Good day. My name is Savannah, and I will be your conference operator for today. At this time, I would like to welcome everyone to the Proterra Third Quarter 2022 Earnings Call. Today's call is being recorded. All lines have been placed on mute to prevent any background noise, and after the speaker's remarks, there will be a question and answer session. If you would like to ask a question during this time, simply press star one on your telephone keypad. If you would like to withdraw your question, please press star one again. Thank you. I would now like to turn the conference over to Proterra's Vice President of Investor Relations, Aaron Chew. Please go ahead. Thank you, operator, and thank you all for joining us for Proterra's Third Quarter 2022 Conference Call. Joining us today from Proterra are our CEO, Gareth Joyce, and our CFO, Karina Padilla. After the markets closed, we published our quarterly letter on our website and in an SEC filing, which we encourage everyone to read for details on our financials and insights into our operating results and strategy, industry dynamics and outlook. During this conference call, we will make statements related to our business and industry that are forward-looking statements under federal securities laws. These statements are not guarantees of future performance. They are subject to a variety of risks and uncertainty. Our actual results could differ materially from expectations reflected in any forward-looking statements. For a discussion of the material risks and other important factors that could affect our actual results, please refer to our SEC filings available on the SEC's website and via the Investor Relations section of our website. Additionally, non-GAAP financial measures will be discussed on today's conference call. A reconciliation of these measures to their most directly comparable GAAP financial measures can be found in today's quarterly letter. We will kick off the call today by introducing our Chief Executive Officer, Gareth Joyce, for his opening remarks. Gareth? Thank you, Aaron, and to everyone for joining us on the call today. Q3 2022 was a breakthrough quarter for Proterra. Not only did we report record quarterly revenue of $96 million, almost 30% above our prior record in Q2 2022, but this was driven by new highs in revenue across both of our business units, along with record production and deliveries at Proterra Transit. As our team works hard to execute while navigating a still challenging supply chain. Beyond our own results, significant progress has been made over the last few months with multiple new U.S. government funding programs supporting our target market of electric commercial vehicles with the Bipartisan Infrastructure Law funding awarded over the last few months, and the passage of the Inflation Reduction Act that should have a transformational impact on commercial vehicle electrification in the quarters and years that lie ahead. For the call today, I will kick it off by providing our key operational highlights for the quarter by business unit. I will pass it over to Karina to review the financial details on revenue, gross margin, adjusted EBITDA and cash before I close with commentary on our guidance, the impact on demand that we expect these government funding programs to enable, and some of our strategic initiatives to maintain our status as a central player in this market. Diving first into our execution in Q3, we generated record revenue of $96 million in the quarter. The growth of 55% year-over-year was driven by new highs in revenue for both Proterra Powered and Energy and Proterra Transit. Proterra Powered and Energy revenue grew more than three times year-over-year to a new high of $40 million, driven by both Proterra Powered deliveries, more than tripling year-over-year to 292 battery systems, as well as Proterra Energy deliveries jumping to a new record of more than 22 MW, up 765% year-over-year. On Proterra Powered in particular, we continue to experience strong demand with deliveries to nine different OEMs in the quarter, spanning a wide range of vehicles from school buses to coach buses to Class 3, 5, 7, 8 and off-highway commercial vehicles. We're really starting to see a meaningful uptick in demand for electric school buses in particular. Following the announcement of Daimler Truck Group's Thomas Built Buses delivery of its 200th Proterra P owered C2 Jouley electric school bus, approximately $900 million was awarded just last week specifically for the purchase of electric school buses to 377 school districts across the country. Orders must be placed with this funding by April 2023, and around another $1 billion of the $5 billion program is expected to be released in 2023. Through September 30th, Proterra Powered has now delivered battery systems to more than 1,300 vehicles since our first deliveries in 2018, and more than 1,000 in the last four quarters alone. Importantly, this excludes Proterra Transit. Battery production, including Proterra Transit, rose 51% year-over-year to 94 MWh in Q3 2022, and we have now cumulatively produced just under 750 MWh of heavy-duty batteries for commercial and industrial vehicles. With our new factory in Greer, South Carolina, which we are calling Powered 1, scheduled to come online by year-end, our battery production output should continue to grow materially in 2023, just as we expect our OEM partners to hit critical milestones in the development of their Proterra Powered vehicles on the way towards start of production. For instance, Komatsu showcased its new Proterra Powered 20-ton electric excavator last week at the bauma 2022 trade fair in Germany, ahead of its expected introduction to the European and Japanese markets next year. The Shyft Group held a ride and