Greetings and welcome to Xos, Inc. Fourth Quarter and F ull Year 2023 Earnings Call. At this time, all participant lines are in a listen-only mode. For those of you participating in the conference call, there will be an opportunity for your questions at the end of today's prepared comments. Please note this conference is being recorded. At this time, I would like to turn the conference over to the General Counsel of Xos, Inc., Christen Romero. Thank you. You may begin. Thank you, everyone, for joining us today. Hosting the call with me today are Chief Executive Officer Dakota Semler, Chief Operating Officer Giordano Sordoni, and Acting Chief Financial Officer Liana Pogosyan. Ahead of this call, Xos issued its fourth quarter 2023 earnings press release, which we will reference during the call. This can be found on the Investor Relations section of our website at investors.xosinc.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.xosinc.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 fourth quarter 2023 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, I now turn it over to our CEO, Dakota. Thanks, Christen. And thank you, everyone, for joining us to review Xos's best year to date. On today's call, I will cover highlights from 2023, during which we generated revenues of $44.5 million, delivered 283 units, and achieved positive gross margins in both the third and fourth quarters. Before handing it off to Gio and Liana for operational and financial updates, I will discuss our anticipated acquisition of ElectraMeccanica and the outlook for 2024. Last year, we delivered quarter-over-quarter growth and set new delivery records in each of the third and fourth quarters following the release of the redesigned Stepvan platform. As is common practice in our industry, most of our customers build confidence in Xos vehicles by starting with an initial order of 10 or fewer trucks and putting these vehicles through their paces in the real world. Customers then return with larger order sizes that make Xos part of their ongoing vehicle replacement schedule. The initial orders all involve important decisions about the vehicle's use case, total cost of ownership, charging infrastructure, and driver training that differ from the traditional commercial vehicle sales process, making a robust sales program a strategic focus of Xos. Our strong customer pipeline built on the past six years of direct sales propelled us to success with significant delivery volumes to established customers like Loomis and UniFirst, as well as new customers including UPS and Canada Post. Direct sales comprise over 90% of our 2023 sales and remain a critical tool in growing our market share. Following the sale, we rely heavily on our dealer partners to service and support Xos vehicles, delivering a high-quality customer experience that directly translates into larger follow-on orders. In 2023, we saw order sizes grow with many of our customers, including Loomis's purchase of 150 vehicles announced in the first quarter, and we expect that our established relationships with globally recognized fleets will continue to differentiate Xos. Our new StepVan platform also contributed directly to our improved financial results, showcasing that Xos's commercial EVs can deliver attractive gross margins without the massive scale and capital requirements cited by many. The new Xos StepVans exhibit unit gross margins in the range of 6%-23%, in line or exceeding the gross margins of many legacy OEMs. We expect these results will continue to improve the concerted efforts of our engineering and supply chain teams, which Gio will describe momentarily. The new StepVan was also a step forward for our customers, combining longer range with improved payloads and reliability. Over the second half of the year, we delivered over 170 units of the new Stepvan to customers alongside a small population of prior generation inventory. It is a vehicle platform that we plan to leverage for many years, both in the Stepvan market and our powertrain and hub products. Operationally, we pursued a series of difficult and aggressive cost-cutting efforts in 2023 that instilled financial discipline and rigor across the company. By the fourth quarter, we reduced operating expenses by 43% from their peak in the fourth quarter of 2021. Those changes, together with improvements to our gross margins, propel Xos towards our next company goal, positive free cash flow. Our steady march towards positive free cash flow is bolstered by our expected acquisition of ElectraMeccanica. In 2023, we explored multiple options to address Xos's need for growth and working capital. We found a unique opportunity with ElectraMeccanica. Following the discontinuation of their Solo EV, ElectraMeccanica conducted an extensive review of all options to deploy their capital and determined Xos offered the best long-term opportunity. Our anticipated acquisition of ElectraMeccanica further underscores Xos's unique position as a leader in fleet electrification. Yesterday, the transaction was approved by shareholders of both Xos and ElectraMeccanica, and we currently anticipate to close this upcoming Monday, March 25th. The deal is expected to provide Xos with over $45 million in additional capital that will provide a secure financial base for many quarters. For reference, Xos's quarterly cash consumption ranged between $2.2 