shower the new board with well-wishes. "I want to thank you guys for all the hard work in helping to bring democracy back to our township," said Holdsworth, the protest singer. "With this election, we can hold the truth to be self-evident that the majority of the township people don't want this battery plant."Elected to serve as chairman of the board, replacing the hated Jim Chapman, was Jason Kruse, a mild-mannered auto-mechanic instructor at Ferris State. Kruse had led the recall effort, driven by fears about China. "If I wanted to take over a country, I'm going to go for their food, and I'm going to go for their energy," he had explained in a promotional video. "And so these are things that we really need to take into consideration. What would be the 100-year plan for China?"But now the Pro-Gos, many of whom were watching the town-hall meeting from home on a livestream, were wondering about Kruse's plan. What would he do now that No-Gos held the reins? He began with something sure to displease everyone: a plea for civility. "There's a lot of hurt that's happened," he said. "Let's use this as a fresh start, please." Whenever he was asked about Gotion, Kruse demurred, saying he and the board had been advised by legal counsel to keep mum. It seemed like a strangely subdued performance for the leaders of an anti-communist insurrection.There were still a few pockets of peace amid the larger war. At one point, a local Filipino American man took the lectern to voice concerns about the rise of anti-Asian sentiment in the wake of the Gotion struggle. "I just want to tell everybody that we are here," he said. "There are examples — in the past and currently — of violence and verbal abuse against Asians because of perceived beliefs. So please talk to your neighbors and friends and do not act on conspiracy theories." He received a rousing round of applause. But such moments of kinship have become vanishingly rare in Green Charter. Not long after Tim Hahn blocked Jeff Peticolas over his toxic texting, Peticolas started showing up at Hahn's workplace, the Big Rapids Pioneer. He told a Pioneer employee that Hahn was an "asshole," and he taunted Hahn on Facebook, saying Hahn's coworkers had told him how much they loathed him. Hahn felt under siege.The pervasive fear of China, it seems, may be the only shared belief holding America together.Matt Harrison Clough for BIThen one day, at the Big Rapids farmers market, Hahn felt someone hovering close behind. It was Peticolas."How's life in crazyville?" Peticolas said."I don't want to engage with you," Hahn replied. "I'm done with you." Hahn started to walk away, but Peticolas stuck by his side. "I'll decide when we're done," he said.Once he slipped away, Hahn filed stalking charges. A personal protective order was granted, but Peticolas challenged it in court. At the hearing, several No-Gos appeared in support of Peticolas. The judge ultimately sided with Hahn, noting that Peticolas had initiated at least three instances of unwanted contact. But she was dismayed by the pettiness exhibited on both sides of the affair."I think it's terrible that as a community we are allowing something like Gotion to tear us apart," she said. "It's the nation right now. We're not able to have these conversations anymore, and it really saddens this court."Around this time, Hahn's mailbox was smashed.It's easy to dismiss what's happened in Green Charter as yet another sign of America's descent into dangerous incivility. But when it comes to China, the anti-communists in Green Charter represent a broader national consensus. At a congressional hearing last July, a former FBI official named William Evanina said it was "100%" likely that Beijing would use the Green Charter factory for spying. To support his claim, he described the CCP's "hybrid methods" of intelligence gathering, including the use of "nontraditional" spies. In January, at another congressional hearing, Evanina's view was seconded by Leon Panetta, who served as President Barack Obama's secretary of defense. Asked about Gotion's plans in Green Charter, Panetta replied, "I don't think there's any question that they are going to take advantage of that situation." The pervasive fear of China, it seems, may be the only shared belief holding America together. When it comes to China, the anti-communists in Green Charter represent a broader national consensus. Gotion is still set to come to Green Charter. In February, loggers from out of town began clearing sites for two proposed battery factories, covering more than 260 acres. The township's new No-Go board still hopes for no Gotion. "I can't talk about what we have in the works," Riebow tells me. "But we are exploring our options."For Riebow's father, the threat of China continues to loom large. After Hahn's protective order was upheld, Peticolas couldn’t sleep for five nights. It terrified him to think he might unintentionally violate the order and wind up imprisoned. He suffered a panic attack and checked himself into a hospital. But his resolve against Gotion remains firm. "I still don't want it just as much as I never wanted it," he says.He described plenty of reasons to oppose Gotion's battery factories. Electric vehicles are a scam; Democrats are ramming green energy down America's throat; Gotion's plants pose an intolerable environmental risk, and the heavy traffic would be a nuisance. But for him, standing up against the threat of a Chinese invasion is a patriotic duty. If China comes to America, it won't be on his watch."This has been a year with a lot of news about China pulling strings to antagonize America," Peticolas says. "I've known forever that China has said they're going to destroy us. But they don't want to do it with weapons. They're smart, and they're patient. They just don't like us."Brent Crane is a reporter based in San Diego. His work can be found at www.brent-crane.com and @bcamcrane on X. Read the original article on Business Insider.....»»
"No CCP in USA!!" Inside a Michigan town"s unhinged war over a Chinese battery plant.
Some saw the battery plant as an economic godsend. Others saw it as a Chinese communist takeover. The backlash in Green Charter represents something seldom seen since the Red Scare: a quasi-militant, homegrown resistance to the perceived threat of communism at home.Matt Harrison Clough for BIWhen Jeff Peticolas was a boy, he wondered how his dad could stomach owning Japanese cameras. Sam Peticolas had survived Pearl Harbor. He'd flown 52 missions against Imperial Japan. He'd nearly drowned after crashing a B-17 into the Pacific and received two Purple Hearts. What was he doing using products like Nikon that were made by his former enemy? Jeez, those are the guys who were shootin' at you, Peticolas thought, and here you are buying their stuff.Now 66, Peticolas is tall and sturdy for his age, with gray hair, a gray mustache, and deep-set wrinkles. He feels guilty about having never served. The draft ended two years before he was eligible, not that he particularly wanted to go fight in Vietnam. Instead, Peticolas trained to become an auto mechanic at Ferris State University, where his father taught, in Mecosta County, Michigan, in and around which he has always lived.But in September 2022, when the county announced that an electric-vehicle-parts manufacturer was coming to town, Peticolas decided it was time to serve his country. The company, Gotion, is the American subsidiary of the world's second-largest EV-battery maker, a Chinese conglomerate called Gotion High-Tech. The $2.4 billion battery plant promised to bring nearly 2,500 jobs to Michigan's fifth-poorest county. But as Peticolas saw it, not only was America's most powerful adversary setting up shop in his hometown, but local officials in Green Charter Township had committed something close to treason by inviting the enemy in. This was nothing short of a communist invasion, in his eyes, and the patriots of Green Charter needed to rise up and confront the Red Peril."Yes, I have Chinese stuff in my house all over the place," Peticolas says. "But it's way better that they build it in China and sell it here than to build it here and be here. It's called embedding with the enemy. It's an age-old military tactic."Peticolas and his neighbors formed a rebel coalition, christening themselves the "No-Gos." They began to see conspiracies around every corner. How long had this Chinese project been in the works? Who among the town's leaders was on Beijing's payroll? In rowdy droves, the No-Gos started attending town-hall meetings in search of answers. They unleashed a barrage of Freedom of Information Act requests, sifting through the emails of Green Charter's township board for signs of "corruption" and other shady dealings with the Chinese. To them, the Gotion project was a Trojan horse en route with communist spies. Some even speculated that Chinese missiles might be concealed in the factory's water tanks.To the No-Gos, the battery plant was a Trojan horse filled with communist spies. Chinese missiles would even be concealed in the factory's water tanks.Matt Harrison Clough for BIGreen Charter, population 3,200, is the kind of quiet Midwestern town where everybody knows everybody. But communal civility quickly gave way to suspicion and ridicule. The township supervisor, a dour ex-cop and vocal Gotion supporter named Jim Chapman, became one of the No-Gos' prime targets. "I've gotten death threats," Chapman says. The calls were frightening. I'm willing to end this with my Second Amendment rights. Or We'll bring the Michigan militia over there. The hostility got so intense that Chapman began attending meetings of the township board armed and wearing a bulletproof vest.Americans feel increasingly threatened by China. In a Pew survey conducted last year, 84% of respondents said they viewed Beijing's military strength as a somewhat or very serious problem. Last year Montana became the first state to issue a sweeping ban on TikTok, owned by the Beijing-based company ByteDance, and Arkansas ordered a Chinese-owned company to divest itself of farmland it had owned in the state since 1988. The town of Reedley, California, freaked out after discovering that a derelict medical manufacturing facility was owned by a Chinese man, who they imagined was building "bioweapons," possibly to deploy on a nearby naval base. And in Manteno, Illinois, residents are mobilizing against another Gotion project, a $2 billion battery plant that opponents have deemed "un-American."The growing anxiety is shared by leading figures in Washington, whom the No-Gos often cite. Rush Doshi, President Joe Biden's point man on China, believes China is seeking to supplant America as the world's sole superpower. "China now poses a challenge unlike any the United States has ever faced," Doshi declares in his influential book, "The Long Game." Donald Trump, meanwhile, is fond of railing against China's "rape" of America and has pushed conspiracy theories about the Chinese Communist Party directing "military-age men" to illegally immigrate to the United States. Both parties routinely portray China as a sinister affront to American values and American jobs. In the Republican response to Biden's State of the Union address on March 7, Sen. Katie Britt of Alabama said, "The CCP knows that if it conquers the minds of our next generation, it conquers America."But the backlash in Green Charter represents something seldom seen since the Red Scare: a quasi-militant, homegrown resistance to the perceived threat of communism at home. Early last year, the No-Gos established a command base in a Facebook group they called No Gotion, which soon amassed more than 1,500 members. Peticolas became a frequent poster. "Pro-Gotion people, wake up!" he urged. "Why would you sell out America?" As the group became a bona fide grassroots force, the Michigan Republican Party took notice. In March 2023, a Green Charter resident named Lori Brock whose horse farm lies near the proposed Gotion site hosted a "Save My Farm" rally. The event was attended by Kristina Karamo, the chair of the Michigan GOP and a 2020 election denier, and state Sen. Lana Theis. Posters peppered the property with signs that read "CHOOSE FREEDOM, NO GO ON GOTION!" and "NO CCP. WE WILL NOT BE SILENCED." The county's Republican congressman, Rep. John Moolenaar, gave a rousing speech. "The CCP is not right for Mecosta County, and it's not right for Michigan," he declared.But to the No-Gos' ire, the Green Charter township board, whose seven members were all Republicans, remained unmoved in their support for Gotion. They argued that not only would the battery plant be an economic godsend, but the board didn't even have the power to deny the project. Gotion had purchased private property that was zoned for industrial use. It had largely completed the permitting process. It had voluntarily submitted information to the Treasury Department, which determined that any risk Gotion might pose to national security was too low to require a full audit. Legally, Gotion was free to build in Green Charter. All that remained was to sort out the details of construction and hiring.Such realities hardly mattered to Peticolas and the No-Gos. To them, the board's acquiescence amounted to a kind of treason. John Holdsworth, a local factory worker, began performing anti-Gotion protest songs at town-hall meetings. (One was set to "American Pie": "A long, long time ago, I can still remember how democracy used to make me smile.") To "piss off" Gotion supporters, Peticolas began parading around town in one of his trucks, a ramshackle 1956 Willys, with a giant sign protruding from the bed like a monstrous shark fin: "STOP! THE CHINESE LAND GRAB!""I've gotten death threats," says Green Charter Township supervisor Jim Chapman, a vocal Gotion supporter. The calls were frightening. "I'm willing to end this with my Second Amendment rights," said one caller.Matt Harrison Clough for BIBy April, town-hall meetings had devolved into standing-room-only shouting matches. Speakers railed at Chapman and the board as if they were the CCP politburo. "It makes me sick that every time we stand up to pledge allegiance to that beautiful flag," one resident fumed. "Your allegiance is to China!" Another seethed, "My family members fought communism, and you're bringing it to our backyard!" No-Gos warned that Chinese spies would infiltrate the town. They pointed to a line in Gotion's parent company's articles of association: "The Company shall set up a Party organization and carry out Party activities in accordance with the Constitution of the Communist Party of China." As the rhetoric escalated, police began attending the town halls, hovering uneasily between the board and its irate constituents, exuding all the confusion of border collies caught between two warring flocks of sheep.Like many locals, Tracy Ruell was overjoyed when she heard about Gotion. Ruell, who works part time as an administrator for her husband's insulation company, grew up in Mecosta County. Her great-great-grandfather migrated from Sweden in the 1800s, and her mother, Carlleen Rose, owns a gift store in Big Rapids, the county seat. Ruell says she has no illusions about China or its efforts to nettle America. But the No-Gos' concerns struck her as "nut-job" nonsense, and the accusations of corruption within the town board seemed like senseless smears. Over 200 Chinese companies operate in Michigan: SAIC Motor, AVIC, Nexteer Automotive. Where was all the malfeasance? Where was the threat to national security?In June, enervated by the conspiracy theories, Ruell launched a rival Facebook group called Only Things Gotion. She envisioned the page, which attracted 1,300 members, as a place where supporters could post in peace, free from "brainwashed" agitators. Ruell spent hours each day painstakingly rebutting No-Go talking points. She prided herself on her commitment to citing her sources, often sharing official documents such as leasing agreements and other Gotion-related contracts to prove a point or challenge a claim. By the end of the summer, she'd become the undisputed leader of the Pro-Gos. "In my opinion, whatever she says is gospel," says a local named Suzi, who requested I use her first name only because of the intensity of the conflict. "She knows her shit."But Ruell's support for the battery plant made her a prime target. The No-Gos wondered why she was so gung ho for Gotion. Surely she was jockeying for an HR position at the company. Surely she was being paid to rally support. People began posting memes featuring her likeness. Several times, walking down the street or at the grocery store, she was called a "commie." Her 69-year-old mother, who often spoke in favor of Gotion at town-hall meetings, became similarly despised. Some No-Gos organized a boycott of local businesses deemed pro-Gotion, including Rose's gift shop. Afterward, Peticolas began loitering outside the shop at a picnic table, which the Pro-Gos saw as a form of intimidation (Peticolas denies this, saying he just enjoys "sitting in the shade for a while" as part of his daily routine.) Over 200 Chinese companies operate in Michigan. Where was all the malfeasance? Where was the threat to national security? But Peticolas made no secret of his disgust over the Pro-Gos. For over a decade he'd been friendly with Tim Hahn, a sales manager at the Big Rapids Pioneer, a local newspaper. Peticolas had attended Hahn's annual barbecues and invited Hahn to parties in a saloon he built in his backyard. But the years of goodwill were wiped away when Hahn sided with the Pro-Gos. Indignant exchanges in Ruell's Facebook group led to testy debates via text. After months of private quarrels, Hahn was exhausted."At this point it would be pointless to engage with you, so I have stopped," Hahn texted Peticolas last spring, pointing to the No-Gos' penchant for unfounded conspiracy theories. "If you can't be honest, you should stop engaging with me too."Peticolas refused to back down. "I find you repulsive lately," he texted Hahn later. "Love your use of the Laffy face when you just gotta be a dick."After that, Hahn blocked Peticolas from texting. "I was starting to become afraid of Jeff," he said. "Of what he might do."Before Gotion came to town, Corri Riebow had never cared for politics. She'd worked in a Big Rapids veterinarian's office and volunteered at an animal hospital. On the side, she made jewelry, some of which she sold at Carlleen Rose's gift shop. But as the war over Gotion began to consume Green Charter, Riebow began to feel that the township board was behaving "too secretly." It should've polled the community before approving Gotion's permits. It should have been more up front about the potential for pollution and other downsides. And like her father, Jeff Peticolas, Riebow worried about the national security threat Gotion seemed to pose."The Chinese government wants to take us out," she says. "They have said it straight up without trying to hide it. It just blows my mind that anybody in any sort of leadership position would not have a problem with that."She decided to join the movement. In October, Green Charter residents began receiving flyers featuring Riebow and four other candidates seeking to replace the township board. The No-Gos had organized a recall election, to be held the following month. They called themselves the "CHOOSE FREEDOM Candidates."Much of the community seemed to support them. In 20 days of canvassing, they said, they collected 630 signatures opposing the Gotion project. This, they proclaimed, was democracy in action: a movement of engaged citizens punishing an elected body that had betrayed its oath. Local radio stations ran ads of support, including some paid for by Moolenaar and a conservative group called Stand Up Michigan. Right-wing media outlets like Fox News, Breitbart, and the Daily Mail covered the campaign. A flyer mailed to residents declared, "It's the Battle to Preserve Our Way of Life."The No-Gos were convinced of an orchestrated plot surrounding Gotion's coming. But Ruell and her Pro-Go allies became similarly convinced that the recall campaign was being mounted by a shadowy network of far-right operators. In their view, the Michigan GOP and right-wing media outlets, in conjunction with the "petroleum lobby," were coordinating the attack to dampen support for electric vehicles and to undercut Gov. Gretchen Whitmer, who had hailed Gotion as "the biggest ever economic development project in Northern Michigan." For both sides, it was dirty politics and dark money all the way down.Gotion's $2.4 billion battery plant promised to bring nearly 2,500 jobs to Michigan's fifth-poorest county.Matt Harrison Clough for BIStill, Ruell and her Pro-Go followers shrugged off the recall as a hopeless stunt that was certain to fail. The No-Gos, they were convinced, were nothing more than a loud MAGA-like minority. So it came as a shock on November 7 when the Choose Freedom candidates won in a landslide, recalling five of the township's seven board members. Each candidate won more than 50% of the vote. In only a few months, the perceived threat of communism — one of the hardiest of American boogeymen — had reconfigured a small town's political landscape. (Two other board members had resigned prior to the election.)The No-Gos were rapturous. "The vocal MAJORITY has won!" Riebow posted in No Gotion. "We are now one step closer to removing the CCP from the USA." Soon after the No-Gos' victory, I attended Green Charter's first town-hall meeting with the new board. Residents I met there and elsewhere in town wondered about my own position: Whose side was I on? When I told interviewees the truth — that I was mainly interested in why people thought the way they did — they often seemed disappointed. It was as if they were so deeply entrenched in their divisions that they couldn’t imagine not holding a strong position either way. Soon after my arrival, when I posted a call for interviews on the No Gotion Facebook page, the backlash was instantaneous. "Something is fishy with you," one member wrote in a string of paranoid replies. Another suggested, "We need to 'vet' a trusted/patriotic writer." But at the town-hall meeting, there was an air of great accomplishment. Some in the crowd wore No Gotion hats. Others brandished signs: "Thy will is done, we've just begun!!" Several residents came forward to shower the new board with well-wishes. "I want to thank you guys for all the hard work in helping to bring democracy back to our township," said Holdsworth, the protest singer. "With this election, we can hold the truth to be self-evident that the majority of the township people don't want this battery plant."Elected to serve as chairman of the board, replacing the hated Jim Chapman, was Jason Kruse, a mild-mannered auto-mechanic instructor at Ferris State. Kruse had led the recall effort, driven by fears about China. "If I wanted to take over a country, I'm going to go for their food, and I'm going to go for their energy," he had explained in a promotional video. "And so these are things that we really need to take into consideration. What would be the 100-year plan for China?"But now the Pro-Gos, many of whom were watching the town-hall meeting from home on a livestream, were wondering about Kruse's plan. What would he do now that No-Gos held the reins? He began with something sure to displease everyone: a plea for civility. "There's a lot of hurt that's happened," he said. "Let's use this as a fresh start, please." Whenever he was asked about Gotion, Kruse demurred, saying he and the board had been advised by legal counsel to keep mum. It seemed like a strangely subdued performance for the leaders of an anti-communist insurrection.There were still a few pockets of peace amid the larger war. At one point, a local Filipino American man took the lectern to voice concerns about the rise of anti-Asian sentiment in the wake of the Gotion struggle. "I just want to tell everybody that we are here," he said. "There are examples — in the past and currently — of violence and verbal abuse against Asians because of perceived beliefs. So please talk to your neighbors and friends and do not act on conspiracy theories." He received a rousing round of applause. But such moments of kinship have become vanishingly rare in Green Charter. Not long after Tim Hahn blocked Jeff Peticolas over his toxic texting, Peticolas started showing up at Hahn's workplace, the Big Rapids Pioneer. He told a Pioneer employee that Hahn was an "asshole," and he taunted Hahn on Facebook, saying Hahn's coworkers had told him how much they loathed him. Hahn felt under siege.The pervasive fear of China, it seems, may be the only shared belief holding America together.Matt Harrison Clough for BIThen one day, at the Big Rapids farmers market, Hahn felt someone hovering close behind. It was Peticolas."How's life in crazyville?" Peticolas said."I don't want to engage with you," Hahn replied. "I'm done with you." Hahn started to walk away, but Peticolas stuck by his side. "I'll decide when we're done," he said.Once he slipped away, Hahn filed stalking charges. A personal protective order was granted, but Peticolas challenged it in court. At the hearing, several No-Gos appeared in support of Peticolas. The judge ultimately sided with Hahn, noting that Peticolas had initiated at least three instances of unwanted contact. But she was dismayed by the pettiness exhibited on both sides of the affair."I think it's terrible that as a community we are allowing something like Gotion to tear us apart," she said. "It's the nation right now. We're not able to have these conversations anymore, and it really saddens this court."Around this time, Hahn's mailbox was smashed.It's easy to dismiss what's happened in Green Charter as yet another sign of America's descent into dangerous incivility. But when it comes to China, the anti-communists in Green Charter represent a broader national consensus. At a congressional hearing last July, a former FBI official named William Evanina said it was "100%" likely that Beijing would use the Green Charter factory for spying. To support his claim, he described the CCP's "hybrid methods" of intelligence gathering, including the use of "nontraditional" spies. In January, at another congressional hearing, Evanina's view was seconded by Leon Panetta, who served as President Barack Obama's secretary of defense. Asked about Gotion's plans in Green Charter, Panetta replied, "I don't think there's any question that they are going to take advantage of that situation." The pervasive fear of China, it seems, may be the only shared belief holding America together. When it comes to China, the anti-communists in Green Charter represent a broader national consensus. Gotion is still set to come to Green Charter. In February, loggers from out of town began clearing sites for two proposed battery factories, covering more than 260 acres. The township's new No-Go board still hopes for no Gotion. "I can't talk about what we have in the works," Riebow tells me. "But we are exploring our options."For Riebow's father, the threat of China continues to loom large. After Hahn's protective order was upheld, Peticolas couldn’t sleep for five nights. It terrified him to think he might unintentionally violate the order and wind up imprisoned. He suffered a panic attack and checked himself into a hospital. But his resolve against Gotion remains firm. "I still don't want it just as much as I never wanted it," he says.He described plenty of reasons to oppose Gotion's battery factories. Electric vehicles are a scam; Democrats are ramming green energy down America's throat; Gotion's plants pose an intolerable environmental risk, and the heavy traffic would be a nuisance. But for him, standing up against the threat of a Chinese invasion is a patriotic duty. If China comes to America, it won't be on his watch."This has been a year with a lot of news about China pulling strings to antagonize America," Peticolas says. "I've known forever that China has said they're going to destroy us. But they don't want to do it with weapons. They're smart, and they're patient. They just don't like us."Brent Crane is a reporter based in San Diego. His work can be found at www.brent-crane.com and @bcamcrane on X. Read the original article on Business Insider.....»»