drive event in October for its Blue Arc Class 3 electric delivery vehicle using Proterra Powered batteries. Volta Trucks introduced its second generation Proterra Powered Volta Zeros for production verification. Anadolu Isuzu premiered its Proterra Powered CitiVOLT 12 electric bus at the IAA Transportation Conference. BusTech unveiled its ZDI-450 Proterra Powered electric transit bus at the Australasia Bus and Coach Expo last month. In addition to this, Proterra Powered also signed a supply contract with a new customer in Q3, REV Group's ENC, formerly known as ElDorado National (California). We will be supplying our S-Series batteries for ENC's 32, 35, and 40-foot Axess EVO battery electric transit buses in North America. This one is significant as it is our first Proterra Powered partnership that serves the same end market as Proterra Transit and underscores the high confidence we have in what our transit product offers beyond the battery. Also supports our aspirations to capture as much value as possible from the rapid adoption of electric transit buses across North America. We believe our Proterra Powered business is starting to gain meaningful momentum. Moving on, Proterra Energy reported a very strong quarter in Q3. Supply chain limitations that had held back project execution in recent quarters eased, and we completed our largest single customer project to date at 9 MW of charging infrastructure installed for Miami-Dade Transit, while also experiencing continued growth in non-transit bus vehicle segments, most notably school buses. This is prior to any funding from the EPA's new Clean School Bus Program. Q3 helped demonstrate how Proterra Energy, with more than 5 MW delivered to non-transit bus customers in the quarter, is expanding beyond the transit bus segment. All in, Proterra Energy delivered more than 22 MW of DC fast charger solutions, up 765% year-over-year. This included delivery of three of our megawatt scale chargers. To put this in perspective, 22 MW is the equivalent of more than 3,000 residential EV chargers. Lastly, on Proterra Transit, revenue grew 12% year-over-year to a new high of $56 million, as we achieved a new record in deliveries of 60 new electric transit buses, along with five pre-owned buses in the quarter. Improvements in our production processes that have recently been implemented and the hard work and focus of our team enabled us to grow bus production and deliveries to a new record, even without adding a full second shift. To be clear, despite our execution in Q3, though, and the record production and deliveries achieved by Proterra Transit, the coast is in no way clear when it comes to the supply chain. We continue to confront challenges, particularly with regard to wiring harness shortages. Overall, we're feeling more confident about our ability to grow transit production over the next couple of years. All in, as you can see, Q3 was a breakthrough quarter for us all round. Based on our performance through the first three quarters and our current views on Q4, which has 17% fewer working days than Q3 due to the holidays and downtime for year-end inventory, we are maintaining our 2022 revenue guidance range of $300 million-$325 million, representing growth of 24%-34% year-over-year. We are not narrowing our guidance at this juncture as we continue to face some uncertainty around the supply chain that could affect transit production in the final quarter of the year. Now I'll pass it over to our CFO, Karina Padilla, to provide deeper insight into our financial performance. Thanks, Gareth. Before I dive into the details of our financial performance in the third quarter regarding revenue, gross margin, adjusted EBITDA and cash, I'd like to take a minute to celebrate and congratulate all of the Proterra team members for achieving another record-breaking revenue quarter, exceeding the $95 million revenue mark. Now on to our financial performance, starting with top-line results. Consolidated revenue was $96.2 million, representing growth of 55% year-over-year and 29% sequentially. Proterra Powered and Energy grew 239% year-over-year and 68% sequentially to reach $39.9 million in quarterly revenue for the first time. Proterra Powered and Energy represented more than 40% of total revenue in the quarter, more than doubling its 19% contribution in Q3 of the prior year. For perspective, we reported more revenue in the third quarter of 2022 than we did through the first three quarters of 2021 combined. Growth was driven by triple-digit percentage increase in deliveries for both Proterra Powered and Proterra Energy. Proterra Powered deliveries grew 274% year-over-year to 292 battery systems. Though down sequentially on an absolute basis, this was primarily due to product mix as we delivered batteries to fewer vehicles but with higher energy per vehicle. Almost three quarters of our Q3 deliveries were for vehicles using batteries larger than 200 kWh, up from less than 50% in the previous quarter. Proterra Energy delivered 22.5 MW of heavy-duty fleet specific DC fast chargers in the quarter, up 765% year-over-year and 655% sequentially. Proterra Energy delivered more megawatts in the third quarter than it did in the prior six quarters combined. Deliveries spanned 23 different customers in the quarter and included our largest single project to date, 9 MW with one customer, as well as 10 different electric school bus charging projects. At Proterra Transit, revenue in the quarter was $56.4 million, representing 12% growth year-over-year and 11% sequential growth. As Gareth discussed, we delivered a record 60 new electric buses in the quarter as well as five pre-owned buses. New electric transit bus deliveries in Q3 included Miami-Dade Transit, which received the first 29 of its