Good afternoon, and welcome to Xos first quarter 2022 earnings conference call. Today's call is being recorded, and we have allocated one hour for prepared remarks and Q&A. At this time, I would like to turn the conference over to Xos General Counsel, Christen Romero. Thank you. You may begin. Thank you, operator, and thank you everyone for joining us today. Hosting the call with me today are Xos's Chief Executive Officer, Dakota Semler, Chief Operating Officer, Giordano Sordoni, and Chief Financial Officer, Kingsley Afemikhe. Ahead of this call, Xos issued its first quarter 2022 earnings press release, which we will reference today. This can be found on the investor relations section of our website at investors.xostrucks.com. On this call, management will be making forward-looking statements based on current expectations and assumptions, which are subject to risks and uncertainties. Actual results could differ materially from our forward-looking statements if any of our key assumptions are incorrect because of factors discussed in today's earnings news release, during this conference call, or in our latest reports and filings with the Securities and Exchange Commission. These documents can be found on our website at investors.xostrucks.com. We do not undertake any duty to update any forward-looking statements. Today's presentation also includes references to non-GAAP financial measures and performance metrics. Please refer to the information contained in the company's first quarter 2022 earnings press release for definitional information and reconciliations of historical non-GAAP measures to the comparable GAAP financial measures. Participants should be cautioned not to put undue reliance on forward-looking statements. With that, let me turn it over to Dakota. Thanks, Christen, and thank you everyone for joining us. Today, we are proud to announce our financial results and an excellent quarter. Despite continued disruption to supply chain and logistics, we grew unit deliveries and revenues and also improved unit margins. I am proud of our team's ability to navigate the ever-changing landscape and meet or exceed the targets that we set out for the first quarter. Our mission remains focused on transitioning fleets in targeted high-growth markets from internal combustion engines to electric commercial vehicles with industry-leading technology and, in the process, decarbonizing commercial transportation. I'll cover some of the exciting updates and highlights we had over the quarter. Giordano will update you on our sourcing and manufacturing progress, and Kingsley will conclude with a detailed review of our first quarter results and outlook. During the first quarter, we continued to make steady progress scaling the business. First, we ramped production and delivered 56 units to customers across the U.S. We also broadened our distribution and service footprint with key customers and partners. Our commercial traction in the first quarter is underpinned by our expansion into growth-focused last mile markets. In the current environment of elevated diesel prices, Xos's industry-leading total cost of ownership and value proposition to our customers is stronger than ever. With trucks on the road since 2018, we are able to showcase our trucks' real-world experience in our customers' hands. We're seeing an acceleration in our sales cycle quarter-over-quarter with more purchase orders and more units per purchase order. Over the first quarter, we received purchase orders for over 350 trucks from a range of customers and use cases. In particular, we continue to secure orders from keystone customers such as FedEx ground operators, with outstanding purchase orders currently standing at over 550 trucks across a range of states. Subsequent to quarter end, we announced delivery of 15 fully electric step vans to five different FedEx ground operators in Southern California. These vehicles were the first deliveries in 2022 under purchase orders signed last year, and we're excited to continue rolling out our products to this leading nationwide fleet. We also continue to have great traction in the beverage, linen, and refrigerated trucks, such as the partnership we've announced with Thermo King. We secured a purchase order from the uniform and workwear leader, UniFirst, and announced three deliveries to UniFirst Southern California location during the first quarter. This delivery was part of an initial rollout of vehicles, and we expect additional deliveries to a UniFirst location in Boston, Massachusetts, in the second half of the year. We are excited to help our long-term partner, UniFirst, reduce their environmental impact and transition their fleet from diesel to electric vehicles. Finally, we are proud of the distribution and service network we have built. In the first quarter, we announced our partnership with Murphy-Hoffman Company, one of the largest commercial vehicle dealerships in the country. We continue to take strategic steps to tackle the current supply chain crisis, which Giordano will talk about in detail. It is early days, but