Arrival SA (ARVL) 2021 Q1 法說會逐字稿

Hello, everyone, and welcome to Arrival's First Quarter 2021 Earnings Call. My name is Megan, and I will be your operator today.

Before I hand the call over to the Arrival team, I'd like to go over just a few housekeeping notes for the program. As a reminder, this webinar is being recorded. (Operator Instructions) Thank you for your attendance today.

I will now turn the call over to Mitesh Soni, Investor Relations for Arrival.

Good morning, and thank you all for joining us today to discuss Arrival's First Quarter 2021 Update.

Before we begin, I'd like to remind everyone that certain statements made on this call today are forward-looking statements. These statements are subject to various risks and uncertainties and reflect our current expectations based on our beliefs, assumptions and the information currently available to us. Although we believe these expectations are reasonable, we undertake no obligation to revise any statements to reflect changes that occur after this call. Descriptions of these factors and other risks that could cause actual results to differ materially from these forward-looking statements are discussed in more detail in our filings with the SEC.

During the call, we also may refer to certain non-IFRS financial measures. This should be considered in addition to and not as a substitute for or in isolation from our IFRS results. For further information, please refer to our Investor Relations website at investors.arrival.com.

With that in mind, I'll turn it over to Denis.

Thank you, Mitesh, and thanks to everyone for joining our webcast this morning. The main message today, our business plan remains unchanged, and we are making great progress towards key milestones.

Just to remind you, Arrival was founded in 2015 with the vision to revolutionize the electric vehicle space, accelerate the transition to zero-emission vehicle globally and bring -- add to our series by using unique, powerful technologies developed in-house.

So why Arrival is different than any other automotive company? First of all, we invented radical new methods to design and produce vehicles using microfactories, so we use no stamping, no welding, no paint shop, and this method is protected by patents. The new method creates best-in-class EVs with attractive value proposition to fleet operators.

Our zero-emission buses, vans and cars are competitively priced compared to fuel vehicles and offer up to 50% lower cost of operations. The hardwares are upgradable, our composites are lighter and more durable than steel, decrease in maintenance cost and increasing the lifespan of the vehicles itself.

Our microfactories are hyperlocal. They're rapidly scalable with low CapEx. For example, our van factory is less than 50 million authenticated vehicles a year. We are virtually integrated, developing tech and components in-house with a very strong IP portfolio.

Arrival is a low-CapEx and high-margin business enabled by hardware, software and next-gen robotics. We have strong demand and $1.2 billion of orders. We have a unique culture and top team of more than 1,900 people capable to execute this business plan. And we believe that the purpose of Arrival is to make radical impact.

So let's focus on the results of Q1. First of all, we successfully completed our merger and listed our shares on NASDAQ in Q1 as planned. Next very important part of our business, our microfactories. So we made good progress preparing our microfactories. To date, we announced and started to equip microfactories in Charlotte, North Carolina; Brookfield, Rock Hill, South Carolina; Bicester in U.K., and we announced the fourth of our factory in Madrid in Spain. Mike will talk about this a bit later today.

In terms of products, we have 4 vehicle designs expected in the market by the end 2023. The start of production of buses scheduled for Q4 2021 as planned. The start of production of vans, both variants, small and big, is planned for second half of 2022. And the Arrival Car is scheduled for the end of 2023.

In terms of our clients, we have orders to date of approximately $1.2 billion. The largest order is from our strategic partner, UPS, who has committed to purchase up to 10,000 vans, with an option to purchase another 10,000 units. UPS is our long-term partner and has also invested in Arrival, alongside other key strategic partners.

We know the commercial vehicle opportunity is huge, with a total addressable market for commercial vans and buses of $430 billion, and we see the commercial segment will move to EV much faster than retail autos. This migration is supported by local state and national government policies around the world.

For example, EV infrastructure is a clear project for the Biden administration, who just this past month announced $174 billion plan to ignite the adoption of EV with a particular emphasis on transit and school buses. We have advanced our work on vehicles, production and digital platforms to begin customer and public roll-out trials later this year.

This includes bus trials in this autumn with First Bus, one of the U.K.'s largest transport operator, who recently announced their commitment to purchase non-diesel buses after 2022 and upgrade to a fully zero-emission fleet by 2035. And I'm pleased to announce our exciting partnership with Uber. We're designing an Arrival Car for the ride-hailing together, which we expect to take into production in the end of 2023.

