All right. We're gonna get started, everyone. Sorry to interrupt. As I said a few minutes ago, thank you so much for coming all the way to visit us here in Mississauga, Ontario, especially those who've traveled from far, especially like Houston, New York, Boston, Minneapolis, Waterloo, San Francisco, downtown Toronto. Thank you. Of course, those who are viewing online, thank you for joining us. This is our inaugural Battery Technology and Analyst Day. I'm very happy to see that it's very well attended. Electrovaya is going to... What we're gonna talk about today is we're gonna go through some of our key technologies, our roadmap, for further development, as well as going into some detail with regards to development of our next-gen solid-state batteries, as well as new applications that the company is looking at targeting. It's not working. I'm sure you've all seen this before. Electrovaya is a publicly listed battery company on the Toronto Stock Exchange and OTCQB. We're also in the midst of a Nasdaq application, which we are optimistic will go through. We're going through a lot of forward-looking statements, we'll take this as read. What is our mission? Electrovaya is front and center in the energy transformation. We are making battery systems and cells which are having a very large impact with reducing greenhouse gas emissions. Every Electrovaya battery actually has a higher impact on GHG than a typical battery used in an electric vehicle. The reason for that is our batteries are being used in very heavy-duty applications, and as a result, we're definitely displacing a higher percentage of GHGs. How are we attacking the energy transition? That's with safer and better batteries. We use those terms carefully. By safer, we have technologies which make our lithium-ion batteries much safer. This revolves around our ceramic separator IP and battery system design, and we believe we have a leg up with regards to safety. We use the word better because we make lithium-ion battery cells and systems which have industry-leading cycle life. They can, what we mean by cycle life is the number of charge discharge cycles you can do on a battery before it reaches end of life. With respect to that, we are about four or five times better than typical lithium-ion batteries. Electrovaya has been in the battery space for two decades, and with that experience comes a lot of wisdom, a lot of technology, and we have well over 100 patents today and personnel in our company who've been with us for that span of time. We've seen this industry, the ups and downs and also the subtleties of battery chemistry and battery systems. We initially were more focused on aerospace applications. That's where we got our start. Around 2009, we started a key focus on electric passenger vehicles, which we were fairly successful with. We had partnerships with Chrysler, we had partnerships with Daimler. The market really wasn't ready for us at that time. As we know, there's really only one electric vehicle manufacturer who really moved things seriously around that time, and that's Tesla. While others were sort of dabbling and now, of course, they're moving after in a big way. During that period of time, Electrovaya had developed a lot of interesting technologies. That's where we developed our pack technology. That's where we had developed our separator technology. We found that our cells were getting performance attributes which were not reflected in the sales price. We were making the world's longest cycle life, highest safety cell, and the buyers of the products wanted us to sell it at the same price of large Asian conglomerates. If we did that, we wouldn't be here today. In 2018, we made a significant pivot as a company, and we moved to a totally different market. We focused all our activities around heavy-duty vehicles. The first being on that list was material handling, the forklifts. We also moved away from a vertically integrated manufacturing setup where we made everything ourselves, and we moved to a asset light model where we manufactured the IP sensitive materials in Japan, and cell assembly was in China, and then battery assembly was in Canada. That served us very well. Now, we're growing very, very quickly. We've doubled revenue pretty much since 2021. We've been doubling revenue every year. Our demand is going up. Also, there's new incentives for domestic manufacturing. For instance, the Inflation Reduction Act, which was recently passed in the U.S., and others are making us re-look at that vertical integration. Electrovaya is building a giga plant in Upstate New York, near Jamestown, New York, specifically. That is going to be front and center of our future expansion. Electrovaya has, as I mentioned, well over 100 patents, so, a lot around ceramic separators and battery systems, and then of course, a huge amount of know-how which may not even be covered in patents. We've been growing quickly. Our team here in Canada has expanded significantly. We're now at about 95 people. Of course, our U.S. expansion is going to be front and center of our further growth. We've been on track to doubling revenue this fiscal year. We're our guidance is $42 million. Last year we did about $20 million, and the year before that we did 11. Very sharp growth over the last few years. That's primarily coming from the material handling sector. You can see here this picture of a warehouse. This is a Fortune 100 e-commerce group using our batteries, and they're using our batteries in multiple distribution centers in the U.S. primarily. What do we make? We make the cells, of course, that's the core technology piece. We put those into battery modules, and primarily what we're selling is a battery system. That's where you've got the modules with a battery management system in a final pack. That's a value add, and we can sell our systems at a higher margin. We have three locations. Two here are in Mississauga, Ontario. The one you're sitting in, for those who are here, is our engineering and headquarters. We do our final battery assembly here. We have another site which is dedicated to the development of solid-state batteries. That's not too far from here. That's our Electrovaya Labs site. Finally, we recently purchased a 52-acre campus in Jamestown, New York, and that will be our gigafactory plant, which will produce everything from cells to packs. That site, we picked it