total order of 75 electric transit buses, and Dallas Area Rapid Transit, whose fleet now includes eight Proterra electric transit buses, including SMART Bus in Troy, Michigan, which received its first EV buses ever, and Wayne County Airport Authority, servicing the Detroit Metropolitan Airport. Moving on to gross margins and adjusted EBITDA. We reported a gross loss of $1.2 million in the third quarter. This compares to a gross profit of $2.7 million in Q3 of 2021, which included a one-time warranty benefit and a gross profit of $555,000 in Q2 of 2022. Our Q3 gross margin was negatively impacted by a high mix of delivery volumes still subject to legacy contracts with pre-inflation pricing. For perspective, approximately 40% of this quarter's revenue was delivered under these legacy contracts. We also incurred more than $2 million of start-up costs associated with our Powered 1 factory that is scheduled to begin production by the end of the year. Operationally, we continue to stay laser-focused on execution. Q3 gross margins benefited from better labor utilization and fixed cost absorption from our record delivery volumes. We also saw significant improvement as a result of tight cost controls we've implemented, particularly around freight expedites. However, these benefits were more than offset by the higher cost to deliver our legacy contracts in the quarter and one-time Powered 1 start-up costs. Our adjusted EBITDA loss in Q3 was $46 million, driven largely by our operating expenses of approximately $57 million, plus non-cash stock compensation of $5 million. Operating expense in the quarter grew $24 million year over year. This includes $1.6 million related to start-up costs for Powered 1 factory that is under construction. If I were to break down the primary drivers of our growth, starting from largest to smallest, they would be as follows. 45% of the year-over-year growth in our operating expenses came from higher costs specifically related to our facilities, as well as the insurance and taxes related to support those facilities. For example, one of our facilities has experienced rent increase of more than 56% over the last three-year period and is estimated to increase over 250% over a five-year period from 2019 through 2024. 30% of the operating expense growth was driven by research and development costs dedicated to support our strategic growth programs, and 15% was from general and administrative expenses to support the growth of our business and the expenses relating to operating as a public company. Finally, on cash. We continue to be supported by a strong balance sheet, ending the quarter with $408 million in cash, cash equivalents, and short-term investments. As we've been mentioning since the beginning of the year, we are expecting a higher than normal cash burn in 2022 as a result of our investment in our Powered 1 factory. Consistent with Q2 of 2022, there were a number of discrete investments and timing factors that led to higher than normal cash usage in the quarter. Total cash usage in the quarter was $115 million. This included $14 million in CapEx, almost all of which was related to the construction of Powered 1. $25 million related to a strategic equity investment in a privately held entity that we expect to diversify our domestic cell supply into other chemistries, which Gareth will discuss in greater detail in a few minutes. A $20 million increase in accounts receivable due to a significant portion of our bus deliveries landing late in the quarter, as well as a $16 million increase in inventory. The growth in inventory is strategic and deliberate with most of the increase in raw materials, 90% of which was to support the Proterra Energy business. The growth in inventory, as I mentioned, is intentional to prepare us for the start of production at Powered 1 by the end of the year, while ensuring smooth production to support on-time delivery to our customers across both business units. Excluding these items, cash usage was closer to $40 million in the quarter. Cash and liquidity is a top priority for us, and it will continue to be. We are allocating our cash to the areas we believe are most critical to reinforcing our market leadership and position us for growth in the years ahead. Ending the quarter with a cash and cash equivalents balance of more than $400 million, we believe we have the flexibility to navigate these times of economic uncertainty and capital market volatility in an advantageous competitive position just as electric commercial vehicle adoption begins to accelerate. I couldn't be more excited about what lies ahead for Proterra. On top of our leadership in battery technology, the strength of our balance sheet, and the breadth of our established commercial vehicle partnerships, we now expect to have additional tailwinds from multiple government programs. It may not be a smooth ride given the volatility we're seeing in the global markets and continued challenges with supply chain disruption, geopolitical instability, and inflation. I believe we have the fundamental ingredients to deliver on our financial commitments and generate strong growth in shareholder returns over the long term. With that, I'll pass it back to Gareth. Gareth? Thanks, Karina. We spent the bulk of our time on this call on our Q3 performance, but I think it's important to spend a few minutes closing the call with some bigger picture commentary on the outlook for the electric commercial vehicle market and our strategy to capture the right target market opportunities. Proterra has been a central player in the electric commercial vehicle industry for many years now as a leader in heavy-duty battery and electrification technology. While we have enjoyed solid growth in deliveries and revenue over