EVgo, Inc. (NASDAQ:EVGO) Q4 2023 Earnings Call Transcript
EVgo, Inc. (NASDAQ:EVGO) Q4 2023 Earnings Call Transcript March 6, 2024 EVgo, Inc. beats earnings expectations. Reported EPS is $-0.12, expectations were $-0.22. EVgo, Inc. isn’t one of the 30 most popular stocks among hedge funds at the end of the third quarter (see the details here). Operator: Good morning. My name is Rob, and […] EVgo, Inc. (NASDAQ:EVGO) Q4 2023 Earnings Call Transcript March 6, 2024 EVgo, Inc. beats earnings expectations. Reported EPS is $-0.12, expectations were $-0.22. EVgo, Inc. isn’t one of the 30 most popular stocks among hedge funds at the end of the third quarter (see the details here). Operator: Good morning. My name is Rob, and I will be your conference operator today. At this time, I would like to welcome everyone to the EVgo’s Fourth Quarter and Full-Year 2023 Earnings Conference Call. All lines have been placed on mute to prevent any background noise. After the speakers’ remarks, there will be a question-and-answer session. [Operator Instructions] Thank you. Heather Davis, Vice President of Investor Relations at EVgo, you may begin your conference. Heather Davis: Good morning, and welcome to EVgo’s fourth quarter and full-year 2023 earnings call. My name is Heather Davis, and I’m the Vice President of Investor Relations at EVgo. Joining me on today’s call are Badar Khan, EVgo’s Chief Executive Officer and Olga Shevorenkova, EVgo’s Chief Financial Officer. Today, we will be discussing EVgo’s fourth quarter 2023 financial results and outlook for 2024, followed by a Q&A session. Today’s call is being webcast and can be accessed on the Investors section of our website at investors.evgo.com. The call will be archived and available there along with the company’s earnings release and investor presentation after the conclusion of this call. During the call, management will be making forward-looking statements that are subject to risks and uncertainties, including expectations about future performance. Factors that could cause actual results to differ materially from our expectations are detailed in our SEC filings, including in the Risk Factors section of our most recent annual report on Form 10-K and quarterly report on Form 10-Q. The company’s SEC filings are available on the Investors section of our website. These forward-looking statements apply as of today, and we undertake no obligation to update these statements after the call. Also, please note that we will be referring to certain non-GAAP financial measures on this call. Information about these non-GAAP measures, including a reconciliation to the corresponding GAAP measures, can be found in the earnings materials available on the Investors section of our website. With that, I’ll turn the call over to Badar Khan, EVgo’s CEO. Badar Khan : Good morning, everyone, and thank you for joining us today. EVgo posted yet another great quarter and set of results in the full year. But before we dive into those details, since this is my first call as EVgo’s CEO, I thought it worth taking a moment to remind everyone of the incredible and important journey we are on. Emissions from transportation represent the largest source of emissions in the United States, and that is why the work we do is so important. At EVgo, our mission is to accelerate the mass adoption of electric vehicles by creating a convenient, reliable and affordable EV charging network that delivers fast charging for everyone. I believe EVgo represents a compelling value proposition for investors, not just because of where the company is currently trading. An investment in EVgo is clearly an investment in sustainability, but it is also an investment in a market that has a multi decade growth trajectory without the need to pick one EV manufacturer over another. Our business model is also focused on the highest growth segment of the charging market, DC fast charging, a fact seen from the data today. We like our core business of owning and operating the charging network. We generate revenue every time a customer charges on our network, unlike a one-time equipment sale. And as we continue to see, our revenue is growing faster than the growth of EVs. From customer capture, through design development and construction, to products and services that build customer loyalty, we have a growth engine that leverages key partner and OEM relationships across this entire cycle and is hard to replicate. Financial discipline is key throughout our business from the proprietary network-planning model to determine where to locate our charging stations to the disciplined investment decision-making processes designed to ensure we generate double-digit returns and minimize reliance on shareholder capital. For over a decade, EVgo has built a growth engine that is benefiting from this megatrend towards electric vehicles and has delivered a near trebling of throughput and revenue for each of the past two years and is adding NPV at scale annually. And as you’ll hear today, has a clear path to adjusted EBITDA breakeven in 2025. And we passed an important inflection point in 2023 as a result of utilization and throughput levels we’re now seeing across our network. The installed base is now profitable on a standalone basis. It’s truly an exciting time at EVgo to be leading the company in the next phase of profitable growth. We had a great fourth quarter in 2023 and for the full year, we delivered record levels of throughput and revenue, near trebling year-over-year. On our Q3 call, we raised revenue guidance, and I’m very pleased to say we came in above the top end of that raised guidance at $161 million in revenue. Operationally, we had another strong year of customer account growth and growth in our network in both stalls and throughput. EVgo’s path to profitability comes from strong top-line revenue growth, but also from operating leverage driving gross margin expansion. On our Q3 call, we also provided improved adjusted EBITDA guidance for the full year. And so I’m also very pleased to say that we came in above the top end of that raised guidance at negative $58.8 million. As a reminder, EVgo currently has three main sources of revenue. Revenues associated with owning and operating our growing network of DC fast chargers, revenues from our capital-light eXtend business that complements our core business, but with chargers owned by site hosts customers, and ancillary and tech-enabled services like our PlugShare business and fleet focused business models. As we said in our preliminary results in mid January, we plan to focus our growth efforts in the near-term on our core owned and operated business given that this business is most leveraged to EV adoption, is experiencing strong revenue and throughput growth and is expected to generate the highest returns. As a result, we’re targeting this to become the majority of our business. As you know, EVgo’s almost 3,000 operational stalls span most of the country with stalls in over 35 states across over 50 national and regional strategic site hosts, and today, over 145 million Americans live within 10 miles of an EVgo charger. Across our site host partners, we’ve identified over 100,000 potential stalls for EVgo to build, which shows how far we can go, but also that we have plenty of opportunity to select some of the best sites. Two years ago, around one-third of our network throughput was outside California, whereas by the end of 2023, that’s grown to around half. In fact, Texas and Florida are two of our fastest growing states in terms of throughput, proving that the growth of electric vehicles is occurring in both red states and blue. In 2021, consumers had approximately 31 EV models to choose from. Today, there are now more than 70 models with many more on the way from the OEMs. These models are not only becoming more affordable, but they are increasingly addressing all vehicle segments and their technology is improving. From EVgo’s inception, we’ve made it a priority to serve all EVs, enabled by our innovation lab in LA, where we work collaboratively with OEMs to ensure interoperability between all EV models and our chargers. EVgo’s commitment to serve all EVs includes adding NACS connectors to our network. For over a decade, the EVgo team has built and refined the growth engine that is now humming. From a proprietary process of determining whether and where to build, to construction to grant capture to customer acquisition to ongoing maintenance, we are adding net present value every year. Foundational to this growth engine are the many years’ experience we have in securing our supply chain, marquee site host relationships, excellent relationships and advocacy efforts with governments and utilities, an innovative tech platform and our sizable OEM partnerships. When put together, this is difficult to replicate at this scale and with the customer experience we now offer and reinforces our competitive advantage. There are several drivers underpinning the growth of transport electrification, although I recognize there may be speed bumps along the way. Despite some OEMs pulling back from their extraordinary ambitions over the past couple of years, commitments from OEMs towards investing in electric vehicles still represents over $400 billion. 14 states, representing over a third of the U.S. population have adopted Advanced Clean Cars II, the regulation from the California Air Resources Board that phases out the sale of new ICE vehicles in favor of a 100% zero emission future for new zero emission vehicle sales. Rideshare companies have committed to an all-electric future with Uber setting the goal of having 100% of their rides in EVs in the U.S. by 2030. This is parallel to efforts of cities such as New York City, where Mayor Eric Adams signed the green rides rule where all rideshare vehicles that operate in the city must be electric by 2030. And across the U.S., we see strong consumer preferences for EVs today, which we expect to gain momentum as the average price of battery electric vehicles becomes closer and eventually becomes cheaper than ICE vehicles with more new models being brought out every few months. Two years ago, the average BEV was around a third more expensive than the average ICE vehicle. And today, it is almost at parity without incentives according to Cox Automotive. Battery electric vehicle sales continue to grow year-over-year and sales of non-Tesla vehicles, which are the majority of vehicles charging on EVgo’s network, grew by 66% year-over-year and now represent approximately half of all 2023 battery electric vehicle sales, up from about a third in 2022. While there may be some uncertainty over the growth of EVs in the near term, estimates for 2030 remain very significant, implying CAGRs of 37% to 42% through 2030. There are few industries in the world with this kind of growth rate underpinning the investment case. EVgo focuses on DC fast charging versus L2 charging. With DC fast charging depending on the vehicle, it’s possible to charge 100 miles in less than 10 minutes. These stalls are in premium convenient locations where people are going about their lives. Our core business generates revenue from the sale of electricity through these well-located stalls. In other words, we would continue to generate revenue even if there were no more new EV stalls. Because of decreasing vehicle efficiency due to larger EVs, we expect to see a higher growth rate of electricity consumption to power those vehicles. Therefore, we estimate the total addressable market or TAM is growing at a CAGR of up to 46% to 2030. And finally, DC fast charging share of the electricity consumption is expected to grow considerably over the next several years with an even higher CAGR up to 60%, resulting in a $12 billion to $15 billion annual serviceable addressable market or SAM by 2030. That assumes a penetration of only up to 15%, implying decades of further growth. The growth of DC fast charging is not some hypothesis for a future yet to emerge. We believe that early adopters of EVs had access to at home charging. As the market moves towards mass adoption, more easy buyers live in multifamily housing. And we know from a study from UCLA that multifamily residents are more likely to rely on public fast charging for their needs. In just two years, the percentage of multifamily dwellers buying EVs has risen to 31%, up 10 points. The percentage of DC fast charging is growing as this transition unfolds. In California, over the last 2.5 years, we estimate that fast charging already accounts for over a quarter of all charging needs for EV drivers, up from an estimated 5% to 10% in 2021 and expect this growth will continue over time. The second driver for the growth of DC fast charging is the growing number of rideshare drivers that drive EVs. The average rideshare drives 3x to 4x more than the average commuter, who is more likely to live in multifamily housing, and is more likely to not want to use valuable time during the day to charge their vehicle and is therefore very reliant on DC fast charging. This segment of drivers is growing very fast. Evaluating our usage on the EVgo network, rideshare drivers on average charge 5x more than our average retail customer. As more rideshare drivers make the shift to electric, the amount of electricity dispensed to this group of customers has increased to 25% in the fourth quarter of this year, up from 11% in Q1 ‘21. One of EVgo’s sources of competitive advantage, honed from over a decade of doing this is a proprietary, sophisticated network planning process that informs where we locate our chargers. We ingest an enormous amount of data from EV adoption rates, forecast sales, to density of multifamily housing, to rideshare volumes, electricity costs, demand charges and availability of grants, all at a census block level, which then tells us where to place chargers, how many and at what pace within specific geographic bubbles that are projected to generate double-digit returns. We then turn to our extensive site partners to determine which of our partners’ sites are best placed to build a site. And the model is iterated continuously, comparing actuals with forecasts to improve the network planning process. The chart on Slide 17 shows our actual forecasted throughput versus what we had originally forecasted for all owned sites. Actual shows not only how accurate our network-planning model is, but also the level of robustness of our underwriting process. You can see this financial discipline in the way we deploy capital, where we seek to minimize the amount of capital we deploy with offsets coming from a range of sources, including OEM payments and grants and incentives. And as we discussed before, we receive approximately $33,000 per stall built under our partnership with GM, which is typically received within a couple of months of stalls going operational. We have over a decade of experience in successfully identifying, applying for and securing grants at the federal, state and local levels. The federal government has two primary programs to incentivize charging infrastructure: the expansion and extension of 30C, the alternative refueling property tax credit from the Inflation Reduction Act and the NEVI program, up to $7.5 billion of formula funding from the bipartisan infrastructure law. In January this year, the IRS clarified rules about 30C eligibility, essentially resulting in more sites being eligible for funding than we had previously expected. As a result, we now expect around 50% of our network plan to be eligible to receive 30C funding. Finally, EVgo and our partners through our eXtend business continue to win NEVI funding for highway sites. However, given our strategy is focused on higher density, urban locations, our network plan is not dependent on NEVI funding as these sites are immaterial to our plan over the next couple of years. As a reminder, these diverse sources of funding can typically be stacked. And in some cases, the funding stack may cover the vast majority of CapEx at a particular site. For sites that are expected to go operational in 2024, these offsets are expected to represent around 40% of the capital required for our owned and operated sites. EVgo’s digital first approach offers customers and partners alike a variety of offerings driving value. We’ve worked tirelessly to improve the customer experience, and a lot of that is driven through software. For example, Autocharge Plus, a seamless plug and charge experience gets rave reviews from EV drivers as do reservations. EVgo offers flexible pricing models with location based, time of use, subscription, rideshare and pay as you go models available for drivers to choose what serves their needs best while optimizing profitability for EVgo. And our partners value a digital first approach from eXtend and rideshare partners to OEMs to site hosts. Each of our partners have benefited from technology offerings that improve our relationship with them. One of EVgo’s core priorities is to offer a best-in-class customer experience. We know that there are four things that customers value the most. First, having lots of stalls at a site so they never have to wait for a charge; second, having high powered chargers available so they can fuel up quickly; third, having reliable solution that works right on the first try; and fourth, a hassle-free payment process. On each of these dimensions, EVgo has made great progress over the course of 2023. Across our over 950 locations, we nearly doubled the number of sites that have at least six stalls and we’re now targeting a minimum station size of six stalls per site and aim for 8 to 10 if the site host has space. Across our nearly 3,000 stall network, we have more than doubled the number of stalls served by a 350 kilowatt charger. Rather than an asset based reliability measure, we track what we call one and done, an internal but more customer oriented metric that measures the percentage of time a customer has a successful charging experience within a reasonable time window on their first try. During 2023, our one and done rate increased over 600 basis points to 91%. Finally, we know that a key frustration for customers during the charging process is payment. As a result, we developed our Autocharge Plus feature, which allows drivers to just plug in and charge automatically without having to perform any additional steps. It makes charging easier and faster. During 2023, we nearly doubled the percentage of sessions using Autocharge Plus, which now has over 50 vehicle models eligible for it. This customer centric model combined with our disciplined investment in building a world-class fast charging network is why I am so excited about our electric future. I’ll now turn the call over to Olga, who will go through our financial performance for the fourth quarter and full-year 2023 as well as our initial outlook on 2024. Olga Shevorenkova: Thank you, Badar. EVgo ended 2023 with yet another strong quarter, mostly driven by the continued growth of our owned and operated charging network. Revenue in the fourth quarter was $50 million, which represents an 83% year-over-year increase. This growth was primarily driven by increased charging revenues. Retail charging revenue grew from $5.8 million in the fourth quarter of 2022 to $16.7 million in the fourth quarter of 2023, exhibiting a 186% year-over-year increase. Commercial charging revenue grew from $1.3 million in the fourth quarter of 2022 to $6.3 million in the fourth quarter of 2023, exhibiting a 378% year-over-year increase. And eXtend revenue grew from $16.7 million in the fourth quarter of 2022 to $18.3 million in the fourth quarter of 2023, exhibiting a 10% year-over-year increase. We added over 930 new operational stalls to our own and operated network during 2023, accelerating off the 670 new stalls we added in 2022. Sold and operational under construction inclusive of $196 sold was 3,550 as of December 31, 2023. During 2023, EVgo added over 866,000 new customer accounts, which represents the majority of all non-Tesa EV sales in 2023. EVgo ended 2023 with more than 884,000 customer accounts, a 60% increase over year-end 2022. EVgo’s network throughput continues to accelerate in the fourth quarter, growing faster than EV VIO growth over the same time period. As Badar discussed earlier, EVgo is focused on the fastest growing segment of the charging market, DCFC, and it can clearly be seen in our numbers. This accelerated growth is driven by a number of factors. EV buyers moving from early to mass adopters with a higher portion of multi union dwellers and the rapid growth in rideshare, as well as EV vehicle miles traveled finally catching up to those of ICE, increasing EV charge rates or how much electricity is delivered over the time period to a vehicle, and heavy less efficient EV models. Utilization was over 19% across the network in the month of December. Over 55% of our stalls had utilizations greater than 15% in December 2023 and over 40% of our stalls had utilizations greater than 20% in December 2023. Another way to look at stall level performance is to look at daily throughput per stall. There are two factors that drive this metric, time-based utilization and charge rate. As a reminder, charge rate depends on the car’s battery, but can be limited by some legacy fast charges whose max capacity is lower than a specific car’s charge rate. We expect average charge rates on our network to increase over time, driven by newer cars with bigger batteries and a higher mix of ultrafast DCFC chargers on our network. Average daily throughput per stall was 200 kilowatt hour in December 2023, up from 51 kilowatt hour in December 2021, representing a 4x increase. Utilization grew around 3x over the same time period, demonstrating the impact of increasing charge rates on throughput per stall. Looking back two years ago, only 2% of our stalls were delivering 200 kilowatt hours or more per day. As of Q4 2023, that number has increased to 42%. And on the lower end, three years ago, 60% of stalls were delivering less than 50 kilowatt hour a day. Today, that number has shrunk to 16%. EVgo continues to realize operating leverage on its path to profitability. In the fourth quarter of 2023, we doubled our revenue while tripling our adjusted gross profit versus the fourth quarter of 2022. Adjusted G&A as percent of revenue decreased from 92% to 54% over the same time period. These improvements are driven by first, leverage within cost of goods sold and second, leverage within SG&A. Let us unpack both. For every stall we deploy, there is an amount of fixed or stall dependent costs associated with it, including property taxes, rent, base maintenance and demand charges. For every additional kilowatt-hour of throughput, these costs remains fixed per stall. Therefore, lowering stall dependent costs as a percentage of revenue driving adjusted gross margin up. To help you model operating leverage in our core business, we have broken our adjusted cost of sales into two categories: charging network cost of sales and other cost of sales. Charging network cost of sales include all costs associated with running our core owned and operated charging network, whereas other cost of sales include cost of goods sold associated with our eXtend and ancillary business lines. Within charging network cost of sales, approximately 40% of costs are stall dependent. In other words, fixed per stall. The other 60% of charging network cost of sales is throughput dependent and includes volumetric energy costs and credit card processing fees. The increase in daily throughput per stall you saw on the prior slide was primarily behind the adjusted gross margin expansion from 18.3% in the fourth quarter last year to 26.5% in the fourth quarter of this year. We also have operating leverage in G&A. Adjusted general administrative expenses at EVgo can be broken down into two categories. First, the cost to sustain the existing charging network and other existing businesses such as call center, third-party IT, account management, marketing, sustain and software and hardware expenses. These costs represent roughly 30% of total adjusted G&A. Second, the cost to support growth of the charging network and other business lines, our so-called growth engine what I have spoken at length about. These costs represent another roughly 30% of adjusted G&A. And finally, corporate overhead costs that represent roughly 40% of total adjusted G&A. Gross costs are tied to the size of the growth engine and corporate costs are fairly fixed at this point. And as a result, adjusted G&A has increased only 9% year-over-year, while as mentioned earlier, revenue tripled, fully demonstrating the operating leverage within G&A. Both of those effects coupled with increased scale of the charging network and other business lines have put us on a clear path to reach adjusted EBITDA breakeven. Importantly, we have passed an important inflection point in 2023 in that as a result of the utilization and throughput levels, we’re now seeing across our network, the installed base is now profitable on a standalone basis. Adjusted gross profit was $13.3 million in the fourth quarter of 2023, up from $5 million in the fourth quarter of 2022. Adjusted EBITDA was negative $14 million in the fourth quarter of 2023, an improvement versus negative $20.1 million in the fourth quarter of 2022. Cash used in operations was $7.3 million in the fourth quarter. We added over 200 new stalls to our owned and operated network during the fourth quarter. Capital expenditures were $34.8 million in the fourth quarter. This includes expansion CapEx, renew CapEx, as well as capitalized engineering and construction and tech development costs. We are now reporting capital expenditures net of capital offsets, where capital offsets represent cash collected from various funding sources in a particular period. Specifically, in the fourth quarter of 2023, we collected $5.7 million in OEM infrastructure payments, all payments under the GM contract and $7.4 million as proceeds from capital build fundings. All cash collected as part of various grants and incentive programs secured over the prior periods. Thus, bringing capital expenditure net of capital offsets to $21.8 million for the quarter. For the full year 2023, total revenue was $161 million, nearly tripling compared to 2022. Revenue growth was primarily driven by charging revenue and EVgo eXtend. Retail charging revenue was $45.7 million, an increase of 142% compared to 2022. Commercial charging revenue was $14.5 million, an increase of 331% compared to 2022. And eXtend revenue was $72.4 million, an increase of 292% compared to 2022. Adjusted gross profit was $41.8 million in 2023, up from $13.3 million in 2022. Adjusted gross margin was 26% for the full-year 2023, up from 24.3% in 2022. This increase was driven by the operating leverage as discussed earlier. Greater leverage effects are observable when comparing adjusted gross margin in the fourth quarter of ‘23 to the fourth quarter of ‘22 versus comparing full year results. This is driven by accelerated LCFS revenue recognition in the first half of 2022, which drove margins higher in that time period. Adjusted G&A as a percentage of revenue improved significantly from 171.2% in 2022 to 62.5% in 2023, demonstrating the same leverage effect when looking at fourth quarter to fourth quarter numbers. Adjusted EBITDA loss improved by $21 million in 2023 to a loss of $58.8 million versus a loss of $80.2 million in 2022. Cash, cash equivalents and restricted cash was $209 million as of December 31, 2023. Cash used in operations was $37.1 million for the year compared to $58.8 million in 2022, clearly demonstrating our focus on reducing the operational cash burn and setting EVgo on a clear path to profitability. In 2023, total CapEx was $158.9 million and capital expenditures net of capital offsets were $122.8 million. The vast majority of the $159 million in CapEx was spent to grow our owned and operated network. Now turning to 2024 guidance. EVgo currently expect full-year 2024 revenue to be in the range of $220 million to $270 million and adjusted EBITDA to be in the range of negative $48 million to negative $30 million. Our guidance is informed by several scenarios, which account for a range of EV sales in 2024, utilization trends and the pace of execution under our contract with the pilot company. We expect PFJ revenue to be roughly 35% of total revenue in 2024 when looking at the midpoint guidance range. We also expect PFJ revenue to be more or less equally distributed through the four quarters with Q4 being slightly heavier than others. Charging network revenue is expected to grow sequentially throughout the year, driven by increasing VIO consistent with prior years. We also would like to add some color on our capital expenditures. Our current deployment plan is for 800 to 900 new EVgo owned stalls, expected to be put in operation in 2024 with an average CapEx per stall of $160,000 before offsets. We expect capital expenditures net of capital offsets to be in the $95 million to $110 million range. As we have discussed at length, EVgo is on a clear path to an important inflection point of our business, hitting adjusted EBITDA breakeven. EVgo expects to be adjusted EBITDA breakeven for the full-year of 2025. This is based on the expectation that EV VIO will continue to grow and that EVgo will continue to expand its network and realize operational efficiencies. EVgo into ‘23 was $209 million in cash, cash equivalents and restricted cash. Our current operational and network expansion plans give us runway through a good portion of 2025. EVgo is actively evaluating a number of non-dilutive sources of financing to fund the business beyond that point, both from private and public sources, including the DOE Loan Programs Office. On the latter, EVgo has put together a high quality DOE loan application that addresses the need for more public charging infrastructure to be judiciously built out at scale across the U.S. EVgo is a credible and sophisticated operator with over a decade plus track record focused on reliability and customer experience. And so far, we are rapidly moving through the process. We look forward to sharing our progress in 2024 with you throughout the year. Operator, we can turn the call over to questions. Operator: [Operator Instructions] Your first question today comes from the line of Gabe Daoud from TD Cowen. Gabe Daoud: Maybe wanted to start with Olga, what you wrapped up with the 2024 capital offsets. So I’m just looking at rough math, 900 stalls at $160,000 per stall, call it, over $140 million of capital. So I guess the offset would be what around $30 million to $50 million or so. Could you maybe give a bit more detail on where all of that is coming from? See also 12 Most Undervalued REIT Stocks To Buy According To Analysts and 15 Most Valuable Languages to Learn for International Business. Q&A Session Follow Evgo Inc. Follow Evgo Inc. or Subscribe with Google We may use your email to send marketing emails about our services. Click here to read our privacy policy. Olga Shevorenkova: So let me kind of like remind the time and component of all of this, and then I’ll answer your question. So when we talk about CapEx spend in a particular year, it’s not necessarily spend on the chargers, which go operational that particular year, because we already probably spend good 30%, 40% of what’s required to be spent to put at 2024 assets in operation in 2024 as of now, because you construct over, like, 12 to 18 months with various stages of development. And, that’s said, within 2024, fiscal CapEx or cash CapEx we’re going to spend, some of it will be spent on ‘24 assets. Some of it will be spent already on ‘25 assets. Some of it will be an early development cost for ‘26 and maybe even ‘27 assets for some early scope and exercises. So just to kind of make it clear, 160K by 800 to 900 won’t get you to that precise numbers, so you won’t be able to match it one-to-one. And the same dynamics plays out with offsets. With offsets, as we spoke at length many times, one of the main components of offsets is grant funding. And when the grants funding, you start invoicing them after the asset goes operational. It takes you up to several months to collect that cashback. So there is a clear mismatch on when you