carefully. That site has an existing manufacturing building on it, on the campus, which was previously used for electronic manufacturing. It has a lot of the same infrastructure we need for cell making. As a result, that was a key buying decision, and key site selection, bonus for us. The other advantage of this location is we get very low-cost electricity with hydroelectricity straight from Niagara Falls. Our roadmap here is we'll start with pack assembly towards the end of this year, followed by module assembly in mid-2024. Finally, cell assembly will start in early 2025. Here is just a few more images of the site. It's a pristine site, and will really enable a much quicker, setup for our activities there. Now I'll delve a little bit more into the core technology that we have. We have really two platforms. The first is our Infinity technology platform. This platform revolves around a ceramic separator tech, as well as unique cell assembly and electrolyte and overall cell design. The ultimate benefit here is the cycle life and the safety. This technology is what's what we're driving 100% of our revenue off of, and which our forecasts are all around this. We're targeting heavy-duty vehicles. Initially was material handling. That's now expanding into robotics, AGVs, high-voltage systems for buses and trucks, and energy storage. The second platform, which we'll briefly go through later today, this morning, we made a press release with a quick update with regards to our solid-state batteries. This also revolves around ceramic separators, for which we know a lot about. The main difference here is the ceramic separators serve as the electrolyte as well, and thereby makes this a solid-state battery. As a company, for the Infinity platform, we're not looking at the mainstream automotive market. We're looking at multi-billion dollar heavy-duty vehicle markets. The first, of course, which we targeted was the material handling sector. That was the most mature market at the time, and is also the market where the duty cycle on the battery is heaviest. If you go to your Walmart distribution center or another similar company's distribution center, you'll see that they have vehicles operating in that warehouse nearly 24 hours a day. They're doing multi shifts and those vehicles are, if they're operating efficiently, they're almost never parked. They need a battery which can handle a large number of cycles, they need a battery which can be charged quickly, and they need a battery that's very reliable and safe because they're operating within buildings. Those metrics we hit with spades, and is why we've been so successful in that market. Now, that's not the only market that needs a high cycle life and safety. The next ones that we're looking at, of course, are e-bus, e-truck, and energy storage, which have similar requirements in terms of performance. This is not a complete list, but in 2021 we established a OEM relationship with Raymond Corp. Raymond Corp, for those who don't know, is a subsidiary of Toyota Industries, and they only make electric forklifts. In terms of market share, they're the largest electric forklift manufacturer in North America, and they picked our technology with a significant amount of due diligence prior. That involved third-party testing of cells, involved third-party safety testing, as well as UL certification. Following all those tests and performance metrics, also testing the actual battery systems in the field, Raymond picked Electrovaya as their supplier, and that relationship has really propelled a lot of our growth. It's been very key for our success, and we want to replicate it with other partners, which we're on track to do. Now, the core battery technology initially was featured in passenger vehicles. The ceramic separator is present in about 20,000 smart cars. interesting to note, not a single one of smart cars has had a battery safety incident. In fact, the battery in those cars is outlasting the vehicle. I know Daimler repurposed a lot of them for energy storage activities. Our chairman drives one today, and the battery works extremely well. The core technology is been extremely successful. Also, in about the 6,000 material handling vehicles we've produced, not a single one has had a battery safety incident. The users of the batteries are the Fortune 100 list, the Fortune 500 list primarily. Just looking at the Fortune 100 list, 10% of those companies are using our batteries. If you think about Fortune 100 companies, only a fraction of them will even have warehouses. We have a very significant market share amongst these big corporations. Jumping to the technical aspects. Here is the cycle life. This data here is third-party data. This is data that was recently published by us, and it comes from DNV GL's lab in Rochester, New York. They took three years to produce this data. That's dedication to the team there and of course, our team and our OEM partners who supported this research activity. The data that's been coming out there is we're showing 9,000 cycles. After 9,000 cycles, the battery still has 87% of its initial capacity. Projecting to 14,000 cycles, that is a very large number. How you put that in perspective, we all know your cell phone lasts about two years, maybe two and a half years, before the battery is noticeably less powerful. That's about 1,000 cycles at most. You have a battery system which is doing an order of magnitude higher cycle life count than that. That really makes our technology a very valuable technology for these heavy-duty applications. It also makes the battery essentially a non-depreciating asset. When typically people will buy battery systems, they are depreciating assets. They've got a curve which shows that they have to have a replacement after five, seven years. In our case, we expect these battery systems to outlast the application that they're being placed in. One other test that was done at that third-party lab was a comparison between our cells and the best of the industry, and again, concurred we were significantly superior with regards to cycle life. Also this manifests into the pack level. We looked at packs after four years of operation, now five years of operation, essentially negligible change in the battery capacity. This is after extremely heavy duty use in a warehousing environment with a three-shift operation. Putting this in perspective with respect