we believe some of the strategic steps we have taken are beginning to bear fruit. In summary, we continue to make significant progress scaling the business, and I'm proud of the team's accomplishments this quarter. The opportunity for clean fleet and logistics solutions in both the public and private sector remains immense, and we expect to continue to benefit from the secular shift to a net zero carbon economy. I will now turn it over to Giordano. Thanks, Dakota. The Xos production system can be bucketed into four core activities, which I'll cover separately. First, we flow quality parts to the assembly line. Next, we assemble chassis at Flex One in Tennessee and Flex Two in Mexico. Third, we assemble the Lyra battery system. Lastly, we work with our partners to install bodies on the X-Platform chassis. While the overall supply chain environment remains challenging and uncertain, we've seen modest improvement in our ability to procure and land some key components like wire harnesses. We've also secured near term allocations of other commodities like battery cells. The team has done a great job in helping us strengthen our supply chain by multi-sourcing components to mitigate risks and securing more of our supply from North America to mitigate shipping cost increases and delays from overseas vendors. While modest, these improvements give us confidence in being able to continue growing deliveries each quarter. Despite the challenges in sourcing and landing parts, we've increased production and deliveries from our chassis assembly plants, Flex One and Flex Two. While outpaced by chassis production, we are making steady progress in ramping up battery production. We remain on track to further improve our production yield with the addition of a more automated battery assembly line at Flex One in Tennessee later this year. We're excited to share that we've begun the build-out of this line, and we're on track to begin producing batteries later in the year. As we look to the current year and our key objectives, we can expect to see continued ramp up of our X-Platform production, as well as the introduction of new vehicle products and software offerings. We've been hard at work, and we're excited to showcase some of these developments at our product reveal event at Xos Fleet Week on May 10th. I'll now pass it over to our CFO, Kingsley Afemikhe. Thanks, Gio, and good afternoon to you all. Xos has had a great quarter in the midst of a very challenging business environment. We are making selective decisions to invest in our business and are excited by the opportunity for growth this year. Our revenue in the first quarter increased to $7 million, versus $0.8 million in the same period in the prior year. This is above our guidance and is a sequential increase of 113% from the fourth quarter of 2021. This is driven by an increase in units delivered to 56 compared to four units in the same period in the prior year and 32 units last quarter. As expected, our average selling price will vary quarter on quarter. However, we saw higher average selling prices this quarter and continue to expect ASPs to be higher this year overall compared to 2021. We continue to see strong demand for our zero emission products as the total cost of ownership strength is proven out and diesel prices remain elevated. Our cost of goods sold for the quarter was $10.2 million compared to $0.7 million in the same period in the prior year. We made good progress in gross margin this quarter with a gross margin of -45% this quarter versus -74% in Q4 last year. This is testament to the hard work of the entire team and the benefits we are beginning to reap as we scale production. Nevertheless, we remain cautious in the current supply chain picture with the likelihood of increased material and logistics costs, particularly from our suppliers in Asia. We are taking price action to cover more of our costs where we can, including applying raw material surcharges. We expect growth margin to improve as we ramp volumes and benefit from the addition of the new expanded automated battery line at our Tennessee facility. With these and other strategic steps, we believe we have a clear line of sight to being gross margin positive. Turning over to expenses, our first quarter operating expenses were $20.3 million compared to $5.7 million in the same period last year, and $23 million in the fourth quarter. Operating expenses decreased 12% from last quarter, primarily due to reduction in R&D expenses. We are focused on the user experience and are making exciting progress in a range of new products, which we look forward to telling you about more next week at Fleet Week. We expect to continue to increase investment in new product development, but as detailed before, we expect that R&D expense relative to revenue will be lower this year overall compared to 2021. Non-GAAP operating losses, which excludes stock-based compensation expenses, were $22.1 million within our previous guidance. This compared to $5.5 million in the same period last year and $23.8 million in the fourth quarter of 