While is it important? Market today is 30 million ride-hailing vehicles worldwide...

Uber has already committed to all of its drivers' cars in London being fully electric by 2025. That's working with the British electric van maker Arrival to create an affordable car developed specifically for Uber drivers who will provide suggestions for the design.

We have a strong team in place, including our newly established Board of Directors, which includes 7 members with growing technology, financial, marketing and automotive industry expertise.

This was an overview. Let me now turn the floor over to Avinash, our President, to give an update of our sales pipeline and eco products.

Thank you, Denis.

In Q1, we continued to execute on our business plan, and we are experiencing strong momentum. We are encouraged by our sales pipeline with nonbinding letters of intent increasing in Q1, both year-over-year and sequentially, for both our bus and van platforms. And we have trials starting with these key customers later this year. Once those trials begin, we expect those letters of intent to be converted to fully executed contracts before the start of production.

Over the course of Q1, we've increased conversations with global governments, cities and customers across territories regarding both vehicles and microfactories. Arrival's localized microfactories and electric vehicle price point provides us a strategic advantage to enabling simultaneous conversations with multiple cities globally, while covering both sales and production.

In Q1, we also signed multiple letters of intent with service network partners and made significant progress on our internal tools to support our vehicles once they go into service with our customers' fleet. As Denis mentioned, we expect to have 4 vehicle programs in market by the end of 2023 and have made significant progress in the quarter towards that goal. We have found that we can increase commonality even further between a van and large van, and in order to drive these efficiencies, we have retargeted the large van production to Q4 2022.

The Arrival Bus program is currently building prototypes that will go into validation and testing in advance of certification before production begins in Q4. It is also producing vehicles in readiness for public road trials in the U.K. with the First Bus this fall. Sales conversations have gained momentum, and further discussions regarding trials are in progress, with trials being a precursor to placing an order for this sector.

The Arrival Van program is also in the process of building vehicles for testing and validation and also for trials beginning this summer, including vehicles for UPS and other key customers who have signed letters of intent. UPS recently experienced their first beta vehicle for user testing in their London depot and are looking forward to deploying them into service at multiple locations later this year.

This month, we were excited to announce our plans for a small vehicle platform that we previously announced. This is the Arrival Car and is expected to go into production by the end of 2023. The Arrival Car will be a purpose-built vehicle for the ride-hailing industry, which has over 30 million global drivers needing to transition to electric to adhere to increasing city regulations. This is a crucial step for the ride-hailing industry to reduce its environmental impact and for drivers as it reduces their total cost of ownership.

This is an example of how Arrival's strategy is good for businesses, people and the planet. We have partnered with Uber and its drivers to ensure that it is designed to be the best possible vehicle for this specific use case. This strategic partnership with Uber will also evaluate how we can work together to help its transition to electric to meet its goals of being fully electric in the U.K. and North America by 2030.

We believe that we are perfectly placed to create a vehicle for this sector as so many attributes align with those of commercial vehicle, from affordability, to durability, the comfort and maximizing functionality. And because we have already developed our components and materials for our van and bus, we were able to develop the Arrival Car in parallel with our other vehicle platforms.

We continue to attract top industry talent to Arrival and in Q1 brought on Adrian Nyman as our SVP of Brand, bringing strong experience from over 10 years at Nike; and Mitesh Soni, our VP of Investor Relations, who joined us from JPMorgan. Our headcount increased by over 400 in the quarter, and we now have over 1,900 employees as we scale up our vehicle programs and move towards production.

It's important to note that COVID has not had a significant impact on Q1 operations, and as we look forward, we don't anticipate it having a significant impact on our future operations and supply chain. But we are continuously monitoring the situation.

Our CEO of Arrival Automotive, Mike Ableson, will now give us an update on our microfactory and supply chain. Mike?

Thanks, Avinash. Arrival's microfactories are a unique approach to vehicle manufacturing and enable production of best-in-class vehicles specific for the market at prices competitive with fossil-fueled vehicles. Microfactories are low footprint, rapidly scalable and low CapEx as compared to traditional OEM automotive factories.

As we continue to order equipment for our first 2 microfactories, we can confirm that we remain on track to spend less than $50 million in CapEx per factory. Specifically for the Rock Hill microfactory, we have over 70% of our production machinery delivered or on order. And for our Bicester microfactory, we have over 60% delivered or on order.

