(MVST) 2022 Q3 法說會逐字稿

Thank you for standing by. This is your conference operator. Welcome to the Microvast Third Quarter 2022 Earnings Call. (Operator Instructions) .

謝謝你的支持。這是您的會議接線員。歡迎來到 Microvast 2022 年第三季度財報電話會議。 （操作員說明）。

I would now like to turn the conference over to Monica Gould, Investor Relations for Microvast. Please go ahead.

我現在想把會議轉交給 Microvast 投資者關係部門的 Monica Gould。請繼續。

Thank you, Sherry, and thank you to the audience for joining us today. Sascha Kelterborn, President and Chief Revenue Officer; and Craig Webster, Chief Financial Officer, will host today's call.

謝謝你，雪莉，也感謝聽眾今天加入我們。 Sascha Kelterborn，總裁兼首席營收官；首席財務官 Craig Webster 將主持今天的電話會議。

Ahead of this call, Microvast issued its third quarter 2022 earnings press release, which can be found on the Investor Relations section of our website at ir.microvast.com. In addition, we have posted a slide presentation to our website to accompany management's prepared remarks.

在此電話會議之前，Microvast 發布了 2022 年第三季度收益新聞稿，可在我們網站 ir.microvast.com 的投資者關係部分找到。此外，我們還在我們的網站上發布了幻燈片演示，以配合管理層準備好的評論。

As a reminder, please note that we will be making forward-looking statements on this call. These statements are based on current expectations and assumptions and reflect our views only as of today. It should not be relied upon as representative about views as of any subsequent date and we undertake no obligation to revise or publicly release the results of any revision to these forward-looking statements in light of new information or future events. These statements are subject to a variety of risks and uncertainties and that could cause actual results to differ materially from expectations. For further discussion of the material risks and other important factors that could affect our financial results, please refer to our filings with the SEC, including our annual report on Form 10-K filed on March 29, 2022, and the 10-Q filed earlier today.

提醒一下，請注意我們將在此次電話會議上發表前瞻性陳述。這些陳述基於當前的預期和假設，僅反映我們截至今日的觀點。它不應被視為代表任何後續日期的觀點，我們沒有義務根據新信息或未來事件修改或公開發布對這些前瞻性陳述的任何修改結果。這些陳述受各種風險和不確定因素的影響，可能導致實際結果與預期存在重大差異。有關可能影響我們財務業績的重大風險和其他重要因素的進一步討論，請參閱我們向美國證券交易委員會提交的文件，包括我們於 2022 年 3 月 29 日提交的 10-K 表格年度報告和早些時候提交的 10-Q今天。

In addition, during today's call, we may discuss non-GAAP financial measures, including adjusted gross profit, adjusted net loss and adjusted EBITDA, which we believe are useful as supplemental measures of Microvast performance. These non-GAAP measures should be considered in addition to and not as a substitute for or in isolation from GAAP results. These non-GAAP measures have been reconciled to their most comparable GAAP metric in the tables included at the end of our press release.

此外，在今天的電話會議中，我們可能會討論非 GAAP 財務指標，包括調整後的毛利、調整後的淨虧損和調整後的 EBITDA，我們認為這些指標可作為 Microvast 業績的補充指標。這些非 GAAP 措施應作為 GAAP 結果的補充，而不是替代或孤立於 GAAP 結果。這些非 GAAP 措施已與我們新聞稿末尾表格中最具可比性的 GAAP 指標進行了協調。

A webcast replay of this call will also be available on the Investor Relations section of our company website.

本次電話會議的網絡直播重播也將在我們公司網站的投資者關係部分提供。

And with that, I'll turn the call over to Sascha for some opening remarks.

有了這個，我會把電話轉給 Sascha 做一些開場白。

Thank you, Monica. Thank you all for joining us. Everyone, please turn to Slide 4 as I cover a few highlights from the third quarter. We posted a 4.7% revenue growth during the quarter, delivering $38.6 million in Q3 2022, despite continuing difficult market conditions in Europe, customer supply chain challenges and currency headwinds. We ended the third quarter with a strong backlog of $140.6 million, driven by a healthy order intake of EUR 81.9 million, led by a strong demand in China.

謝謝你，莫妮卡。謝謝大家加入我們。大家請翻到幻燈片 4，因為我介紹了第三季度的一些亮點。儘管歐洲市場狀況持續艱難、客戶供應鏈面臨挑戰和貨幣逆風，但我們在本季度實現了 4.7% 的收入增長，在 2022 年第三季度實現了 3860 萬美元的收入。我們在第三季度結束時積壓了 1.406 億美元的強勁積壓訂單，這得益於中國強勁需求帶來的 8190 萬歐元的健康訂單。

Some key wins during the third quarter included an order from Si for over EUR 24 million and an order from Barzan in excess of $10 million. We also continue to benefit from ongoing customer relationships with Ascoriland, Iveco Group, Shell and others.