to miles, if you put this battery into a car that has a range of 250 mi, comparing our cycle life to the best in the industry. Top three supplier from China, top three supplier from Japan, top three supplier from Korea, We have a significant advantage with respect to cycle life. Most of those competitors are very focused on automotive applications, which may not need that type of performance. As I mentioned earlier, there are a host of applications like energy storage, warehousing, buses and trucks, which need to use the vehicles at a much higher level than your passenger EV or your consumer electronics. There is a significant benefit to having this performance. That, one way to look at that is total cost of ownership. Here we've taken a look at a high voltage application, and these are real numbers. We've gotten feedback from the OEM in this case where our pack cost is almost the same as our competitors, but the competitor needs to replace the battery pack at year four, year eight, if that two-cycle duty cycle per day is what they need. That really shows a significant advantage with regards to total cost of ownership. Those who are buying cars, passenger cars or phones, they're not thinking about total cost of ownership. You're thinking about your sticker price. For those so-sophisticated buyers, whether that's a municipality or a Fortune 100 company for a warehouse, they're looking at total cost of ownership in their purchasing decisions. Jumping to safety. Fundamentally, we have a large advantage with regards to safety, and that stems from the ceramic separator. Ceramics, as you know, are stable at high temperature. Typical lithium-ion batteries use polymer-based separators. And while they work well, they allow the ions to pass through, and they keep your plus and your minus apart from one another. They don't work well if they get hot. If your polymer separator gets too hot, it'll shrink. If you have a shrinking separator, you get your plus and your minus touching one another, and then you have what the battery scientists would call a thermal runaway event. Most other people would call that a big fire. With a ceramic separator, you're stable at a much higher temperature. It doesn't necessarily make the cell immune to catching fire, but it greatly enhances the safety. That is also shown at the pack level, where one of the tests that we had to do prior to our relationship with Raymond Corp was a fire propagation test. They did this test at both room temperature and elevated temperature, about 50 degrees Celsius. They purposely put a cell on fire by wrapping it up with igniters. After that test, they found that there was no cell-to-cell propagation in the pack whatsoever. A pass would have been no fire coming out of the pack, and we took it to the next level. The lab said this was the most benign lithium-ion battery fire they'd ever seen. It's a testament to the separator technology. With lithium-ion batteries, you need to have a lot of controls. The majority of our engineers in this building work on battery management systems, and that's the software, hardware which controls both the safety and the operation of the battery. We're adding new features to this BMS with our next generation, which will have significant amounts of IoT features. Data from the battery will be going to the cloud. We'll also be able to control the charge of battery systems remotely, which will allow us to do things like demand response. A lot of extra features that we'll be implementing in our systems going forward. Yesterday, we also announced a higher capacity cell, which is a 52 amp hour cell, which will really come into production in 2024, but has already passed its certifications. We're just starting the manufacturing of that product now. Over the last few years, we've already increased the energy density of our cells by 30%, and we have a roadmap to further increasing that in 2026 with another three cells which are currently in development. We have a LFP platform which will be directed more at the energy storage market. We have even higher energy density cells for those applications that need higher energy density. Looking at the cell tech versus the competition. With regards to energy density, we're very similar. However, we massively outperform with respect to cycle life and safety and even on power density, because we can withstand higher temperatures in our cells. That, of course, leads to the lower total cost of ownership. 2023, today we have over 40 battery models for material handling. We're also supplying batteries for AGV applications. That's a segment which is growing quickly. Later this year, we'll launch our high voltage packs, which are optimized for bus, truck, and energy storage applications. Next year, we're further expanding the material handling footprint with our next gen systems, which have further improvements, additional models, of course. Also we're looking at expanding into additional AGV equipment and smaller forklifts. We're going to be expanding our market share in this segment. Finally, we're also looking at some new applications such as fuel cell hybrids and even airport ground equipment. I'll briefly touch on the solid-state battery platform. Why are solid-state batteries even interesting is they offer significantly higher energy density. Energy density of our Infinity platform is similar to typical NMC-based batteries at around that 200-250 Wh per kg mark. A solid-state battery takes it to about 350-400 Wh per kg and on a volume basis, even a higher percentage increase. It potentially could double the range of your electric vehicle or half the weight of your battery system, and even enables new applications such as electric aircraft or improving other consumer electronics and drone applications. It's a very interesting thing to develop, and is often referred to the holy grail of battery technology. Now, to date, no one has really commercialized a solid-state battery. There are companies who are working on it, and we're one of those companies. What are the challenges with solid-state batteries? Of course, the biggest one, of course, is getting a separator to work as your electrolyte. That solid electrolyte interface is the biggest problem, and that's an area that Electrovaya has been making ceramic separators for years. We know a thing or two about that. We're optimistic that we're going down a good route