2021. We continue to see strong customer interest and are investing in our sales and marketing efforts. Sales and marketing expenses were $2 million in the first quarter compared to $0.3 million in the same period last year, and $1.3 million in the fourth quarter of 2021. Finally, general and administrative expenses for the quarter were $11.3 million compared to $2.4 million in the same period in the prior year, primarily driven by an increase in headcount. Turning now to the balance sheet. At the end of the first quarter, our cash and equivalents and investments amounted to $132.7 million. This includes $3 million of restricted cash. In addition, we have added flexibility from a $125 million standby equity purchase agreement. Inventories were at $40.3 million at the end of the quarter, about $18.6 million of which was in work in progress. Our inventory position continues to reflect some of the steps we are taking to ensure sufficient supply of key components. Overall, net cash used in operating activities and cash paid for capital expenditures totaled $34.3 million. Finally, wrapping up with our business outlook, we continue to be focused on delivering sequential growth in revenues and deliveries over this year. Due to the continued uncertainty in the supply chain at this time, we are providing guidance for the second quarter of 2022. As we gain more clarity in the supply chain, we will expand that window. For Q2, we expect deliveries to be in the range of 70 units-90 units, delivering revenues in the range of $8 million-$11 million, and non-GAAP operating loss in the range of $23 million-$28 million. Thank you, and I'll pass you back over to Dakota. Thanks, Kingsley. Before we open it up for questions, I want to thank our team for their contributions to our success, as well as our partners, customers, and shareholders for their continuous support. We remain optimistic on our future based on market growth, our technology platform, and the exceptional people we have here at Xos. Now, we'll open up the line for questions. Thank you. We will now begin the question and answer session. To join the question queue, you may press star then one on your telephone keypad. You will hear a tone acknowledging your request. If you are using a speakerphone, please pick up your handset before pressing any keys. To withdraw your question, please press star then two. We will pause for a moment as callers join the queue. The first question comes from Mike Shlisky with D.A. Davidson. Please go ahead. Hello, guys. Good afternoon. Good afternoon, Mike. Thank you. I wanted to start off just by looking at the purchase orders outstanding. Looking at what you've written and what you said, you have 150 units from FedEx, but you also got other orders throughout the quarter. Can you give us a number as of quarter end or as of today, like how many purchase orders you actually have outstanding in total for all customers? We didn't share that information about total orders for all customers outstanding, but it continues to grow quarter-over-quarter, with Q1 representing one of the strongest quarters yet. That continues to increase, particularly as hundred-dollar oil prices spike and fleets begin to see the benefits of the total cost of ownership reductions that our fleet vehicles are offering for them. The other thing we've also seen is that customers, such as early customers like Loomis and others, have placed follow-on orders to really reap the benefits of electric Xos vehicles across their fleet, as they've started to deploy their early vehicles. Okay, super. Also, could you maybe give us some commentary on how the recent HVIP allocations went, how you guys did? Did you feel like you got all you could? Did you get more than you were able to last time, et cetera? Just love to hear your commentary around how that's going. We definitely participated in this year's HVIP opening up of their program, and we were really successful this year. Don't have exact numbers on issuances, but we did exceed our last award period and had the opportunity to get more trucks into California. Just a reminder, these trucks are being sold all across the country. Really, we're focusing on getting that acquisition price as close to a diesel competitive vehicle as possible, so that the TCO savings that fleets will see from the reduced maintenance costs and the reduced fueling costs are relevant in any market, and not just California. Now most of our deliveries are actually taking place outside of California in states that don't have the same favorable incentives. Okay. I also wanted to ask about the deal you announced today with Thermo King. Is that, quote-unquote, the big launch you've got going on or is that something separate? Tell us a little bit about how that works. Is that a full-scale vehicle or are you just powering the actual reefer unit there? I wasn't quite sure exactly what's going on there. Yeah. Happy to talk more about the relationship and partnership with Thermo King. We've been working with them for quite some time to integrate Thermo King's zero emissions