第三季度的一些關鍵勝利包括來自 Si 的超過 2400 萬歐元的訂單和來自 Barzan 的超過 1000 萬美元的訂單。我們還繼續受益於與 Ascoriland、依維柯集團、殼牌和其他公司的持續客戶關係。

Raw material prices remain at an elevated level as a result of supply chain disruptions as well as worldwide inflation. Our unit cost across the board continue to track significantly higher than we anticipated at the beginning of the year. We are actively monitoring these trends and implementing migration strategies, where possible, including optimizing longer-term supply contracts, identifying new and additional sources of supply and increasing our selling prices, where possible. However, we expect raw material prices, especially for certain key materials like lithium, to remain elevated through the end of 2023 and possibly all the way into 2024.

由於供應鏈中斷和全球通貨膨脹，原材料價格仍處於高位。我們的整體單位成本繼續明顯高於我們年初的預期。我們正在積極監控這些趨勢並在可能的情況下實施遷移策略，包括優化長期供應合同、確定新的和額外的供應來源以及在可能的情況下提高我們的銷售價格。然而，我們預計原材料價格，尤其是鋰等某些關鍵材料的價格，將在 2023 年底之前保持高位，並可能一直持續到 2024 年。

Looking forward into 2023, we expect our order volume to increase after we bring the new manufacturing capacity online, we expect this additional volume to increase our production visibility, enabling us to lock in higher volume commitments.

展望 2023 年，我們預計在新的製造能力上線後我們的訂單量會增加，我們預計這一額外數量將提高我們的生產可見度，使我們能夠鎖定更高的產量承諾。

Please turn to Slide 5, which highlights some of our key partnerships in the commercial vehicle market. Microvast joined a mining industry consortium led by Shell whose goal is to offer an end-to-end modular truck solution for the mining industry. Microvast is developing a custom high-powered battery solution with ultrafast charging capabilities. This ultra-high-voltage LTO battery system will have an extremely high sea rate capability and long life of up to 20, 000 cycles under normal operational conditions, which will be critical to enable the high-power ultrafast charging and heavy-duty use solutions that the consortium is targeted to deliver.

請轉到幻燈片 5，其中重點介紹了我們在商用車市場的一些重要合作夥伴關係。 Microvast 加入了由殼牌牽頭的採礦業聯盟，該聯盟的目標是為採礦業提供端到端的模塊化卡車解決方案。 Microvast 正在開發具有超快充電能力的定制高功率電池解決方案。這種超高壓 LTO 電池系統將具有極高的海倍率能力和在正常操作條件下長達 20, 000 次循環的長壽命，這對於實現大功率超快充電和重載使用解決方案至關重要該財團的目標是交付。

Kalmar, part of Cargotec, which offers a wide range of cargo handling solutions and services to ports, terminals, distribution centers and heavy industries across the globe, extended their supply and purchase agreement with Microvast through 2026. Kalmar will use our new MVB and NBC generation 4 packs to power their full electric and hybrid portfolio.

Cargotec 旗下的卡爾瑪為全球港口、碼頭、配送中心和重工業提供廣泛的貨物裝卸解決方案和服務，並將與 Microvast 的供應和採購協議延長至 2026 年。卡爾瑪將使用我們的新 MVB 和 NBC第 4 代電池組為其全電動和混合動力產品組合提供動力。

Shaanxi Automobile Group, a commercial vehicle OEM, formed a partnership with Microvast to support a 49-ton hybrid truck tractor with anticipated deliveries of 23-megawatt hours in Q4 2022. SinoSynergy, the leading fuel cell battery system manufacturer in China is collaborating with Microvast for its 49-ton hydrogen truck tractor with anticipated deliveries of up to 5-megawatt hours in Q4 2022.

商用車 OEM 陝汽集團與微宏建立合作夥伴關係，以支持 49 噸混合動力卡車牽引車，預計 2022 年第四季度交付量為 23 兆瓦時。中國領先的燃料電池系統製造商 SinoSynergy 正在與微宏合作用於其 49 噸氫卡車牽引車，預計 2022 年第四季度交付量高達 5 兆瓦時。

I will now turn the call over to Craig to review our financial performance.