with regards to the separator. The other challenges, of course, are manufacturing. It's one thing to make a solid-state battery in the lab and another to scale it up for real-life applications. That's also been a challenge in the industry. Again, our team, led by Sankar, is very focused on only utilizing methods which are manufacturable. This is our current ceramic separator, which is used in our Infinity products. Use of a ceramic separator is difficult. We initially said, "Oh, let's try to get other battery companies to use this product." It requires nuances with regards to cell assembly processes and other steps. We found we could do it with modifications to our manufacturing, but it's not that easy. This is a core advantage that we have with regards to solid-state batteries, is the know-how in making ceramic separators and the use of them. Another key advantage we have is we have technology around making thick or high loaded cathodes. If you're making a solid-state battery, you're essentially replacing the graphite electrode with lithium metal, and you're improving the energy density of that electrode by a factor of 10. If you're doing that, you need to do something on your other electrode, which is the positive electrode or cathode. There, the main way of doing that is to make it thicker. We have a coating technology advantage here with our NMP-free coating technology, which allows us to make high loaded thick cathode materials to match the lithium metal. The cell design that we're working on uses the, that coating process to make your high loaded thick cathode, combined with our proprietary ceramic composite separator. Currently, we're already producing cells with six layers of stacks. We're also producing the ceramic material in-house. We have a proprietary formulation for that ceramic material and making the separator as well and of course, the final cell. It's still too early for us to sample these cells out, but we're not too far. We're targeting late 2023 for initial samples to some valued high-performance vehicle and other types of applications that are interested in this technology. I'll let John talk a little bit more about the financial blue sky as well as our plans on in Jamestown, New York. As Raj mentioned, what we really wanted to do with this part of the presentation was just to give a little bit more color on the Jamestown plants, what we're looking to do there, our timeline. We've talked a lot about, you know, we're gonna go from just Mississauga to two plants, and it's gonna be 300 MWh, and we've got about 600 MWh and 1 GWh. What does that mean from not only an operational standpoint, but from a financial standpoint as well? Raj mentioned earlier, the pack and assembly testing will start within Jamestown, which in our fiscal Q1, which is October this year. What that will do is it'll augment our capacity within Mississauga. We're not gonna slow down here, but we're going to get to a point where we can't easily scale or quickly scale, so we'll be able to utilize the capacity within Jamestown to increase our output and in turn, increase our revenue. Module assembly will go live in the second half of 2024. Then, as we mentioned previously, cell assembly at the start of 2025. This is really just a factor of the time it's gonna take to get all the equipment into the building commissioned and everything up and running as we, as we start up the process. When it comes to expansion, we've got a couple of options. What we wanna do is we wanna expand based on our demand, so we don't want to build a multi-gigawatt battery if we're gonna leave it at 10% capacity. From 26 to 27, obviously, depending on the order volume that we're receiving, we'll increase the size of the plant to between, somewhere between 600 MWh and a gigawatt. As that demand keeps increasing, we will scale up again to multi-gigawatt. The initial operations will mirror what we do in Mississauga. It's very easy for us to do that. Very little CapEx is required to actually do this. Some cyclers, cranes, no major equipment will be added to the facility just to get batteries out the door. Increasing our overall capacity, and I'll touch on that shortly. One other benefit of manufacturing within Jamestown is the IRA cash rebates. Initially, until we have our cell lines up and running, we'll be able to take advantage of the module benefit, which is $10 per kWh on the modules and $35 per kWh on cells. If we were running at the initial 300 MWh capacity, that translates into about $30.5 million that comes back into our hands, which, if you bring that into the gross margin, increases it quite significantly. Reshoring the cell production into Jamestown will also increase our margins by approximately 3%-5%. We're looking at going, if you take the IRA into account, from where we are right now to well into the 30s for gross margin standpoint. What we're also given, with Jamestown is the opportunity to expand our horizons in terms of what revenues we can go after. We're limited from a capacity standpoint here. We cannot juggle too many different types of batteries. Material handling has really been our focus. We don't have the room or the manpower really to also concentrate on high voltage bus and truck batteries or energy storage. With Jamestown, that will allow us to then move into those sectors very easily. I mentioned at the top, we do want to remain flexible. We don't want to, you know, bite off more than we can chew, and we'll scale ourselves as demand comes in. This gives you a kind of idea on the revenue standpoint. If we're starting at 300 MWh, we add on the potential max capacity out of Mississauga of approximately 100 MWh. That would be between $150 million and $200 million now. Obviously, those are the max capacity. We're operating as efficiently as we can. We have no downtime. You know, the orders are there. That's what we can expect to see. Similarly, when we go between 600 MWh and 1 GW, you can scale that up from $450 million- $750 million, and multi-gigawatt would be well over $1 billion. This is obviously product mix dependent, and market dependent. Obviously depending on where we are going with the orders coming in and what market we're attacking at the time, these numbers will obviously vary. These are the max dollar values we can expect to see going forward. What we've got here is we did a case study on current market demand, where we see