had spent the CapEx for this particular asset versus when you collected the offset. The cycle is a little shorter with OEM payments because they just pay quicker to commercial organization. And on 30C offsets, there will be a delay. It’s unclear yet if we’re going to be trading once a year, those credits twice a year or maybe once transaction costs come down and, industry, the overall, so to see trades and tax industry matures, we maybe will be trading every quarter, but there will still be a delay. So when you are, looking at, kind of cash number within the year, the capital offsets versus CapEx, they don’t relate into the same assets. That’s why we introduced the concept of vintage CapEx or the concept of vintage offsets. And I talked about it in my prepared remarks, and the chart is included in the materials we provided. When we compare the CapEx, refer to specifically assets which go in operational ’24 and capital offsets also related to those particular assets. We expect to offset roughly 40%. So 60%, comments. It’s net comes from EVgo, and 40% comes from other sources. Within the particular year, that number could fluctuate one way or the other depending on a timing of each of those components. Gabe Daoud: And maybe just sticking to that. So I guess ’24, is that this will be the first year you’ll attempt to monetize 30C credits? Just kind of curious how that looks in the secondary market from a value standpoint? Is it like $0.90 on $1? Just how should we think about 30C value? Olga Shevorenkova: Yes. That’s going to be the first time, and it’s going to be the first time for a lot of actors in the market. Both buyers and sellers are trying to understand what will work for each party to transact. We have a lot of interest for our first portfolio, for our effect to a 2023 assets portfolio. I probably will not comment on the price just yet because we just started exploring it. Maybe when we speak next time in a couple months, I’ll give you a better indication of what that is if we’re sufficiently more along with one of the parties. Gabe Daoud: And then just a follow-up for me would be talking about some of the attractive economics here. Just curious if you could refresh maybe thoughts on you get to 2030, I know it’s a long time from now and you do see $30 million to $40 million in VIO at 20% utilization. How does that translate to like financials and what the business actually looks like in terms of maybe EBITDA or free cash flow? Any kind of thoughts around that would be helpful. I know, again, longer dated, but just curious. Olga Shevorenkova: So, we obviously are looking at all of those numbers internally, Gabe. But we think that the more appropriate time and space to share something like that will be a separate occasion. We are thinking about conducting, kind of webinars, event of some sorts, where we will go in a greater in-depth detail in our project unit economics and our more mid-term to long-term planning. In the meantime, we think with this call we gave quite a bit of information on the separation of fixed and variable costs within our cost base, how we’re thinking about the charge rate and whatnot. Honestly, our business is types to EV adoption, right? That’s as a driver, and we’ve been saying it over and over again. The EV VIO grows, our business grows. Now I think you have enough information to try to even model it yourself and see. It’s going to be big if we continue to deploy in Africa and continue to grow alongside the adoption. How exactly it’s going to look like from our perspective? I think a separate occasion is probably a better chance for us to share that information and talk about it at lengths. Badar Khan: Gabe, let me just quickly just add to that. We’ve shared with you already in this call and our materials that this is the operational business, so the stalls that we have in the ground, are covering their costs. So if you exclude the cost of the growth engine and our corporate overhead fixed costs, the assets that we have in the ground at the 19% utilization rate are actually covering their costs today. And so as this business continues to scale, we should expect to see margins coming from those operational stalls well in excess of the fixed costs certainly by 2030. And I think anyone that will model this business will find it to be a pretty attractive business at that point. Operator: Your next question comes from the line of Andres Sheppard from Cantor Fitzgerald. Andres Sheppard: I wanted to maybe touch on how should we be thinking about cost of energy, ASPs and the utilization rate for 2024, particularly given the guidance that you issued? What kind of, in terms of for modeling purposes, what will be a good way to think about the ASPs and the utilization rate, 19% as of year-end, which is great? Curious, what you’re targeting or what you might expect for 2024? Olga Shevorenkova: So we don’t disclose either, but I’ll describe the dynamics here. On an energy cost front, we probably will see a slight reduction in 2024 because we’re still observing the effect of amortization of demand charges, coupled with us moving to very favorable EV rates in a number of geographies. So you should see a slight improvement on that front. On our pricing side, we probably will see a slight improvement as we’ve just made some changes to algorithm and pricing strategy or like a month ago or so. So it should take an effect to probably gain a couple cents there. And if we’re talking about the difference between the two, we definitely should assume some improvement on the energy margin. Andres Sheppard: So if I’m understanding correctly, then probably a reduction in ASPs for ’24 and then maybe a gradual improvement in the utilization rate of the chargers for this year? Olga Shevorenkova: So the reduction in average sales cost, so reduction in energy cost, but improvement in ASP, average sales price, right? So the difference between the two is the margin that should expand a little bit in ’24. Badar Khan: And Andres, just again, just to reemphasize, you can see the operating leverage that exists in gross margin. We’ve shared with you how much of our charging COGS is fixed versus variable at a stall level. And so if we see growing utilization, growing throughput per stall, which you’ve seen a very significant increase over the last year, I’d expect us to see that operating leverage show through in expanding gross margin. Olga Shevorenkova: And so just to just to maybe clarify, Andreas, adjusted gross margin is not just energy cost. There is a lot of different costs and then it’s fully loaded. It’s quite a loaded number. There’s maintenance, there’s property taxes. There is some AT&T and Verizon charges. There is rent. So when you’re looking at adjusted gross margin, it doesn’t just talk to the dynamics of the difference between the price and then energy cost. Energy cost is another part of it. It’s 60/40 split, to be precise. Andres Sheppard: And then maybe switching gears, on NEVI funding, obviously, understanding that you’re not dependent on it, but just can you maybe remind us what is the total amount that you have been awarded so far from NEVI? I think it was about $180 million in last quarter. So just seeing if there’s an update there. And how should we be thinking about in terms of awards for this year? Is there a target that you guys are expecting for? Or just trying to, again, incorporate that into the model as well? Badar Khan: Yes. I mean, Andreas, the NEVI, as you said, funding is not a particularly material part of our build plan. As we’ve said, we were focused on building infrastructure in kind of urban, suburban, locations as opposed to highway corridors. So it’s not a huge part of what we do. We are excited about supporting our partners, so Pilot Flying J and GM with through our extended relationships. So we’re excited about supporting them in deploying sites that may be eligible for NEVI funding, but it’s just not really a particularly material part of our build plan today, at least in the near-term. Olga Shevorenkova: And maybe just to add to it, we view NEVI as one of many grant funds and sources we’re applying for and we have a called a big program and a bunch of other programs across different states. For those other programs, the amount which awarded but we haven’t collected yet, that’s tens of millions of dollars, just to give you a magnitude. So maybe small, it doesn’t necessarily mean our overall capital offset strategy is not working out. We are accessing it wherever we can, where we’re being guided by the principle of maximizing NPV rather than maximizing the grant captures. Some of the locations even with grant captures, it doesn’t work for us. Just to remind that that’s our strategy. Andres Sheppard: Sorry, I’m not sure if I missed it, but do we know then what the total awards is to date from NEVI? Again, I think it was $180 million as of last quarter. Is that number unchanged or is there? Badar Khan: I don’t know if we have it at my fingertips, Andres, but we can get back to you offline on that. Olga Shevorenkova: Yes. I don’t remember on top of my head, the total either. Operator: Your next question comes from the line of Bill Peterson from JPMorgan. Bill Peterson: Hoping you can help just with the full year view. I know you dropped a lot of bread crumbs on how to think about your network operations. But if we think about the trajectory between that business, which you said should see growth throughout the year. What about eXtend and tech-enabled services? Trying to get a better understanding of how the cadence kind of goes through the year and maybe what’s your underlying assumptions around BIO growth and so forth? Olga Shevorenkova: For the eXtent, we have a big contract with Pilot Flying J as we’ve talked at length. We are in a full speed executing on that contract. We just gave a guy, gave some color in my prepared remarks that it will be roughly 35% if you take a mid-point range of revenue. That will bring us, by the end of 2024, so roughly half of revenue collections to that contract. So another half will be left or to collect over ‘25 and ‘26, and execute on that as well. We do not have any other big contract right now committed to EVgo. We’re focusing our efforts on our owned and operated network. If a big lucrative deal like that comes our way, appears in the market, we’ll go for it, and then we’ll give an update. That’s another way we’ll be executing on. But as of now, that is not the case. So eXtend as of now, will turn into the operational maintenance revenue for PFJ after we’re done executing through and building out Phase 1 and Phase 2. On the ancillary services, that’s mostly PlugShare at this point. We expect the revenue to grow, probably a little slower than VIO year-over-year, but you should see some growth in that business line year-over-year. That’s kind of how we view it as of now. And what was the last question you asked after that, Bill, if you don’t mind repeating it? Bill Peterson: Well, I think you gave us, you do expect network to grow quarter-on-quarter, but I think what’s missing and what’s difficult for everybody is how to think about eXtend. Is it first half-weighted, second half-weighted? It tends to be lumpy, but, I mean I know you don’t want to talk about one quarterly guidance versus hard to say on the bottom of that. We haven’t seen sort of. Olga Shevorenkova: Sure. We gave some color in the remarks, but I’ll reiterate it. We expect the eXtent to be roughly equally distributed among quarters this year with Q4 being a little heavier. So it will be a little bit of a different dynamics versus last year. Last year was lumpy because of large equipment deliveries. This year, we’re mostly focusing on construction, which just tends to be steady quarter-over-quarter. Bill Peterson: We’ve heard some prior commentary that, you’ve talked in the past that maybe 10,000 additional stalls that potentially pencil for the team. Trying to get a sense for how you’re thinking about the growth in this business. I think you exited this year around 3,000 operational with around 560 under construction. You didn’t guide this year, but how should we think about new stalls for this year? And then how many are you planning on completing this year? Badar Khan: We did, Bill, in August comments. We said that we expect 800 to 900 new stalls going operational this year. So that’s just a little bit behind the 930 that we added for, well, that about that 930 includes the 100 eXtend stalls that we added in 2023. So we’re quite, and so you’re right that we’ve got a very large number of stalls that we think pencil. And so we are focused on ensuring that we are deploying the right number of stalls and minimizing capital from shareholder funds as we seek to execute on financing that extends the runway. And if that means we’re a couple of stalls less than new than this 2024 we might otherwise have done. As you said, already there’s 9,990 other stalls that pencil to our double-digit return framework. Operator: Your next question comes from the line of Stephen Gengaro from Stifel. Stephen Gengaro: So, two for me. One is a clarification. When you say that at the asset level, the charges are profitable. Do you mean, like, all in costs? Can you just give us color on what exactly you mean when you say the profitable at an asset level? Olga Shevorenkova: We do mean all in cost and when we say all in, it’s all in and more. So it’s obviously all the direct costs like energy, maintenance, property taxes, rent, third-party IT charges, asset management, customer operations, teams. It’s call center. And then on top of it, we allocate a portion of other teams which are involved in sustaining and operating the network such as marketing, analytics, software and hardware, and a couple others. So it’s a really, really full on number. So the only costs which are not included in that will be your true corporate costs and your, the gross engine cost, so cost required to deploy and grow the network. So it is a very encompassing number and a pretty robust number when we say that, it is positive. Stephen Gengaro: From a bigger picture perspective, when we think about it and when you guys think about internally what Tesla has done opening up the network, I mean one of the things I think about and you mentioned this earlier, having access to fast charging without having to wait. And I would think that if I was a Tesla driver and showed up at a charging station and I had to wait for a Ford, I’d be upset. So I’m just trying to think about how do you think about their decision and whether that is a net positive or negative for you and how that kind of works in the overall fast charging world we’re living in? Badar Khan: Yes. It’s a great question. I mean, I think we think this, the same as we have for quite some time, which is that, Tesla opening up their network, will contribute to lowering anxiety for customers in the purchase decision-making process for individual customers. And I think that’s a good thing for EV adoption and, obviously, for our business. With respect to customers utilizing Tesla’s network, and again, we’re talking about model year 2026. That’s when the vast majority of OEMs will have, max or expected to have max ports available on their cars to be able to use their network in a significant way. I think that if that results in congestion at Tesla sites, then clearly we would expect to benefit from that. So we’re expecting to see range anxiety being addressed at the purchase decision point for customers and we’re expecting if there’s congestion at Tesla sites for us to be picking up the additional volume. Stephen Gengaro: And that’s helpful. And just a quick follow-up to that. When you think about your detailed analysis of site planning, is that starting to become a part of the algorithm? Badar Khan: We take into consideration, Stephen, a whole host of things as I talked about in our prepared remarks. So forecast sales, density of neighborhoods, multifamily housing, rideshare, but also, of course, location of other chargers. Right now, we’re looking at — we see that about a quarter of EVgo’s sites are in ZIP codes where we expect Tesla will be able to actually charge other OEMs. And so very much we take into consideration all of these factors. Operator: Your next question comes from the line of Craig Irwin from Roth MKM. Craig Irwin : Most of my questions have been answered. Your acceleration that you saw in the OEM charging and commercial charging, is kind of counterintuitive with some of the things going on out there. There’s rental companies reducing the size of their fleets and a bunch of announcements that sort of suggest that might have gone the other way. Can you connect for us sort of what’s going right for EVgo there? Why we are seeing this acceleration and how sustainable it’s likely to be this year? Badar Khan: Look, I think we all read the same things in the papers. We can clearly see that EV sales grew year-over-year, particularly for non-Tesla vehicles. Non-Tesla sales were up from 22% to 23%, up about 66% as we said in our materials. We are also seeing on our network, as again, we’ve said in our remarks here and we’ve said in the prior call, we’re seeing a very significant increase in rideshare. So rideshare customers are taking advantage of our network, being able to charge different times of the day at off peak hours, and that rideshare volume is now 25% of our throughput. So that’s obviously very attractive, and we think that’s something that’s likely to grow, especially since we’ve seen commitments from the likes of Uber for a 100% of their rideshare drivers to be driving electric vehicles by 2030. So there are some factors here that I think are quite compelling. I mean, I think that in terms of near-term, from the data that I’ve seen, we are still seeing year-over-year growth in electric vehicle sales. So January sales from what I’ve seen for battery electric vehicles continue to go higher year-over-year and I think that’s also a positive for us. Craig Irwin : And actually, I’m sure many of us on this call have heard anecdotal reports using rideshare services that people are switching and that they do it for economics. But can you maybe sketch out for us what the economic advantage might look like for a traditional rideshare driver? I mean, is that something you might be able to do for us at this time? Badar Khan: I don’t think we can do it on this call, but I think that it’s an interesting question. I think that, we expect that rideshare customers, as they look at their costs like, rideshare drivers, I’m sorry, I think is your question. As they look at their costs, they’re finding that, driving a battery electric vehicle actually is an attractive thing to do for them versus a nice vehicle and we can perhaps dig into that at a future date. Operator: And we have reached the end of our question-and-answer period. I will now turn the call back over to CEO, Bedar Khan, for some closing remarks. Badar Khan: Great. Well, thank you, everyone. As you heard, EVgo had a great fourth quarter and full year beating the top end of our guidance. Our strategy to focus on owning and operating DC fast charging, we think, is clearly working, and with a very strong throughput and utilization that is now far outpacing the growth in EVs and our own stall growth and we’ve passed a key inflection point where our installed base is now profitable on a standalone basis. Our focus on customer experience combined with disciplined investment, I’m very excited about where our growth engine will take us, and I look forward to providing you an update on progress on our next call next quarter. Thanks very much, everyone. Operator: This concludes today’s conference call. Thank you for your participation. You may now disconnect. Follow Evgo Inc. Follow Evgo Inc. or Subscribe with Google We may use your email to send marketing emails about our services. Click here to read our privacy policy......»»
I read all the studies on the economic impact of bike lanes. Here"s what I learned.
Research proves that bike lanes are good for business. So why do so many stores and restaurants still oppose them? Pete Ryan for BIBusinesses hate bike lanes. Sure, they reduce pollution, slow the pace of climate change, cut traffic fatalities, and make cities healthier and more pleasant. But they also take away parking spaces, which makes it tougher for shoppers to load up their cars with piles of stuff. Freaked-out business owners have been fighting bike lanes coast to coast, in cities from San Diego to Cambridge, Massachusetts. They worry — not unreasonably — that anything that makes it harder for customers to get to their stops will eat into their already precarious margins. “As someone whose family had a small business when I was growing up, I know how invested you get in it,” says Joseph Poirier, a senior researcher at the urban-planning consultancy Nelson Nygaard. “It’s your whole life. Anything you think could threaten that, even if the government and their consultants tell you it’s not going to be a problem, is very scary. It makes sense.”It’s also wrong. Four decades’ worth of research proves it. I know this because I’ve read every study and report I could find that looked specifically at the economics of bike lanes since 1984 — 32 research articles, to be exact. The results show that making streets friendlier for bikes — and sidewalks friendlier for pedestrians — is actually good for business. The rise of “complete streets” and “road diets,” as urban planners call them, has been a huge boon to businesses in cities. I won’t walk you through every study, because most of them actually use survey data. Do you think bike lanes discourage shopping? How much do you spend when you ride your bike here? Surveys aren’t the most reliable way to look at this question. People lie, they misremember, they get stuff wrong. And anecdotal experience tends to loom too large. One angry customer who complains about not being able to find parking trumps the 10 who rode their bikes to your shop and didn’t say boo.More confoundingly, survey after survey has shown that business owners overestimate how many of their customers drive to their stores, versus walking or biking. In a study of the effects of street improvements on a shopping corridor in Los Angeles published in 2012, more than half of the store owners on the bike-laned part of the boulevard thought most of their customers drove. The actual number was 15%.So what we need is financial data. Revenue numbers. Sales taxes. Credit-card receipts. Employment figures. That’s the good stuff. And for methodological rigor, we want to case-match our study areas to similar neighborhoods that didn’t get bike lanes — and to numbers for the city overall, to establish a baseline.That cuts the number of useful studies to just about half a dozen. Here, in brief, is what they tell us.In 2013, a researcher at the University of Washington named Kyle Rowe looked at two shopping districts in Seattle that got put on road diets. Rowe compared sales taxes in these “Neighborhood Business Districts” with those in similar districts in the city that didn’t get bike lanes. In one NBD, which replaced car lanes and three parking spots with two bike lanes, sales closely tracked those in the bike-less areas, both in peaks and troughs. Conclusion: Bike lanes did nothing to reduce business. And in the other NBD, which replaced 12 parking spaces with a bike lane, sales quadrupled.Was the spike in business because more cyclists came to shop? Rowe, a careful researcher, declines to make that leap. “It would be logical to assume that more bicyclists were coming to the NBD because of the new facility,” he writes, “but no conclusion can be made to connect mode choice to economic performance.” Still, there’s no mistaking the data: Adding bike lanes certainly didn’t hurt sales — and may have boosted them dramatically.A year later, the New York City Department of Transportation conducted the same kind of study on a larger scale, examining sales-tax data in seven retail-heavy neighborhoods. A few were plaza-type hubs; the others were more linear retail corridors. All had been through the kind of extensive changes to pedestrian access, mass transit, traffic calming, landscaping, and bike paths that New York was pushing at the time. The results were striking. Compared with the overall business climate in each borough, sales in the bike-friendly areas soared by 84 percentage points in Brooklyn, 9 percentage points in Manhattan, and 32 percentage points in the Bronx. “Better streets,” the report concludes, “provide benefits to businesses in all types of neighborhoods,” from “lower-income neighborhoods with ‘mom & pop’ retail” to “glitzier areas with sky-high rents.”The next couple of studies got even more specific. In 2018, Joseph Poirier, the urban planner I quoted earlier, looked at sales data from three retail neighborhoods in San Francisco with newly installed bike lanes. Drawing on everything from industry coding conventions to map data, he was able to draw detailed distinctions among hundreds of businesses: what they sold (retail versus restaurants), where they were located (right next to a bike lane versus a few blocks away), and who their customers were (coffee shops serving locals, say, versus a furniture store serving the entire city).The results were mixed. In two of the three districts, shops and restaurants serving locals did way better than places serving a wider area. In the other district, sales tanked relative to the number of people a shop employed, suggesting that bike lanes gave an advantage to smaller businesses. “The takeaway is that it’s probably a minimal effect on businesses when you put in a bike lane,” Poirer says. “That actually makes a lot of sense. If you think of a busy downtown district, there’s not that many parking spaces relative to the number of people who come to the business.” In this case, bike lanes didn’t seem to help businesses much. But overall, it didn’t hurt them.In 2019 Poirer was on a team that did another study of San Francisco. They looked at businesses directly adjacent to two kinds of bike infrastructure — Class II, which creates dedicated bike lanes denoted by a paint stripe, and Class III, where signs instruct cars and bikes to share the street. (Either way, blocks with the new lanes lost an average of three parking spaces.) Once again, the results were mixed. On Class II lanes, bars and barber shops and banks enjoyed increases in sales, while furniture stores and gas stations were more likely to experience decreases. Older businesses tended to decline more than new ones. Overall, in the year after the bike infrastructure went in, businesses on Class II streets lost a median of $27,921 compared with $19,390 for those on Class III lanes. But similar shops that weren’t on a bike lane lost $25,296. When it came to bike lanes, there were lots and lots of winners. But there were some losers, too.The most definitive study, to my eye, came in 2020. Jenny Liu and Wei Shi, researchers at Portland State University in Oregon produced a 260-page report looking at neighborhoods that got bike lanes and other street improvements in Portland, San Francisco, Minneapolis, and Memphis. The team cross-referenced financial information like sales taxes with geographic data, so they could tell exactly where businesses were in relation to the street improvements. They ran three kinds of econometric analyses on each site. And they looked not only at revenue but also at the number of employees — per business and in total — in each study area. “I was really trying to be rigorous methodologically, to provide the kind of evidence that people can use to talk to their communities,” says Liu, the director of the Center for Urban Studies at Portland State.Bike lanes don't hurt the shops next to them. They usually help bring in customers.Boston GlobeLike Poirier, Liu and Shi found that in many cases, only certain kinds of businesses benefited from the bike lanes and street improvements. Food and beverage did better; retail did worse. And just slapping a bike lane on a hectic thoroughfare didn’t do anyone any good. “On really large streets with high traffic volumes or speeds, even if you add a bike lane or pedestrian improvements, it still isn’t really inviting,” Liu says. “Just having street calming doesn’t always have positive results.”But overall, Liu’s team found, retail areas benefited from better streets. Sometimes nothing changed, but more often the areas near bike lanes wound up with more employees and more revenue. That was true in Portland, at two sites in San Francisco, one site in Minneapolis (at the other, retail did better than food), and one site in Memphis (at the other, food did a bit better than retail). Across the country, again and again, the numbers told the same story: Either “business activity remained pretty much constant,” Liu says, or “certain types of businesses became much more prosperous.” Back in the 1960s, when the advent of suburban flight and climate-controlled malls began to draw business away from America’s once thriving downtowns, cities tried to stanch the flow by banning cars on shopping streets. It was called, not exactly trippingly, “pedestrianization,” and it was a disaster. Pedestrian-only plazas couldn’t compete with the Golden Age of the Automobile, and many downtowns turned into boarded-up wastelands. That extinction event is still encoded in the genetic memories of today’s retailers and restaurateurs.But things have changed. Nowadays, online retail is crushing brick-and-mortar worse than any half-assed pedestrian plaza ever could. What’s more, demand for new homes means lots of cities are putting them downtown, trading daytime workers for all-the-time residents close enough to ride a bike. COVID showed us it’s worth giving up parking spaces for outdoor restaurants. America’s cities are undergoing nothing short of a total rethink of what and whom downtowns are for.You can pack way more bikes than cars into a small space — and that means way more shoppers. UCG/Getty ImagesNationwide numbers of bike lanes are tough to come by. By one count, there are nearly 20,000 miles of bike-ready paths in the United States, but that includes rural routes and trails. Still, city after city is working to create European-style streets. Portland has over 430 miles of bike lanes, about the same as Chicago; New York City has more than 1,500; Los Angeles has added almost 1,000 miles since 2010. And every new mile of bike lane per square mile of city increases the number of cyclists by 1%. The training wheels are about to come off the “complete street” movement.Now, advocates and policymakers should be honest about all this. Even if bike lanes boost revenues and employment overall, some individual businesses are going to win and some are going to lose. An older business selling heavier goods, or drawing from a wider watershed for its customer base, might well be in trouble. “Newer businesses who are thrilled with density and development around them are pivoting to a customer who’s younger, who’s arriving on a scooter or a bike,” says Larisa Ortiz, a managing director at the urban-planning consultancy Streetsense. “But this process of evolution toward bike lanes and mobility does not come without loss.”One way I’d propose to help businesses adjust to the total remaking of the urban landscape is the most American solution of all: Just hand them some money. All you’d have to do is build funds into the budgets for street-improvement projects to compensate adjacent businesses for any sales they wind up losing. If your business takes a hit from all the bikes, you get a pay-out.The most effective way to deal with opposition from local businesses is to just get the bike lanes built. Before-and-after surveys tend to show that in the long run, everyone winds up satisfied. “It’s a political question, and oftentimes it’s a very divided community when it comes to these types of projects,” Poirier says. “But once a street is changed, generally speaking, after six months or a year, nobody remembers what it used to look like. It’s the new normal.” All the data in the world may prove that bike lanes are good for business. But nothing beats experiencing them.Adam Rogers is a senior correspondent at Business Insider.Read the original article on Business Insider.....»»