the years, it has become more and more obvious recently that we are merely scratching the surface, and we believe that commercial vehicle electrification is on the verge of going mainstream. Over just the last few months, multiple programs in the United States have either launched or been passed that provide an unprecedented level of funding to help accelerate the adoption of cleaner, quieter, electric, commercial, and industrial vehicles. First and foremost, awards have been announced for the first year of funding from the approximately $7 billion dedicated to zero-emission transit buses and school buses that was approved as part of the Bipartisan Infrastructure Law of 2021. On electric transit buses, recipients of funding from the Low or No Emission Vehicle Program were announced in August, with $829 million explicitly dedicated to zero-emission buses and related infrastructure, suggesting significant growth in orders across the industry over the next few quarters. Importantly, another batch of around $800 million in awards will be announced again next year, and for that matter, each year through 2026. Separately, on electric school buses, recipients of the first year of funding from the EPA's new Clean School Bus program were announced last week. For this first batch of $965 million of awards for fiscal year 2022, the EPA received applications for more than $4 billion, totaling 12,000 electric school buses. Though as much as 50% of the awards could have been given to low-emission buses like propane, 95% of the vehicles that were awarded funding were electric school buses. In total, about $900 million was awarded for the purchase of more than 2,350 electric school buses spanning all 50 states plus Puerto Rico. Recipients must use this funding to order a bus by April 2023, and the bus must be delivered before October 2024. We expect up to another $1 billion of funding out of this $5 billion program to be released in 2023. Now, beyond this funding dedicated to zero-emission transit and school buses, the new Inflation Reduction Act passed in August 2022 provides an even greater level of funding to support the electrification of other commercial vehicles, from delivery vans to Class 8 trucks to off-highway vehicles. The centerpiece of this legislation for our industry is the commercial clean vehicle credit of up to 30% of the price of new zero-emission Class 4 to Class 8 commercial vehicles, up to a maximum of $40,000 per vehicle. When this credit goes into effect in 2023, we expect it to be transformational for electric commercial or industrial vehicle demand. Unlike passenger vehicles, as many of you know, commercial vehicle demand is significantly driven by vehicle capability and total cost of ownership. Additionally, new state regulations in California and New York will ban the sale of internal combustion, medium and heavy-duty trucks by 2045, and now the Commercial Clean Vehicle Credit should help make the total cost of ownership of electric trucks and commercial vehicles even more competitive with diesel. Most importantly, for Proterra, we expect to be able to apply for the battery production credit of $10 per kWh for domestic module manufacturing. With these programs starting to unfold, we believe we have entered a new era of demand for commercial vehicle electrification. Our primary goal is to be the premier battery and electric powertrain technology provider to the commercial vehicle market, particularly in our core markets of North America and Europe. There are two critical elements of our strategy to achieve this goal. First is to develop and maintain technology leadership in the marketplace that not only meets today's demand, but can accelerate tomorrow's. Secondly is to rapidly ramp localized manufacturing capacity and supply chain. On the technology front, we remain a leader in heavy duty batteries and electrification technology, demonstrated by the breadth of vehicle programs and OEMs we are expected to be supplying, and our best-in-class gravimetric and volumetric energy density, cycle life, and safety characteristics. Our battery technology today is centered on NCM nickel-based cylindrical cells, which already leads the market in performance for all the advantages it offers. We still see this as the foundational chemistry to our product portfolio. We have also made a strategic equity investment in a battery cell manufacturer that we expect will provide us preferred access to lithium iron phosphate, or LFP, as it's more widely known, battery cells that will be manufactured in the United States, which will not only help us expand our product portfolio to a broader set of the electric commercial vehicle market that we don't target today, but also helps us secure a local supply of LFP battery cells. Importantly, over 90% of iron-based cells are produced in China today, making them a poor fit for our customers focusing on localizing their supply chain. This should provide us with another key strategic advantage that enables us to extend our value proposition with complementary cell chemistries to access new market opportunities. On the manufacturing front, we're taking our biggest step forward so far with our new Powered 1 factory in Greer, South Carolina. This will not only be our first purpose-built, high volume battery manufacturing facility that will multiply our capacity, but we believe it will be the largest battery facility in the United States dedicated exclusively to heavy duty commercial vehicles to date. We remain on track for start of production by the end of 2022 and have made significant progress completing the facility over the last few months. We've completed installation of the first module line at the factory last month, and we've begun building the first D samples