technology onto some of our vehicles. Starting in the medium duty realm by taking their transport refrigeration units and installing them on vehicles with boxes and bodies that'll service refrigerated fleets in the beverage sector and several other grocery delivery and food delivery sectors. That's the first aspect of the partnership and something we've already started working on and are really excited to be able to deliver those products to customers that already operate reefer fleets. The second area is Thermo King is also assisting us with some of our thermal management technology that we'll be incorporating into our Xos Hub. As you probably remember, the Xos Hub is our modular and mobile energy storage device and charging infrastructure to allow fleets to manage the delay between permanent charging infrastructure and when their trucks get delivered. We're working with Thermo King to install some of their zero emissions thermal management units onto our production Xos Hubs as well, leveraging a lot of their cooling technology that they've brought to the industry, some of the first that's in the industry, for zero emissions applications. Then you also alluded to our product launch event next week, which is Fleet Week. In Long Beach, California, on next Tuesday, May 10th, we will actually be hosting a product launch event where we're gonna be announcing some really exciting upcoming products that we'll be able to continue to deliver to fleet customers and are really excited about showing and demonstrating this new technology to those customers, and some of which may actually have some of those reefers on them eventually. Okay. Well, definitely looking forward to that event for sure. Today's announcement is not the product that you're launching. Is that true? Is something- That is correct. Today's announcement. Okay. This is not the product that we're launching on Tuesday. Okay, great. Well, I've got more, but I'm gonna give somebody else a chance. I appreciate the help, guys. Thanks, Mike. The next question comes from Jerry Revich with Goldman Sachs. Please go ahead. Yes. Hi, good afternoon. Afternoon, Jerry. Hi. I'm wondering if you could just talk about the planned deliveries that you folks have in the second quarter. Are all of these step van chassis? Can you talk about, you know, how many different configurations you're planning to deliver? You know, on that same token, the bookings, the 350 purchase orders you highlighted this quarter, can you just comment on how many different vehicle types that represents? Yeah. Happy to provide more context and clarity on those deliveries for the upcoming quarter. The vast majority of those vehicles will be our medium-duty step van platform going to some existing customers, or our MDXT platform, and will also be going to some new customers that are gonna be taking delivery of their first vehicles. There will also be a small portion of those deliveries that will be our powertrain systems, for some of our customers that are acquiring the technology, like the battery systems and powertrain technology that we've developed. Super. Then, you know, can I just ask, unit profitability, at this point, you know, obviously we'll see at what pace the supply chain is gonna allow us to ramp production. Kingsley, how should we be thinking about incremental margins for every additional truck that we might be able to produce? If you folks are able to deliver, let's say, you know, 100 trucks this quarter, what's the incremental contribution we should be thinking about per truck at the gross profit line? As you know, it's a complicated supply chain picture, so it's hard for me to give that exact guidance. What I can give a lot of guidance on is kind of breaking down how we think about it. First of all, pricing-wise, we have taken pricing action in Q1, and you'll see that extend into Q2 as well. What we are excited about is that our customers are ready to take our trucks because the advantages are so clear. We're taking pricing action, given what's going on with commodity prices. Then secondly, when you look at the direct costs, we're working very, very closely with our engineering teams and our supply chain teams to really bring those costs down and engineer for availability and also for costs. Some of those projects will take, you know, a bit longer, so most of the effect of that you'll see later in the year or next year. What we're really excited about is the scale and the absorption of costs of our direct and indirect costs. We're beginning to see the benefits of that this quarter, and we expect more of that next quarter. I think even though we're cautiously optimistic, we all know that it's a lot of unknown unknowns out there with the supply chain, so we haven't given exact guidance on when we'll be gross margin positive, but we do have that clear line of sight now when we look at the different actions we're taking. Okay. Thank you. Dakota, you folks have had a steady stream of new distribution agreements every couple of months. Can you just talk about what's that pipeline look like, you know, for