Bike lanes are good for business
Study after study proves that bike lanes boost shopping. So why do so many stores and restaurants still oppose better streets? Pete Ryan for BIBusinesses hate bike lanes. Sure, they reduce pollution, slow the pace of climate change, cut traffic fatalities, and make cities healthier and more pleasant. But they also take away parking spaces, which makes it tougher for shoppers to load up their cars with piles of stuff. Freaked-out business owners have been fighting bike lanes coast to coast, in cities from San Diego to Cambridge, Massachusetts. They worry — not unreasonably — that anything that makes it harder for customers to get to their stops will eat into their already precarious margins. “As someone whose family had a small business when I was growing up, I know how invested you get in it,” says Joseph Poirier, a senior researcher at the urban-planning consultancy Nelson Nygaard. “It’s your whole life. Anything you think could threaten that, even if the government and their consultants tell you it’s not going to be a problem, is very scary. It makes sense.”It’s also wrong. Four decades’ worth of research proves it. I know this because I’ve read every study and report I could find that looked specifically at the economics of bike lanes since 1984 — 32 research articles, to be exact. The results show that making streets friendlier for bikes — and sidewalks friendlier for pedestrians — is actually good for business. The rise of “complete streets” and “road diets,” as urban planners call them, has been a huge boon to businesses in cities. I won’t walk you through every study, because most of them actually use survey data. Do you think bike lanes discourage shopping? How much do you spend when you ride your bike here? Surveys aren’t the most reliable way to look at this question. People lie, they misremember, they get stuff wrong. And anecdotal experience tends to loom too large. One angry customer who complains about not being able to find parking trumps the 10 who rode their bikes to your shop and didn’t say boo.More confoundingly, survey after survey has shown that business owners overestimate how many of their customers drive to their stores, versus walking or biking. In a study of the effects of street improvements on a shopping corridor in Los Angeles published in 2012, more than half of the store owners on the bike-laned part of the boulevard thought most of their customers drove. The actual number was 15%.So what we need is financial data. Revenue numbers. Sales taxes. Credit-card receipts. Employment figures. That’s the good stuff. And for methodological rigor, we want to case-match our study areas to similar neighborhoods that didn’t get bike lanes — and to numbers for the city overall, to establish a baseline.That cuts the number of useful studies to just about half a dozen. Here, in brief, is what they tell us.In 2013, a researcher at the University of Washington named Kyle Rowe looked at two shopping districts in Seattle that got put on road diets. Rowe compared sales taxes in these “Neighborhood Business Districts” with those in similar districts in the city that didn’t get bike lanes. In one NBD, which replaced car lanes and three parking spots with two bike lanes, sales closely tracked those in the bike-less areas, both in peaks and troughs. Conclusion: Bike lanes did nothing to reduce business. And in the other NBD, which replaced 12 parking spaces with a bike lane, sales quadrupled.Was the spike in business because more cyclists came to shop? Rowe, a careful researcher, declines to make that leap. “It would be logical to assume that more bicyclists were coming to the NBD because of the new facility,” he writes, “but no conclusion can be made to connect mode choice to economic performance.” Still, there’s no mistaking the data: Adding bike lanes certainly didn’t hurt sales — and may have boosted them dramatically.A year later, the New York City Department of Transportation conducted the same kind of study on a larger scale, examining sales-tax data in seven retail-heavy neighborhoods. A few were plaza-type hubs; the others were more linear retail corridors. All had been through the kind of extensive changes to pedestrian access, mass transit, traffic calming, landscaping, and bike paths that New York was pushing at the time. The results were striking. Compared with the overall business climate in each borough, sales in the bike-friendly areas soared by 84 percentage points in Brooklyn, 9 percentage points in Manhattan, and 32 percentage points in the Bronx. “Better streets,” the report concludes, “provide benefits to businesses in all types of neighborhoods,” from “lower-income neighborhoods with ‘mom & pop’ retail” to “glitzier areas with sky-high rents.”The next couple of studies got even more specific. In 2018, Joseph Poirier, the urban planner I quoted earlier, looked at sales data from three retail neighborhoods in San Francisco with newly installed bike lanes. Drawing on everything from industry coding conventions to map data, he was able to draw detailed distinctions among hundreds of businesses: what they sold (retail versus restaurants), where they were located (right next to a bike lane versus a few blocks away), and who their customers were (coffee shops serving locals, say, versus a furniture store serving the entire city).The results were mixed. In two of the three districts, shops and restaurants serving locals did way better than places serving a wider area. In the other district, sales tanked relative to the number of people a shop employed, suggesting that bike lanes gave an advantage to smaller businesses. “The takeaway is that it’s probably a minimal effect on businesses when you put in a bike lane,” Poirer says. “That actually makes a lot of sense. If you think of a busy downtown district, there’s not that many parking spaces relative to the number of people who come to the business.” In this case, bike lanes didn’t seem to help businesses much. But overall, it didn’t hurt them.In 2019 Poirer was on a team that did another study of San Francisco. They looked at businesses directly adjacent to two kinds of bike infrastructure — Class II, which creates dedicated bike lanes denoted by a paint stripe, and Class III, where signs instruct cars and bikes to share the street. (Either way, blocks with the new lanes lost an average of three parking spaces.) Once again, the results were mixed. On Class II lanes, bars and barber shops and banks enjoyed increases in sales, while furniture stores and gas stations were more likely to experience decreases. Older businesses tended to decline more than new ones. Overall, in the year after the bike infrastructure went in, businesses on Class II streets lost a median of $27,921 compared with $19,390 for those on Class III lanes. But similar shops that weren’t on a bike lane lost $25,296. When it came to bike lanes, there were lots and lots of winners. But there were some losers, too.The most definitive study, to my eye, came in 2020. Jenny Liu and Wei Shi, researchers at Portland State University in Oregon produced a 260-page report looking at neighborhoods that got bike lanes and other street improvements in Portland, San Francisco, Minneapolis, and Memphis. The team cross-referenced financial information like sales taxes with geographic data, so they could tell exactly where businesses were in relation to the street improvements. They ran three kinds of econometric analyses on each site. And they looked not only at revenue but also at the number of employees — per business and in total — in each study area. “I was really trying to be rigorous methodologically, to provide the kind of evidence that people can use to talk to their communities,” says Liu, the director of the Center for Urban Studies at Portland State.Bike lanes don't hurt the shops next to them. They usually help bring in customers.Boston GlobeLike Poirier, Liu and Shi found that in many cases, only certain kinds of businesses benefited from the bike lanes and street improvements. Food and beverage did better; retail did worse. And just slapping a bike lane on a hectic thoroughfare didn’t do anyone any good. “On really large streets with high traffic volumes or speeds, even if you add a bike lane or pedestrian improvements, it still isn’t really inviting,” Liu says. “Just having street calming doesn’t always have positive results.”But overall, Liu’s team found, retail areas benefited from better streets. Sometimes nothing changed, but more often the areas near bike lanes wound up with more employees and more revenue. That was true in Portland, at two sites in San Francisco, one site in Minneapolis (at the other, retail did better than food), and one site in Memphis (at the other, food did a bit better than retail). Across the country, again and again, the numbers told the same story: Either “business activity remained pretty much constant,” Liu says, or “certain types of businesses became much more prosperous.” Back in the 1960s, when the advent of suburban flight and climate-controlled malls began to draw business away from America’s once thriving downtowns, cities tried to stanch the flow by banning cars on shopping streets. It was called, not exactly trippingly, “pedestrianization,” and it was a disaster. Pedestrian-only plazas couldn’t compete with the Golden Age of the Automobile, and many downtowns turned into boarded-up wastelands. That extinction event is still encoded in the genetic memories of today’s retailers and restaurateurs.But things have changed. Nowadays, online retail is crushing brick-and-mortar worse than any half-assed pedestrian plaza ever could. What’s more, demand for new homes means lots of cities are putting them downtown, trading daytime workers for all-the-time residents close enough to ride a bike. COVID showed us it’s worth giving up parking spaces for outdoor restaurants. America’s cities are undergoing nothing short of a total rethink of what and whom downtowns are for.You can pack way more bikes than cars into a small space — and that means way more shoppers. UCG/Getty ImagesNationwide numbers of bike lanes are tough to come by. By one count, there are nearly 20,000 miles of bike-ready paths in the United States, but that includes rural routes and trails. Still, city after city is working to create European-style streets. Portland has over 430 miles of bike lanes, about the same as Chicago; New York City has more than 1,500; Los Angeles has added almost 1,000 miles since 2010. And every new mile of bike lane per square mile of city increases the number of cyclists by 1%. The training wheels are about to come off the “complete street” movement.Now, advocates and policymakers should be honest about all this. Even if bike lanes boost revenues and employment overall, some individual businesses are going to win and some are going to lose. An older business selling heavier goods, or drawing from a wider watershed for its customer base, might well be in trouble. “Newer businesses who are thrilled with density and development around them are pivoting to a customer who’s younger, who’s arriving on a scooter or a bike,” says Larisa Ortiz, a managing director at the urban-planning consultancy Streetsense. “But this process of evolution toward bike lanes and mobility does not come without loss.”One way I’d propose to help businesses adjust to the total remaking of the urban landscape is the most American solution of all: Just hand them some money. All you’d have to do is build funds into the budgets for street-improvement projects to compensate adjacent businesses for any sales they wind up losing. If your business takes a hit from all the bikes, you get a pay-out.The most effective way to deal with opposition from local businesses is to just get the bike lanes built. Before-and-after surveys tend to show that in the long run, everyone winds up satisfied. “It’s a political question, and oftentimes it’s a very divided community when it comes to these types of projects,” Poirier says. “But once a street is changed, generally speaking, after six months or a year, nobody remembers what it used to look like. It’s the new normal.” All the data in the world may prove that bike lanes are good for business. But nothing beats experiencing them.Adam Rogers is a senior correspondent at Business Insider.Read the original article on Business Insider.....»»
Stoneridge, Inc. (NYSE:SRI) Q4 2023 Earnings Call Transcript
Stoneridge, Inc. (NYSE:SRI) Q4 2023 Earnings Call Transcript February 29, 2024 Stoneridge, Inc. isn’t one of the 30 most popular stocks among hedge funds at the end of the third quarter (see the details here). Operator: Good day, and thank you for standing by. Welcome to the Stoneridge Fourth Quarter 2023 Conference Call. At this […] Stoneridge, Inc. (NYSE:SRI) Q4 2023 Earnings Call Transcript February 29, 2024 Stoneridge, Inc. isn’t one of the 30 most popular stocks among hedge funds at the end of the third quarter (see the details here). Operator: Good day, and thank you for standing by. Welcome to the Stoneridge Fourth Quarter 2023 Conference Call. At this time, all participants are in a listen-only mode. After the speakers’ presentation, there will be a question-and-answer session. [Operator Instructions] Please be advised that today’s conference is being recorded. I would now like to hand the conference over to your speaker today, Kelly Harvey, Director of Investor Relations. Please go ahead. Kelly Harvey: Good morning, everyone and thank you for joining us to discuss our fourth quarter and full year 2023 results. The release and accompanying presentation was filed with the SEC and is posted on our website at stoneridge.com in the Investors section under Webcasts and Presentations. Joining me on today’s call are Jim Zizelman, our President and Chief Executive Officer; and Matt Horvath, our Chief Financial Officer. During today’s call, we will be referring to certain non-GAAP financial measures. Please see slide 2 for a more detailed description of these non-GAAP measures and in the appendix — in the appendix for a reconciliation of the non-GAAP measures to the most directly comparable GAAP measures. In addition, I need to inform you that certain statements today may be forward-looking statements. Forward-looking statements include statements that are not historical in nature and include information concerning our future results or plans. Although, we believe that such statements are based upon reasonable assumptions, you should understand that these statements are subject to risks and uncertainties and actual results may differ materially. Additional information about such factors and uncertainties that could cause actual results to differ may be found in our 10-K which will be filed later this week with the Securities and Exchange Commission under the heading forward-looking statements. After Jim and Matt have finished their formal remarks, we will open up the call to questions. And with that I will hand the call over to Jim. Jim Zizelman: Thank you, Kelly and good morning, everyone. Let me begin on page 4. I am extremely proud of our progress in 2023. We delivered on our financial commitments throughout the year driven by an unwavering focus to both execute our long-term strategy and drive continuous operational improvements. Although, the supply chain environment continued to improve, the transportation industry continued to face many challenges throughout the year including the UAW strike, higher interest costs and the slower than expected penetration rate for electric vehicle platforms. However, by focusing on the execution of our major program launches, continuous improvement in our manufacturing facilities and the execution of operating expense initiatives to both reduce cost and improve efficiency, we were able to navigate through these challenges. And as a result we achieved full year sales, operating performance and adjusted EPS in line with the expectations we set forth at the beginning of the year. And we’re not done yet. Throughout this process, we’ve identified multiple areas for further improvement and expect our efforts to continue to drive long-term profitable revenue growth and significant earnings expansion going forward. I will discuss some of our key priorities for 2024 in further detail later in the call. Our fourth quarter adjusted EPS of $0.12 was in line with the expectations we outlined in the third quarter call and is a $0.02 sequential improvement compared to the third quarter and Matt will provide further detail on the fourth quarter results later in the call. We continue to focus on product platforms that will drive future growth. In 2023, we continued to build momentum with our MirrorEye programs with continued strong take rates with the DOT program in Europe and the launch of our first OEM program in North America with Kenworth. Earlier this week, we announced our next program will be a luncheon with Volvo in Europe midyear and will be our largest program based on the current expected take rate of approximately 45%. In addition, we will also be launching with Volvo in North America in 2025. Also earlier this month, we announced the extension of our FMCSA exemption for an additional five years, which will allow our North American fleet partners to remove their traditional mirrors on MirrorEye equipped vehicles. And finally today, we are announcing retro-fit expansions with several new fleets. And I’ll provide a more extensive mirror update MirrorEye update later in the call. In 2023, we also launched our next-generation tachograph the Smart 2 that provides incremental capabilities to conform with the most recent EU mobility package standards. As mentioned on previous calls, both the OEM and aftermarket retrofit channel provides significant growth opportunities for Stoneridge over the next several years. And this morning, we are updating our long-term financial targets to include our strong OEM backlog, aftermarket, and non-OE growth opportunities and substantial margin expansion through our five-year plan. Our five-year awarded business backlog of $3.5 billion supports a five-year compound annual growth rate of almost 10% based on our midpoint targets. This results in midpoint targeted revenue of $1.45 billion, targeted midpoint EBITDA margin of 13%, and targeted midpoint EBITDA of $190 million by 2028. Page 5 summarizes our key financial metrics for the full year 2023 compared to the prior year. We started the year with a challenging first quarter due to the lingering effects of the supply chain constraints and material cost headwinds. In response, we focused on driving gross margin improvement and successfully negotiated customer price increases, resulting in adjustments both retroactively and related to sales going forward. In the second half of the year, we navigated through the impact of the UAW strike which in total reduced sales by approximately $6.4 million, operating income by approximately $2.1 million, and adjusted EPS by approximately $0.05. Finally, below-the-line FX and non-cash reductions in equity earnings reduced EPS by an additional $0.05. Excluding the impact of these items which are not expected to recur, adjusted EPS would have been above breakeven for the full year. Despite these macroeconomic headwinds, we were still able to deliver on our financial commitments through price increases aligned with increased material costs, careful cost control, and the efficient use of engineering resources to ensure our new products launched on time. Overall, we have made significant progress toward our long-term goals in 2023, but we also know there’s so much more work that we can and will do to further enhance our performance. We achieved full year 2023 adjusted sales of $961.2 million or 14.2% growth compared to the prior year. This growth was driven by improved customer production volumes and Stoneridge specific growth drivers including the launch and continued ramp-up of our MirrorEye OEM programs, the launch of our next-generation tachograph and despite less vehicle production than we originally expected the growth of actuation programs on electrified vehicle platforms. Full year adjusted EBITDA margin improved by approximately 150 basis points and $18.3 million versus 2022. And Matt will provide additional detail on our segment level performance later in the call. Now, turning to Page 6. MirrorEye continued to gain momentum in 2023 as we continued to ramp up production of our previously launched OEM program in Europe with Duff, launched our first North American OEM program with Kenworth, and continued to expand our retrofit and bus applications. MirrorEye revenue grew by $20 million in 2023 to over $50 million and is expected to almost double in 2024 to approximately $100 million. As mentioned earlier on the call, our next MirrorEye OEM program will be launching with Volvo in Europe midyear on the Volvo FH Aero. Based on customer communicated volumes we expect the program to have a take rate of approximately 45%. Volvo has highlighted MirrorEye on the new FH Aero truck focusing on the system’s ability to improve the aerodynamics of the truck to save energy and reduce carbon footprint as well as a significantly improved field of view in both good and poor weather conditions. The North American portion of this award is set to launch in early 2025 on Volvo’s all new VNL truck, which marched the North American OEM debut of MirrorEye’s independent wing design, which separates the system from the traditional mirrors. The Volvo MirrorEye programs in Europe and North America combined are currently estimated at over $60 million of peak annual revenue making, this again our largest OEM program to-date. These program launches mark yet another step in Stoneridge’s journey to provide industry leading safety and efficiency technologies. In North America, we are focused on the continued ramp up of the Kenworth program and the launch of the second nameplate Peterbilt, which has which is expected to occur in the middle of the year. We continue to work with our customers and their dealership networks to reach their end customers to drive awareness of the system with the ultimate goal to drive take rate expansion. Overall, we are expecting total MirrorEye OEM revenue to at least double to approximately $65 million in 2024. Earlier this month, we announced at FMCSA, an agency of the US federal government grant of Stoneridge a five year extension of our MirrorEye exemption which will allow our US-based fleet partners to maximize the safety and fuel economy benefits of the MirrorEye system by fully removing the traditional mirrors on MirrorEye equipped vehicles. These benefits include enhanced real-time visibility from nearly every angle of a commercial truck, which can reduce the frequency and severity of accidents, as well as increase in the fuel savings of approximately 2% to 3%, when the traditional mirrors are removed. This fuel savings translates to approximately 5000 pounds [ph] of CO2 reduction annually per vehicle and aligns with the sustainability goals of Stoneridge, our customers and the fleets. Furthermore, we continue to expand our retrofit applications. Today, we are announcing three additional fleet partnerships with PS logistics, Stokes Trucking and Cargo Transporters. These fleets understand the significant safety and fuel economy benefits of MirrorEye and have committed to equipping all of their long-haul trucks with MirrorEye over time. Together, these three fleets have approximately 4,300 long-haul vehicles on the road. In addition, we expect our MirrorEye bus applications to expand in North America and Europe in 2024, resulting in approximately $35 million of non-OE MirrorEye revenue. Our investments in the MirrorEye platform, continues to drive year over year growth, strong take rate expectations and continued momentum across our end markets and applications. We will continue to invest in the technologies and the adjacent product opportunities to optimize our position in the market and drive technology innovation, improve safety, efficiency and driver retention for our customers. Turning to page 7. Our long-term strategy focused on industry megatrends and drivetrain agnostic technologies continues to drive strong long-term growth prospects. As we have reported in the past, our backlog is the estimated cumulative awarded sales for the next five years using current IHS estimates for production volume assumptions, current foreign currency rates and current pricing. We have had substantive growth in our commercial vehicle five-year backlog, resulting in year over year growth of approximately 5%. In addition, several next-generation OEM commercial vehicle platforms are expected to launch between 2028 and 2030. And as a result, we are expecting incremental award activity for next-generation platforms over the next two years that will impact the back half of the backlog period, including next-generation MirrorEye systems, driver information systems and controls and connectivity modules. We expect that these systems will become increasingly more integrated into what would be called the cockpit of the future and we are preparing for potential programs that can integrate several of our system. Market dynamics around electric vehicle adoption rates have impacted expectations for current electric vehicle programs and are influencing business award activity on the passenger vehicle side. Most OEMs are now considering a mix of drivetrains that favor more hybrids and internal combustion engines than what was originally expected. Our drivetrain agnostic technology portfolio will permit us to respond effectively to enhance the back half of the backlog for control devices. While we continued to add our medium term backlog for 2025 through 2027, which grew by approximately 4% relative to last year. Our overall backlog remained relatively flat, as we continued to pursue new program awards that we expect to impact the outer years. It should also be noted that more of our business is shifting to the aftermarket end markets, which we do not include in the backlog. We have significant opportunity in our aftermarket channels between MirrorEye retrofit and bus applications, Mirroreye platform based products, such as the trailer technologies we’ve discussed previously and the Smart 2 tachograph and our lack of branded products as well. Mirroreye OEM programs are included in backlog at our current customer volume expectations and this considers volumes based on customer expectations either at the time of award or updated based on actual program take rates or expectations. We continue to expect that MirrorEye take rates on OEM products will improve, as the product becomes more widespread and additional OEM start offering the system and OEM applications. This also represents upside to the existing backlog. We are committed to driving long-term profitable growth and we’ll provide updates on business awards as new platform designs are solidified and business is awarded. Turning to Page 8. We remain on track to achieve the 2027 goals we outlined last year at this time and we are advancing our long-term revenue and EBITDA targets by a year aligned with our existing backlog, continued opportunities in non-OEM channels and new business opportunities. Our long-term strategy has resulted in a growth profile that is expected to outperform the market by more than five times over the next five years. From a midpoint of $1 billion expected in 2024, we are anticipating another several years of strong growth, driving our long-term revenue target up to a midpoint of $1.45 billion by 2028. As we continue to focus on fixed cost leverage and gross margin improvements through material cost reduction and operational improvements, we expect revenue growth to drive significant EBITDA margin expansion. Based on our 2028 revenue target, we are targeting a midpoint EBITDA margin of 13%. This EBITDA margin expansion will be driven by our expectation of continued contribution margin of 25% to 30%, a favorable mix, primarily aligned with growth in our aftermarket products and continued leverage on our operating cost structure as we scale. Overall, Stoneridge is well positioned to significantly outpace our weighted average end markets and drive margin expansion and earnings growth through our long-range plan. Now turning to Page 9. We remain focused as a company to achieve our goals both in 2024 and going forward. One year into the CEO role, I am proud of what we have accomplished here. We have delivered results consistent with what we promised. And as I’ve stated several times on this call, my focus remains on executing on our long-term strategy to drive sustainable performance and achieve our long-term targets as well. As we look forward to this year, we have a lot to be excited about. Our 2024 revenue is expected to grow by 4%, while our underlying end markets are expected to decline by approximately 5%. To continue this growth, we are focused on leveraging our global footprint to service our global customers and win new business. In Control Devices, we’re focused on business development aligned with industry trends including growing our core product portfolio aligned with drivetrain agnostic technologies and product applications. In electronics, we’re focused on new product development, continued momentum with our existing products and technologies and continued expansion of our products into a more substantial platforms that will drive long-term sustainable growth. We are focused on gross margin expansion through material cost improvement and enterprise-wide operational excellence. Both our product line and program management organizations have been centralized, streamlined and redesigned to specifically focus on pricing, built-in quality, material cost improvement and manufacturing efficiency, we are focused on reducing fuel costs through engineering changes, supply chain strategy and continued conversations with our customers for the price of material relationship still requires attention. As a result of these focused efforts, our midpoint guidance includes 140 basis points of gross margin improvement in 2024. We are also focused on leveraging our global footprint to maximize our capabilities and output. Specifically, we are better utilizing our existing talent by refining our global engineering structure and investing in capabilities and capacity that will allow us to both expand margins and continue the pace of development that has fueled our backlog and forward growth profile. Similarly, we took actions last year to centralize many of our global functions and drive synergies between our business units from both a cost and efficiency perspective. We will continue to evaluate and optimize our organizational structure. And as a result of these actions, we expect 170 basis points of operating margin improvement in 2024 and continued strong growth going forward. We are also focused on efficient cash generation, more specifically, historical supply chain challenges coupled with strong production forecasts have driven inventory levels that are greater than what we have had historically. We are focused on reducing inventory to improve working capital and generate more cash. In some cases, this will take some time as we burn down the extra material we bought when supply chains were more volatile or when production volumes were estimated to be greater than the current views. In other cases, we’re working to manage engineering changes and work with our suppliers to more quickly reduce the existing balances. We are targeting an improvement in inventory over 2023 that would align us with our historical averages and provide a runway for continued improvement going forward. And finally, we’re focused on efficient capital deployment, while maintaining an appropriate capital structure. This includes prioritizing our organic investment opportunities with a focus on return on engineering and investing in technology to develop new products for customers that will facilitate future growth. In 2024, we are targeting approximately $40 million of capital focused, primarily on supporting organic growth initiatives. Each of our segments plays a critical role, in helping us achieve our long-term targets. I am committed to continuing to execute on the long-term plan that Stoneridge has in place and driving our company-wide priorities to achieve our goals. Given our focus, we will execute at a high-level, resulting in strong margin expansion and growth that will continue to outpace our underlying end -markets. Now turning to Page 10 and in summary, we remain focused on implementing our long-term strategy to drive sustainable profitable growth by focusing on technologies that are Drivetrain Agnostic, winning business in critical growth areas and expanding on our existing opportunities. As evidenced by our progress made this year, this team is focused on strong execution and careful cost control, to continue to drive margin improvement. The actions we took, resulting in a successful 2023 and we look forward to continuing that momentum with top line growth above market and earnings expansion in 2024. Now with that, I’ll turn it over to Matt, to discuss our financial results and guidance in more detail. Matt? Matt Horvath: Great. Thank you, Jim. Turning to Page 12, as Jim mentioned earlier on the call, we are proud of the progress we made last year. In the fourth quarter, we delivered on our previously provided EPS expectations, driving sequential improvement of $0.02 from the third quarter to $0.12 in the fourth quarter. Adjusted sales were approximately $229.4 million, a decline of 3.3% relative to the third quarter. This was primarily due to the incremental impact of the UAW strike of approximately $5.5 million in the quarter as well as the continued softening of demand for Electric Vehicles relative to prior expectations. Fourth quarter adjusted operating income was $6.2 million or 2.7% of adjusted sales, a decline of approximately 40 basis points versus the third quarter. This was due in part to the incremental impact of the UAW strike of $2 million over the third quarter, as well as continued costs related to the distressed supplier we discussed during our last call of approximately $1.1 million. Adjusted EBITDA for the quarter was $15.6 million or 6.8%. Turning to page 13, on our third quarter earnings call, we guided fourth quarter adjusted EPS to a range of $0.10 to $0.20 with an expected revenue midpoint of $238 million. Unfavorable FX movements reduced sales by $7 million will reduce production volumes resulted in a $0.02 headwind relative to our previously-provided guidance, primarily due to the slowing growth of Electric Vehicle platforms. Fourth quarter operating performance resulted in a $0.04 headwind during the quarter versus previous expectations. During the fourth quarter, we observed, higher we absorbed higher manufacturing costs than previously expected primarily related to elevated warranty and inventory costs on higher than normal inventory balances. This was partially offset by continued run rate material cost improvements as well as reduced operating expenses primarily driven by engineering reimbursements and the reduction of our annual incentive compensation programs. As we discussed previously, we incurred approximately $1.8 million of costs related to a specific distressed supplier which we expected to be relatively minimal in the fourth quarter. We expected these costs to moderate with improvement in the situation. Unfortunately, we continued to incur incremental costs relative to the third quarter to provide additional support to the supplier. Although, we are still incurring some costs related to the situation, the costs are moderating as we navigate the first half of this year. We will pursue routes to recover these incremental costs. However, our priority remains investing in end customer disruption. The after-tax net impact of foreign currency versus prior expectations resulted in approximately $0.03 of net benefit in the quarter. The below-the-line favorable impact of foreign currency more than offset the unfavorable FX impact to operating income of approximately $900,000 recognized during the quarter. We remain focused on operational execution and controlling the variables within our control to drive performance. We will continue to respond to externalities as necessary to insulate the company from macroeconomic headwinds and drive overall performance. Page 14 summarizes our key financial metrics specific to control devices Control Devices. Control Devices, fourth quarter sales declined by approximately $15 million versus the third quarter, due to the UAW strike as well as a slower rate of penetration for Electric Vehicles. Fourth quarter operating margin of 1.2% declined by 500 basis points compared to the third quarter, primarily due to reduced fixed cost leverage on decremental sales and incremental costs recognized in the fourth quarter related to the distressed supplier outlined previously. In total, we estimate that the UAW strike and distressed supplier costs impacted Control Devices operating margin by approximately $3.6 million or 440 basis points in the fourth