million and $8.5 million in the second half of 2023, excluding our now completed repayments to Yorkville. The positive impact of the acquisition is hard to overstate, and I thank all of the ElectraMeccanica shareholders for their support in ensuring that Xos remains a leader in commercial EVs for years to come. Following the anticipated close of the transaction next week and the resultant influx of capital to Xos, Xos will continue to make judicious capital allocations in those areas where we anticipate short and mid-term gains in our bottom line. We will remain open to outside funding opportunities where it unlocks significant value for both customers and shareholders. However, we do not foresee a need for additional capital to deliver growing volumes of our core products. Turning now to our commercial prospects for 2024, I firmly believe that Xos has selected the ideal entry point to the commercial EV market with our StepVan, and further believe that Xos will parlay StepVan success into other sectors as customer demand and infrastructure readiness grows. For now, we remain wholly committed to the StepVan market and our related powertrain products. That continued focus is reflected in our CapEx and R&D budgets, which remain unchanged following the acquisition. We believe concentrated attention on increased StepVan deliveries is the key to reaching our financial goals. In 2024, our delivery volumes will be bolstered by three major factors. First, we anticipate our established customers will continue to increase their order sizes and make Xos a part of their routine vehicle procurement cycles. We continue to believe that deliveries will be weighted to the second half of the year as customers race to install charging infrastructure supported by our sales team who've gotten a strong start to the year. Relative to 2023, we expect to see substantially stronger first and second quarters. Second, regulatory pressure combined with customer incentives available in at least 10 states will continue to motivate new and existing customers to adopt EVs. Lastly, the revised StepVan platform is translating into stronger powertrain sales. We have powertrain deliveries planned for Winnebago and a nationally recognized school bus manufacturer in 2024. In addition to bolstered vehicle sales, we have high expectations for the updated Xos Hub. The hub serves as both a sales enablement tool for StepVans and as a high-margin product in its own right. We are seeing surging interest and purchase orders from a range of customers, including Xcel Energy and Duke Energy, who have signed sales orders and are beginning to take delivery. Our hub leverages existing power infrastructure at customer sites to provide stop-gap EV charging, remote and rescue charging, and low-cost DC charging infrastructure. Each unit can charge up to four vehicles at one time from a single power connection, which many locations already have on site. The hub can also be mounted to a trailer to provide mobile power storage and charging capabilities. By allowing users to forgo expensive and time-consuming electrical upgrades, our fleet customers can put newly purchased Stepvans into service before permanent charging infrastructure is complete. In many cases, fleets can entirely avoid the uncertain infrastructure installation timelines that have impacted Xos vehicle delivery schedules. In additional support for hub sales are the recent incentives from the California Air Resources Board CORE Incentive Project, which provide up to $160,000 per unit for certain hub purchases. In all, while the hub won't eliminate charging-related delays for our customers, we believe it will meaningfully improve the predictability of our StepVan deliveries. I'll now hand it over to our COO, Gio, for an operational update. Thanks, Dakota. 2023 was a banner year for the Xos engineering, supply chain, and manufacturing teams. We launched a new higher-performance Stepvan platform, delivered positive gross margins, and sustained higher vehicle build rates than ever before. Our updated Stepvan platform delivers higher payload and range performance to our customers while simultaneously enabling us to achieve our gross margin targets. The long-range variant of our platform is a particular highlight and comprised approximately 53% of 2023 deliveries. The platform redesign was coupled with significant revamp of our factory operations. By bringing our manufacturing team in-house, integrating our ERP system into our product development and manufacturing systems, and fabricating more components on site, we were able to scale up factory output to match customer demand without significant capital investments. In both the third and fourth quarters, we were able to demonstrate, for periods of time, build rates in excess of 700 chassis per year. Such sustained build rates underscore the Tennessee factory's future production capabilities and reflect the agility with which our team can quickly pivot and satisfy production demands without risking unhealthy inventory buildup. The team accomplished all of this while significantly reducing operating expenses over the year, which is a testament to our ability to deliver results in a capital-constrained environment. Beyond Stepvans, our team fully revamped the hub. By leveraging our existing battery and charger technology, the hub now offers sub-10,000-pound curb weight, 