of our new H-Series battery on the production line over the last few weeks. We are also working on the installation of the second module line at Powered 1. Bringing it all together, I will conclude the call with three key points. One, we reported record results in Q3 with triple-digit delivery growth at both Proterra Powered and Proterra Energy, complementing record transit production and deliveries to drive record revenue of $96 million in the quarter. Two, we believe commercial vehicle electrification demand in the United States has entered a new era with billions of dollars of funding from multiple government programs all starting to become available. Three, through our innovative battery technology, we believe that we have positioned ourselves to be a central player in this industry with a strong balance sheet, healthy production capacity going into 2023, and a leading product platform with a well-positioned product strategy for the future. Finally, I'm of the strong belief that our team, our culture, and our ability to execute has been and will be a competitive advantage. I'd like to thank the Proterra team for their tireless work and commitment to our mission. Our progress is a direct result of our team's effort, for which I am thankful, and I have every confidence our team will help us remain a leader in this market. With that, we'll open up to Q&A. As a reminder, that is star one if you would like to ask a question. Our first question will come from the line of Mike Shlisky from D.A. Davidson. Please go ahead. Yes, hello, good afternoon, and thanks for taking my question. Can you hear me okay? We can. Thank you, Mike. Okay, great. It looks like you're targeting almost maybe even a little bit above 100 transit buses in the fourth quarter here, at least. What's your confidence level there that you can actually have the supply chain to get that done? And do you anticipate further expansion in your run rates in 2023? Are there any major contract due dates that could make next year a little bit lumpy from quarter to quarter? Or do you see a smooth ramp up, you know, throughout the year? Mike, I'll tackle the first part of the question. I'm not sure where you're calculating that number from. You know, our guide is $300 million-$325 million off of our current year to date number. You know, you probably wanna have a look at that again. Yeah, we don't give guidance by business unit, but obviously as we navigate the fourth quarter, we have a couple of dynamics we've gotta think about. One, there's 17% fewer working days in the quarter. Two, from an energy business point of view, a really strong Q3, where a lot of big projects we've been working on came together in the quarter. That business will continue to be lumpy as we've seen in the past. Three, you know, we're still working through a very challenged supply chain environment. These are all dynamics we had to think about as we considered guidance from now through to year-end. We're navigating these dynamics, but we remain confident that you know, the growth opportunity that lies ahead and the demand that's out there is gonna continue into next year, and we're excited about where we're positioned as we go into year-end. Your second question relating to how we see sort of lumpiness in next year. Yeah, we're not giving guidance on next year at this point. Probably that's something we'll talk about more in our next quarterly call in Q1, which is typically what we do annually. Okay. Well, maybe I can just transition you over to your school bus comments. I definitely will check my transit bus numbers there. On the school bus program, do you feel that your partner in the Type C school bus, Thomas Built, will get its fair share of orders from the EPA subsidies? Had you been told that, you know, yes, they can build these buses all the way through 2024, but chances are, given the next tranche that's coming, most of these will be built in time for next school year, 2023. Is there a large number coming, I'm guessing in the second quarter of 2023, if you had a lot of buses to build by that point, or not. Bus battery systems to build by that point? First of all, I enjoy a very constructive and healthy relationship with the team at Daimler and the Thomas Built School Buses group. They just announced, as we mentioned in our script, their 200th C2 Jouley battery electric bus that's been delivered, so clearly momentum building in that business. If you look at the awards under the EPA's Clean School Bus Program, there was 2,350 electric school buses that were awarded funding, that was just recently announced. You know, Daimler has been a very strong participant in that market, enjoying healthy market share. You know, we work together with them, have a lot of confidence in their product, so you know, believe that they're gonna continue to be competitive in that market segment. As far as volume of bus production goes and those vehicles being delivered to the market, you know, we don't talk about our customers' production volume programs and forecasts, 'cause really that is programs that they run. I would just close out by saying that, you know, we are very excited about the fact that there's strong momentum in the school bus market. You know, we love the fact that the market has responded well to knowing that families are gonna put their children onto clean, quiet school buses and, you know, transport them to and from school. It's just great to see that the momentum is building in the market to electrify that product. Okay, great. I also wanted to ask about The Shyft Group and the Blue Arc product. We saw the vehicle a few weeks back. We drove it, we loved it all sounds good. Right now, they're guiding to a few hundred units next year, probably 1,000 in 2024, and