We've started to install equipment in our Bicester factory that we're using to confirm the results of the production process analyses we've already completed. To this point, our actual results are exactly in line with what we expected. Using the production equipment, we've already completed assembly of the van chassis structure and operation required fitting multiple parts and joining them together with both adhesives and a variety of mechanical fasteners. We've also begun producing concept panels at Bicester using production equipment and raw material from our production supplier.

In addition to our first bus microfactory in Rock Hill, South Carolina, we've also recently announced our first U.S. van microfactory in Charlotte, North Carolina. The Charlotte microfactory will build vehicles on both our van and large van platforms as vehicles on both platforms are intended to be part of the UPS order. Similar to our Bicester, U.K. microfactory, the Charlotte microfactory will be capable of producing 10,000 vans per year when operating on 2 shifts.

Finally, we're announcing today that we've acquired a location for our first European van microfactory in Madrid, Spain. We're still in the process of determining a start of production date for this facility.

On supply chains, we continue to work with our suppliers to ensure the supply of components for raw materials as we approach start of production at our first microfactories. As one example, we have worked with LG Energy Solution for a number of years to supply the battery cells we use to manufacture the Arrival battery modules. We've recently signed a 5-year agreement with LG Energy Solution to supply a quantity of cells more than sufficient for our initial microfactory ramp-up.

We've also been working with our suppliers to avoid the microchip supply concerns that have surfaced in some parts of the industry. We have committed supply agreements in place for all the chips used in our Arrival components through 2022. And because these are Arrival-designed components, we also have the ability to change the chips used in a component if we see that supply of a specific microchip becomes a concern.

In summary, the first quarter saw us make good progress towards the start of production at our first microfactories.

Our CFO, Tim Holbrow, will now take you through the financials from Q1.

Thanks, Mike. The financial information we are providing today represents management's expectations of the underlying operational performance of the business during Q1 2021. We expect to provide our full financial results for Q1 when they are available. These Q1 results will include the accounting impact of the merger with CIIG that was completed on March 21, 2021. The merger raises a number of one-off accounting matters, and whilst we're well progressed with finalizing them, they remain subject to completion of the ongoing audit by our external auditors.

As such, in this Q1 report, we're presenting management's expectations in relation to certain financial highlights prior to the inclusion of these merger-related items. For clarity, the items excluded from today's report include, but are not limited to, the accounting for the CIIG merger itself and any resulting charges from the differences between the fair value of Arrival shares and warrants issued and the net assets merged into the group; the accounting for other share exchanges performed in preparation for the merger; the accounting for warrants issued by Arrival at completion; and the accounting for one-off transaction costs borne by Arrival and one-off executive transaction bonuses.

Excluding these CIIG merger-related items, management expects Arrival's EBITDA loss for the first quarter of 2021 will be EUR 28 million. By comparison, the EBITDA loss in Q1 2020 was EUR 14 million. Taking into account the equity settled share option plan cost of EUR 1 million, management expects the adjusted EBITDA loss prior to inclusion of merger or transaction cost will be EUR 27 million.

The increase in operational expenditure reflects the increased activity within Arrival across its portfolio of research and development projects and the activity in our automotive and elements division as we prepare to enter production. This increase can be seen in our average headcount this quarter, which almost doubled year-on-year to 1,714 at the end of Q1 2021. As Avinash mentioned, we now have over 1,900 employees.

Administration expenses for Q1 2021, excluding costs directly attributable to the merger transaction, are expected to be EUR 20 million. Research and development expenses in the period are expected to be EUR 7 million. Although it's worth noting that costs directly attributable to product development will not be recorded in the profit and loss, but rather capitalized as assets under construction.

In Q1 2021, EUR 27 million will be capitalized in this way. Cash and cash equivalents at the end of Q1 2021 were EUR 516 million, an increase of EUR 449 million on the balance at December 31, 2020, of EUR 67 million. Net cash inflow from the SPAC merger transaction was EUR 518 million. Excluding this funding inflow, Arrival's net cash outflow for Q1 2021 was EUR 68 million.

Looking forward to the rest of 2021, as Michael said, we're making good progress in the delivery of our first microfactories in the U.K. and U.S.A. As we start equipping these factories ahead of production, we've been able to further validate our business plan assumptions on capital and operational expenditure and on vehicle production volumes. Indications are that all these assumptions are tracking in line with the expectations we set out in our initial business plan last year.

And now, I'm going to hand back to Avinash, who will complete the presentation.