280 kWh capacity, and four charge heads with up to 150 kW charge speed, all at a 40% lower price than our prior version. Thanks to our engineers' efforts and the highly overlapping supply chains, we have the manufacturing capacity to build up to 100 hubs per year at our Byrdstown, Tennessee factory, in addition to our projected StepVan volumes. Turning to 2024, our supply chain and engineering teams will continue to focus on cost reductions and improved vehicle performance. Our growing scale and reputation as a leader in the industry is starting to pay dividends in supplier relationships. As a result, we have more opportunities to enter into long-term supply agreements with better terms that have eluded new OEMs. Our engineers are working closely alongside our supply chain team to further improve the performance and margin of our vehicles. In 2024, we expect to expand our addressable market by introducing new StepVan variants and powertrain systems where customer demand is sufficient to justify the R&D resources. The Xos Hub, and Powered by Xos, will continue to expand and support revenue growth, but for 2024, our top priority will remain scaled StepVan production and deliveries. With that, I'll pass it to Liana. Thank you, Gio, and good afternoon, everyone. 2023 presented a year full of challenges that Xos was able to navigate, all while making significant progress financially. Launching our gross margin positive Stepvan, growing unit deliveries, and securing meaningful capital via our expected acquisition of ElectraMeccanica have prepared Xos to deliver strong results in the coming years. Compared with 2022, we grew revenue by 22%, improved our annual gross margins to near break-even at -2.9% from -83%, and reduced our quarterly operating expenses by 27%. These accomplishments required immense dedication from our entire team and provide me confidence that we will continue to deliver on our aggressive targets in 2024 and beyond. With that in mind, I'll now review our financial performance for the fourth quarter of 2023. Our revenue for the fourth quarter increased to $18.4 million compared to $16.7 million in the third quarter. Our cost of goods sold during the quarter increased to $17 million compared to $14.7 million in the prior quarter. GAAP gross margin during the quarter was a profit of $1.3 million compared to a profit of $2 million in the prior quarter. The change in revenues was primarily due to the increase in quarter-over-quarter unit deliveries, as well as an increase in current quarter deliveries of energy products, including the Xos Hub. Cost of goods sold increased in line with revenues during the quarter. Gross margin was impacted in the current quarter by changes in our inventory reserves, updates to the absorption of overhead costs related to sold units, and the results of our physical inventory count. This activity resulted in slightly lower margins compared to the prior quarter but highlights our focus on continuous improvement of our inventory management processes. As noted last quarter, GAAP gross margin for a vehicle OEM is impacted by a range of reserves that, combined with changes in the sales mix between dealer, direct, and prior model inventory sales, introduced higher levels of volatility in quarterly results. For this reason, we continue to share a consistent non-GAAP gross margin that you can find in today's earnings release. Our fourth quarter operating expenses decreased to $13.2 million from $14.6 million in the prior quarter, primarily driven by the October 2023 reduction in workforce and overall lower expenses across all categories, partially offset by ElectraMeccanica transactional-related expenses. Full-year non-GAAP operating loss was $58.1 million and for the fourth quarter, $10.9 million. Operating expenses are expected to increase moderately following the acquisition as we wind down the remaining ElectraMeccanica operations through the second quarter. We ended the year with cash and cash equivalents of $11.6 million compared with $22.6 million at the end of the third quarter. In addition to cash use and operating activities, we used $10.9 million during the fourth quarter in financing activities. This was primarily related to our convertible debentures with Yorkville, which have now been repaid in full. As mentioned last quarter, these payments concluded in the fourth quarter and will not impact future results. Inventory contracted to $37.8 million from $48.9 million in the third quarter as we continue to draw down pre-pandemic inventory and prior generation Stepvans. Raw materials balance decreased as a result of the expeditious production of Stepvan units during the quarter, offset by fewer receipts given our focus on strategic purchasing and inventory management. Finished goods inventory decreased due to the sale of our prior generation StepVans as well as the sale of energy products. We expect inventory balances to stabilize moving forward with prudent and deliberate purchasing. Operating cash flow, less CapEx or free cash flow, improved to -$0.9 million for the fourth quarter from -$8.4 million last quarter. This reflects both Xos's improved cost structure from reductions made in 2023 as well as increased deliveries of gross margin positive units. Wrapping up with outlooks for 2024, we expect to generate $66.7 million-$100.4 million in revenue, achieve a non-GAAP