then they're guiding to about 3,000 units in 2025. You know, this is not an easy company. They're an old school manufacturer, so they have no need to put anything exaggerated out there. It does seem like a pretty real guidance based on what they know. I guess my question is on mix. This is a class three through five vehicle, and 3,000 units in 2025 or even 1,000 in 2024, that could be an appreciable percentage of your sales by then, you know, given the sheer number of vehicles being delivered. Is the average selling price to Proterra appreciably lower than, let's say, a school bus or an ElDorado? Is this something we need to kind of keep in mind in our models for 2024, some kind of lower ASP on average, or is it somewhat close to the broader range? First of all, again, Mike, you know, we're not gonna comment on our customers' build plans and volume forecasts. We've been working very hard with the Shyft team as they've done the product development on that vehicle and validation testing. Again, we enjoy a really healthy working relationship with that team, and we're very excited to see them bring that product to market. Yes, your question around mix effects is relevant in that, you know, obviously not all battery electric commercial vehicles are equal. What we really like is that, you know, we're building out a healthy portfolio of product that varies in energy on board, right? The fact that we're developing our portfolio so nicely gives us a good sort of blended mix that we expect will smooth out over time and, you know, not see too much lumpiness and mix effects in our volume development. Okay. Well, that's a great color. I'll pass it along. Thank you so much. Thank you, Mike. Our next question will come from Steven Fox with Fox Advisors. Please go ahead. Hi. Hi, good afternoon. I'm struggling a little bit with the free cash flow burns of the last couple quarters. Can you maybe talk about the plan to start moderating these cash flows? There's on one hand, you guys are facing a lot of growth in the incoming quarters. On the other hand, even though you're calling out recent investments in inventory and AR timing, you're gonna face more of those decisions going forward. How do we get comfortable with the idea that free cash flow burns are gonna start to consistently moderate? Then I had a follow-up. Yeah, sure, Steven. I'll take this one, and then Gareth can add anything. First of all, the $115 million of cash rate is, usage this quarter is the highest that we've seen. It was very heavy in investment. As you know, as I mentioned earlier, there was $15 million of CapEx due to the almost completion of our Powered 1 factory. We had $25 million in a strategic investment. $16 million tied really to the inventory growth as we get ready to start production in Powered 1. Then $20 million in our accounts receivable due to the late delivery or deliveries late in the quarter that were month-end delivery, so those don't come due. That's strictly due to timing. If I strip out what I'll call investments tied to the growth of our business, these are specifically tied to strategic deployments for the growth. Really, you end up with $40 million, I'd say, of cash usage. That's roughly 35% of my cash burn in Q3 went towards what I would call to run the business. On a year-to-date perspective, if I were to kind of do that same math, there's about $140 million of strategic deployment to help grow the business on, call it a year-to-date of $252 million. Over 50%, about 55% of that is going to strategic deployment. It's really upon the completion of Powered 1, and as we start production, that you're really going to start seeing some of that, I'll say, go back to a normal, more of a normal trajectory. We still, unfortunately, this is a very capital-intensive business, as we need to be sure we're able to ramp and start production and need to have everything ready before you generate a dollar of revenue. That's very helpful. For a second question, on the cost side, you talked about 40% of your contracts are still on legacy terms. What's sort of the timeline for shifting that to you know, current inflation you know, approaches? How does all that play into you know, supply chain that could still get stressed for your products, given all the government funding that's gonna be enabled next year? Thanks. I'll start by saying that, you know, as you know, we started in April, in the spring, evaluating all of our contracts. There were some contracts that had inflation clauses in there that were very easily to work through. There were others that did not, and even those that did not, we had conversation with each of our customers. As we've mentioned, it's really through the end of 2022, and not until you get into 2023 that you start lapping the legacy contracts. These are contracts that were signed in 2018. Obviously we've had different varying levels of success on what we have been able to to implement. To be honest, just as you finish implementing one contract, you know, then you get hit with another round of inflation. What we've seen from an inflation perspective continues to be at a historical high. If I were to just, you know, at a high level, it's really not until 2023 that you really start seeing the benefit that we lap from the legacy contracts. All of our contracts going forward on both the transit as well as the powered side do have inflationary clauses in there. That's just become our standard contract practice. I'm sorry, I think you had a follow-up question. Yeah. On supply chain. Yeah, within that context, continuing to manage the supply chain inflation, given what you just highlighted, that could be a very strong, you know, I guess, a very strong growth year, especially for buses next year. Yeah, I think, Steve, I'll