the market demand going, where our customers and our OEM partners see the market going. Right now we're seeing roughly 5%-10% adoption of lithium-ion batteries within material handling. This is only material handling. Next year is gonna increase to 12%-15%. '2025 to '2027, increasing up to 50%. What does that mean from a dollar point of view? What we did is we looked at one of our OEM's productions, extrapolated that down. If we move to... Currently, we're seeing about 3,000 units, which would be the 5%-10%. If we move that up to 12%-15%, what does that mean for revenue? That's 4,200 units at $70 million a year. Again, 20%, 30%, 50%, up to 15,000 units, which is $200 million a year. That's really where we see the market in material handling. Now, we're not saying that we're gonna receive all these orders or that we could de-deliver on all these orders. That's just a significant amount of batteries to go out the door. That's where we're seeing the market go. It's quickly increasing and we're gonna scale with this demand coming in. Why is it going up so quickly? There's restrictions on gas-powered trucks operating indoors, so you're gonna see propane trucks phasing out. Stricter emission standards. There's greater understanding of safety and lower life cycle costs. That brings us on to from material handling to the other, our other offerings, e-buses, trucks, energy storage. Currently, there's about a 15% adoption rate within e-buses. This is expected to increase to roughly 50% by 2025, helped obviously by the incentives that are being offered within U.S. and Canada for manufacturers to move this way. If we, if we were talking to one OEM, bus OEM who produced roughly 1,000 buses a year, once we get to the 50%, obviously that's 500 buses, that would represent about $100 million a year in revenue for the company that wins that contract. It's a lucrative market to move into. In those kind of cases it's more of a volume game than a margin game, but we're definitely now gonna see more to a $100 million contract that $20 million-$25 million. This is a photo of the high voltage lift. Same as the one we have downstairs when we go on a tour for people that are here, you'll see that in operation. This would be the same kind of thing we would set up within Jamestown, just on a much larger scale. Yeah. So, in conclusion, Electrovaya. It's very well-posed to do extremely well. On the financial side, we're already breaking even. We're only gonna increase our output. We're looking at markets which will pay a good premium for our better battery. We're also looking at additional revenue streams, which we didn't mention here. For instance, we're starting to look at some... Like, if we had all the money in the world, you wouldn't wanna sell a battery that doesn't degrade, right? You'd want to rent it or lease it, and we're starting to see some interest in that. We're already renting batteries to our two largest end users at a small degree, but that's something that we'd like to see expanded. The margin potential with respect to that is ginormous. We're also looking at looking at that rental model, looking at renting batteries during peak periods, so these Fortune 100 companies for their peak season, and in the downtime, use those same assets for energy storage activities. We're doing a pilot with a company called Jupiter Power, who's one of the largest energy storage developers and owned by BlackRock, on a feasibility study to do that. We're gonna look at taking some of our rental fleet and using them in the downtime as energy storage assets. That's something that we if successful, we can expand significantly. The other things we're looking at are value adds with regards to data analytics. We're already starting to sell data analytics to some of our key customers, and that's something we'd like to expand. Finally, things like demand response. That's something that could be quite valuable going forward. We're very excited with what's happening to the industry and us as a company, and we're well-posed to continue our growth trajectory. With that, we'll start to take some Q&A. I think, I'm gonna mute this one. Yes. We'll first start with Q&A from the phone. Go back to slide. 85% of different chemistry, or is it 15% of all buses- Okay, thanks very much. Maybe we'll try unmuting that again. On this. Okay, let's give it a try. Yeah, we'll give it another go. If you're as long-term on the potential to rent it, I mean, as you're seeing in other markets where third parties will come in, they'll own the battery, like in the school bus market. Is that something that is a possibility going forward where, you know, maybe it's not on your balance sheet at first, it's on someone else's balance sheet, but you also benefit from a margin perspective? We're looking at exactly, like, some scenarios like that. One scenario is, which could really dramatically increase the adoption is the leasing side of things. Currently, we're working with very conservative OEM partners, right? They need core. In their leasing model, they have a certain residual value for the battery systems after six or seven years. Five, six, seven years. Those are the typical lease periods. If that residual value hits about 40%, which we think is something that we would potentially collaborate with them on. You know, maybe we would get a stake of the residual battery if it comes back. In that case, the cost to the end user comes lower than the lead acid battery cost per year. It would be a no-brainer to adopt the technology. At the same time, it offers us an additional revenue stream. That's one potential thing that we're looking at. The other is exactly what you're describing, Eric, which would be almost like a special purpose vehicle where we have a stake in a, that owns battery assets and rents it or uses them as energy storage. That's another model we're also looking at with some potential partners. Again, the company's core focus, which is currently the case and will be the case next year at least as well, is selling battery systems and just producing more and selling more kind of. That's the core business. Going back to the technology. What is it that makes the cycle life so low, so many cycles? Is it integrated with the ceramic separator coatings? Yeah. Part two of that question is, does it translate to the solid-state batteries and increase cycle life? Thank you. A good question. On