Thank you. In conclusion, our business plan remains unchanged, and we made significant progress in Q1. We have a strong demand environment fueled by industry tailwinds, and we have the team and resources in place to execute our vision.

Thank you all for joining us today, and now, we'll go to Q&A.

(Operator Instructions) Your first question comes from Jeff Osborne with Cowen.

A couple of questions on my end. One, Mike, I think you alluded to it in the comments about the expectations for throughput for the facilities. But can you give us some comments on the robots in your preproduction facility in the U.K. and level of comfort with the throughput expectations as you originally laid out in the SPAC merger deck of 1,000 vans -- or 1,000 buses and 10,000 vans per site?

Happy to do that, Jeff. Thanks for the question. To your point, we've designed the facility such that our van microfactories will deliver 10,000 vans when they're operating on 2 shifts, and the bus microfactory will deliver 1,000 buses when operating on 2 shifts.

I want to be clear that some of the video that you saw was production equipment that's now being installed in our actual microfactory in Bicester in the U.K. So we have production equipment operating in the production environment. So it's not just being done in R&D facilities at this point.

To get specifically to your question on capacity and throughput, we've done extensive modeling of all of the processes and the systems in the microfactories. So we have very high confidence in that. And the work that we've done so far with the actual robotic cells in Bicester confirm that analysis to this point.

That's great to hear. And then maybe a question for Avinash. In your segment, you had talked about letters of intent being up sequentially. A common question we get from investors is the bus market domestically in the U.S., in particular, where prior to the SPAC merger, you didn't have any sort of publicly announced bus backlog relative to the van market.

So can you talk about what your level of comfort is of bus demand in North America for that South Carolina facility? I assume a portion of the LOIs are for that.

Yes, you're right. So we have actually seen LOIs come in for the bus as well. So it is for both bus and van. We've had a multiple increase on LOIs year-to-date, as I mentioned. And it's actually quite evenly split between the U.S. and EU. So we're actually seeing, I would say, a significant increase in demand in the bus segment, in particular.

Just to remind everybody that the sales cycle for bus typically is going to be trials first before long-form orders. And so we have announced the bus trial in the U.K. with First Bus, and that's happening in the fall of this year. But yes, to directly answer your question, we have seen LOIs come in for our bus in the U.S. in particular. And we're quite comfortable with the demand, and therefore, the forecast that we have put out today.

Perfect. And a few other ones. One on the Madrid side, great to hear. Is that going to be for bus or van? Or is it still TBD?

That will mean for van, Jeff. It will be our first van microfactory on the comp.

Got it. And then the last one, back to the bus side and van in South and North Carolina. Where do we stand on sort of the time frame for Altoona testing for buses and any other certifications that are needed on the van side so that we can start selling road-worthy vehicles that have all the safety certifications.

So the Altoona testing, as you know, is particular to sales to transit agencies in the U.S. They use federal money to purchase buses. And we will be putting one of our very early builds from Rock Hill onto the Altoona test. So that will run beginning very early next year.

On the van side, the key certifications are meaning both FMVSS and EU certifications. We're well along on meeting those. And I don't foresee any difficulties there.

Now since you asked about Altoona testing, I also want to emphasize that our sales team in North America is talking to people in Canada and Mexico outside of the U.S. And obviously, any sales there would not require the Altoona certification.

So as Avinash said, we're feeling very comfortable about our bus demand in North America.

Got it. And then just very quickly, Tim, no changes to the modeling in terms of cash burn or CapEx expectations? It sounds like everything is in track with what you previously disclosed, but I just wanted to confirm.

Yes, that's right. That's right, Jeff. We -- obviously, we recently announced report as part of the closure of the merger we did with CIIG and will not update the given guidance today.

Your next question comes from Rob at Wolfe.

In light of your comments -- in light of, I guess, rising inflation, you talked about having a line of sight with supplier readiness through 2022. Can you give us a sense if there's been any changes in your overarching BOM expectations for kind of through 2022 as well as looking out beyond 2022?

I would say, Rob, we have not seen an impact on any of our negotiated pricing with suppliers at this point. We'd -- obviously, we can't predict exactly what's going to happen with the inflation rate, but to this point, we haven't seen an impact.

That's helpful. And then just as we're getting closer to the service centers becoming production ready, can you give us a sense of the status of your suppliers with the components that you're outsourcing in terms of their readiness for the fourth quarter of this year and then looking out to the second half of 2022?