chime in here. The supply chain continues to be a challenging environment. You know, we've developed our management operating systems during the course of this year to become, you know, more agile and flexible to deal with this very unique sort of circumstances we've been in for some time now, you know, nearly two years. We expect that to continue going into next year. It does two things for us. Number one, it obviously means that, you know, you're having to navigate the challenge of availability, but also the pricing pressure on the inflation side. In addition to that, it you know continues to drive some inefficiency in our operations because you're really not flowing your production lines as efficiently as you you know would like to and can. That that's gonna be a factor that will continue into next year as we look ahead. We you know we've just been increasingly developing our competence to be able to manage our way through that. The good news, as Karina said, I think on the contract side, you know, we've done a lot of work this year to you know negotiate with our customers, improve pricing positions. You know, we'll start to see the impact of that going into 2023. Certainly, it is not a normal environment yet from a supply chain point of view. We're gonna have to continue to be really focused on that. Got it. Having said that, I would say that we've talked about this on a number of calls. We've also been very intentional about building out our team, our leaders, with experience in running, you know, scaled companies. As a now scaled-up business, not a startup, you know, we're increasingly developing the competence around executing an environment like this. You know, we wanna just continue to develop our track record for delivering against plans. Great. That's all very helpful. Thank you. Thank you. Thanks, Steve. Our next question will come from Jordan Levy with Truist Securities. Hi. Afternoon, Gareth, Karina, Aaron. Glad to be on the call, and I appreciate y'all taking my questions. First on Proterra Energy, clearly a very strong quarter for that group. As you move into next year, I wanted to get a sense of your comfort level as it relates to that segment's capacity and ability to meet potential increases in infrastructure demand as your powered volumes and maybe your transit volumes ramp up, is supplier capacity where it needs to be? I don't know if you'd be thinking about that sort of thing. Yeah. Hi, Jordan. The sound quality on your mic's not brilliant, so I think I've got the direction of the question. The energy business unit as part of Proterra Powered and Energy had a very strong quarter. We are seeing an increasing awareness in the market of the need to make sure the infrastructure dimension of the deployment of battery electric commercial vehicles now sort of keeps up with the appetite to deploy the vehicles themselves. Certainly there's awareness among our customers, and I do believe that we will see increasing levels of focus being placed on infrastructure deployment to make sure that we not only have the vehicles on the road, but we have the ability to keep the vehicles on the road. We've been very intentional about our business model for some years now. We like our product portfolio. We've positioned well with our transit buses in a part of the market that it was an early adopter and is maturing very nicely. Out of that, obviously, we recognize the need to develop the energy infrastructure and, you know, we're now starting to see that roll over into the other segments where you're seeing the adoption of the battery electric commercial vehicles. We like the way we're positioned with our business model. Obviously, you know, a very healthy spectrum of customers starting to develop for power as well. You know, using the technology out of the transit powertrain and scaling that part of the business, it really is starting to work well for the total product mix and product portfolio. That's great. Can you hear me better now? Yes, thank you. That is better. Okay, good. Just as a follow-up on the battery cell investment y'all mentioned, just curious if that's an area you're all going to continue to explore opportunities or was this more of a unique opportunity? I guess along with that, is it fair to say this would imply you've all been comfortable with any LFP tests that you may have done so far? Yeah, Jordan, very important topic, so thanks for asking that. What we've come to learn in the market is that not all commercial vehicle customers require high energy density batteries for their vehicles. You know, we obviously build our product portfolio today on that core technology, NMC technology, cylindrical. We have an industry-leading product, but we recognize that there is a segment of the market that also looking for something different, more competitively priced. Adding LFP to our product portfolio, we think expands our market potential, on the one hand, and on the other hand, it importantly will provide us with U.S. made LFP cells, which gives us, you know, implicitly additional capacity at a time where, you know, access to cell capacity is a strategic advantage. We like the combination of those two factors as an additional element of fueling our growth potential into the future. We will take our next question from Sherif El-Sabbahy from Bank of America. Please go ahead. Hi, good evening. I just wanted to ask, you know, with the legacy contracts you've discussed rolling off into 2023, how should we think about the impact to gross margin overall in the fourth quarter, just given past commentary of expecting to be relatively flat year-over-year? Yeah, I think, you know, Q4, as I started out by saying, you know, we've got supply chain constraints remain a factor for us to consider. You