quarter. Excluding the impact of these headwinds, adjusted operating margin was relatively in line with prior quarters despite significantly lower sales control devices. Control Devices full year sales of $345.3 million were approximately in line with 2022 generating operating income of $13.4 million or 3.9% of sales. For the full year, we estimate that the UAW strike and distressed supplier costs impacted Control Devices operating margin by approximately 120 basis points. In addition to relatively flat end market performance, we expect a continued ramp-up of electric vehicle platforms, however, at a lower pace than previously expected, which will impact some of our recently launched actuation applications. As a result, we expect Control Devices sales to slightly decline this year relative to last year. That said, we have identified several opportunities to reduce material costs through redesigns or supply chain strategies to help improve gross margin going forward and offset this slight decline in sales, despite the modest decline in sales that we expect for control devices in 2024 we are expecting a stable margin profile. As discussed on previous calls, we remain focused on dry training ASIC technology to drive new business awards as the market evolves we continue to focus on operational excellence and enterprise-wide cost reduction, including material cost reduction plans to drive margin improvement going forward. Page 15, summarize our key financial metrics. Specifically to electronics. Electronics fourth quarter sales increased by $4.4 million or 3.1% compared to the third quarter. Full year sales of $593.6 million increased by approximately 25% compared to the prior year. Sales growth was driven primarily by higher customer production volumes, the MirrorEye launch with Kenworth in North America, the smart two tachograph launch in Europe and the continued growth of our existing MirrorEye OEM program in Europe. We expect continued strong sales growth in 2024 driven by MirrorEye launches with Peterbilt and Volvo in Europe both midyear as Jim discussed earlier in the call. Similarly, we expect significant growth related to the two Smart as regulatory requirements force adoption both in OEM applications and in the retrofit market. Fourth quarter adjusted operating margin of 7.5% expanded by 130 basis points compared to the third quarter primarily due to lower engineering costs due to the timing of customer reimbursements. This was partially offset by elevated warranty and inventory related costs incurred on higher than normal inventory balances. Full year operating margin expanded by approximately 400 basis points, compared to the prior year primarily due to contribution on incremental revenue, stabilization in the supply chain and material cost improvements, including the impact of incremental pricing. This was partially offset by incremental engineering costs related to the launch of new programs. We are proud of the progress we made this year in electronics led by our strong sales growth and cost improvement actions. Looking forward, we expect continued margin expansion as we focus on improving our manufacturing performance and focus on quality driven processes and efficient execution of new program launches as well as the continued ramp-up of our existing programs. Electronics remains well positioned to take advantage of significant future growth and margin expansion, as a result of a strong product portfolio a substantial and growing backlog of awarded programs, continued improvement in material cost and cost structure organizational optimization. Page 16 summarizes our key financial metrics. Specific to Stoneridge Brazil, Stoneridge Brazil’s full year sales totaled approximately $57.2 million, an increase of $4.9 million, or 9.5% relative to the prior year. Full year adjusted operating income increased by approximately 190 basis points relative to the prior year, primarily driven by lower material costs and fixed cost leverage on incremental sales, resulting in adjusted operating margin of 7%. We expect stable revenue and operating margin in 2024 as we continue to shift our portfolio in Brazil to more closely align with our global growth initiatives and further expand our local OEM programs to support our global customers. Brazil has become a critical engineering center as we continue to expand our global engineering capabilities and capacity. We will continue to utilize our global footprint to cost effectively support our global business. Turning to page 17, net debt to trailing 12-month EBITDA as calculated for compliance purposes remained relatively flat quarter to quarter resulting in a leverage ratio of approximately 3.1 times, with supply chains mostly normalized. We are focused on improving cash performance and reducing net debt through targeted actions to reduce net working capital, and more specifically, our inventory balance. Over the course of the last couple of years, we have procured materials when available during supply chain shortages and committed to future material purchases to ensure material availability forward. Our response to those supply chain challenges, along with planned inventory build to support significant growth and new program launches, has resulted in an inventory balance that is higher than our historical average. We are focused on improving our inventory turns this year, to more closely align, with our historical averages. Going forward, we see additional opportunities to streamline our operations, evolve our supply chain strategies and continue to design products to enable efficient material procurement and production, to drive inventory turns even higher. We are focused on reducing net working capital to improve cash performance, reduce net debt and related interest expense. Based on our 2024 guidance and net working capital initiatives, we expect a compliance leverage ratio of less than 2.75 times, at the end of the first quarter of this year, and between two and 2.5 times by the end of the year. We are focused on maximizing cash performance to drive value to shareholders. Turning to Slide 18, we are establishing guidance for our 2024 financial performance. We are guiding 2024 revenue to a midpoint of $1 billion, an increase of approximately 4% versus 2023. This revenue growth is expected to significantly outperform our weighted average OEM end markets, which are expected to decline by approximately 5%, resulting in nine percentage points of market outperformance. We expect strong contribution margins on our growth, and the ability to take advantage of our existing cost structure to drive operating leverage, as we grow. We are guiding gross margin to a midpoint of 22.4%, operating margin to a midpoint of 3% and EBITDA to a midpoint of $67 million or 6.7% of sales. Our midpoint guidance implies EBITDA margin expansion of 170 basis points and approximately$90 million, relative to 2023. Based thereon, and considering an expected tax rate of approximately 33%, we are guiding to a midpoint of $0.35 of EPS for the full year. Turning to Slide 19, we expect strong growth in 2024, driving midpoint revenue guidance to $1 billion. MirrorEye continues to be a major growth driver, as Jim discussed earlier in the call, we expect $100 million of MirrorEye revenue in 2024, an increase of $46 million versus the prior year or almost double the total sales. Due to the incremental launches on Peterbilt in North America and Volvo in Europe both midyear, we expect incremental MirrorEye revenue to accelerate in the second half of the year. Another specific growth driver in 2024, is the expected ramp-up of our Smart 2 tachograph programs, that launched in the third quarter of last year. This next generation Smart tachograph will be required to be on vehicles across weights and usage applications, over the next several years, with the current market primarily served by Stoneridge and only one other competitor. This will drive both OEM growth, as well as aftermarket opportunities, as existing vehicles are also subject to the regulations. As a result, we expect Smart 2 tachograph contribute $30 million of incremental revenue in 2024. That said, we expect the adoption of this next-generation device to ramp up in the second half of the year, as the adoption deadlines approach. Other factors contributing to our growth in 2024, include the continued growth in our off-highway vision systems with Orlaco branded products and OEM programs launching in Brazil, as we continue to expand our OEM product offerings in South America. Due to the second half weighting for MirrorEye and the Tachograph ramp-up, as well as improved production forecast in the second half of the year, we are expecting revenue to be more back half weighted than usual. Overall, we expect to first half second half revenue split of approximately 48% to 52%, with a slight ramp up between the first and second quarter, relatively larger growth between the second and third quarter, aligned with our key program launches and another gradual ramp-up into the fourth quarter. We continue to significantly — outpace our underlying end markets, creating a runway for sustainable long-term growth. Page 20, summarizes our expectations for full year EBITDA, relative to 2023. In 2024, we are expecting EBITDA growth of approximately $19 million and EBITDA margin expansion of approximately 170 basis points. We are expecting contribution margins aligned, with our historical average of 25% to 30%, on approximately $38 million of revenue growth, resulting in over $10 million in EBITDA growth. We are expecting gross margin expansion, driven by material cost improvement and enterprise-wide initiatives, aimed at improving manufacturing performance including, the reduction of quality related costs. More specifically, we continue to focus on improving the price-cost relationship of our products through redesign, reengineering and other supply chain strategies aimed at reducing overall material costs. We are expecting a moderate increase in SG&A primarily, driven by annual inflationary labor increases and the normalization of our annual incentive cost programs, back to targeted levels in 2024, after they were reduced in 2023. We expect to continue to invest in the engineering resources, that will drive our growth and expect to offset these investments, with continued footprint optimization resulting in approximately flat D&D expense year-on-year. Aligned with our revenue cadence for the year, we expect EBITDA to be more back-half weighted. We expect first quarter EBITDA to slightly decline relative to the fourth quarter of 2023, primarily due to the annualization of our targeted incentive compensation programs and timing of engineering reimbursements compounded by slightly lower production in our commercial vehicle end markets. This will result in slightly below breakeven first quarter EPS. We expect gross margin improvement in the first quarter to continue into the second quarter. However, we are expecting some incremental engineering spend in the second quarter to ensure an efficient launch of our next two OEM MirrorEye programs as our next MirrorEye programs launch, smart tachograph adoption accelerates and production increases aligned with current third-party forecasts. We expect a significant improvement in EBITDA from the second to third quarter and continued improvement into the fourth quarter. We will continue to leverage our above market top line growth, targeted gross margin improvements and an efficient operating cost structure to drive earnings growth. Moving to slide 21. In summary, we expect continued strong revenue growth in 2024, continued focus on operational improvement and material cost reduction and continued optimization of our cost structure to drive earnings growth for the year. Longer term, Stoneridge remains well-positioned to significantly outpace our underlying markets with strong contribution margins and structural cost leverage driving a targeted five-year revenue midpoint of $1.45 billion and midpoint EBITDA margin of 13%, resulting in a midpoint target of $190 million of EBITDA by 2028. As always, driving shareholder value is at the forefront of all of Stoneridge’s strategic initiatives. With that, I will open up the call to questions. See also 20 Countries with Most Bombers and Superior Air Force and 15 Countries With Most Effective Gun Control In The World. Q&A Session Follow Stoneridge Inc (NYSE:SRI) Follow Stoneridge Inc (NYSE:SRI) or Subscribe with Google We may use your email to send marketing emails about our services. Click here to read our privacy policy. Operator: Thank you. [Operator Instructions] And our first question is going to come from the line of Justin Long with Stephens. Your line is open. Please go ahead. Justin Long: Thanks, and good morning. Jim Zizelman: Hi, Justin. Justin Long: Hi, good morning. So maybe to start by just taking a step back, when I think about the 2024 guidance, it implies that you’ll be growing EBITDA in excess of 30% in an environment where the weighted average end markets are down about 5%. So can you just speak about your level of visibility and confidence that you have in this 2024 guidance, but you say the end markets end up being worse than anticipated? Can you speak to your ability to adjust and flex the business for? Matt Horvath: Yeah, Justin, I really appreciate the question. Our guidance this year is very much aligned with some very specific Stoneridge drivers. When you think about the launch of the MirrorEye programs in midyear, the continued adoption of Smart 2 those things are really not market dependent on any significant improvement in production forecast. That’s really a Stoneridge specific product that will drive a lot of content for us in the back half of the year. So I feel very confident in our ability to look at that as improvement for the back half and on the contribution margins that we get on that type of content, you can expect pretty strong EBITDA growth as well to follow that. In addition, the aftermarket products generally have a higher margin than the overall business. So those products in particular can drive some pretty significant earnings expansion as well. So when you look at the volume side, I feel pretty comfortable that we have enough Stoneridge specific drivers that we have a lot of momentum going into the back half of the year with those launches. And I’ll let Jim comment on this a little bit too. But when you look at the operational performance and what we really have set as a foundation in 2023, the continued annualization of those initiatives should drive some pretty significant improvement both starting in the first quarter. But, obviously, as revenue ramps up, it gets compounded in the second half. So I feel really good about the runway that we’re on, which drives improvement in the first half. And then it follows pretty significant revenue growth in the second half with that improvement. So I feel very confident in our ability to see the year and that kind of split. Justin Long: Okay, great. And maybe to follow up on MirrorEye. So the guidance for the full year is $100 million in revenue, but it sounds like that over as we move into the second half. So is there anything you can share in terms of the annual run rate for MirrorEye revenue as we exit 2024? Matt Horvath: Yeah. So you’re going to see continued ramp in 2025. We’ve got — we’ve announced the first of all the Volvo program will be launching in North America in 2025 as well as another program that we haven’t given a tremendous amount of detail yet on specifically but we’ve got two programs in 2025. You’ll also get the annualization of the programs that we are launching mid-year this year both in North America and in Europe with Volvo. So, MirrorEye will continue to grow significantly 2024 to 2025 just based on program launches annualization. And Justin, I would also argue that and we announced three additional fleets this morning, the more the system becomes available at the OEs, the more the fleet see the system, the more we expect adoption of the OE system and retrofit opportunities as these fleets kind of commit to full adoption over their fleet. So, I think that you’ll get not only normal annualization program launches, but you’ll get some increased take rate and retrofit expansion as we continue to address that market, particularly in North America. Jim Zizelman: And that will also see some benefit from the platform technologies that really are sponsored by the base MirrorEye platform, specifically things like the review trailer camera and its connectivity into the MirrorEye system along with other technologies that will really grow from that or even more forward into the cockpit of the future that we mentioned this morning. So, there’s a lot of opportunity here for substantive growth beyond just the base platform of MirrorEye as well. Justin Long: Okay. That’s very helpful. And I guess the last one for me would be on the balance sheet, and specifically free cash flow. I think you mentioned a couple of times in the prepared remarks that there was an opportunity inventory levels and getting those back to historical averages. Can you help us kind of understand the order of magnitude, in terms of the working capital opportunity in 2024, and what you’re assuming for free flow generation and the guide? Matt Horvath: Yes Justin, it’s a great question. So really an area of focus for us as we come off some of these supply chain challenges last couple of years and things have started to normalize. Our inventory balances and turns are relatively worse than what they’ve been historically. Some part of that is planned obviously to support the tremendous amount of growth that we expect this year and going forward. But the normalization of supply chain will help us burn down some of that inventory and generate cash out of the working capital that’s currently on the balance sheet. So, it’s right now we’re five turns or so. We can expect that to improve by a turn or two in a relatively shorter-term as we burn down existing inventory that should generate $20 million to $30 million of cash. We also expect, because earnings are growing that — we’re pretty cash efficient and we should generate cash on a normal base business. So, if you look at the implied guidance for the end of the year, it does obviously include some expectations for cash generation. [Technical Difficulty] Operator: Please remain on the line. Your conference will resume shortly. Again, ladies and gentlemen, please stay on your line. Your conference will resume shortly. Speakers, I see you guys reckon continue. Jim Zizelman: Sorry. Sorry, I think we may need to make sure we know where we were. did Justin’s question complete or was it cut during his question? Justin Long: Hi, Jim, Matt. this is Justin. Can you hear me okay? Jim Zizelman: Yeah, Justin, we can hear you. Can you hear us? Justin Long: Okay. Great. I can hear you, Matt. I think I heard your $20 million to $30 million of kind of cash generation opportunity from inventory and then it cut off shortly thereafter. So I can let you finish that up. Matt Horvath: Yeah. And sorry for the technical difficulty there. We are — inventory has really built as we prepare for some of the growth, particularly electronics as we look at some of the components that have long lead times there. So if we think about a return to historical inventory averages, or we should even have improvement on that going forward, there’s a couple of terms opportunity here. Some of that will be shorter term as we address some more specific issues with burn down inventory and particularly with the launch of these programs. But some of that will take some time as we burn down existing balances. So we should expect a turn or two of inventory improvement going forward at least, which should generate, like I said, about $20 million to $30 million of working capital benefit. And then like we said, we’re pretty capital efficient. So the earnings expansion will also drive cash performance. So if you look at our EBITDA guidance and net debt levels, we do imply some cash generation and the ability to reduce that leverage profile by the end of the year. Justin Long: Okay. Great. That’s all I had. Thank you so much for the time. Matt Horvath: Thanks, Justin. Jim Zizelman: Thanks, Justin. Operator: Thank you. And one moment as we move on to our next question. And our next question is going to come from the line of Gary Prestopino with Barrington Research. Your line is open. Please go ahead. Gary Prestopino: Hi. Good morning, all. Matt Horvath: Hi, Gary. Jim Zizelman: Hi, Gary. Gary Prestopino: My questions really revolve around MirrorEye as it’s starting to ramp up. You’re going from, I think, $54 million of sales to $100 million of sales this year. As these sales ramp up, how much margin — incremental margin increase do you get on that product overall? Or is it still at a point where because you’re winning new programs, that you’re not getting expansion on the margin in terms of the new sales growth coming in? Jim Zizelman: No. Great question, Gary. I appreciate the question. MirrorEye has, as we’ve talked about for several years, MirrorEye had a pretty significant investment to ramp up for some of the new technology and development of these programs. And you saw that in the increased D&D over the last several years. Going forward, we have always said that MirrorEye at quoted take rates is basically at corporate average contribution margins. The benefit there is as the take rates increase, it leverages really well on fixed costs, right? So if take rates were to significantly improve versus where they are today, you can expect an accretive margin profile on that growth, particularly on the OEM side. Retrofit just by the nature of the programs, aftermarket margins are generally higher, not just for MirrorEye but generally across our business. And so you can expect some sort of accretive margin on those programs as well, although, the yields are a little bit less volume as we’ve talked about. Gary Prestopino : So given where you are, where you will be this year $100 million of sales would that be at the average margins that you guys are describing or forecasting 2024. Matt Horvath : And I think that there’s roughly right out there. Gary Prestopino : And then on a couple of other questions here. Number one, I’m on the control devices side, which is more oil related. It has the situation where during the pandemic the OEM order patterns were very erratic stuff like that has all of this really normalize. And within the system given the fact that we’ve had a year to have good growth in auto production. Jim Zizelman : Yes, generally, yes, the chaos in the ordering has stopped, but what has instead come in a bit Gary is that with the, I’ll say, the weaker than expected growth in electric vehicle platforms and I’m sure reading a lot about OEMs really considering how they’re going to go forward with the various types of drivetrains. Certain OEs has suggested that they were going to be electric only going forward and many of those folks have reversed that. So now we’re going to go back to some hybrids and we may even be investing a bit in some of our existing internal combustion engine technologies given the likelihood that this these technologies will last a little bit longer. So we’re seeing a little bit of a change in terms of what’s being requested of us in terms of what to expect in terms of what their slowdown. We’re well placed for that just by the nature of the fact that we’ve been very careful about how we’re focusing on technologies making sure that the great majority is drivetrain agnostic. So the from a technology perspective could be applied to electrics to hybrids or to internal combustion engines depending on the particular application. Gary Prestopino : Well, yes, that’s what I’m trying to understand. If your drivetrain agnostic, obviously, EVs are the you know all the rosy projections, or you can throw them out. So that baby out with the bathwater. So you’re going to get a shift maybe to more hybrids and you know growth in ICE. Does it require you to win the business on some of these other programs or do you just shift what you’re doing for the various automakers two their plans for more hybrids versus electrics more ICE versus where they thought they’d be? Jim Zizelman : I think in some cases there will be a need to win new businesses. But I think more often than not it will be extension of current business. We have in the ICE space, they’ll be currently for a longer period of time. The types of technologies are working with today and there might be some continuing continuous improvement on those technologies or products, but they’ll be for the most part. Gary Prestopino : Okay. Thank you. Operator: Thank you. And I would now like to hand the conference back to Jim Zizelman for closing remarks. Jim Zizelman : Well, thanks everyone for joining us for the call today. I know your time is really important and we do appreciate your willingness to engage us today. And we are very proud of our performance in 2023. It’s consistent with the commitments we made at the start of the year. We will continue to deliver on our commitments by focusing on our long-term strategy, our brought — operational improvements and excellence in execution. We expect that our performance along with our unique mix of industry-changing product platforms will continue to drive strong shareholder value. Thanks again everyone. Operator: This concludes today’s conference call. Thank you for your participation. You may now disconnect. Follow Stoneridge Inc (NYSE:SRI) Follow Stoneridge Inc (NYSE:SRI) or Subscribe with Google We may use your email to send marketing emails about our services. Click here to read our privacy policy......»»
25 Best Free Tech Newsletters to Subscribe to in 2024
In this article, we will take a look at the 25 best free tech newsletters to subscribe to in 2024. If you want to skip our detailed analysis, you can go directly to the 5 Best Free Tech Newsletters to Subscribe to in 2024. Generative AI: A Catalyst in 2024 According to a report by Deloitte, […] In this article, we will take a look at the 25 best free tech newsletters to subscribe to in 2024. If you want to skip our detailed analysis, you can go directly to the 5 Best Free Tech Newsletters to Subscribe to in 2024. Generative AI: A Catalyst in 2024 According to a report by Deloitte, spending on software and IT services backed by artificial intelligence, cloud computing, and cyber security is expected to increase in 2024. Generative artificial intelligence is expected to dominate the market, as technology companies continue to experiment with different applications. These applications will primarily aim to improve efficiency and productivity. According to a survey conducted by Deloitte, 52% of tech leaders stated that artificial intelligence will be the primary technology in 2024, 47% of tech leaders vouched for cloud computing, and 40% were in favor of cybersecurity. 27% of the respondents suggested that generative artificial intelligence will prove to be a game changer for companies in 2024, as tech giants continue to make billion-dollar investments in the industry. Lastly, global spending on security and risk management tools is expected to witness double-digit growth in 2024. What are Tech Giants Up To? Some of the leading tech companies include Microsoft Corporation (NASDAQ:MSFT), NVIDIA Corporation (NASDAQ:NVDA), and Oracle Corporation (NYSE:ORCL). Let’s discuss some recent updates from these companies. You can also take a look at the most valuable tech companies outside of the US. On February 13, Microsoft Corporation (NASDAQ:MSFT) launched new data and AI solutions in Microsoft Cloud for sustainability. These initiatives help companies bring their sustainability initiatives into action. The company highlights that while 85% of executives regard sustainability as an important business component, only 16% of them have integrated sustainable initiatives into their business operations. A key solution launched by Microsoft Corporation (NASDAQ:MSFT) is faster environmental, social, and governance (ESG) data analytics and insights. This is an AI assistant tool that speeds up the reporting and decision-making process for companies. You can also take a look at the best free newsletters to subscribe to in 2024. On January 8, NVIDIA Corporation (NASDAQ:NVDA) announced that Li Auto, a leading name in the extended-range electric vehicle industry, chose NVIDIA Corporation’s (NASDAQ:NVDA) DRIVE Thor to power its next-generation fleets. DRIVE Thor is a centralized car computer. Primary features of the next-gen car computer include a single AI compute platform, autonomous driving and parking capabilities, driver and passenger monitoring, and AI cockpit functionality. Currently, Li Auto leverages two DRIVE Orin processors to back its assisted driving system, AD Max, for its L-series models. The two processors provide full-scenario autonomous driving for navigation on advanced driver-assistance systems (ADAS), full-scenario-assisted driving for lane change control (LCC), and automated parking and automatic emergency braking (AEB) active safety. On January 30, Oracle Corporation (NYSE:ORCL) announced that Marriott International chose Oracle’s Cloud Property Management System and Sales and Event Management solution to manage all their properties. Marriott International will leverage the platform to streamline its hotel operations, optimize event space, and improve guest planning and customer service. The company is also using Oracle Corporation’s (NYSE:ORCL) Fusion Cloud to streamline its human resource processes. Subscribing to tech newsletters can help you stay updated on the latest trends in tech. Without further ado, let’s take a look at the 25 best free tech newsletters to subscribe to in 2024. You can also read our piece on the most influential email newsletters in 2024. A close-up of a hand reaching out to touch a virtual animation, demonstrating the power of the company’s IoT technology. Our Methodology To gather a list of the best free tech newsletters, we went over several sources including over 10 reports on the internet, our rankings, and multiple similar rankings. Of them, we picked the newsletters that appeared in 50% of our sources. To identify the top 25 items, we sourced the total site visits in the past 28 days for our pool of newsletters from Similarweb. Our list of the 25 best free tech newsletters to subscribe to in 2024 is in ascending order of the total site visits, as of February 16, 2024. By the way, Insider Monkey is an investing website that tracks the movements of corporate insiders and hedge funds. By using a consensus approach, we identify the best stock picks of more than 900 hedge funds investing in US stocks. The top 10 consensus stock picks of hedge funds outperformed the S&P 500 Index by more than 140 percentage points over the last 10 years (see the details here). Whether you are a beginner investor or a professional one looking for the best stocks to buy, you can benefit from the wisdom of hedge funds and corporate insiders. 25 Best Free Tech Newsletters to Subscribe to in 2024 25. Hacker Newsletter Total Site Visits as of February 16, 2024: 11,212 The Hacker Newsletter is a weekly newsletter providing information on startups, technology, and programming. The newsletter has been active since 2010. 24. NextDraft Total Site Visits as of February 16, 2024: 25,594 NextDraft is hosted on Substack and ranks as one of the best tech newsletters to subscribe to in 2024. The newsletter is delivered on weekdays. Dave Pell writes about news, technology, and media. 23. Bay Area Times Total Site Visits as of February 16, 2024: 78,140 Bay Area Times sends a free daily newsletter covering top stories about businesses and technology. It has more than 250,000 subscribers. Users can upgrade to Bay Area Times Pro to receive exclusive interviews, guides, and research reports. 22. Sidebar Total Site Visits as of February 16, 2024: 82,133 Sidebar ranks 22nd on our list of the best tech newsletters to subscribe to in 2024. The Sidebar newsletter is sent five days a week from Monday to Friday. 21. LeadDev Newsletter Total Site Visits as of February 16, 2024: 104,039 The LeadDev Newsletter is sent once a week. It covers important updates to polish the reader’s engineering management skills. It provides insights from tech experts in the LeadDev community. 20. Chartr Total Site Visits as of February 16, 2024: 159,657 Chartr ranks 20th on our list of the best free tech newsletters to subscribe to in 2024. The newsletter covers important data-driven insights into business, tech, entertainment, and society. 19. Benedict’s Newsletter Total Site Visits as of February 16, 2024: 196,048 The Benedict’s Newsletter is one of the best tech newsletters to subscribe to in 2024. The free newsletter is delivered every Tuesday and covers core news and analysis. 18. TLDR Newsletter Total Site Visits as of February 16, 2024: 245,148 The TLDR Newsletter ranks 18th on our list of the best free tech newsletters to subscribe to in 2024. The daily free newsletter covers interesting stories about startups, tech, and programming. 17. Exponential View Total Site Visits as of February 16, 2024: 290,442 Exponential View by Azeem Azhar is a newsletter covering various topics including data, AI, and exponential technologies. The newsletter has more than 94,000 subscribers. Readers receive a weekly newsletter on market signals, key reads, and important trends for free. 16. Ask Leo! Total Site Visits as of February 16, 2024: 317,716 Ask Leo! ranks as one of the best tech newsletters to subscribe to in 2024. The weekly newsletter helps readers feel safe with technology and solves common problems. 15. Lenny’s Newsletter Total Site Visits as of February 16, 2024: 407,223 Lenny’s Newsletter is hosted on Substack and is one of the best tech newsletters to subscribe to in 2024. Readers can receive one newsletter a month for free. The newsletter covers topics around product and career growth. 14. Techlicious Total Site Visits as of February 16, 2024: 595,930 Techlicious ranks 14th on our list of the best tech newsletters to subscribe to in 2024. The free newsletter covers important tech stories, tips, and updates. 13. Pragmatic Engineering Total Site Visits as of February 16, 2024: 755,548 Pragmatic Engineering is hosted on Substack and is one of the best tech newsletters to subscribe to. Users can access short newsletters every Tuesday with a full article once a month for free. The newsletter provides tech advice and tech stories for engineering managers. 12. The Hustle Total Site Visits as of February 16, 2024: 841,027 The Hustle is a free five-minute daily newsletter aimed at innovators. The newsletter covers stories on business, technology, and the internet. More than 2.5 million innovators have subscribed to the newsletter. 11. CIO Newsletter Total Site Visits as of February 16, 2024: 978,932 The CIO Newsletter ranks 11th on our list of the best tech newsletters to subscribe to in 2024. Users can sign up for several weekly and bi-weekly newsletters. The newsletters discuss artificial intelligence, machine learning, and other tech stories. 10. ByteByteGo Newsletter Total Site Visits as of February 16, 2024: 1.35 Million The ByteByteGo Newsletter ranks as one of the best free tech newsletters to subscribe to in 2024. Users can subscribe to the free version to receive one newsletter every week on Saturday. The newsletters cover important subjects such as system design, software solutions, and discussions around basic tech terminologies. 9. CB Insights Total Site Visits as of February 16, 2024: 1.59 Million CB Insights is one of the best tech newsletters to subscribe to in 2024. Users can sign up by providing their email and receive the latest updates on tech and money markets. 8. The Information Total Site Visits as of February 16, 2024: 1.61 Million The Information ranks eighth on our list of the best tech newsletters to subscribe to in 2024. While most of the newsletters such as the Information AM, The Takeaway, and Every Weekend are free to read, the news service also offers paid newsletters such as the Pro Weekly Newsletter. It is available to pro-subscribers only. 7. The Download Total Site Visits as of February 16, 2024: 1.99 Million The Download is a product of the MIT Technology Review. Users can sign up by providing their email and receive a fresh tech-based newsletter every day from Monday to Thursday. 6. Product Hunt Total Site Visits as of February 16, 2024: 3.93 Million Product Hunt ranks sixth on our list of the best tech newsletters to subscribe to in 2024. Product Hunt aims to identify new products in the market. The Product Hunt Daily newsletter is a daily digest of the best new products in the market. Click to continue reading and see the 5 Best Free Tech Newsletters to Subscribe to in 2024. Suggested Articles: 10 Best Car Insurance in Texas for 2024 15 Best Coffee Beans for Beginners 13 Best Major Stocks to Buy Right Now Disclosure: None. 25 Best Free Tech Newsletters to Subscribe to in 2024 is originally published on Insider Monkey......»»