So I didn't mention it explicitly in the remarks, but at the same time, obviously, we went out and looked at all the chip availability for our in-house components. We also surveyed our Tier 1 suppliers as far as their readiness and their availability, and everything looks to be on schedule.

Now I want to mention, Rob, we're operating in much lower volumes than traditional OEMs, so the number of -- in the case of chips, the number of chips we're trying to secure is relatively small, which I have to admit is probably one of the reasons we don't see the same difficulties that some the larger OEMs are seeing.

Yes, that's very clear. And I guess in the early forecast that you had, your bus, which obviously is going to be the first product that's coming to market, your pricing is kind of meaningfully below kind of what industry averages are today for the electric bus.

Have you guys thought -- have you made any tweaks to kind of what your go-to-market strategy is from a bus perspective, just given underlying demand and industry pricing dynamics in North America?

We haven't seen anything, as far as pricing dynamics in North America, that would modify our initial approach to pricing here. To your point, we -- as far as we can tell, we can still comfortably price below our competition, our EV competition here in North America.

I just wanted to add a very important point is that, obviously, it's not only our ability to make bus pricing much better than other players in the market. So I think the major question is why, why is it like this? And the reason for this is because -- there are a few reasons.

One is that we're using quite many components from the van. So it means that we're taking high-volume products and putting them in the bus. So the good example here is that the biggest bus producer today is, like, probably they're producing 15,000 units a year, like, a Chinese company. But still, for the market, when you buy 15,000 motors, it's very small volume. And that's why the prices for those components are very high.

In our case, because we are using components from the van, and as an example, we have 4 motors exactly same as the van is using in our bus. So this is one of the reasons why our buses are so much cheaper.

And the other important part is that we are robotically assembling buses as well. So it means that there are not many companies in the world who are assembling buses using robotics. And this is another reason why, like, we can price our buses better than other players.

I think we're also very comfortable with the product position in our conversations with operators around the world. Our -- we're not comparing apples-to-apples when we look at the Arrival Bus, and Denis has the background there. And the technology that's going inside that bus when you compare it to what's available from many players who are taking potential diesel buses and turning those electric. It's just a very strong product proposition with a very attractive price point.

Your next question comes from Brian Johnson at Barclays.

A couple of things. First, when you talk about the build-out of the first plant site, Mike, you've mentioned that so far, it's tracking the simulation model. So how much -- what percent of the assembly line is actually finished? And then when do you think -- not so much job one, but kind of the first end-to-end validation of the production process should be coming?

Brian...

Mike, I just -- I would like to answer this question. Is that -- just one important angle is that we need to remind you that, like, our method of assembly is not converted lines, so it's not operations in sequence. So it means that we don't need to build all factories before we know all the operations.

So we have a few cells installed already and commissioned, and those cells are capable to do a majority of operations within the vehicle. So it means that, as we said, like, our method allows us to go in earlier -- much earlier than wait and see when all equipment is going to be installed.

And Brian, to your question about end-to-end builds, we intend to be building some of our late-stage prototypes of the vans through the production process that Denis talked about later this summer. And that will be at Bicester.

Okay. And second question, while I recognize that the subsidies for buses and school buses in the U.S. is still very much in draft legislation form, what's your thinking on -- the incentives is going to be Buy American provisions there, and then how the South Carolina, North Carolina factories will fit into the potential into that -- into those whatever boundaries lawmakers may put on the subsidies?

Yes. So there are -- to be clear, there are already Buy America requirements in place for transit buses that are purchased using federal money. The requirement is already 70%, this content has to be U.S. made. And we will meet those requirements with the Rock Hill assembly plant or microfactory with buses.

There is nothing established yet on the van side, but obviously, because we shared so many components between the bus and van, as we've established the U.S. bus supply chain, it gives us the ability to go to a very high level of U.S. content on the van side as well for the vehicles we're building in the Charlotte microfactory.

Your next question comes from Joseph Spak with RBC Capital Markets.

Just some questions on the Uber announcement. One, I guess, is it exclusive with Uber? Are you allowed to work with other ridesharing companies? And two, is the vehicle design that you were working with Uber also exclusive to Uber? Or can elements of that design be for other operations?

So on that partnership, the answer to both those is no. There's no exclusivity with us and Uber. We are working together on the vehicle design, but that vehicle design is for a ridesharing vehicle. And also, we are already in discussions with several other ride-hailing operators on the Arrival Car platform. So there is no exclusive agreement between us.