operating loss of $48.7 million-$43.7 million, and deliver 400-600 units. As a result of redesigned StepVan and updated Xos hubs, we expect Xos to deliver positive gross margin in each quarter of 2024. This growth will be supported by improved liquidity in the form of over $45 million in cash and cash equivalents that we expect to receive from the acquisition of ElectraMeccanica in the coming weeks. This capital will be used to fund Xos's ongoing operation and working capital needs to support our growing StepVan deliveries. Our expected acquisition of ElectraMeccanica includes the assumption of certain liabilities, mainly in the form of two real estate leases that we expect to sublease. We do not anticipate the acquisition to meaningfully change the trajectory of Xos's operating expenses or delay our achievement of positive cash flows. I'll now turn the call back over to Dakota. Thanks, Liana. To wrap up, 2023 was a critical year for Xos that set the stage for an exciting 2024. Our customers clearly demonstrated their growing demand for electrification, leading to our back-to-back record quarters in the second half of 2023. Our vehicles are now in use by the majority of North America's large StepVan fleets and remain the sole source option for zero-emission Class 5 and 6 StepVans delivered at scale. We also demonstrated that commercial EVs can be built profitably with the release of our gross margin positive StepVan, making Xos a leader in positive EV economics. Now, with the upcoming acquisition of ElectraMeccanica, we have secured the funding needed to build a sustainable, cash flow positive business. These milestones remain rare accomplishments in the commercial EV industry. Xos continues to be an outlier in the industry and a critical part of the electrification of commercial vehicles. With that, let's open the line for questions. We will now begin the question and answer session. To ask a question, you may press star, then one on a touch-tone phone. If you're using a speakerphone, please pick up your handset before pressing the keys. If at any time your question has been addressed and you would like to withdraw your question, please press star and then two. Our first question comes from Donovan Schafer with Northland Capital Markets. Please go ahead. Hey, guys. Congratulations on getting the votes for the ElectraMeccanica acquisition. That's great to hear. So for my first question, I want to ask about gross margins. So they came down a little bit this quarter, and based on what Liana said, I realized there's some inherent lumpiness, it seems, that has to do with the way reserves are treated in different channels, whether it's direct sales or through a dealer. But it sounds like on a non-GAAP basis with the non-GAAP gross profit you report, it adjusts for a lot of that. So I'm curious if we can kind of just isolate if there was something. My impression is that kind of on an apples-to-apples basis, gross margins may have come down a little bit Q3 to Q4. Correct me if I'm wrong on that. If so, just if you can talk through what kind of was the impact there in the fourth quarter. Hello? The reserve. Yeah, yeah. Your line is now live. Sorry. Can you hear us now, Donovan? Yes. Great. So there's really a couple of things that drive that. When you look at the GAAP figures, it's obviously the reserves that Liana touched on that drive a little bit of that change. But when we adjust for non-GAAP considerations, the single largest factor is going to be model mix. And some of the shorter-range battery vehicles or slightly different-configured vehicles are going to represent or demonstrate different margin profiles. And so as we make different deliveries to various customers that have longer range or lift gates or other components that might be added onto the vehicle, that's ultimately going to drive our margin performance quarter to quarter that changes. But as we get through some of the older inventory, which should end in Q2, and as we make more deliveries of our 2023 and 2024 StepVans, the margin profile across all of those vehicles will continue to increase. As we've said in previous calls, we believe the margin profile of all of our products should be north of 20%. It should continue to improve in quarters to come. Okay, great. Then turning to 2024. Just to add one more point on the margins. I think one point for this quarter is in our script; we mentioned that there was absorption of overhead-related costs. Part of the evaluation of the methodology, we recorded a change in estimates this quarter that was one-time in nature that we don't expect to reoccur. That was primarily driven the lower margins this quarter as well. Okay, okay. And then turning to 2024, it was a very crude kind of approach to things. But if I take the midpoint of the revenue guidance and I take the midpoint of the non-GAAP operating loss guidance, and if I just sort of hold OpEx and other expenses constant, and I just sort of make that the same in 2024 as it was in 2023, which I know is very crude. But the implication there is something like is a gross margin for 2024 somewhere in the ballpark of 11%. I'm just curious if you can give any color around is that going to grossly mislead us to think in that framework? Are there going to be different sort of puts and takes or things that would cause a deviation from that? And then also, if it'll start