All Warship and Submarine Classes in the Russian Navy
According to Global Firepower’s 2024 rankings, the United States has retained its title as the strongest and most advanced military on the planet. For the past 18 years, the U.S. has remained in the top spot, besting global rivals China and Russia. However, when it comes to world naval fleets, although the American military still […] The post All Warship and Submarine Classes in the Russian Navy appeared first on 24/7 Wall St.. According to Global Firepower’s 2024 rankings, the United States has retained its title as the strongest and most advanced military on the planet. For the past 18 years, the U.S. has remained in the top spot, besting global rivals China and Russia. However, when it comes to world naval fleets, although the American military still comes out on top in terms of power, it doesn’t take the top position in numbers. China and Russia have more watercraft in their navies than the U.S. Russia ranks second as the strongest military and is currently using its navy against Ukraine in the ongoing Russo-Ukranian conflict. Ukraine struck at Russia’s Black Sea Fleet Headquarters in Sevastopol, Crimea to devastating effect in late September 2023. Casualties were reported in the dozens. However, there was not any clear indication as to any actual damage to the fleet. (See how Russia’s and NATO’s military capabilities compare.) 24/7 Wall St. reviewed the military data site World Directory of Modern Military Warships’ directory of all active ships in Russia to get a better picture of all warships and submarines in the Russian navy. Ship and submarine classes are ranked in order of the number of vessels currently in active use by the Russian navy, according to WDMMW. Any ships on order were excluded. The aircraft carrier Admiral Kuznetsov is the largest ship in the Russian fleet, and the only one in its class, measuring roughly 305 meters (1,000 feet) in length, making it one of the largest aircraft carriers in the world. (The Nimitz class aircraft carriers from the United States are 1,092 feet in length.) Equipped with an angled flight deck and a ski-jump ramp, Admiral Kuznetsov can operate a mixture of fixed-wing aircraft and helicopters and carry up to 41 aircraft, including an array of fighter jets and helicopters. The carrier is powered by a combination of traditional oil-fired boilers and gas turbines, providing it with a maximum speed of around 30 knots. Another notable class is the Admiral Gorshkov guided missile frigates. These frigates are designed for multi-purpose operations and are equipped with modern missile systems, anti-ship and anti-submarine capabilities, and advanced radar systems, according to Military Factory. Although these are not the fastest ships in the fleet, with a maximum speed of roughly 20 knots, or 23 mph, they are very well armed with turreted deck guns, anti-aircraft missiles, and even torpedoes. This class is also one of the newest and most advanced to join the Russian fleet. Russia has 65 submarines in its fleet, just one more than the U.S., including the Borei class, which is the newest generation of ballistic missile attack submarines. These nuclear-powered vessels possess immense destructive power due to their arsenal of Bulava missiles. These missiles are loaded with multiple nuclear warheads and have a range of 5,000 miles. Although there are only a handful of these submarines in service at the moment, more are on order. (Here are the 20 biggest bombs in Russia’s military arsenal.) Compared to other major world powers, the majority of Russia’s warships and submarines have been in service for at least a few decades. The median hull age of the fleet is around 30 years, according to WDMMW. For comparison, the median hull age of the U.S. fleet is just over 23 years. The newer classes of submarines, frigates, and corvettes in Russia’s fleet have only been introduced in the past decade or so and therefore do not account for a large portion of the fleet. Here are all warship and submarine classes in the Russian fleet. 44. Delta III Number in class: 1 Type: Nuclear-powered ballistic missile attack submarine Year introduced: 1976 43. Gremyashchiy Number in class: 1 Type: Guided-missile stealth corvette warship Year introduced: 2018 42. Kuznetsov Number in class: 1 Type: Conventionally-powered aircraft carrier Year introduced: 1991 41. Lada Number in class: 1 Type: Diesel-electric attack submarine Year introduced: 2010 40. Typhoon Number in class: 1 Type: Nuclear-powered ballistic missile submarine Year introduced: 1981 39. Bora Number in class: 2 Type: Guided-missile corvette Year introduced: 1989 38. Gepard Number in class: 2 Type: Guided-missile frigate Year introduced: 2003 37. Gorshkov Number in class: 2 Type: Guided-missile frigate Year introduced: 2018 36. Gorya Number in class: 2 Type: Minesweeper Year introduced: 1988 35. Ivan Gren Number in class: 2 Type: Amphibious assault Year introduced: 2018 34. Kirov Number in class: 2 Type: Nuclear-powered guided-missile battlecruiser Year introduced: 1980 33. Krivak Number in class: 2 Type: Guided-missile frigate Year introduced: 1970 32. Neustrashimyy Number in class: 2 Type: Multirole frigate Year introduced: 1986 31. Sierra II Number in class: 2 Type: Nuclear-powered attack submarine Year introduced: 1984 30. Slava Number in class: 2 Type: Guided missile cruiser Year introduced: 1982 29. Victor Number in class: 2 Type: Nuclear-powered attack submarine Year introduced: 1967 28. Yasen Number in class: 2 Type: Nuclear-powered cruise missile submarines Year introduced: 2013 27. Buyan Number in class: 3 Type: Guided-missile corvette Year introduced: 2006 26. Grigorovich Number in class: 3 Type: Guided-missile frigate Year introduced: 2016 25. Karakurt Number in class: 3 Type: Guided-missile corvette Year introduced: 2018 24. Project 22160 Number in class: 3 Type: Offshore patrol vessel Year introduced: 2018 23. Alligator Number in class: 4 Type: Amphibious assault Year introduced: 1965 22. Borei Number in class: 4 Type: Nuclear-powered ballistic missile submarine Year introduced: 2013 21. Korund Number in class: 4 Type: Minesweeper Year introduced: 1967 20. Shmel Number in class: 4 Type: Armored artillery gunboat Year introduced: 1967 19. Sovremenny Number in class: 4 Type: Anti-aircraft guided-missile destroyer Year introduced: 1980 18. Alexandrit Number in class: 5 Type: Minesweeper Year introduced: 2016 17. Delta IV Number in class: 6 Type: Nuclear-powered ballistic missile attack submarine Year introduced: 1984 16. Parchim Number in class: 6 Type: Anti-submarine corvette Year introduced: 1993 15. Lida Number in class: 7 Type: Minesweeper Year introduced: 1989 14. Steregushchiy Number in class: 7 Type: Guided-missile corvette Year introduced: 2008 13. Natya Number in class: 8 Type: Minesweeper Year introduced: 1970 12. Oscar II Number in class: 8 Type: Nuclear-powered cruise missile submarines Year introduced: 1980 11. Udaloy Number in class: 8 Type: Anti-submarine guided-missile destroyer Year introduced: 1980 10. Akula Number in class: 10 Type: Nuclear-powered attack submarine Year introduced: 1984 9. Buyan M Number in class: 9 Type: Guided-missile corvette Year introduced: 2006 8. Kilo II Number in class: 9 Type: Attack submarine Year introduced: 1980 7. Nanuchka Number in class: 10 Type: Guided-missile corvette Year introduced: 1970 6. Kilo Number in class: 12 Type: Attack submarine Year introduced: 2014 5. Ropucha Number in class: 15 Type: Amphibious assault Year introduced: 1974 4. Grachonok Number in class: 20 Type: Anti-saboteurship Year introduced: 2009 3. Grisha Number in class: 20 Type: Anti-submarine corvette Year introduced: 1970 2. Eridan Number in class: 22 Type: Minesweeper Year introduced: 1983 1. Tarantul Number in class: 22 Type: Guided missile corvette Year introduced: 1977 Sponsored: Find a Qualified Financial Advisor Finding a qualified financial advisor doesn’t have to be hard. SmartAsset’s free tool matches you with up to 3 fiduciary financial advisors in your area in 5 minutes. Each advisor has been vetted by SmartAsset and is held to a fiduciary standard to act in your best interests. If you’re ready to be matched with local advisors that can help you achieve your financial goals, get started now. The post All Warship and Submarine Classes in the Russian Navy appeared first on 24/7 Wall St.......»»
Lucid Group, Inc. (NASDAQ:LCID) Q4 2023 Earnings Call Transcript
Lucid Group, Inc. (NASDAQ:LCID) Q4 2023 Earnings Call Transcript February 21, 2024 Lucid Group, Inc. misses on earnings expectations. Reported EPS is $-0.3 EPS, expectations were $-0.28. Lucid Group, Inc. isn’t one of the 30 most popular stocks among hedge funds at the end of the third quarter (see the details here). Operator: Hello, and […] Lucid Group, Inc. (NASDAQ:LCID) Q4 2023 Earnings Call Transcript February 21, 2024 Lucid Group, Inc. misses on earnings expectations. Reported EPS is $-0.3 EPS, expectations were $-0.28. Lucid Group, Inc. isn’t one of the 30 most popular stocks among hedge funds at the end of the third quarter (see the details here). Operator: Hello, and thank you for standing by. Welcome to Lucid’s Fourth Quarter 2023 Earnings Conference Call. [Operator Instructions]. Please be advised that today’s conference is being recorded. I would now like to hand the conference over to Maynard Um, Senior Director of Investor Relations. You may begin. Maynard Um: Thank you, and welcome to Lucid Group’s Fourth Quarter 2023 Earnings Call. Joining me today are Peter Rawlinson, our CEO and CTO; and Gagan Dhingra, our Interim CFO and Principal Accounting Officer. Before handing the call over to Peter, let me remind you that some of the statements on this call include forward-looking statements under federal securities laws. These include, without limitation, statements regarding the future financial performance of the company, production and delivery volumes, financial and operating outlook and guidance, macroeconomic and industry trends, company initiatives and other future events. These statements are based on predictions and expectations as of today and actual events or results may differ due to a number of risks and uncertainties. We refer you to the cautionary language and the risk factors in our most recent filings with the SEC and the forward-looking statements on Page 2 of our investor deck available on the Investor Relations section of our website at ir.lucidmotors.com. In addition, management will make reference to non-GAAP financial measures during this call. A discussion of why we use non-GAAP financial measures and information regarding reconciliation of our GAAP versus non-GAAP results is available in our earnings press release issued earlier this afternoon as well as in our investor deck. With that, I’d like to turn the call over to Lucid’s CEO and CTO, Peter Rawlinson. Peter, please go ahead. Peter Rawlinson: Thank you, Maynard, and thank you, everyone, for joining us for our fourth quarter earnings call. During the first 3 years of production of Lucid Air, we’ve garnered significant industry accolades, including Car and Driver 10 Best List for 2024, The 2023 World Luxury Car of the Year and the 2022 Motor Trend Car of the Year. I can’t think of any other company that has gotten this far this fast. Our superior technology, design and performance has repeatedly been recognized. We’ve proved our technology prowess with Lucid Air. And not only did we pioneer the concept of efficient range through our technology, we also grew our lead with 4.74 miles of range per kilowatt hour for the Air Pure real wheel drive. The technology gap between Lucid and others is growing, not shrinking. We also launched the Lucid Air Sapphire, the first supersport EV Sudan as a halo product to showcase the potency of our technology. Not just the most powerful production Sudan ever, it has also been recognized as a great all-around driving car with exceptional handling and driving dynamics. Its exceptional 427 miles of EPA estimated range and fast charging truly completes the package. And now we’re embarking upon our next and most transformational phase of our development with the expansion of our vehicle lineup. The expansion of Lucid’s total addressable market starts right now with the Air Pure rear wheel drive grows with Gravity and broadens with the forthcoming midsized platform. We unveiled the Lucid Gravity at the LA Auto Show in November to tremendous early reviews. I am confident that the Lucid Gravity will redefine the electric SUV segment with incredible range, superior efficiency, fast charging speed and interior space that you have to see to believe. It will be unlike anything in its class, and it will be massive for Lucid. And for those who might be in Geneva, Switzerland next week, we welcome you to come and see us at the Geneva International Motor Show, where we will introduce the Gravity to the European market. Now turning to sales and marketing. In 2023, we increased our brand awareness. And of greater significance our awareness among EV purchasing tenders increased substantially from the beginning of the year. And this gives us confidence that our sales and marketing initiatives are making solid progress. And we’ll continue to take a science-based, data-driven analytical approach to our marketing but are also adding new initiatives. For example, our recent Saks Fifth Avenue partnership will allow us to leverage Saks luxury brand and ecosystem to generate awareness, leads and sales. Select locations will have test drive vehicles, further expanding our reach in locations which are not currently present with the studio. Of particular significance has been our recent Air Pure Stealth initiative launched just last week. We have now realized a starting price point for the Lucid Air range of $69,900. Yes, that’s right. The finest production EV in the world now starts at under $70,000. This effectively extends the scope of the Lucid Air range into a new total addressable market segment. In fact, we’re already seeing extremely promising results from this. Moreover, this is commensurate with our long-term strategy to make progressively more affordable vehicles. This remarkable value proposition has in large part been made possible by our world-leading technology. Because [indiscernible] enables our cars to go further with less batteries, the Air Pure rear wheel drive is able to achieve an EPA estimated range of 419 miles [indiscernible] further than the competition. But more significantly, it achieves this with a battery pack size of just 88-kilowatt hours. And since the cost of an EV is dominated by the cost of the battery pack, this technical advantage translates directly to profound commercial advantage. Now I believe it’s important that the full impact of this is fully comprehended. The EPA testing procedure has recently been revised, and it’s become more stringent. So Air Pure rear wheel drive is able to achieve a landmark miles of range per kilowatt hour of battery capacity, and that’s with new EPA ratings. So whilst we are currently witnessing other EV brands registering reductions in their respective range ratings, Lucid is forging ahead, growing and building upon our technology advantage, and with it, I believe our future commercial advantage. But I want to be clear, I’m also critically focused upon cost. It’s not well understood that we designed and developed our technology for true mass manufacturability at scale. And we have more coming. We have significant advancements that I believe can drive costs down further. Technology is not only about creating incredible products. It’s also about innovation to improve costs. And I’ve never been more pumped about what’s coming, what’s yet to come from our technology roadmap. We are resolutely focused upon cost whilst continuing to prudently invest for the future. Through 2023, we dramatically expanded our advanced manufacturing plant in Arizona, which we call AMP 1, and that was in preparation for Gravity. We built a state-of-the-art a general assembly line that is capable of assembling both Gravity and Air on the same line. And we’ll continue to vertically integrate where it makes the most sense in areas of stamping, , our paint shop expansion and the new powertrain facility at AMP 1. We built the first ever car manufacturing plant in Saudi Arabia for semi knockdown kits. This year we also broke ground for the manufacturing of the completely built-up cars there. These are critical long-term investments that are reflected in our cost of goods sold. Now the imagery in our earnings presentation, I hope gives you some sense of the scope and scale of what we’re doing. When you see it in person and not the different shots in the factory, you truly start to understand how we’re building a state-of-the-art factory for the future. In fact, in January of this year, we have more than 100 guests representing over 60 strategic suppliers for Gravity, Air and for potentially midsize come to our factory. The feedback and support from our suppliers was extraordinary. They highlighted our best-in-class and advanced technology and continued investment in our production facilities, which provide a material signal of our long-term commitment. My key message to them was one of growth, the critical need for obsessed partners, focused upon excellence and the importance of driving this journey together. So I want to express my heartfelt gratitude to all of them. Now on the R&D side, we continue to invest for future supremacy, and I’m incredibly excited about our road map, both from an innovation and from a cost perspective. In 2023, we also raised $3 billion, including unparalleled support of $1.8 billion in equity funding from our largest shareholder, the PIF. Now Gagan will talk about liquidity in further detail. We formed our technology licensing and access business through our first such deal with Aston Martin, and we’re actively exploring additional and even broader technology and supply agreements. We also have sales to a rental car company, and we’re very pleased with early results. Lucid’s range and efficiency are perfectly suited for fleets. And in fact, we saw new incremental orders from that rental car company due to demand. Of course, we haven’t yet scaled this business. We’re taking a methodical approach, which is prudent, and we’re pleased with what we’re seeing thus far. This is yet another tool to help grow our brand awareness and allow potential customers experience the car. 2023 was also a year where we made significant progress with our in-house software capabilities. Software is more than just the user interface. We have some of the best software engineers in the world, working on everything from user interface to new features, to powertrain to infrastructure. In fact, we developed and have been transitioning to our own in-house over-the-air software infrastructure. This not only helps our OTA functionality but it’s also a source of cost savings. Now building an OTA software as a service platform is no small feat. One that I believe most other car companies would simply not be able to do. And it’s another example of technology aiding costs. And of course, this is a platform that we could potentially monetize in the future. Now I want to be transparent as well. We also had some challenges. Firstly, the macroeconomic and higher interest rate environment impacted mainly in this market. And in the new markets to us, there’s been some learning. For example, in Saudi Arabia, we learned that there are different market dynamics and intricacy is unique to that market. And so we have to scale that business differently for growth. But we’ve addressed the pain points. We’re scaling up and expect good growth in the region this year. Now we’ve also faced some technical challenges with commencing production of the rear wheel drive Pure in the fourth quarter. This is normal when doing something so advanced and so efficient. As I said, a landmark achievement with a 4.74 miles of range per kilowatt hour. This is our most accessible car, and we had challenges ramping it up. But I’m delighted to say that we’ve now overcome these challenges and are now fully ramped in pure production. So as we start 2024, I’m very excited about the year ahead and beyond. We made focused improvements to further enhance our customer journey. For example, the Lucid financial services team has been working to enhance and to simplify the customer financing experience, significantly reducing the customer cycle time to finance vehicles. And we are also in the midst of implementing a new technology platform. Combined with the rollout of our accelerated delivery pilots, we were able to significantly improve the cycle times from order to delivery, improve customer satisfaction and, in some cases, increase orders. In one instance, we were able to get a customer through their purchase journey from the time they place the order to the time they completed delivery walk out in only just about 3 hours. Now this new process has been live for select markets since Q4 and for new loans and is expected to go live for all lease and other loan markets by the end of Q1 of this year. You’ll see us roll these out to more locations throughout 2024. So our total addressable market triples by doing what we always intended to do, making the Air progressively more affordable and now starting at under $70,000. A technical achievement in getting an 88-kilowatt hour battery pack in the Pure allows us to cut out battery costs but still provide an EPA estimated range of 419 miles even based upon the new and more stringent EPA testing. And Gravity will further expand our total addressable market from 2023 by more than 6x. The Gravity is scheduled for start of production late this year and numerous prototypes are already driving around. In fact, we just built more than 40 prototypes to date. You just have to see to believe it, the interior space and the sheer practicality is what every family has been craving, made only possible by our technology and design. And I’m exceptionally encouraged by the early feedback and interest. We saw more than fourfold increase in daily gravity interest sign-ups following the L.A. Auto Show unveil. And the start of production for more affordable, high-volume midsized car is scheduled for late 2026. We’ll continue to push the boundaries of what’s possible with the midsized platform and the next-gen powertrain technology. And this will expand our market opportunity from 2023 to nearly 20x. As I mentioned earlier, we’ll continue to invest in our future with further vertical integration with stamping, with for Gravity with paint shop expansion and powertrain at AMP 1, an important part of our longer-term cost and quality strategy. I want also to touch on the broader market landscape and what seems to be a shift in emphasis from EVs. We have the utmost confidence in the future growth of the EV market. Environmental sustainability, energy storage improvements, regulatory forces and sheer performance superiority over internal combustion engine vehicles will drive the eventual march to an EV dominated automotive market. Emission standards are getting more stringent, and you’ve heard me say this many times. This truly is a technology race. But doing world-leading EV technology isn’t easy and not everyone can do it. And I believe that is becoming better understood now. As others are pulling back on EVs, we are here ready to help. We’ve talked about our willingness to work with other OEMs, and we’ve signed our first technology access deal with Aston Martin. And we continue to receive incremental interest from larger OEMs and others in the automotive space as well as in adjacent markets for our advanced technology. In the automotive vertical, this is not only for electric vehicles, but we are also seeing interest in our technology for use in hybrid electric vehicles. There’s nothing to announce yet today in terms of the deal, but we’re really encouraged by the level of interest. And we’re open to it because we think it’s critically important for the planet. Sustainability is at the core of who we are. It’s ingrained in our purpose and our products, and we are a technology innovation company. EVs are just the start, but we also believe in the importance of accountability and transparency, which is why I’m so proud to say that we published our very first sustainability report just last week. We have more to come in 2024 with the expansion of our total addressable market opportunity with Air Pure and Gravity, further software enhancements and significant announcements, the opening of Gravity orders, the start of Gravity test drives and, of course, start of production of Gravity later this year. Now we’ve come a long way, and we’re here to do much more. We are here to stay. We have a clear and determined strategy for growth while having a laser focus upon costs. So I’d like to close by saying thank you to our suppliers, to our partners, and to our most important asset, our employees. We’ve overcome significant challenges and I can’t think of any other people I would rather be with on this journey than the people here at Lucid. You are the core of our successes. And we are embarking upon our next transformational phase of the Lucid story, and so I’ve never been more excited about the future. And with that, I’d like to introduce Gagan Dhingra, who has stepped into the role of our interim CFO, Gagan, please provide an update on our financials. Gagan Dhingra: Thank you, Peter, and thank you to those who are taking the time to join us today. Before I get to my prepared remarks, I would also like to start by thanking the entire Lucid team. Over the past few months, I have spent even more time working closely with all the different parts of the organization. I am incredibly impressed by your perseverance, resourcefulness and teamwork. The successes we have been able to achieve is in no small part due to all of you. Turning to the business. In 2023, we made headway with our cost optimization programs, the key strategic priority for the company. We found success in areas, including freight, logistics, overhead and bill of materials. For example, we activated logistics as a part of the Phase II build-out of our Arizona factory, AMP 1, allowing us to bring the vast majority of vehicle components under the same roof as general assembly. This enabled us to realize savings from the reduction in overhead, transportation and complexity as well as better efficiency. From an inventory perspective, we drew down raw material inventory levels by high teens percent from the start of Q4 through material planning and inventory management improvements. Improvements in focus accuracy, in particular, allowed us to reduce inventory resulted in savings related to logistics and material handling labor, equipment rentals and storage cost. We also experienced a significant reduction in freight from more efficient transportation and storage planning. For vehicle direct costs, we implemented a number of initiatives that resulted in certain bill of materials cost savings, some of which is directly related to our commitment to reduce our carbon footprint. We have identified additional opportunities in cost of goods sold as well as operating expenses that we will look to operationalize over the course of 2024. Turning to our 2023 and fourth quarter financial results. We produced 8,428 vehicles in 2023, up 17% year-over-year and at the higher end of the 8,000 to 8,500 guidance we provided on our third quarter earnings call. During the fourth quarter, we produced 2,390 vehicles, up 54% sequentially. In 2023, we delivered 6,001 vehicles up 37% year-over-year and in the fourth quarter, delivered 1,734 vehicles, up 19% sequentially. We expected to deliver more vehicles in Saudi Arabia in the fourth quarter. As we mentioned last quarter, the ramp-up was taking longer than we expected. However, we believe we now have the right infrastructure and processes built out. Turning to the P&L. For Q4, revenue was $157.2 million, up 14% sequentially, driven primarily by higher deliveries. Cost of revenue in Q4 was $410 million. I want to make sure this is well understood. You cannot take this line item and divide it by the number of cars delivered to get the initial cost of making each vehicle. This is because our lower of cost or net eligible value, or LCNRV, also takes into account losses on raw materials and from purchase commitments. We have LCNRV adjustments, which write down certain inventory value to the amount we anticipate receiving upon vehicle sale after considering the future cost necessary to get the inventory ready for the ultimate sale. And we also record losses on firm purchase commitments. In addition, as we ramp up production, we expect the overhead per vehicle to improve. Our gross margin improved on a quarter-over-quarter basis primarily due to lower impairment charges in Q4 related to LCNRV. This amount was approximately $174.1 million, a 24.6% reduction from Q3. Although there are many controllable and