the, on the, keep to the, keep it green. On the solid-state batteries, I'll start with the cycle life. The cycle life stems really from a variety of fixes. The ceramic separator is just part of it. Just by putting a ceramic separator in your lithium-ion cell, you're not gonna get better cycling. However, we do take advantage of it. I'm not gonna get into all the details, but ceramic separators are stable at high temperature, they're stable with other chemicals. We have taken that and, taken advantage of that. We're using unique electrolytes. We're using unique cell assembly methods. And when you take all those things combined, you get this benefit with regards to cycling. On the solid-state batteries, the target is not to get anywhere near the same number of cycles. If we get 500, 800 cycles, I think that's a commercializable product. However, the ceramic separator, of course, is core to achieving that. When you use liquid electrolytes, they may work for a few cycles, but they break down, and a solid ceramic separator is really what's required to get the long cycle. Just, you know, to add to that question. Maybe the market wasn't ready for these long cycle batteries. Now that everything is using these batteries, how are you seeing sort of demand, conversation with customers changing given these advantages? Yeah, great question. I'll use the bus as a good example. The bus segment started electrification just two years ago. When they looked at it, essentially, it's new to them, they just were looking for the battery supplier to provide the battery at the lowest cost. They're not looking at total cost of ownership. They're just looking for a name brand battery supplier which can meet their cost targets. You're looking a few years into it, there have been some safety issues, high-profile safety issues in Paris and Connecticut and some other places. Safety is now, "Oh, we need a battery that's safer." And also we've heard from one of the OEMs that the batteries that they have in the field are degrading. Performance is degrading. Suddenly they're thinking, "Oh, cycle life is important. We're on the hook for these warranties." They want the warranties of the batteries to match the bus. Again, that having some negative experiences is what's waking up to the fact that they want a safer, longer cycling battery. The very start of things, I think that was a harder sell. On the e-bus and truck side, you're talking to OEM already. Maybe how to think about just cycle time in terms of getting specced in on new models. Do they wanna see the new manufacturing facility? Do you align it with as that production ramps? It's a long process to get an OEM or, you know, a good OEM partner. For the bus segment, they do wanna see U.S. production. They wanna see that you can meet Buy America requirements, et cetera. That's a key decision point for them. Also, of course, it takes two years to spec in a battery for production. There's a lot of development that goes with it, both on the hardware and software side. It's a long process, but one that I think works well with us. When we initially looked at this market two, maybe two years ago, the OEMs had a very firm view on pricing, and that's what they were looking for, and that's why we stayed away from the market for the most part for the last two years. That's changing, that's why it's now looks very attractive for us. The market's expanding, and it's a good time to get in. Are you already down that road on that two years to get specced in? I mean, it sounds like you're fairly advanced in some of the discussions that you're having. We are fairly advanced at some of those discussions. We haven't gotten green-lighted yet. When we do, of course, we'll make a big splash about it. We're confident we will have some wins in the sec. On the material handling front, is Raymond your primary and only OEM, and then, the aftermarket conversion? Raymond is not our only OEM partner in the material handling side of things. However, the only one we really name. If you went to ProMat in March, you would have seen our batteries not just powering Raymond vehicles. They were powering other Toyota branded, Toyota related companies like Bastian Solutions, who's owned by Toyota. If you do your own digging, you probably will be able to figure out who else we're supplying in that sector. What was the second part of it? Are you looking at other aftermarket? The majority of the sales are going into new vehicles. That said, there's some customers who have a mixed new and existing vehicles, and we're outfitting those existing vehicles as well. It's a bit of a mixture. Maybe it's 75, 25. Just another technical question. on the solid-state front, because you are increasing the size of the battery so much, are you, and the size of the battery facing any other issues that would be, safety related? I think it's too early to say. You know, we believe, it's gonna be a very high energy density battery. The more energy you put in a small space, the more potential energy you have, right? For a problem. That said, we're removing liquids. We're at ceramic separator. We're optimistic that not to say, It should be a commercializable product. Just on the safety, because we are adding the, what I would call the internal part in an oxide matrix, I don't see any increase in safety in a solid-state battery. There's no lithium in it. It's all about lithium. So it seems like- Sort of directional. Right. It seems like in material handling, if the end of the sector or industry requires batteries that require high cycle, what other applications would require batteries that require high cycles, and the provided batteries have comparative observation? I'll go through a couple of those. First of all, the bus segment. The bus segment, they're doing at least one cycle per day on an electric bus, sometimes two cycles per day. That would also fit into that high cycle requirement. It's also you're looking for a battery to match the life of the vehicle. The typical bus sale for your transit buses, they sell the bus with everything in it, and they give the municipality a 12-year warranty with service costs, et cetera. They want it to last 12- 16 years. With a traditional lithium-ion battery, it's not gonna last 12- 16 years. In our case, it will. That's a key selling factor for our technology. The another application which we believe is a good fit is energy