And just to add to this point is that you all know that companies like Uber -- and Uber explicitly announced their plans about electrification. There is a huge push on those type of companies to bring electric vehicles to the cities. And we know that there are not many options actually available for this market. But we already know that just taking the vehicle from, like, traditional standards like vehicles were designed, especially in the cars, is not enough to create the right user experience for customers, and they were not designed to operate in these conditions as well.

And it's -- I'm surprised actually that the industry didn't use the vehicle for that market yet. That's the reason we are focused on that. So this our work focused there, because as a company, we do commercial vehicles, and this is a good example where our technologies and method of assembly using microfactories is enabling these types of scenarios.

Okay. On the microfactories, I know part of the strategy there is to be able to build locally, supply locally. And I know you've mentioned a number of times that each can have around 10,000 capacity on 2 shifts.

But I guess what I'm curious about is, like, if the demand is eventually there, what's the -- what do you think, like, the functional or economically viable area, of a given, like, factory concerns, before you need to open another one like closer to a factory?

Again, to be clear, our strategy on microfactories is we're going to be expanding the number of microfactories very quickly, and so we'll move briskly, I would say, to add additional microfactories.

To your question, the sizing of the microfactory capacity, one way to think about it is, we think it's roughly sized so that it can supply a city of 1 million inhabitants on a very rough basis. So that can give you some idea, I guess, on my side, I guess, there.

Okay. And then the final question is, I know you mentioned van trials this summer. How long are your customers telling you that they need to really trial these vehicles in the fleet before they have confidence to place a larger or significant order?

So the trials encompass several different kinds of trials. There are obviously trials with drivers that you saw we've already started in the Camden depot outside of London, where we get driver feedback. Then to our operational trials where the vehicles will be going out on actual routes later in the year.

And then typically, the large commercial fleet operators also have some sort of durability testing that they require. And that varies from company to company. But we're aware of those testing requirements and we've got them built into our schedule.

I would also just add on the van, what we see is that's really just an early part of the process given where we are. Obviously, once the van is in production and all the certification is done, we expect very short, if not, no trials before the batches of the vehicles.

On the bus, as we approach new operators, there will consistently be a trial period. And on that, it can be a month, it can be a quarter, so that's what we're seeing so far.

And I think the Avinash makes a very important point. As we think about moving to the small and medium enterprises, we think that the fact that we passed all these testing with the large commercial operators will give them, the small and medium fleets, a lot of confidence to order the vehicle. So it's just one of the several reasons we've decided to serve the large commercial fleet operators' demand.

Okay. So I think that was the last question. So we just would like to, before we leave, just reiterate the key points. I think there's a...

And before you open the slide, I think one comment is important is that we actually gave 2 very important numbers on this call today, so which is our costs, which we occurred in Q1 and, like, our cash use. And I think it's quite important to mention that we are, like, a 1,900 people organization.

And if you just compare, like, our numbers with, like, other players in the market, I'm sure that you will see that how efficient we are in the way how we use funds of -- actually preparing many factories in parallel, but also not 1 vehicle program, but 4 vehicle programs at the same time, which actually, the secret sauce here is our new method. Actually, technologies and the new method of making design and assembling vehicles. So this is the -- actually, the first fruits we're getting out of this method, which we see with the improved numbers.

Thanks, Denis. So, if you can just show the slide. Thank you. So just to reiterate, our business plan remains on track. As Denis mentioned, we have the 4 vehicles under development in market by the end of 2023, with our bus coming later this year and the 2 van variants, the large van and the small one -- and the full-time van in second half of 2022, and the car in Q3 of '23.

We have 4 microfactories being built, 2 in the U.S. and 1 in the U.K. We announced Spain today in Madrid. So we have the strong demand with tailwinds. We have obviously the government policies, but also we have private companies' commitments to transition to being electric.

We announced our Arrival Car partnership with Uber, and that is a very large market at 30 million units. And we secured our battery supply from LG Energy Solution. As Denis also mentioned, we're over 1,900 employees. We have the talent and resources to execute.

And really, this is enabled by our new method, and it's why we believe Arrival is unique with our microfactories, our vertical integration on hardware, software, materials, next-gen robotics, a unique assembly process, and most importantly, our vehicle attributes and price.

So with that, thanks, everyone, for joining, and see you next quarter.

This concludes today's conference call. You may now disconnect.

Thank you. Bye.

Thank you.