uncontrollable variables that can affect gross margin, so we don’t typically provide specific gross margin guidance, I wanted to provide some directional color to aid in your modeling. Looking forward to the first quarter of 2024, we anticipate improvements to gross margin despite the price adjustments in the quarter for Pure and Tooling. The improvements are expected to be driven primarily by projected reductions in impairments. As we move into the back half of the year, we expect to build inventory of Gravity components ahead of start of production, and so expect an increase in LCNRV impairments from an accounting standpoint that will affect gross margin. As I noted earlier, we have identified additional opportunities in cost of goods sold and we’ll continue to focus on implementation and further areas for cost out. Now moving to operating expenses. R&D expense in Q4 totaled approximately $243 million up 5.3% sequentially due largely to higher personnel-related expenses. We believe our R&D investment into technology garners a strong return as the technology is not only used in our own vehicles but can also be leveraged as an additional revenue stream through strategic technology deals such as the one with Aston Martin. SG&A expense in Q4 was approximately $241 million, up from $189.7 million in Q3. The sequential increase was primarily related to an increase in sales and marketing spend, which is consistent with what we talked about in prior quarters related to putting more energy behind our science-based data-driven sales and marketing initiatives, professional services and personnel-related expenses related to largely geographic expansion. We ended the fourth quarter with 45 studio and service centers, excluding our temporary and satellite service centers flat from Q3. On the service side, we ended Q4 with 47 mobile vans in the fleet and 79 nationwide shops. We plan to continue to strategically expand our studio and service center footprint as well as satellite service centers, which will cost effectively provide additional locations for Lucid customers. Although we don’t provide specific guidance on operating expenses, I did want to provide some broader directional color. Looking into 2024 we expect operating expenses to be up year-over-year on an absolute basis, but expect it to decrease as a percentage of revenue. Our stock-based compensation in the quarter was $63.9 million. Total other income was $83.1 million, down from $122.3 million in Q3. The decrease was largely attributable to a lower noncash benefit of $25.3 million related to the change in fair value of our common stock warrant liability down from $60.3 million in Q3. As a reminder, this noncash impact can be influenced quarter-to-quarter by a number of factors with one of the larger factors being Lucid shared price at the end of the quarter. We also recognized $6 million in unrealized gains related to the Aston Martin stock we received in Q4 as a part of our strategic technology management. In Q4, we achieved an adjusted EBITDA loss of $604.6 million, a slight improvement from $624.1 million in Q3. Moving to the balance sheet. We ended the quarter with approximately $4.3 billion in cash, cash equivalents and investments, with total liquidity of approximately $4.78 billion. Note, this excludes the $81.5 million in value of the Aston Martin shares as of December 31. We have been able to consistently sustain a strong balance sheet over time. And as we have done for the last couple of years, we will continue to be opportunistic in exploring and diversifying access to financing sources. Accounts receivable increased to $51.8 million in the fourth quarter, up sequentially from $23.4 million in the third quarter. The increase was primarily due to vehicle sales related to EV purchase agreements with the government of Saudi Arabia, and you can expect that this mix could result in fluctuations on a quarter-to-quarter basis. Turning to inventory. Total inventory decreased 12.9% sequentially primarily due to raw material drawdown. We continue to see a box to a significant reduction in raw material days of inventory on hand as we work towards greater predictability in the transportation channel and refine our inventory management processes and systems. Capital expenditures for 2023 was $910.6 million, slightly below the $1 billion to $1.1 billion range we guided to on our third quarter earnings conference call. The lower CapEx was primarily related to developed projects into 2024. CapEx in the fourth quarter was $272.6 million, up from $192.5 million in Q3. Moving to the outlook for 2024. We forecast production of approximately 9,000 vehicles in 2024, and we’ll continue to prudently manage and adjust our production to meet our sales and delivery needs. Although we don’t typically provide quarterly forecasts, I would remind you that the North American market is typically down sequentially in the first quarter. However, we expect to deliver vehicles in Saudi Arabia that we were not able to deliver in fourth quarter of 2023. With regard to our liquidity position, we ended the quarter with total liquidity of approximately $4.78 billion. We expect this will give us runway through the start of production of Gravity and at least into 2025. Moving to CapEx. Our focus is increasing investments in our future growth initiatives, and we expect capital expenditures for 2024 to be approximately $1.5 billion, reflecting certain defers in our capital outlay, M2 expansion for completely built up unit which we broke out last month. The completion of the AMP 1 Phase II expansion for stamping, paint shop, powertrain on-premise and Gravity body in . From a product perspective, we have scheduled for Gravity starter production in late 2024, and start of production of our high-volume midsized platform is scheduled for late 2026. In closing, I would like to echo Peter’s excitement as we enter the next transformation phase of the Lucid. We gained market share in 2023 and outpaced our overall addressable market despite the challenging macro environment, and I’m excited about the significant expansion of our total addressable market opportunity with the Pure, Gravity and the upcoming midsized platform. We are confident in the growth of the EV market and that we have the right technology, people and product lineup to succeed. With that, let me turn it back to Maynard to get to your questions, Maynard. A – Maynard Um: Thanks, Gagan. We’ll now start the Q&A portion of the call. As we typically do, we’ll start with the saved retail questions. The first question is from Ed. Where are you at on production and delivery of Saudi orders? Peter Rawlinson: Well, last year, we made history in Saudi Arabia with the opening of the country’s first ever manufacturing facility. In its first phase, the factory has a capacity to assemble just 5,000 Lucid vehicles a year, and operations have been well underway. Last month, actually, we broke ground on the factory for completely built up or CBU cars and these are critical investments into our future. And we’re grateful for all the support from the government and from our partners. Gagan Dhingra: With regard to deliveries, we started deliveries to the Ministry of Finance last year. Under the terms of the agreement, the government has committed to purchase 50,000 vehicles with an option to purchase additional 50,000 over a 10-year time frame. This includes the Lucid Air as well as future models such as the Gravity and midsized platform. As I said in the opening remarks, the ramp was taking longer. We now have the infrastructure built out and have the right processes, we are scaling and expect good growth in 2024. Maynard Um: Our next question is from Paul. Do you plan to reduce time to market for new products? Gravity has delayed 1 year. Third model is now mooted as mid- to late decade to the 2025. And as shareholders were losing value due to failures and delays, what happened to the all-star team and proven track record? Peter Rawlinson: Yes. That’s a good point actually. I mean what we saw unprecedented external forces that impacted us with COVID and the global supply chain disruption. And that impacted many in the industry, not just Lucid. But I would say this. Tesla is the benchmark for engineering speed. If you look at the time taken between the start of production of Tesla Model S and X, it was just a bit over 3 years. If you look at where — I mean we’re scheduled for production for Gravity late this year, that’s going to be a very similar time period between production of Air and Gravity. And that’s despite it not being a derivative product there, a whole new platform. So I think that is a world-leading pace of engineering. And for a small team to get Gravity, a landmark product, a completely differentiated product in just over 3 years. Now midsize what we’ve done is define a schedule for it, we’re scheduling for late ’26. Very similar in time scale. It’s right there. I think this is world-class execution, frankly. Maynard Um: Thanks, Peter. We’ll go to question 3. Are there any updates regarding future partnerships with Apple? Peter Rawlinson: Well, as a general corporate policy, we don’t talk about any particular companies, particularly as it relates to the future. But as I said in my prepared remarks, we have what I believe is the best tech history. We’ve seen increased interest from others, and we’re very open to it because we think it’s critically important for the planet. As I said before, it’s super hard to do a good EV. It’s relatively easy to make a bad EV and this growing realization just how hard it is to do a world-class EV. Maynard Um: Next question is from Landon. When will Gravity reservations open? Is there a target date for first deliveries? We know what — the target date for first deliveries. Peter Rawlinson: Oh, yes, I’m hoping we’ll deliver some Gravity vehicles later this year. But naturally, you should expect the bigger volume to be around 2025. But we know the excitement around gravity is palpable. Maynard Um: Okay. And we’ll take our last saved question from Daniel. Do you plan to take a salary cut to reduce losses or plan to buy back shares to improve stock health? Peter Rawlinson: Well, many may not be aware of my founding role in this company as we know it today. I joined the company around 11 years ago, with a clear goal of making the very best electric vehicle and to drive a revolution towards sustainable transportation, which is going to benefit everyone in the planet. Around that, we would call [indiscernible]. And I guess we had around 19 employees. So in 2021, I received a onetime CEO stock grant, and this was solely determined and approved by the Board of Directors. And a significant portion of that vested due to the company achieving certain market capitalization milestones as we publicly disclosed in 2023. So I think there’s a huge misperception that this onetime grant was received as a salary and somehow we replicate it as my salary in the future. In fact, in 2023, at my request, I did not receive a bonus for 2022, nor did I receive any further equity grants in ’22 or ’23. And I just want to assure you, my mission and my dedication is still unwavering. I have not sold a single share of stock in all this time, over 10 years, except what was absolutely necessary for tax purposes. And the company stock I received from the grant remains in the form of company stock. And so I am also directly tied, personally tied, directly and hugely to the company’s performance as a key shareholder. And so I’m incentivized that way. My promise is to continue to work tirelessly, day and night, to drive brand awareness, to deliver more cars, to sign up more technology licensing and access agreements, to drive down costs and to bring the Gravity and midsized platform to market. We have an incredible team. We’re driving forward, and I’m incredibly excited about our products and moreover, our future. Gagan Dhingra: Regarding the second part of the question, we are investing in our future, but we are a growth company. We are also a technology company. and I believe our investments into areas such as our research and development is an advantage and give us the opportunity for higher returns than any other automotive company because we are monetizing the intellectual property through agreements such as the one with Aston Martin. When we feel we can’t increase value from reinvesting back into the business, we would consider returning the cash to shareholders via a repurchase program. But we don’t believe this would happen for quite some time. Maynard Um: Okay, thanks. Towanda, can we turn it over to go to questions on the call, please? Operator: [Operator Instructions]. Our first question comes from the line of John Murphy with Bank of America. See also 12 Best Ways To Leave Money To A Child and 13 Best Falling Stocks To Buy Right Now. Q&A Session Follow Lucid Group Inc. Follow Lucid Group Inc. or Subscribe with Google We may use your email to send marketing emails about our services. Click here to read our privacy policy. John Murphy: Good morning, everybody — good afternoon. Sorry, long day here. Peter, as you think about the gravity, it’s really kind of showcasing your technology, not just on the powertrain but also in the body and structures of the vehicle, meaning just you have maximum material space for the footprint, is pretty impressive. As we think about the Gravity, it seems like it’s going to be a game changer for you in the market. However, it does seem like the midsize platform may be even more important. As we think about the launch of these two programs late this year and then the midsize in 2026, in relative importance, which is more important for Lucid for mid- to long-term success? And how do you kind of gauge that relative size of importance to the company? Peter Rawlinson: Thank you, John. I mean if you asked the question a year or 2 ago, people would question our technology. Today, it’s given. The world’s most — we’ve got the very best technology. What we haven’t got is scale and an economy of scale. And that is going to take place in 3 critical steps and the first step happened last week. We launched our Pure Stealth initiative. Lucid Air is now available at 69 — from $69,900, the best EV on the planet at that price. That puts us into 3x the TAM, the total addressable market because now we go into E class Mercedes territory rather than S class So step one, Pure from $69,900, 3x the total addressable market. And then scheduled for production late this year, we have Gravity, the SUV. We’re talking about 6x the TAM with Gravity. And then scheduled production late ’26, the third step on this journey, midsize, 20x for TAM. It’s all about scale. We’ve got the tech. The tech is designed for scale. It’s about achieving scale and with that, we’ll get the economies of scale and the margins and the profitability. John Murphy: So ultimately, just to interpret that, I mean we’re fighting to the position of getting to that even greater scale with the midsize, and that probably is sort of the fulcrum point and where you’ll get to escape philosophy on profitability and cash flow. Is that a fair statement? Peter Rawlinson: Today, we’re competing with Mercedes and Porsche. With midsized, we compete directly with Tesla Model Y and Model 3. That’s the best selling car in the world. John Murphy: And then just one follow-up. You mentioned the potential for hybrid technology or joining obviously a nice engine to be part of a hybrid powertrain. I mean, one, what kind of discussions are going on there? And two, I mean in layman’s terms, there’s always these positions in electric motor to be put or placed in the ICE powertrain from P0 all the way back to P4 and various positions in the middle. As you kind of envision what you could bring to the table and the potential positioning or integration with an ICE engine to make a presumably pretty efficient powertrain for hybrid, where would you land in that positioning? And have you even thought of that at this point? So if you just talk about discussions that are going on and then sort of your thought process about how you would integrate into an ICE engine. Peter Rawlinson: Yes. So we always envisaged a key pillar of our business being the technology licensing and supply where in we got the best technology, and that’s recognized. Our arrangement with Aston Martin last year has triggered an increase in interest in our technology. we’re also growing our own internal team so that we’ll be able to not just be receiving passively inquiries but actually become a little bit more proactive in the future. Actually, the application for hybrid has come as an external inquiry. Because if you look at the core capabilities of our powertrain, the unique selling price of it — proposition of it is its efficiency. Well, that applies equally to say, a hydrogen fuel cell vehicle or a gasoline electric hybrid and also it’s compactness its power. And that is very relevant to the hybrid because in a hybrid, you’ve got to stuff in a gasoline engine and exhaust and all that stuff and that paraphernalia, and electric motors and battery. And it really becomes a packaging puzzle plus. And because we’ve got the most complex technology, that ideally lends itself to that. Now Lucid, it’s not going to do hybrids. We’re ready to bat for electric. We believe Pure is the solution. But certainly, the hybrid opportunity opens up a whole new market arena for our technology. Operator: Our next question comes from the line of Doug Dutton with Evercore ISI. Douglas Dutton: Peter, so you mentioned a few manufacturing advancements coming to further drive down costs in 2024. I was just curious if you can quantify those or give us a couple of examples of initiatives that you have in progress right now to help on that cost side of the business. Peter Rawlinson: Right. So we’re really looking at further vertical integration, particularly in our factory in Arizona. We’re bringing stamping in-house and that is going to be right alongside the new body shop for our Gravity. So we will reduce the operational cost, we will reduce OpEx. We’ll reduce inbound logistics costs, we will actually reduce scrap as well. And there’s an internal efficiency as well by having an integrated state-of-the-art hydraulic transfer stamping line with laser blanking facility fully integrated. Then we’re actually moving our powertrain, which is already vertically integrated our world-class motors, inverters, drive units, all in-house at the moment. But that’s in a separate factor up the road so we will save those logistics costs by actually putting them under the same roof as our main factory in Arizona, so we will save operational and will be efficiencies. The other thing we’re integrating into that factory is logistics. And we’ve been able to draw down some of the cross stocks. I think all our cross stocks now virtually have been drawn down upon. So we’ve got inbound logistics cost savings. And then the other thing we’re doing is we’ve really revised the organization so that quality reports directly into me. We’re really driving down man hours per vehicle. But perhaps, Gagan, you could provide a little bit more color on some of the initiatives you’re driving leading to drive down cost. Gagan Dhingra: Yes. Thank you, Peter. So we have identified 3 initiatives, 1 scale. Scale will help us improve our margin. This is technology and volume rate. One, we took some initiatives in 2023, and we are seeing the results. But more importantly, we have identified additional opportunities that will look to operationalize in 2024. On operational efficiency, which is number three. And as Peter mentioned, we are looking multiple areas. One, freight, we made significant improvements in ’23 and looking more in 2024. Logistics specifically as we move from our LOC warehouse to implement Phase 2 general assembly. This has really helped us in reducing the cost. This is a consistent exercise. And we are looking at this very carefully. This is my #1 goal, having the cost optimization. But again, it is not easy. We are looking at consistently. And also, we have initiated a team under me specifically looking each area very carefully looking at each dollar and bring the efficiencies. But as we grow, as we scale, it will bring us efficiencies. This is a technology and volume risk. Peter Rawlinson: Yes. Scale is critical because to drive down the COGS, you’ve got that fixed cost component. And it’s the amortization of the fixed cost and overhead depreciation per vehicle. So this is a — this is the initiative to start at $69,000 is 3-step hitting our total addressable market, the scale will drive down the costs. Douglas Dutton: Excellent. I appreciate all the detail there. That’s really helpful. Just one quick one from me then. On Gravity, starting price of $80,000, obviously, not a ton of deliveries in 2024, but will that be similar to the strategy with the air where you’re starting with the higher trims and then moving downstream. Is that the right way to think about pricing and the model pending ’24 and going into ’25? Peter Rawlinson: Yes. we haven’t disclosed that yet. I do think it’s reasonable to assume Gravity is going to be in a similar competitive set as Air, it’s going to be completing more in the Mercedes arena, we’ll have to wait for midsize to come, which is scheduled for production late ’26 to have a true Tesla Model Y Model 3 competitor. I mean, the key thing with Gravity is we’re going to hit about 6x the TAM that’s going to help us hugely with this economy of scale. Operator: Our next question comes from the line of Steven Fox with Fox Advisors, LLC. Steven Fox: I was just wondering if you could talk a little bit more about your expectations for the KSA market this year. You mentioned, first of all, that there was some unexpected nuances in ramping and I guess, production to during ’23. So how do we think about how you benefit from that market and the growth during the year. Gagan Dhingra: Yes. Thank you, Steven. We are limited to what we can say in general, and we do not specifically talk about any specific customer. But what we can say, and most of you are already aware that the government of Saudi Arabia has an initial commitment to purchase 50,000 vehicles with an option to purchase additional 50,000 vehicles. And as I said in the opening remarks, the ramp was taking longer than we expected. And we now have the right infrastructure and processes built out. There were significant administrative challenges. We have addressed most of the pain points we are scaling and expect good growth this year. And also note this government with Saudi Arabia also includes Air, Gravity and Midsize. Steven Fox: That’s helpful. And then just one clarification. You mentioned a lot of cost initiatives that are underway for ’24. In ’23, is there a way to quantify how the bill of materials came down or just directionally what it did versus ’22? Gagan Dhingra: Yes. We don’t specifically guide but what I can say that our gross margin in Q4 improved compared to Q3. And also we don’t provide a guidance, but I expect our gross margin will improve sequentially in Q1 next year. Having said that, our purchase of Gravity components ahead of start of production may have some impact on LCNRV as we progress. But as I said, the cost is a critical component. We are looking at it very carefully. We are very proud of what team has accomplished. Specifically related to the engineering team and supply chain team. They have done a tremendous job finding savings even through technology. So we are — we have identified couple of areas, and we are looking very aggressively. And this is our #1 goal, looking at the cost optimization and [indiscernible]. Peter Rawlinson: I think the other thing is that I know I keep bringing on this point that is critical. It’s a critical differentiator of us. Because we can go batteries, we can hit the biggest single cost item of ore on an EV, which is the cost of the battery. Some people are looking at these are so-called advance in technology and manufacturing, you might save $100 in a vehicle. You can say $,1000 potentially with having the ability to go further with less batteries. And we’re seeing that playing out now with the Air Pure rear wheel drive. We’ve got more range than anyone else in that sector. And with just a 88-kilowatt hour battery pack, smaller pack, say, 12-kilowatt hours of pack has potentially thousands of bucks on bill of material. Operator: Our next question comes from the line of Tobias Beith with Redburn Electric. Tobias Beith: I’d like to — and maybe we’ll start with my questions for Gagan. If I exclude the inventory write-down of the $172 million from COGS in the fourth quarter, it looks like unit COGS improved by about 20 percentage points sequentially. I was wondering what was it that drove the improvement? Was it the receipt of the $98 million government grant? Or is this accounted for elsewhere? Gagan Dhingra: Yes, that’s a good question. So first of all, grant doesn’t play a role in the course as of today. What — as I highlighted, we took a couple of initiatives in 2023. Freight like very important, we made significant savings but also, more importantly, our forecast accuracy of raw materials because today, the cost of goods sold is not only related to how many cars we sell. But is also related to what raw material inventory will have and how we utilize that. So the focus, accuracy, the freight opportunities in BAM really helped us out improve our gross margin in Q4. Tobias Beith: Sure. Okay. That’s helpful. And my second question relates to the Air and the Gravity. If I put aside the differences in the interior and exterior of the vehicles, are you able to share roughly what proportion of parts and components are shared I guess the fact that these vehicles are using different platforms may impact the variable cost down assumptions. It was previously communicated that both vehicles would leverage LEAP. Peter Rawlinson: Okay. Let me cover that. If you look at the battery pack, which is the core, core part of the bill of materials of both vehicles, it is about 95% the same. It’s — they’ve both got the same number of modules, the same number of cells. They made exactly on the same line. It’s just that the two of the top modules are a different location. We move them from underneath the rear seat in Air to underneath the front seat in Gravity. This has a transformative effect upon the nature of the vehicle, which in turn leads to a much bigger TAM. We can only capture that TAM, by having a degree of differentiation. Now if you look at the core powertrain, the drive units and the inverters they’re very, very high proportion carryover, slightly different gear ratios because the wheels are bigger, and you need more tractability you have slightly lower gear ratios. Now the rest of the platform is very similar, which has meant that it saved on our R&D costs because we’ve got a learning and the process knowledge of how we rivet and glue the sheet stampings, the castings and the extrusions together. But there is a degree of difference in that platform, which I think makes a whole bunch of sense because it makes gravity a true SUV, not some sort of — soft CUV derivative. And that means we go into a whole new TAM 6 times. We would not be able to capture that TAM. And also, you need to double the tools anyway because of the extra volume. So then we look at the upper body shell of the car, they’re always going to be different anyway. So we’re talking about a very slight increase in tooling costs. But in return for that, we truly enter a massively bigger term, 6x, and this is all about economy of scale. We’ve got the technology. It’s designed for scale. We just haven’t achieved that scale yet. And so therefore, it’s not showing in our P&L. Tobias Beith: Makes sense. All right. And if I could squeeze one last one in. 2 quarters ago, I asked about the steps required to move from beta prototyping of the gravity, which is then just started to series production. I was wondering if you could provide an update on the progress today. Peter Rawlinson: So we’re writing the thick of beta prototypes. In fact, both between betas and alphas, we’ve got more than 40 prototypes built, many of which are running around right now. We’ll be finishing our run of beta prototypes over as we move now into the spring. And the next step will be to do our release candidates. That’s our preproduction run through the summer in the factory and Arizona, which will lead to our scheduled start of production late this year. Operator: Thank you. Due to the interest of time, I would now like to turn the call back over to Maynard for closing remarks. Maynard Um: Thank you. This concludes Lucid’s Fourth Quarter 2023 Earnings Conference Call. Thank you all for joining us today, and you may now disconnect. Follow Lucid Group Inc. Follow Lucid Group Inc. or Subscribe with Google We may use your email to send marketing emails about our services. Click here to read our privacy policy......»»