storage. Energy storage is a rapidly growing segment with lots of flavors. Like, if you look at Texas, they have two peaks in a day. They have a lot of wind, a lot of solar. You really need, if the storage systems really should be doing two cycles per day if they're installed in that type of market. Again, energy storage is gonna be very important, and cycle life is gonna be a key selling factor in that segment. On the IRA benefits front, since we probably will get much higher gross margins than what John mentioned, was that number 30s%, blended number or was it requested? It's essentially a blended, depending on, you know, the battery model that we're selling. There's always gonna be a mix in there. Some battery models have a slightly higher growth margin than others. We just kinda flatten the curve a little bit, add in the benefit of the reshoring cells, plus the IRA takes us into, like, the mid to high thirties range. it's blended for U.S. markets or produced in U.S.? Yes. Yeah. We think, you know, margins are gonna be a little higher in material handling than they would be on bus. Yes. That... We're being conservative. We think without the U.S. plant and without our IRA benefit, we should be able to get to 30% with the current applications and the current production process. The IRA gives you an extra five to seven points on that. The material handling market, I guess just in general, it's there are a lot of smaller players. How do you think that evolve, shakes out over time? In terms of OEMs and multi-sourcing and, you know, how many vendors they'll want? Yeah. Look, it's, the segment is diverse, right? You've got a diversity. You've got the Fortune 500 customers, the Fortune 100 customers who are using those vehicles a lot, they're looking for the best technology for those, for their vehicles. Then you've got the applications, whether they're looking at one shift or not a high utilization, they may be more CapEx focused. There is a, there is space for players to focus on 1 segment or the other. We're definitely focused on the high performance aspects of the market, which we believe is the larger part. That said, this industry is changing rapidly. There's a couple things that are happening. One is the OEMs, traditionally have not gone into the battery side, right? They traditionally just made the forklift, and then the dealer who sells the forklift finds the customer a battery to go with. That's starting to change. The OEMs want to get into that. Us having OEM relationships is really gonna help us in the long term. The second thing that's happening is the vehicles themselves are probably going to change. First of all, they're gonna be automated. The amount of driver vehicles is dropping and levels of automation are going up. When you have a higher level of automation, that vehicle's cost goes up quite significantly, you wanna utilize that vehicle more. You're gonna want a better battery for that purposes. That's one thing that's happening. The second thing that's happening is the OEMs who are developing those vehicles or just vehicles in general, are starting to look at designing in the battery system into the vehicle. They won't be able to be removed from the vehicle. When you go on the tour, you'll see in our prototyping area one of those batteries. And what about on the dealer side? Is there any opportunity there? The dealers are important to the OEMs as well, like, you know, energy as a service. Is that, you know, something they could potentially offer or? For sure. We're working with a few dealers on that rental model that we discussed. That said, the dealers themselves, for the most part, are starting to be consolidated, right? Raymond owns the. Nearly all of them. Nearly all of their dealers. Their sister company is starting to acquire the dealerships. How are you guys thinking about building the sales channel? We've kept a very lean sales marketing team. A very tech-focused sales and marketing team. We're very focused on relationships with the big end users. That Fortune 100 list, we're working with some of those companies directly. Because they can buy a lot, we work with them directly, also through the OEM. In the bus segment, the bus segment is control for transit vehicles. There's essentially three big OEMs in that segment which control more than 80% of the market. We just wanna partner with one of those three. There's not a huge amount. Once you win that type of contract, it's not. You have to maintain it, but there's not a lot of direct sale requirements. That's the direction we're headed in. By partnering with major OEMs in the material handling segment or other segments, they already have brick-and-mortar dealership support across the continent and other continents, and to replicate that ourselves would be a huge cost. That's something that we've decided that we don't wanna do for the time being. Between the bus and the storage. Storage is going to be a more faster cycle, we're seeing with that. Do you expect to see any storage related revenue separately through soon? Yeah. We're looking at a few small projects, which will be delivered in 2024. Storage will be there. We bid on a very large project as well with, a development partner, and that's, a project which would be, you know, hundreds of MWh. If we're successful in that type of project, of course, we're gonna have to scale our manufacturing plans further, which we haven't built into our models. Energy storage is a potential game-changing market, which is much larger than we've anticipated. The bus segment is one we feel very excited about because it's a market that is starting to become tech-focused and one where our batteries have a very nice fit. Also one where you can probably get higher margins than the energy storage. Can you frame up the competitive landscape in the bus market? The competitive landscape's changed a lot over the last 12 to 18 months. When we initially looked at this market, and we shied away because essentially there were players who would be subsidizing the battery cost. They'd sell things at negative gross margins, and one of those players has ceased to exist already. Another one is having some issues because of that negative pricing. I think that is going to aid in our capability of coming in with some strength. Do you think that you'll take the same approach as materials handling and be aligned with one bus OEM, or