you and, you know, if we fast-forward 12 months from now, you know, how many additional states are you targeting to have representation in? Yeah, absolutely. Happy to provide more context. Just to catch you up on what we've currently announced, we have relationships with several groups across the country. Most recent announcement being our partnership with MHC or the Murphy-Hoffman Company, which is one of the leading commercial vehicle distribution and dealership networks in the country. We're working with them in seven different states and multiple locations within those states as well to provide coverage to areas that we don't already have existing support and distribution services in. We have a pipeline on several additional locations in the coming quarters. Haven't provided specific clarity on which states and which regions, but as those regions do become available and we're ultimately able to talk about them, we'll certainly share those more publicly. Strong focus areas for us in terms of regional focus for fleet distribution is in the Northeast, in the Northwest, and then also some additional regions throughout the Midwest. Those are areas where we're continuing to see further growth, and some of that is gonna be through distribution partners and dealers like MHC, but some of it will also be our own Xos distribution services, which actually is our own direct sale application where we're distributing vehicles directly to fleet customers. Terrific. Thanks. Thanks, Eric. The next question comes from Donovan Schafer with Northland Capital Markets. Please go ahead. Hey, guys. Congratulations on the quarter. It looks great. I wanna start off with looking at gross margins. You know, I know, you know, you're a young company and, you know, there's all kinds of supply chain stuff going on. Maybe, you know, as investors and being on the south side where, it's tempting to become a little impatient, for lack of a better word, on my part, not saying anything towards you guys. You know, we look at the gross margins, and it's just hard not to sit here and go like, "Oh, we really wanna know when that'll change or when something will happen." I'm wondering, can you give any kind of a ballpark? 'Cause, of course, there's two factors. One is the price environment, and you don't have control over that. You know, you can pass things through to customers with the surcharges and such, but you know, it's hard to stay out ahead of it and you don't know what's gonna happen in a month with steel prices or batteries or whatever. The other one is just sort of scale, and I think that's probably one of the most important levers for you guys. Do you have a sense? I know you're not gonna give a timeline for when you could see yourself, you know, being, you know, with a line of sight to positive gross margins. Is there like a volume level where you feel you could get there? Like, and even if you could give rough numbers, I mean, is it safe to say that you would see yourselves gross margin positive at a, you know, at a run rate of 1,000 units a year or a run rate of 500 units per year? Just wondering anything to kinda give us a hook there. Yeah. No. Hey, Donovan. Look, it's a very fair question, and we absolutely believe that this is a high gross margin business. That is a target that we as an entire company are working towards. We really think about it in a couple of ways. I'll start again with, you know, pricing action there. We're trying to be proactive there as well where we can. What's helpful is that the cost of ICE vehicles are also going up. We haven't seen any slowdown at all in demand in the areas where we've been taking price action, which is exciting for us. The second thing is when we think about the direct material costs, it isn't necessarily just a volumes game, right, and a scale game. It's also, we're making continuous engineering additions to the vehicle. We're also thinking about ways that we can restructure things and so on. I think that's one of the strengths of being a manufacturing company, and having that engineering ability. There are projects that we're working on there. You are absolutely right when it comes to other costs and other fixed costs, amortizing that over the number of units. Even though it's early days, we are beginning to see the benefit to that. I can't give you an exact number and say, "When we get to this number of cumulative number of vehicles, you'll see the inflection into positive gross margin." The message we've said, and the guidance we've given is that we expect gross margins to improve over time this year, and that's our focus. Following up just quickly on that, you know, I think, correct me if I'm wrong, but I believe Dakota said in the prepared remarks that there would be a, you know, at least your belief and your expectation as a company is that you will have sequential improvement in unit volumes from quarter to quarter to quarter through this year. I'm wondering, you know, if we talk about these, there's the two factors here of commodity costs versus, you know, scale being one of the