lower and scale through the year, how you would expect that kind of gross margin to behave over the year? Yeah, so that's a great question. While we don't guide to gross margins and free cash flow or, I guess, operating cash flow at a granular level, we can provide some context that I think informs your assumptions. Which if you look at 2023 OpEx, we talked about making significant improvements since our full-year OpEx reductions were close to 25% by the end of Q4. So if you look at the annualized OpEx number, it's probably not the stabilized OpEx number that we saw in Q4. So that'll drive a little bit of improvement. Then as we represented, that model mix will continue to improve. And we anticipate selling a substantial portion of those higher-margin kind of vehicle configurations within the year that will ultimately lead to that improved gross margin performance in the year ahead. Obviously, a lot of it comes down to what gets delivered quarter to quarter. There is still a little bit of variability. I think, generally speaking, OpEx performance should be better, excluding some of the impacts of the inclusion of EMV financials for Q1. The profitability of all the vehicles we'll deliver in this year will continue to improve as well. Okay. And if I can squeeze one more in, just if we can get an update on the state of the current state of things for your customers getting the EV charging infrastructure in place, kind of what visibility you have, what kind of conversations or engagement you're doing with customers to make sure that they will be able to take delivery sort of as scheduled where and compared to, I know, in the past, a year ago or so, that was limiting the ability of customers to take delivery. So if we can just get kind of an update there, that'd be great. Yeah, absolutely. We're happy to provide a general update. Infrastructure continues to be the biggest issue that we and other OEMs experience in terms of delivering vehicles, growing deliveries, period over period. But we're taking that into our own hands and really working with customers to improve the rate with which we deliver infrastructure. We also recently announced the launch of our second-generation hub subsequent to Q4 close in the beginning of Q1. This second-generation hub was released to much fanfare. We've been building a significant order backlog of those units, which will help enable delivery of more of our own trucks as well as other EVs for customers that don't currently acquire Xos trucks. So we believe that's solving a significant portion of the problem that we're dealing with today. But beyond that, we don't believe that the hub is going to solve all of our infrastructure challenges. I will say that we have better insight and better visibility into the deployment timelines of some of our key infrastructure projects with a lot of our customers here in California or in other large states where charging infrastructure is being deployed, such as in Texas or New York. It doesn't mean we have certainty around all of those dates as projects can experience construction delays, utility delays, building permit delays that can slow these projects down. We're continuing to be more proactive about monitoring that and incorporating that into our annual planning exercise. Then products like the hub will continue to supplement and provide a stop-gap solution until we can get that permanent infrastructure deployed. All right, great. Thanks, guys. I'll take the rest of my questions offline. Thank you. The next question comes from Jerry Revich with Goldman Sachs. Please go ahead. Hi, this is Adam on for Jerry today. Thanks for taking my question. It seems like you are sort of at the run rate of deliveries consistent with the low end of the guide. So just wondering how you're thinking about the puts and takes that would keep you at this run rate and at the low end versus the high end of the range. What are the key bottlenecks to deliveries and the range of that embedded in guidance? Yeah. Thanks for the question, Adam. So I would start off by reiterating my previous point, really, about infrastructure. That continues to be the single biggest bottleneck or hurdle in terms of increasing deliveries. So for reaching or obtaining the high end of the guide, I think infrastructure will drive the majority of that incremental performance. There are other factors that are obviously playing into all of this, including the time to delivery from the outfit facility, supply chain, and component parts that go into the vehicles. But I would say the majority of the delays that we experience in that range are going to be attributable to infrastructure delays with projects that customers are deploying. One other factor that I think will significantly change that is the hub. And although we've just launched, the hub Gen 2 units are going to be shipping our first units this quarter. We don't have a clear understanding of how that will impact deliveries quite yet as we haven't fully rolled out production and fully got them into the field with customers. But we do anticipate that it'll have a pretty significant positive impact for us being able to stay within that range and hopefully stay at the high end of that range. So as the hub continues to ramp up in production in Q2, we hope that that can drive our performance in being in the top end of the range. Nice to see the positive