know, some of the inefficiencies we've seen already this year will persist through Q4. Obviously the inflationary pressure is still there. I think the pressure we've seen on gross margins will persist in the short term. Understood. Thank you. As a reminder that it's star one if you would like to ask a question. Our next question will come from Tyler DiMatteo from BTIG. Please go ahead. Hi, everyone. Thanks for taking the question. So if I could just go back to the equity investment on the LFP supplier. From an IRA perspective, I imagine that gives you the option for the $10 per kWh credit on that front, just to clarify. I guess, broader picture here, you know, how do you think about supplying the different end markets with the different chemistries? I mean, we hear a lot about LFP, as you alluded to, just trying to get a sense as to what that would mean for your business over the next couple of years. Yeah. On the IRA, we expect to qualify for the $10 per kWh battery module credit in all of the facilities where we're producing our batteries today. In the you know instance of the expanded product portfolio to include LFP cells, we would expect to continue to enjoy the credit for our battery module production independent of which cells we're using. Of course, there is a cell credit that goes along with the IRA legislation that obviously sits at the cell manufacturing level. Yeah, that is a you know fairly fresh legislation, as you know, and we're actively working to understand that legislation and in particular, how the tax treatment of the accounting on that will develop. Nevertheless, as I said, we expect to qualify for that $10 per kWh battery module credit for all of the battery modules we're manufacturing, independent of the cell that goes into it. We do think both the investment into this expanded sort of product portfolio opportunity that opens up more market potential for us on top of the market that, you know, we have high confidence in our current nickel-based chemistries for today, combined with obviously the benefits of supportive legislation around these tax credits, really does position us well for growth into the, you know, future long term. We feel, you know, really confident about our strategy. Okay, great. If I could just get another one in here. In terms of the charging business, I think at one point it was said that 80% of transit customers also purchased a charger. I guess, can you provide some further color on the breakdown of maybe transit versus non-transit and how you are viewing that business moving forward, please? Just for clarity, are you talking about the development of the deployment of energy charging infrastructure for non-transit products? Was that the question? Yes. Yes. Yeah. As you saw in this quarter's numbers, you know, we were very excited about the fact that while we had a strong quarter for energy that was, you know, largely off the back of infrastructure deployed for transit bus charging, we also did see a very healthy demand pattern developing for non-transit product, particularly around school bus sites, as we're seeing electrification pick up and adoption pick up in that segment. We expect to see that pattern developing as the market segment picks up, where the vehicles start to, you know, come into production and come into the market. We expect to see the energy infrastructure demand follow that because it's kind of intuitive that, you know, for the product to operate, you've got to have the charging infrastructure in place. That pattern, we think, will continue. Okay, great. Thank you for the time. I'll turn it back to the queue. We have a follow-up from Mike Shlisky from D.A. Davidson. Please go ahead. Yes. Thank you. I wanted to follow up with another question about the IRA and what it means to Proterra. You talked a lot about some of the credits that are available for your modules for some of your customers and the end users getting credits for buying vehicles. Is there anything available to Proterra, either from the ATVM loan program or other programs where you can potentially reduce your CapEx going forward? Or because Greer is almost done, it's probably too late. Is it more for your customers to get their own loans for their own manufacturing facilities going forward? Yeah. Mike, thanks. Yeah, we're very focused on our capital strategy. You know, we work actively on that as part of our strategic plan. Yes, we very much, you know, look to the various opportunities of funding that are available through, you know, one example you just mentioned, government loan programs, ATVM being one of them. There are grants, you know, location-based grants. These are all sort of key dimensions of our capital strategy that we've got to look at. You know, the ATVM loan program is something we are very familiar with and certainly value the opportunity that that could present for us. All right. Thanks for the answer. I appreciate it. That will conclude the time for our question and answer session. At this time, I would like to turn it back to Gareth Joyce for any closing remarks. Yeah, thank you. Well, first of all, I really appreciate the time you've spent with us today. It's been a you know, great year for us. Our results in Q3 were very exciting. As you see the you know, growth in the business starting to show in our results, with records across both business units. We look forward to finishing out 2022 with strong momentum. The entire team here is extremely excited about 2023 and what the future holds for us in the electrification of commercial vehicles in the U.S. and beyond. Thank you for the time today. We appreciate it and enjoy the rest of your day. That will conclude today's conference. Thank you for your participation, and you may now disconnect.