factors, although, you know, it doesn't apply to every cost input. If the scale is expected to increase sequentially, should we be expecting sort of steady sequential gross margin improvement, or could changes on the pricing side, you know, overcome that? You know, if some cost moves aggressively and it takes a month's delay or a two-month delay to pass that through to customers, would that undercut that kind of thinking? Yeah. Look, absolutely. We are in an extraordinary time when it comes to supply chain, and we've done a, you know, good job as a team to manage that. So making commitments on margins is gonna be. We're not gonna do that at this time. What we're clear about is that we're focused on improving margins over time, and we believe strongly that this is a positive margin business. Okay. Now this is the last question, and I'll get back in the queue, or I'll save them for later. In terms of the supply chain, and commodity. Well, you know, 'cause clearly you have the purchase orders and that's really great, you know, clearly the demand is there. It's more- Yeah. of a you know supply-constrained environment. What are the kind of gating key supply inputs? Is it just sort of you know everything. Yeah, I know there are companies that every day you know the floor the line workers come into the factory and there's something on a whiteboard that says, "Well, we're now we're out of this item, and now we're out of that item," and it's just you know 100 different parts and it's just constant kind of you know hand to mouth in terms of. Or are there things that are more specific like could it be. Does it come down to port congestion with inbound product coming into Port of Los Angeles, outbound coming out of ports in China with the shutdowns there? Does it come down to spec-specific, certain specific items more often than other ones, you know, like chips, cells? You mentioned wire harnesses this time, which I think has come out for the first time, but that you've resolved that. Just curious what the major things are right now that cause you to be sort of supply constrained. Yeah, Donovan, this is Giordano. I appreciate your question. Thank you. It's a little bit of all the above in terms of port delays and delays in China with shutdowns. As far as components, it changes over time, so it'd be a little, you know, misleading or disingenuous for me to say it's this component because that might be true this week, and it'll be a different component next week. I think what you picked up on in our prepared remarks is that we did mention some improvement in wire harnesses and being able to land those and get those to the plant more quickly than in the last quarter, and then also having better near-term visibility on our cell allocations. So those are both, you know, positive trends that we're talking about this time around. Yeah, you're right. It is a situation where we are tracking, we call them red flags or and orange flags and yellow flags, depending on how dire it is, but those change from week to week and day to day, and there's, you know, a daily meeting going through each of those issues at each plant. As you know, you can't build a truck without 100% of the parts. We're making sure to get all those in. We have had to start builds in some cases without all the parts in warehouse and had to add them on later on in the process and move flow product through the line. That's a decision we made to be able to continue to keep the lines moving and continue delivering trucks and growing our deliveries each quarter. Okay. Yeah. Well, thank you guys for answering the questions. That's great. I gotta say, being here in Southern California also, seeing this, you know, prices almost $7 a gallon, I have to admit, when I saw the FedEx announcement for the 15 vehicles in Southern California, I just thought that just feels like a no-brainer. $7 a gallon. Yeah. Anyway. All right. Well, thank you guys. Definitely making the TCO equation. I'll follow up with you later. Yeah. It's making the TCO equation even better. Yeah, given that you're here, hope to see you at Fleet Week on Tuesday. Absolutely. I'll see you there. The next question comes from Dan Ives with Wedbush Securities. Please go ahead. Yeah, thanks. Opal as well. Can you just talk like with FedEx and how does that change conversations with other potential customers? You know, obviously just given what we're seeing in the environment and push to EV. Yeah. Happy to provide some additional context there, Dan. So working with large fleets like FedEx is incredibly helpful to build value for fleet operating customers. They see the diligence that these fleets have done in evaluating our vehicles and getting the infrastructure installed to support the vehicles, and it provides them with the peace of mind that Xos is not only building great truck products for fleets but also supporting those products in the field. I think that's a testament to our customer service and customer support team that help maintain and service these vehicles across the country. We're actually servicing and supporting through