我現在將把電話轉給克雷格來審查我們的財務業績。

Thank you, Sascha. I'll spend the next few minutes discussing our Q3 2022 financial results. Please turn to Slide 7, I'll summarize the main line items from our Q3 P& L.

謝謝你，薩沙。接下來的幾分鐘，我將討論我們 2022 年第三季度的財務業績。請轉到幻燈片 7，我將總結我們第三季度損益表中的主要項目。

First off, we achieved third quarter revenue growth of 4. 7% to $38.6 million from $36.9 million in Q3 2021. I will take you through the geographic breakdown in a later slide, but I would like to note that this marks the seventh quarter in a row that we have shown year-over-year revenue growth. This came despite some challenges we encountered during the quarter, as Sascha noted earlier, along with some currency headwinds.

首先，我們實現了第三季度收入增長 4. 7%，從 2021 年第三季度的 3690 萬美元增至 3860 萬美元。我將在稍後的幻燈片中向您介紹地域細分，但我想指出的是，這標誌著第七季度我們已經顯示出同比收入增長的行。儘管我們在本季度遇到了一些挑戰，但正如 Sascha 早些時候指出的那樣，還有一些貨幣逆風。

On a year-to-date basis, revenue was $139.7 million, up 64% and from $85.2 million in the prior 9-month period. We posted a gross profit of $2 million in Q3 2022 compared to gross loss of $35.9 million in the prior period. After adjusting for noncash settled share-based compensation expense in our cost of sales, adjusted gross profit was $4 million in Q3 2022 compared to adjusted gross loss of $33.6 million in Q3 2021. This translates into an adjusted gross margin of 10.2% in Q3 2022 compared to negative 91.1% in Q3 2021, a 101.3 percentage point improvement.

從年初至今，收入為 1.397 億美元，比前 9 個月的 8520 萬美元增長 64%。我們公佈的 2022 年第三季度毛利潤為 200 萬美元，而上一季度的毛虧損為 3590 萬美元。在對我們的銷售成本中的非現金結算的基於股份的補償費用進行調整後，2022 年第三季度調整後的毛利潤為 400 萬美元，而 2021 年第三季度調整後的毛虧損為 3360 萬美元。這意味著 2022 年第三季度調整後的毛利率為 10.2%與 2021 年第三季度的負 91.1% 相比，提高了 101.3 個百分點。

Operating expenses were $39.6 million in Q3 2022 compared to $78 million in Q3 2021. The largest contributor to the decrease in operating expenses was the decline in SBC expense, which totaled $17.3 million in the quarter compared to [$56 million] in Q3 2021. The higher SBC in the prior year quarter was a result of recognizing $39.2 million of SBC spend upon accelerated vesting in connection with the business combination. As I mentioned previously, noncash SBC expense was a significant contributor to both GAAP operating expenses and operating losses. We believe a more accurate representation of our financial performance, especially as it relates to cash operating expenses and operating loss, is as illustrated in Slide 8.

2022 年第三季度的運營費用為 3960 萬美元，而 2021 年第三季度為 7800 萬美元。運營費用減少的最大原因是 SBC 費用的下降，與 2021 年第三季度的[5600 萬美元]相比，本季度總計 1730 萬美元。上一季度較高的 SBC 是由於在與業務合併相關的加速歸屬時確認了 3920 萬美元的 SBC 支出。正如我之前提到的，非現金 SBC 費用是 GAAP 運營費用和運營虧損的重要貢獻者。我們認為，如幻燈片 8 所示，我們的財務業績更準確，尤其是與現金運營費用和運營虧損相關的情況。

After adjusting for noncash SBC expense in SG&A, our adjusted operating expense in Q3 2022 was $22.3 million. GAAP net loss was $36.5 million in Q3 2022 compared to net loss of $116.5 million in Q3 2021. After adjusting for noncash SBC expense and changes in fair value of our warrant liability and convertible notes, adjusted net loss was $17.4 million in Q3 2022 and compared to $65.1 million in Q3 2021. Reconciliations of these non-GAAP metrics to the most comparable GAAP metrics are included in the tables at the end of our earnings press release.

在對 SG&A 中的非現金 SBC 費用進行調整後，我們在 2022 年第三季度調整後的運營費用為 2230 萬美元。 2022 年第三季度 GAAP 淨虧損為 3650 萬美元，而 2021 年第三季度為淨虧損 1.165 億美元。在調整非現金 SBC 費用以及我們的認股權證負債和可轉換票據的公允價值變動後，調整後的 2022 年第三季度淨虧損為 1740 萬美元，與到 2021 年第三季度達到 6510 萬美元。這些非 GAAP 指標與最具可比性的 GAAP 指標的對賬包含在我們的收益新聞稿末尾的表格中。

Slide 9 shows the geographic breakdown of our revenue for the 3- and 9-month periods ended September 30, 2022, compared to the prior year period. As you can see, for the third quarter, our China business showed a 35% increase year-over-year. This was partially offset by a decline in other Asia Pacific markets of 39% as potential customer orders linked the success of their tender bids did not materialize, and some confirmed orders were pushed out to Q4.