is there the possibility that you would longer term just sell to all three? Potentially. It's hard. It's too early to say. With the material handling segment, we partnered with the largest OEM group, which controls over 50% market share, so we were comfortable with that. It's more than we can handle. On the bus side, we may try to keep it more, less exclusive. Initially, we're definitely targeting one now. The battery management systems, we didn't talk much about that. Henry talked about some of the other cloud-based and, like, demand response kind of services. How do you plan to monetize maybe interface cloud-based? Yeah. I'll let Jeremy talk a little bit more about our-. I missed the last part of the question. Just the BMS systems, monetization of that, in terms of, interfacing with other battery factions even... Yeah. Yeah. One of the systems that we have already commercialized and out in the field is called EVISION. That's battery data in a cloud, essentially. With one of our largest end user, we use that tools to better understand your fleet usage, understand batteries that are underutilized, batteries that are overutilized, trying to balance the workload across the entire fleet. They can also see what kind of energy savings they're seeing from a sustainability point of view. With that system, it's a subscription fee they pay based on unit per month, and they pay for the entire duration of the warranty period. Most of these cases, it's either a six-year or 10-year warranty. That's one way we're monetizing the EVISION system. We're looking at launching the next version of the EVISION system that will have further capabilities such as demand response, so being able to curb charging behaviors during peak season, peak times. You wanna limit charging events during the day when your electricity bills are the most expensive and promote charging at nighttime or even prioritizing charging for low state of charge batteries over high state of charge batteries. Overall, customers wanna be able to pay less but be able to do more. This is where EVISION and the next gen EVISION will come into play. Are you already working on these ideas or these are, like, planned in the future? The current EVISION is already in play. We have customers for that. We are monetizing that right now. The demand response, that's part of the next generation, currently in testing and development. Yeah, we're also looking at potentially licensing this whole system to one of the OEMs that we're working with. They could go instead of saying Electrovaya, it would say OEM name, and they would sell it. Jason, you wanna take some questions from the. Yeah. Oh, yeah. Can you talk briefly about how this Electrovaya sort of started? I guess I'm trying to understand. There's actually no question being said. Okay. Yeah. What proprietary technology the company has that's sort of sustainable? The company has continued to develop technologies over its lifetime. Currently we've filed about four patents over the last 12 months. We're going to accelerate as our solid-state batteries develop. The company is founded by Sankar and James Jacobs. We have core patents on materials. Okay. Core patents on interfaces. We have some good patents on the whole separator side. We have patents on the system design. It's almost across the case we have strong patenting situation. We pioneered a lot of the technology. Mm-hmm. How sensitive are the margins to lithium prices? Is that? That the supplier of the cathode material would be more sensitive to that. They, they lock in prices with us on an annual basis. We did see prices go up quite a bit in 2022, and that was responsible for some reduction in our margins. We also increased pricing. Now we're seeing the opposite take place where we expect cathode prices to reduce. We, so we'll probably see an upside on the margin side. Maybe back to that competitive landscape question. How important is your forklift customer base helping you penetrate, say, energy storage or delivery vehicles? Yeah. Great, great question, James. One of our probably our largest end user is a Fortune 100 company who likes the technology, right? They initially deployed it 2021 with one warehouse, and then they went to six last year. They've asked us to. That's part of the reason we're getting into energy storage. We're looking at some energy storage projects directly with that customer, as well as they've asked us to look at some of these hybrid applications. There's a potential for those relationships to lead to further business and entering new markets. It's definitely a good relationship to have with some of these big companies. What about just near term sort of demand planning? A lot of the OEMs I think are, you know, taking orders out to 2024. How much of a challenge is that with the supply chain with the? Yeah, we're taking orders up to 25, right? Some, some orders that come in, they want delivery ASAP. Some of them are coming for... It's a mix of, mix of everything. Our order intake has been pretty high. Last quarter, we shipped $10 million, ten and a half million dollars worth of battery systems. Order intake was over $29 million. That's the type of, you know, you want them to be a little closer eventually, this is how you grow. You mentioned longer term or maybe 2024, a fuel cell hybrid product. I'm just trying to envision what that is. Is that a range extender or, I mean, as part of a vehicle application or maybe could you discuss that a little? Every fuel cell vehicle or storage system, most of them also have a battery, right? The fuel cells are the range extender, and then the battery is what's connected to the motor or device. Mm-hmm. We're looking at some applications where we would be the battery with someone else's fuel cell. Would that be partnering with someone or? Yeah, it would be partnering with the, in this case, it'd be the fuel cell. OEM. Okay. It wouldn't be near your new plant. Sorry? No. Not necessarily, no. Probably it'd be a different one. Gentlemen, ladies and gentlemen, thank you very much for participating in our presentation today and taking part in the Q&A period. This is formally gonna close this question and answer period. We'd like to thank all those who joined us virtually on the webinar today. Feel free to reach out to myself and or the company if you have any follow-on questions. We wish you a great day. Thank you. Thank you.