our CX team, tracking and maintaining all of those vehicles that we deploy, and then making sure that each of those fleets that have trucks in them are getting those parts. That kind of brand behind us is really helpful when it comes to smaller or medium-sized fleet operators in making the decision around which electric truck manufacturer they're gonna work with. Great. Kingsley, can you just hit on like from a cost perspective, obviously like through supply chain and just everything you're seeing, like what have you instituted just different procedures now just to make sure as much as possible that you could kinda just get guardrails around what's going on in supply chain? Absolutely. A little bit of context here. We've had trucks on the road since 2018, so we've been building out our supply chain over that time in a high level of detail. Clearly, as we are scaling, and so we are in this extraordinary supply chain environment, there are a number of steps that we are taking all the way through. First is we've done a lot of work in nearshoring our supply chain and diversifying our suppliers and really entering into those agreements where we can get larger volumes and have more certainty of supply. That's been very, very helpful when we're doing our long-term planning for this year. In addition, when we work through the cost of the vehicle with the particular components and have the choice of different suppliers for the components, and we're spending a lot of time on managing freight. You know, as you know, we manufacture our trucks here in the U.S. and also in Mexico. There's a large amount of logistics required in our trucks and those come through in COGS. We're being really thoughtful and managing that, making sure that we have the supplies for deliveries and making sure we do that in a way that's cost conscious. You know, Mike Tafens and team, you know, who joined us late last year, been really critical in helping us to manage costs and manage when we go through the whole process in manufacturing, which is the other point about manufacturing as well. We work through to make sure that our direct and indirect costs are really managed by us. We are in an extraordinary situation all the way through in different costs and different components. We're watching and monitoring all the costs. We're taking price action where we can, and I think that you can see that in the improvements in the margin, and it's our focus to keep on going on that journey. Yeah. Look, I think relative to industry and the challenges, you guys are doing a great job, so. Okay, thanks. Okay. The next question comes from Mike Ward with Benchmark. Please go ahead. Thanks. Thanks. Good afternoon, everyone. Can you guys quantify the change in the total cost of ownership? I mean, since these fuel prices have doubled, can you quantify that at all? Also, I don't know, maybe talk about how that's affected your negotiations and with your different clients or potential clients as you look at the entire market going up. Yeah, absolutely. It's a great question, Mike, and one of the most important factors that fleet owners face when they're deciding around acquiring new vehicles what to purchase. In general, when we're talking about last mile or regional haul vehicles, fuel costs can make up anywhere from about 20% all the way up to 40% of your total cost of ownership. In some applications, in Class 8, they can even get higher than that. If you factor in some of the fuel price increases that we've seen, certainly here in California and in other locations where we have our manufacturing facilities in Tennessee, the fuel prices have nearly doubled over the course of, you know, several months. That means that total cost of ownership, if these prices hold, could also double, and it becomes the single most expensive component of operating a commercial vehicle fleet, even more costly than the driver or the operator of the vehicle itself. It's a significant factor. It's been driving up the demand for these vehicles. Even while we're going through this supply chain challenging environment where commodity costs have increased in some cases 10% or 20%, the fuel cost increase has greatly surpassed any COGS increase that we've seen, making the total cost of ownership much more beneficial for Xos's electric vehicles than an alternative diesel or internal combustion engine vehicle. Well, it's gotta be a staggering number, and it's gotta be. Now, what are the dynamics of the reefer fleet? I mean, I don't know if you have any data on the size of the reefer fleet, and then are the dynamics the same as other, you know, last mile delivery, or is it more of a longer road type delivery functions? Yeah. It was a little difficult to understand, but I think you were asking about the size of vehicle and does the TCO savings... Yeah. correspond to other last-mile delivery. Are the dynamics of the reefer fleet more like last mile, or are they, you know, are they more long haul? It's a great question. There are some long haul reefer fleets, but as you know, anything that operates in a reefer