20 Most Sustainable Companies in the US
In this article, we will look into the 20 most sustainable companies in the US. If you want to skip our detailed analysis, you can go directly to the 5 Most Sustainable Companies in the US. Sustainability Outlook for the US According to the SDSN Sustainable Development Report 2023, the United States demonstrates mixed performance […] In this article, we will look into the 20 most sustainable companies in the US. If you want to skip our detailed analysis, you can go directly to the 5 Most Sustainable Companies in the US. Sustainability Outlook for the US According to the SDSN Sustainable Development Report 2023, the United States demonstrates mixed performance on sustainable development goals, especially with respect to infrastructure, innovation, and the environment. The country has a strong infrastructure and boasts an impressive research landscape, evident by its high research expenditure. The US spent 3.46% of its GDP on R&D in 2022. The country has the highest tentative R&D spending in the world. In 2021, the country’s R&D expenditure grew by $72 billion and amounted to $789 billion. Despite being one of the most innovative economies in the world, the country still lags in renewable energy use, cleaner energy practices, and sustainable management of GHG emissions. Climate change is also a significant challenge in the country, despite a decrease in its domestic emissions. The country still ranks high in per capita emissions and fossil fuel exports. However, the country is making efforts to counter these challenges. The United States has a score of 75.9 out of 100 on the SDG index, according to the SDSN. It has made impressive progress in the health and education sector among others. The nation is home to some of the most sustainable companies that are continuously improving the sustainability landscape of the country, by reducing their net emissions and leveraging innovation to reach their sustainability goals, ultimately benefitting the country as a whole. Corporate Sustainability The relentless pursuit of economic development has resulted in multiple environmental catastrophes. Continuous industrialization and globalization have incited global GHG emissions, pollution, and deforestation, ultimately leading to alarming shifts in the global climate. The urgency of these crises demands a combined effort from authorities, governments, and the corporate sector. With the rise in awareness about sustainable alternatives, consumers are now more drawn toward companies prioritizing sustainable development goals. This shift along with factors such as the economic benefits of sustainability, including enhanced resource efficiency and higher profits, has urged companies to embrace sustainability. A study by McKinsey and Company revealed that companies that prioritize both ESG and financial growth goals perform better compared to their competitors. Companies prioritizing profit, growth, and sustainability, reach 2% higher annual shareholder returns compared to companies solely focused on financial growth, and 7% higher than the rest of the companies. Sustainability Initiatives by Major Companies Some of the most sustainable companies in the US market include Owens Corning (NYSE:OC), Ingersoll Rand Inc. (NYSE:IR), and Newmont Corporation (NYSE:NEM). Owens Corning (NYSE:OC) is one of the major companies leading the US market with its sustainability initiatives and ESG-centric policies. The company aims to increase the overall positive impact of its products and services, eliminate negative impacts, and foster inclusion and diversity. Owens Corning (NYSE:OC) has made significant efforts to reduce its energy and carbon footprint to reach its ESG and sustainability goals. It has deployed more than 1,270 energy efficiency projects in its facilities all over the world since 2006, resulting in a decline in the estimated energy usage by nearly 1.47 million MWh annually. The company actively collaborates with external partners to reduce its footprint and reach its sustainability goals, characterized by strategic partnerships and collaborative efforts. In 2022, the company deployed 12 projects, resulting in an annual energy saving of over 17,000 MWh. These projects reduced the GHG emissions by more than 4,400 MT annually. The company aims to reach its 100% renewable electricity goal by 2030. In 2022, the company reached a renewable electricity consumption of 56% of its total electricity consumption. On February 14, Owens Corning (NYSE:OC) reported its earnings for the fiscal fourth quarter of 2023. The company reported an EPS of $3.21 and beat estimates by $0.25. It reported a revenue of $2.30 billion for the quarter and outperformed estimates by $55.15 million. Over the past year, the stock has surged more than 40%, as of February 16. Ingersoll Rand Inc. (NYSE:IR) is one of the top companies in the US working on its sustainable development. On February 1, the company announced that it had decided to expand its air treatment capabilities. The company has acquired a renowned Italian air treatment provider, Friulair for $146 million. This acquisition will provide Ingersoll Rand Inc. (NYSE:IR) with access to new channels and expand its chiller production capabilities. The company anticipates improved profitability within 3 years with the addition of Friulair’s $65 million in revenue. Committed to sustainable development through environmental stewardship, Newmont Corporation (NYSE:NEM) is one of the most sustainable companies in the United States. The leading gold mining company is committed to driving a positive change, driven by its sustainable practices and a focus on social responsibility. In 2021, the company partnered with Caterpillar Inc. (NYSE:CAT) to develop an automated zero-carbon mining system, aimed at achieving safer and more productive mines, helping Newmont Corporation (NYSE:NEM) reach its emission reduction goals. The company made an initial investment of $100 million to electrify and automate haulage fleets at two mines of the company. Recently, on December 19, 2023, Caterpillar Inc. (NYSE:CAT) demonstrated the first-ever battery-electric prototype truck for underground mining to Newmont Corporation (NYSE:NEM). This is a milestone in the company’s journey towards an automated future, aligning with its sustainability agenda. In 2022, Caterpillar Inc. (NYSE:CAT) announced the R1700 XE battery electric loader. The new electric truck will complete the first fully electric load and haul solution when paired with the R1700 XE battery electric loader. Now that we have discussed the sustainability outlook of the US and the role of companies, let’s look at the 20 most sustainable companies in the US. 20 Most Sustainable Companies in the US Methodology To compile our list of the 20 most sustainable companies in the US, we consulted S&P Global’s Sustainability Yearbook 2024. The yearbook considered 9,400 companies, evaluated in the Corporate Sustainability Assessment of 2023, and ranked the top 759 companies based on their ESG scores. Firstly, we identified the US companies ranked in The Sustainability Yearbook 2024 and then sourced their ESG scores from S&P Global. Finally, we ranked the 20 companies with the highest ESG score in ascending order. We have used companies’ market caps, as of February 16, to break the tie between two or more companies having the same ESG score. By the way, Insider Monkey is an investing website that tracks the movements of corporate insiders and hedge funds. By using a consensus approach, we identify the best stock picks of more than 900 hedge funds investing in US stocks. The top 10 consensus stock picks of hedge funds outperformed the S&P 500 Index by more than 140 percentage points over the last 10 years (see the details here). Whether you are a beginner investor or a professional one looking for the best stocks to buy, you can benefit from the wisdom of hedge funds and corporate insiders. 20 Most Sustainable Companies in the US 20. Healthpeak Properties, Inc. (NYSE:PEAK) ESG Score (2024): 68 Market Cap as of February 16: $9.38 billion. Healthpeak Properties, Inc. (NYSE:PEAK) is ranked among the most sustainable companies in the US. As of February 16, the company has a market cap of $9.38 billion. Healthpeak Properties, Inc. (NYSE:PEAK) has been leading the sustainability shift with its sustainable buildings, preventing 127,000 tonnes of carbon emissions since 2011. The company has a team of 120,000 scientists, researchers, and medical professionals, working continuously toward sustainable and innovative healthcare solutions. It has an ESG score of 68. 19. Las Vegas Sands Corp. (NYSE:LVS) ESG Score (2024): 68 Market Cap as of February 16: $41.63 billion Las Vegas Sands Corp. (NYSE:LVS) is a leading multinational hospitality and integrated resort company. As of February 16, it has a market cap of $41.63 billion. The company aims to reduce its emissions to 17.5% by 2025 from the baseline year, 2018. In 2022, the company’s emissions decreased by 50%, compared to 2018. It dedicated 192,330 volunteer hours in 2022 to achieve its social responsibility goals. Las Vegas Sands Corp. (NYSE:LVS) aims to prevent, or divert 25% of its food waste by 25%. In 2022, the company achieved a diversion of 20%. The company has an ESG score of 68. 18. AT&T Inc. (NYSE:T) ESG Score (2024): 68 Market Cap as of February 16: $122.05 billion Headquartered in Texas, AT&T Inc. (NYSE:T) is a leading telecommunications company, specializing in wireless services, U-verse, and managed hosting solutions. As of February 16, it has a market cap of $122.05 billion. AT&T Inc. (NYSE:T) is actively working toward reducing its carbon footprint. The company employs energy efficiency projects to cut down its emissions and energy use. In 2022, renewable energy accounted for 2.8 million MWh of total produced electricity. It is ranked 18th on our list of the most sustainable companies in the US. 17. AbbVie Inc. (NYSE:ABBV) ESG Score (2024): 68 Market Cap as of February 16: $313.24 billion Headquartered in Illinois, AbbVie Inc. (NYSE:ABBV) is a major biopharmaceutical company in the US. The company specializes in biotechnology, research and development, biotherapeutics, oncology, immunology, neuroscience, and virology. As of February 16, the company has a market cap of $313.24 billion. AbbVie Inc. (NYSE:ABBV) exhibits a considerable commitment to sustainability, innovation, and social responsibility. The company aims to reduce its scope 1 and scope 2 GHG emissions by 42% and a 20% reduction in its waste production by 2030. In 2022, the energy consumption of the company reduced by 9.6%. Moreover, the company provides support to diverse and small businesses by providing grants of more than $897 million in the US and Puerto Rico. The company invested $7.1 billion in research and development in 2022. The company has an ESG score of 68. 16. Ball Corporation (NYSE:BALL) ESG Score (2024): 69 Market Cap as of February 16: $19.59 billion Ball Corporation (NYSE:BALL) is ranked 16th on our list. It specializes in innovative and sustainable packaging solutions. The company has a market cap of $19.59 billion, as of February 16. Ball Corporation (NYSE:BALL) has made substantial progress on the sustainability front. In 2022, it achieved a 66% average recycled content and dedicated more than 30,000 volunteer hours toward sustainability efforts. The company believes in empowering women and minorities, by financing their businesses. In 2022, the company spent $153.8 million in North America to finance diverse, women-owned businesses. Moreover, the company has cradle-to-cradle material health certification for its products. It has an ESG score of 69. 15. International Flavors & Fragrances Inc. (NYSE:IFF) ESG Score (2024): 69 Market Cap as of February 16: $20.74 billion International Flavors & Fragrances Inc. (NYSE:IFF) is ranked among the 20 most sustainable companies in the US. It specializes in research, cosmetic actives, food technology, food sciences, probiotics, extracts, fragrances, and flavors. As of February 16, the company has a market cap of $20.74 billion. The company aims to shift toward 100% renewable electricity by 2030. In 2022, International Flavors & Fragrances Inc. (NYSE:IFF) produced 256,169 MWh of renewable electricity, covering nearly 14% of total electricity consumption. With a goal to achieve a 50% reduction in Scope 1 and 2 emissions below 2021 levels by 2030, the company achieved a 6% reduction below 2021 levels, in 2022. 14. CBRE Group, Inc. (NYSE:CBRE) ESG Score (2024): 69 Market Cap as of February 16: $28.24 billion CBRE Group, Inc. (NYSE:CBRE) is a leading real estate and investment company. It specializes in commercial real estate services, asset service research and consulting, valuation and advisory, and industrial services. The company provides services such as Zero from CBRE, dedicated to helping businesses achieve their sustainability goals by providing green leasing, decarbonization, supply chain consultation, renewable energy, and sustainability reporting solutions. The company has an ESG score of 69. As of February 16, the company has a market cap of $28.24 billion. CBRE Group, Inc. (NYSE:CBRE) is ranked 14th on our list of the most sustainable companies in the US. 13. Biogen Inc. (NASDAQ:BIIB) ESG Score (2024): 69 Market Cap as of February 16: $31.84 billion Biogen Inc. (NASDAQ:BIIB) is a leading biotech research company. The company works on the discovery and development of innovative therapies. As of February 16, the company has a market cap of $31.84 billion. Biogen Inc. (NASDAQ:BIIB) is continuously integrating sustainability into its operations. The company has sustained 100% renewable electricity since 2014. The company is actively assessing pathways to decarbonize its key facilities. It has achieved a 42% reduction in emissions and 33% in waste production. The company has a women-representation of 47% in senior positions. It has an ESG score of 69 and is ranked 13th on our list. 12. Moody’s Corporation (NYSE:MCO) ESG Score (2024): 70 Market Cap as of February 16: $67.82 billion Headquartered in New York, Moody’s Corporation (NYSE:MCO) is a leading financial services company, providing integrated risk assessment services. As of February 16, the company has a market cap of $67.82 billion. Moody’s Corporation (NYSE:MCO) categorizes its sustainability goals as better lives, better business, and better solutions. The company aims to reduce its Scope 1 and Scope 2 emissions by 50% and Scope 3 by 15%. As of 2022, the company is exceeding its targets. Moody’s Corporation (NYSE:MCO) has taken substantial steps towards its goal of net-zero emissions. Since 2020, the company is relying on 100% renewable electricity. It is ranked 12th on our list of the most sustainable companies in the US. 11. Jones Lang LaSalle Incorporated (NYSE:JLL) ESG Score (2024): 71 Market Cap as of February 16: $8.98 billion Jones Lang LaSalle Incorporated (NYSE:JLL) is ranked on our list of the most sustainable companies in the US. The real estate company specializes in investment, corporate solutions, capital markets, sustainable property, and commercial property. Jones Lang LaSalle Incorporated (NYSE:JLL) demonstrates its commitment to sustainability on various fronts. It achieved a 34% reduction in its office emissions in 2022. Moreover, the company is on track to achieve 100% certified green buildings. The company has an ESG score of 71. 10. American Airlines Group Inc. (NASDAQ:AAL) ESG Score (2024): 72 Market Cap as of February 16: $9.58 billion American Airlines Group Inc. (NASDAQ:AAL) is a leading airline and aviation company, specializing in travel, cargo, aviation, aerospace, technology, and flight. The company has a market cap of $9.58 billion, as of February 16. American Airlines Group Inc. (NASDAQ:AAL) aims for net-zero GHG emissions by 2050, with a 45% reduction in GHG intensity by 2035 compared to 2019 levels. The company is taking significant measures to reach its target. It has already achieved a 50 million gallon reduction in jet fuel, saving 480,000 tonnes of CO2. The company strives to expand its renewable energy to 2.5 million gigajoules by 2025. The progress made by the company signifies its commitment to its ESG and sustainability goals. 9. S&P Global Inc. (NYSE:SPGI) ESG Score (2024): 73 Market Cap as of February 16: $133.04 billion S&P Global Inc. (NYSE:SPGI) is one of the leading financial services companies, specializing in analytics, credit ratings, market analysis, commodities, portfolio, enterprise risk solutions, sustainable finance, and ESG. As of February 16, the company has a market cap of $133.04 billion. The company has integrated sustainability into its core values. It provides ESG analysis for companies. Moreover, the company actively supports local communities and organizations all over the world. In 2022, S&P Global Inc. (NYSE:SPGI) dedicated 20,000 services to local communities, creating a positive impact in 50 cities globally. The company also donated $4 million to over 2,600 organizations worldwide. The company has an ESG score of 73. 8. Ecolab Inc. (NYSE:ECL) ESG Score (2024): 74 Market Cap as of February 16: $61.41 billion Ecolab Inc. (NYSE:ECL) is a chemical manufacturing company, specializing in water, hygiene, and infection prevention solutions. As of February 16, it boasts a market cap of $61.41 billion. The company has an ESG score of 74. The company updated its internal sustainability policies in 2021, to promote product stewardship and provide scientific evidence on the use of chemicals in its products. In 2022, Ecolab Inc. (NYSE:ECL) reduced its high-concern substances by 3% and pledged to decrease it further in the coming years. 7. Abbott Laboratories (NYSE:ABT) ESG Score (2024): 75 Market Cap as of February 16: $197.92 billion Abbott Laboratories (NYSE:ABT) is a leading medical device company in the US. The company boasts a market cap of $197.92 billion, as of February 16. The company has defined sustainability as shaping the healthcare future and creating a long-term impact for its customers. With an ESG score of 75, Abbott Laboratories (NYSE:ABT) aims to design accessible and affordable technologies and products to enhance the lives of over 4 billion people by 2030. It is ranked 7th on our list. 6. HP Inc. (NYSE:HPQ) ESG Score (2024): 76 Market Cap as of February 16: $28.32 billion HP Inc. (NYSE:HPQ) is ranked 6th on our list of the most sustainable companies in the US. The company provides a comprehensive range of products including personal systems, 3D printing solutions, and printers. As of February 16, the company boasts a market cap of $28.32 billion. The company has an ESG score of 76. HP Inc. (NYSE:HPQ) has created a significant impact over the years. It has partnered with environmental conservation organizations such as WWF, Arbon Day Foundation, and Conservation International to plant over 200 million trees. The company has empowered small businesses in the US by spending a total of $423 million, with $86 million for minority-owned businesses and $115.1 million for women-owned businesses. The company fosters digital equity in the US, Nigeria, and India, by training over 7.4 million students and teachers. Click to continue reading 5 Most Sustainable Companies in the US. Suggested Articles: 30 Unhappiest Countries In The World Top 15 Electric Bike Brands According to Reddit 30 Highest-Grossing Media Franchises of All Time Disclosure: None. 20 Most Sustainable Companies in the US is originally published at Insider Monkey......»»
25 Coldest Cities In the World
In this post, we list and discuss the 25 Coldest Cities In the World. If you would like to skip our discussion of the global climate and temperature, you can go directly to 10 Coldest Cities In the World. According to NASA’s Goddard Institute for Space Studies (GISS) scientists, the Earth’s temperature has increased by […] In this post, we list and discuss the 25 Coldest Cities In the World. If you would like to skip our discussion of the global climate and temperature, you can go directly to 10 Coldest Cities In the World. According to NASA’s Goddard Institute for Space Studies (GISS) scientists, the Earth’s temperature has increased by at least 1.1° Celsius (1.9 °F) since 1880. Over 144 years, a 1 °C change may seem small — a 1 °C change in a country or city’s temperature is merely noticeable. Despite the rise in global temperature and global warming happening for over a century, there are some places on Earth so cold that habituating them is impossible for humans. The AGU’s geophysical research finds that the East Antarctic Plateau regularly reached snow surface temperatures of −98 °C and below between 2004 to 2016. Living in such harsh weather conditions, especially in winter, is unbearable for ordinary civilians. During Summer, however, up to 5,000 scientists and researchers live in the East Antarctic Plateau. The number drops to 1000 in winter. There are also some permanently inhabited places where the temperature often falls drastically below the freezing point. Oymyakon, a small village in Russia, is the coldest inhabited place where the temperature touches −71.2 °C (−96.2 °F). The village has a population of around 500 people. Does the presence of these places nullify the existence of Global Warming? No. Over time, the term Global Warming has been used interchangeably with Climate Change. However, in essence, Climate Change is the umbrella term under which Global Warming resides. According to scientists, Global Warming is causing Arctic regions to warm up four times faster than the rest of the planet. As a result, the band of air that circles the Arctic and keeps the Arctic air restricted within the northern regions – the polar jet stream – is weakening and allowing frigid air to escape more easily into the South. A 2017 study by Nature Geoscience concluded that due to this phenomenon, North America will see harsher winters in the future. Another study conducted by Nature Communications in March 2018 concluded the same but also added that the northeastern portion of the U.S. will face the harshest impact. (See: 25 Coldest Cities in the US) All in all, there is a blatantly evident link between Global Warming, Climate Change, and the rise and fall of global temperatures. Scientists predict that by 2100, extreme and deadly weather conditions will see an increase of 50%. Countries like Russia, Canada, and Norway often experience harsh weather conditions in winter, with frigid temperatures, strong winds, and heavy snowfall. For citizens and visitors alike, these situations can get extremely difficult to endure. Moreover, snow and icy roads combined with harsh cold winds pose significant driving hazards, which, as a result, negatively affect a country’s economy and disrupt logistic activities. Logistic activities usually come to a halt in places with harsh weather conditions, such as the northern region of Canada. The 2024 winter season has been extremely harsh in Northern Ontario, Canada, which has threatened the winter road system in the region, according to CBC reports. Winter roads are seasonal roads built every year on land and frozen sea, which are then used as an alternative means of transportation during winter. Note that these roads are extremely difficult to build in harsh cold weather, but at the same time, they are extremely important for the locals to engage in economic activities. During winter, costs for many essentials rise, such as gas and electricity. Business activities are also often forced to slow down in winter due to lower demand from consumers or infrastructural damage such as pipe bursts or power outages. During January, Des Moines in Iowa experienced a record-breaking cold that caused an electricity outage, leaving 85,000 homes and businesses without power, Guardian News reports. However, not all businesses stumble in cold climates. Some businesses, such as snow removal services, ski rentals and resorts, and electric heater manufacturers, survive and thrive in cold climates. Some examples of the leading Winter season companies include Vail Resorts (NYSE: MTN), Watsco (NYSE: WSO), and Columbia Sportswear (Nasdaq: COLM). Vail Resorts (NYSE: MTN) is a leader in the ski industry, owning 41 resorts across four countries, including the US. Unfortunately, climate change has threatened the ski industry, and Vail Resorts has experienced the impact. According to EPA, 57% of stations across the country observed a decrease in total snowfall since widespread observations became available in 1930. To achieve sustainability and protect the climate, Vail Resorts (NYSE: MTN) committed in 2017 to achieving a zero net operating footprint by 2030. Columbia Sportswear (Nasdaq: COLM) a leading company in winter apparel and ski equipment, has also suffered dramatically due to Climate Change. The company’s CEO, Timothy Boyle, said that warm winters have affected their fourth quarter’s sales. According to NOAA, the northern tier and much of the far West of the US experienced warmer-than-average temperatures in winter. On the other hand, we have Watsco (NYSE: WSO). The company is headquartered in Miami, Florida, and is a heating, air conditioning, and refrigeration equipment distributor in the US, Canada, Mexico, and Puerto Rico. The demand for Watsco (NYSE: WSO) heating equipment is often highest in the first and fourth quarters, which happen to be winter selling seasons in the US. Li Hui Chen/Shutterstock.com Our Methodology For our list of the coldest cities in the world, we have analyzed habitable places that experience the lowest temperatures during Winter. We have sourced our data on temperature, weather, and climate from Weather Atlas and Accu Weather. To compile the list, we shortlisted the cities that had experienced significantly lower temperatures than the rest of the world, going as low as 64 °C in the lowest temperature ever recorded metric. The list is in ascending order, going from cold to coldest cities. 25 Coldest Cities In the World 25. Anchorage, USA February average temperature in °C: -9.3 Lowest temperature ever recorded (in °C): -31.4 Anchorage is the largest city located in the state of Alaska in the USA. It falls under the subarctic climate zone and faces extreme winters. Overall, it has extremely dynamic and variable weather conditions owing to its geographical position – at the merging point of maritime and continental climates. The coldest month of the year in Anchorage is December, and temperatures fall as low as -10.5 °C. In summer, temperatures peak only up to 16.6 °C. In February, the temperatures increase slightly more than in January but remain subzero, falling as low as -9.3 °C during nighttime. The lowest temperature ever recorded in Anchorage was -31.4 °C. 24. Vladivostok, Russia February average temperature in °C: -10.6 Lowest temperature ever recorded (in °C): -31.4 On number 24, we have Vladivostok, a port city in Russia where winter lasts for five months: November, December, January, February, and March. The lowest temperature ever recorded in this city was -31.4 °C. As of February 2024, the average temperature recorded for Vladivostok is -10.6 °C. 23. Nuuk, Greenland February average temperature in °C: -10.7 Lowest temperature ever recorded (in °C): -36.2 Known for its polar climate, Nuuk is famously known as the northernmost capital in the world. Wintertime in Nuuk is freezing, windy, and snowy, and the lowest temperature ever recorded here was -36.2 °C. As of February 2024, the average temperature recorded for the city is -10.7 °C. 22. Golmud, China February average temperature in °C: -11.6 Lowest temperature ever recorded (in °C): -33.6 Golmud, the second biggest city in Qinghai province of China, has long, harsh, and extremely cold winters. The lowest temperature ever recorded in Golmud was -33.6 °C, and the coldest months in this city are December, January, and February. As of February 2024, the average temperature recorded for Golmud, China is -11.6 °C. 21. Valdez, USA February average temperature in °C: -12 Lowest temperature ever recorded (in °C): -31 Valdez is a city in Alaska, USA, with a subarctic climate. The city faces severe winters and cool summers, with no dry season. The highest that the temperature peaks in Valdez is 11.8 °C in July. Throughout the rest of the year, the city sees fluctuation in temperature, falling as low as -12.2 °C in January. Winters in Valdez are extreme, and the temperatures drop to -7.8 °C in December, and -6.7 °C in February. The lowest temperature ever recorded for this city was -31 °C. As of February 2024, the average temperature for Valdez during the month has been -12 °C. 20. Lapland, Finland February average temperature in °C: -13 Lowest temperature ever recorded (in °C): -51.5 Lapland is a city in Finland’s northernmost region. Winter is the longest season in this city and lasts around 200 days. February in Lapland is the coldest month of the year. On January 28th, 1999, the temperature in Lapland’s municipality Kittilä, dropped to -51.5 °C, marking the lowest temperature ever recorded in the city. As of February 2024, the average temperature recorded in Lapland is -13 °C. 19. Urumqi, China February average temperature in °C: -13.7 Lowest temperature ever recorded (in °C): -28 Urumqi is the second largest city in China’s northwestern interior. While February shows a subtle transition from the harshness of cold weather compared to January, the winter chill is still quite dominant during February. Winters in Urumqi last for over five months — from November to April. In this city, the lowest temperature ever recorded was -28 °C. As of February 2024, the average temperature recorded for the city is -13.7 °C. 18. Edmonton, Canada February average temperature in °C: -15.1 Lowest temperature ever recorded (in °C): -49.4 Edmonton is the fifth largest city in Canada and experiences harsh Winters every year. In February, Edmonton experiences high levels of snowfall, and the daylight hours in the city slowly begin to increase, too. The lowest temperature ever recorded in the city was -49.4 °C on January 19 and 21, 1886. As of February 2024, the average temperature recorded for the month in Edmonton is -15.1 °C. 17. Kronayarsk, Russia February average temperature in °C: -15.1 Lowest temperature ever recorded (in °C): -52.8 Kronayarsk is a Russian city situated along the Yenisey River in Siberia. It is the second-largest city in the region. It has a Dfc Köppen climate classification and a dominant subarctic climate. It faces severe Winters, cool summers, and no dry season. The lowest temperature ever recorded in Kronayarsk was -52.8 °C. In February 2024, the average temperature recorded in the month was -15.1 °C. 16. International Falls, USA February average temperature in °C: -16.8 Lowest temperature ever recorded (in °C): -48.3 International Falls is also known as the Icebox of America due to its temperatures being frequently the lowest in the 48 contiguous states during winters. The winter season in International Falls is usually cloudy, frigid, and snowy, and the lowest temperature ever recorded for the city stands at -48.3 °C. As of February 2024, the average temperature of the city is -16.8 °C. 15. Winnipeg, Canada February average temperature in °C: -17.8 Lowest temperature ever recorded (in °C): -48 Winnipeg is the capital city of the Canadian province of Manitoba. The winter weather in this city is fierce and comes with heavy snowfall and windchill. January in Winnipeg is the coldest month of the year, with temperatures falling as low as 18.5 °C. Daylight hours are shortened as well, going as low as only 8.2 hours in December. The lowest temperature ever recorded for Winnipeg stands at -48 °C today. As of February 2024, the average temperature of this city is recorded to be -17.8 °C. 14. Saskatoon, Canada February average temperature in °C: -17.8 Lowest temperature ever recorded (in °C): -50 Next on the list of coldest cities in the world, is Saskatoon, a growing and friendly city located in Saskatchewan, Canada. As of February 2024, the average temperature recorded for this city is around -17.8 °C. During winter, the temperature remains below freezing even during the daytime. On February 1, 1893, Saskatoon experienced the lowest temperature ever recorded in the city’s history: −50.0 °C. 13. Astana, Kazakhstan February average temperature in °C: -18 Lowest temperature ever recorded (in °C): -51.6 Astana, the capital of Kazakhstan, is the second-coldest national capital in the world. Astana sees some of the harshest winters, with the temperatures being the lowest between December and February. Compared to December and January, February is somewhat less cold, with an average temperature of -18 °C as of 2024. The lowest temperature ever recorded for Astana, Kazakhstan was -51.6 °C. 12. Whitehorse, Canada February average temperature in °C: -17.4 Lowest temperature ever recorded (in °C): -56.2 Whitehorse is the capital city of the Yukon territory in Canada. It lies in the Subarctic and Subalpine zone, going through sharp temperature fluctuations. The highest temperatures in the city are observed in July, reaching up to 17.8 °C. On the other hand, the lowest temperatures are observed in January, falling as low as -17.5 °C. Overall, the winter season in Whitehorse lasts from November to March. During the season, daylight hours are minimal too, shortening to as little as 5.8 hours in December. In February, the temperatures generally increase slightly more than in January. However, the opposite has been the case in February 2024, with the average temperature being -17.4 °C. The lowest temperature ever recorded in this city was -56.2 °C. 11. Fairbanks, USA February average temperature in °C: -19.2 Lowest temperature ever recorded (in °C): -54.4 Ranked eleven, Fairbanks, a city in the state of Alaska in the USA, is known for having breathtaking views of aurora dancing during winter. It has a subarctic climate with long, cold winters lasting for five full months – from November to March. The lowest temperature ever recorded in Fairbanks was -19.2 °C. As of February 2024, the average temperature recorded for the city is -19.2 °C. Click to continue reading and see the 10 Coldest Cities in the World. Suggested articles: Top 50 Coldest Countries In The World 25 Cities with the Best Climate in the World Year Round 25 US Cities with Cleanest Air and Water Disclosure: None. 25 Coldest Cities in the World is originally published on Insider Monkey......»»