gross margins on the new Xos StepVans. I think you said unit gross margins in the range of 6%-23% on that product. What drives that variability? And where do you expect margins on that product to trend over time? Yeah. So it actually is driven a lot by customer model mix and the configuration, ultimately, that our customers deploy. Some of our longer-range battery options may have a higher margin profile. Other feature add-ons, things like lift gates or power takeoff or power export, might drive that, and even the body configuration. So generally, customer-specific attributes and features on the vehicle, as well as customer-specific deal terms, as we go to increase volumes and increase deliveries to some of our larger customers, we do offer small discounts for some of those larger bulk purchases. And those generally will accrue to those customers that are buying north of 100 units or more. So that's what drives most of the variability. There is obviously COGS allocation or labor allocation that gets attributed to different vehicles depending upon how that vehicle is built up. But those vary less than the actual final vehicle model spec. Got it. That's helpful. And then last one for me, the unit deliveries outlook for 2024, can you provide any color between the split of StepVans versus powertrains versus Hub products? Yeah, we're not providing that guidance today. We anticipate that really all three of the categories are growing pretty substantially. And so as we look to 2024, there's just depending upon our customer, whether it's a Powered by Xos customer or it's a StepVan customer, there are different variables that inform when they take delivery of those trucks. But we have a pretty good confidence around that pipeline to stay well within that range and know that really all three of these product segments are going to be growing double digits in terms of their deliveries in the year. Great. Thanks so much. Thanks, Adam. The next question comes from Mike Shlisky with D.A. Davidson. Please go ahead. Yes. Hi, good afternoon. Thanks for taking my question. I guess I wanted to see, do you still have legacy vehicles to deliver in 2024, or will it be entirely the new version? And I guess on top of that, do you have a new, new version? Is there a whole new round of improvements for the gross margin in the somewhat near future here? Yeah, absolutely. Thanks for the questions, Mike. And thanks for joining. With regard to the legacy units, in Q2, we'll have less than 10 of those units to deliver. So with most of the net realizable value accruals already having hit our P&L in the previous year, we don't expect the margin trail to really impact us in full year 2024. So again, very single-digit units for the remainder of the year. And then the second point around your question around new models, which is our 2024 model year step van, we will continue to make improvements every year on the product, both for improved customer experience, improved efficiency, and durability and reliability. But one of the other side effects or benefits of making those engineering changes is, as you pointed out, the improvement of our cost of goods sold. So we do anticipate some improvement in our cost of goods sold, not as drastic of an improvement from our legacy inventory to the 2023 step van, but still incremental margin performance improvement within the year because of some of those engineering changes and particularly because of some of the supply chain changes and improvements that we've negotiated with our key vendors and suppliers that make up the cost of that vehicle. Okay, great. Then I guess I was curious, you had mentioned that almost all your sales were through the direct channel, and the dealer network was providing most of the service piece of it. Do you anticipate more of the 2024 sales of new equipment to be in the dealer channel, or do you still think it'll be mostly national or direct accounts? Yeah, that's a great question. So as we mentioned in the call, 90% of our sales came through the direct channel. I believe that number will actually continue to go up, and we'll see even higher than 90% of our sales go through our direct channel. And just one quick clarification on the service perspective, most of the service work is still done by our traveling technicians and our mobile maintenance Xos service team, which are Xos employees. But we do work with those third-party dealer vendors and mobile maintenance companies to help supplement in markets where we may not have a concentrated population of vehicles. And so we do anticipate that our service footprint will continue to grow as we deliver vehicles across new territories throughout the central United States and other locations where we don't already have trucks. But we also anticipate that we'll continue to do a majority of the service work on those vehicles. Got it. And then thirdly, can you discuss some of the non-step van sales you've got? I guess, can you? Are you able to say what happened in the fourth quarter? Could you provide a breakdown of the vehicles versus the powertrains, and whether that even matters at this point for your margins? And then looking ahead, I'd be curious just some more details as to what that might look like in 2024. Particularly on the school bus side, there's only a few players. Will you be providing one of the large players with bus