vehicle you would purchase in your refrigerated section of a grocery aisle, a convenience store, a produce market, that all has to go on a refrigerated truck. We're working with Thermo King to address those markets, those last mile regional haul markets. We're starting with the medium duty vehicles and focusing on box trucks that are frequently used for meat or produce or seafood delivery, and we have several grocer customers or grocery customers that are gonna be utilizing refrigerated vehicles within their fleet. Then eventually we'll expand into larger vehicles with transport refrigeration units that are mounted to trailers, and some of the Class 8 applications. The focus today is really on that last mile distribution fleet that operates refrigerated trucks. Is Thermo King the biggest? I believe they are the biggest in the industry, and they've got an incredible portfolio of zero emissions products that they have been working on for several years now that we're gonna be integrating into the vehicle. None of those products that we're putting on our trucks are gonna be utilizing any diesel fuel or any gaseous liquid fuel to power the reefer unit. Well, that's a big win. Are you exclusive with them, or can they deal with other electrified trucking companies? It's not an exclusive relationship, and really we wanted to think about keeping an open mind in terms of what the customer wants. We're gonna have several customers of ours that are Thermo King customers, and we have customers that'll also request other options. But we're excited about this partnership because they've been a leader when it comes to building zero emission solutions that are more energy efficient for zero emission vehicles like ours, so they don't impact the overall range of the vehicle as significantly. Well, congrats. It's a big win. Thank you. Thank you. Yeah, thank you. Once again, if you have a question, please press star then one. The next question comes from Sherif El-Sabbahy with Bank of America. Please go ahead. Hi, good afternoon. I just wanted to ask. Hi, Sherif. A bit about the free cash flow. You know, we saw cash from operations, the cash burn from operations accelerate a bit, year-over-year, and we haven't yet seen a lot of the CapEx that was guided flow through yet. Thinking about the guidance for next quarter as a benchmark, it seems like we could expect something similar for cash from operations in Q2 as Q1. When you combine that with expected CapEx spend, it seems like we could end up with about another $57 million of cash burn or so. I wanted to ask if that's the correct way to think about it. Within that context, how do you think about the equity purchase agreement? No, I think. Thanks. Hey, Sherif. I think in general that's higher than what we're thinking of. You know, the numbers that we gave and the guidance for capital investments are a kind of a guidance over the entire year. When we think about kind of cash use this quarter, you know, we haven't given exact guidance on that, but we expect it to, you know, to be kind of in the range of what we've seen in the past. If you look at our inventory position, the $40 million, $18.6 million of that is WIP. So we have a number of the components looking for, you know, final pieces to finish off to put in our customers' hands. The numbers are a bit more flexible than that. Linking on to your second question about the equity purchase. You know, we strongly believe in the equity of this company, and we think that there's a lot of upside. You know, when we think about any equity issuance, we would do it only if it's necessary and in a way that strategic step for us in an opportunistic way. We're a capital light business, and we have a lot of flexibility in the business that we can use and control. Understood. Thank you. I'll pass it along. Cheers. Those are all the questions that we have today. I will now turn the conference back over to Dakota for closing remarks. Thank you. Thanks everybody for joining, and thank you to all our analysts for asking some incredibly insightful questions. We believe that the investment case for Xos is clear. As you consider the current environment we are in, with diesel prices being highly volatile and trending upwards, our total cost of ownership advantage is even more compelling and clear, as can be seen by our commercial traction. We're excited about next week and our product launch event, the Xos Fleet Week, to be on Tuesday, May 10th, which will be in Long Beach, California, and will also be live streamed on our website, xostrucks.com. We're hoping that everybody listening in to the call today will be able to tune in to that event and really keep up to date with our new exciting products. We're building a business tailored to the needs of our customers and focused on delivering for them. Our announcements at Xos Fleet Week will only continue to demonstrate our commitment to those fleet customers. Thank you everybody. Have a great day. This concludes today's conference call. You may disconnect your lines. Thank you for participating, and have a pleasant day.