powertrains, and is that a replacement for a prior model, or will these both be putting out an entirely new EV school bus model in 2024? Yeah, it's a great question. So when we talk about model mix, as you know, the step vans have seen significantly improved gross margins starting in 2023 and will further improve into 2024. Our Powered by Xos margins, because of the associated engineering costs and the setup costs of building out those customers and that customer pipeline, the margin profiles are generally even higher in the 20%-30% range, sometimes higher, but ultimately depends a lot on the customer circumstances. The challenge in that segment is that we don't always control the volume deliveries because we are a powertrain supplier providing a component to a final vehicle manufacturer or an OEM. With regard to our specific customers in that space and the school bus and recreational vehicle products, these are new products that they would be launching with our powertrain technology. So incremental business that they're not already currently supporting and servicing today. We do anticipate there'll be growing volumes, although the mix, I would say, relative to our overall core step van business is still relatively low. It's a minority percentage of our overall vehicle deliveries and revenue. I thought I'll have to ask Dakota just to make sure, the bus that this customer will be launching, do you know if they'll be eligible for some of the large subsidies from the EPA and various states that are currently underway? Those are pretty large programs. I'm curious to make sure that Xos-powered buses will be able to receive those types of subsidies. That's a great question. We do believe it will be eligible under the program because it's not in production yet. We haven't gotten final confirmation. But as you know, Mike, the EPA was expected to release about $500 million in subsidies in their last grant release in early January, and they announced a billion-dollar pool of funding. So it's a fast-growing market and continues to see lots of demand in that space. And we expect our vehicle to be our powertrain to be one of the vehicles that will be eligible for those EPA incentives and potentially other state-driven incentive programs. Great. I appreciate the discussion. I'll pass it along. The next question comes from Daniel Ives with Wedbush. Please go ahead. Hi, this is Stephen Wierchoptig on for Daniel Ives. I just had two quick questions. You mentioned on the call that the cash consumption that you guys had in the back half of 2023 was somewhere between $2.2 million and $8.5 million, if I heard that correctly. Do you expect this to continue throughout the first quarter and into 2024? And then also, you mentioned that the deliveries for this year would be a little bit more back half weighted. Should it be similar to what we saw in 2023? And if not, then how should we really expect that going forward? Yeah, those cash burn numbers are what we delivered in the second half of 2023. We anticipate that with our continued delivery of 2023 and 2024 model year vehicles, our margin profiles will continue to improve, thereby reducing that number. We also anticipate that we can continue to deliver more units, which will also continue to reduce that number in the year to come. And I think when we're looking at inventory turns in terms of getting older inventory off the balance sheet, we anticipate that our inventory turns will continue to anticipate necessitating less working capital to build a larger amount of vehicles. So that's to address your first question. And then what was the? Can you clarify the second question just one more time for me? Yeah. So you mentioned a little bit about the deliveries for this upcoming year would be a little bit more back half weighted. Is it going to be similar to what we saw in 2023? And if not, how should we expect to be modeling this out? We do anticipate that it will be back half weighted. There's a variety of factors that are more industry factors that drive seasonality in some of the markets, such as our parcel delivery customers. They generally, in Q1 and Q4, don't take a lot of deliveries. The reason for that being Q4 is obviously the busiest season where volumes for them can go upwards of 100% of their baseline volume. So delivering to those customers at that time period is very difficult. Then in Q1, we see a lot of that carryover volume from package returns and shipment returns. The deliveries in Q1 and Q4 tend to be slow for parcel delivery, which represents a substantial portion of our overall vehicle deliveries. That's where they concentrate amongst Q2 and Q3, generally. And then in terms of our other powertrain customers and some of our uniform rental or vocational customers, they generally take delivery in the second half of the year, either during the summer period or in Q4, some of which for our smaller fleets is to take advantage of some of the accelerated depreciation tax treatment of acquiring new equipment, such as Section 179, some of which just has to do with the end of their fiscal years and the timing of their budget cycles. But to reaffirm, it definitely does mean we do have a back half weighted 2024 as well. Thank you. Thank you. That concludes our question and answer session. The conference is now concluded. Thank you for attending today's presentation. You may now disconnect.