幻燈片 9 顯示了與去年同期相比，截至 2022 年 9 月 30 日的 3 個月和 9 個月期間我們收入的地域細分。如您所見，第三季度，我們的中國業務同比增長 35%。這部分被其他亞太市場下降 39% 所抵消，因為與投標成功相關的潛在客戶訂單沒有實現，一些已確認的訂單被推遲到第四季度。

As a result of the challenging market conditions in Europe we noted earlier, revenue in the region declined 30% compared to Q3 2021. However, we have some exciting projects coming up in the region, especially in anticipation of our new 5 3.5 Mpower cell and we expect the growth rate to pick up starting in 2023. Our balance sheet remains solid, as you will see on Slide 10. We ended the quarter with cash, cash equivalents and restricted cash of $415.7 million. Net cash provided by operating activities during the quarter was $4.9 million, which was primarily due to cash collections from customers reducing our account receivables and those receivables.

由於我們之前提到的歐洲充滿挑戰的市場條件，該地區的收入與 2021 年第三季度相比下降了 30%。但是，我們在該地區即將推出一些令人興奮的項目，尤其是我們新的 5 3.5 Mpower 電池和我們預計增長率將從 2023 年開始回升。正如您在幻燈片 10 中看到的那樣，我們的資產負債表仍然穩健。本季度末我們的現金、現金等價物和受限現金為 4.157 億美元。本季度經營活動提供的現金淨額為 490 萬美元，這主要是由於向客戶收取的現金減少了我們的應收賬款和那些應收賬款。

Negative free cash flow of $11.9 million was mostly as a result of our CapEx spend on Huzhou 3.1 and Clarksville 1A in Q3 2022, which totaled $12.8 million. We also had capital expenditures totaling $4 million from improvements to our existing facilities and ongoing R&D projects. Our current estimates are our capital expenditure for the fourth quarter will be in the range of $90 million to $120 million and will primarily be used for our capacity expansion projects. As our payments are determined by construction and equipment delivery milestones, it may be the case that some of these payments are pushed out into 2023.

1190 萬美元的負自由現金流主要是由於我們在 2022 年第三季度在湖州 3.1 和克拉克斯維爾 1A 上的資本支出總額為 1280 萬美元。我們還有總計 400 萬美元的資本支出，用於改進我們現有的設施和正在進行的研發項目。我們目前的估計是我們第四季度的資本支出將在 9000 萬至 1.2 億美元之間，主要用於我們的產能擴張項目。由於我們的付款是由施工和設備交付里程碑決定的，因此其中一些付款可能會推遲到 2023 年。

In our last call, I explained that as we derisk the construction phase of our capacity expansions and have multiyear orders in place from our broad and growing customer base, especially those in Europe and the U.S., we would add leverage to our balance sheet. I'm pleased to report that during the quarter, we completed a $111 million project finance facility to support our Huzhou expansion with a syndicated bank. This full year amortizing loan with a December 2026 maturity and the current interest rate is 4.8%. With the benefit of this debt financing, we expect to close the year with at least $250 million in cash, cash equivalents and restricted cash. The use capacity expansion brings our new high power and high energy sales online and supports our growth targets for 2023 and beyond.

在上次電話會議中，我解釋說，由於我們不考慮產能擴張的建設階段，並從我們廣泛且不斷增長的客戶群（尤其是歐洲和美國的客戶群）那裡獲得多年訂單，我們將增加資產負債表的槓桿作用。我很高興地報告，在本季度，我們完成了一項 1.11 億美元的項目融資，以支持我們與銀團銀行在湖州的擴張。這筆全年分期償還貸款將於 2026 年 12 月到期，當前利率為 4.8%。受益於此次債務融資，我們預計年底將獲得至少 2.5 億美元的現金、現金等價物和受限現金。使用容量的擴展使我們新的大功率和高能量銷售在線，並支持我們 2023 年及以後的增長目標。

Manufacturing equipment deliveries and installation began in the third quarter. and our efforts are focused on ramping up production to meet very strong orders, especially for our new LBC cells. We currently expect Clark to begin serial production in Q4 2023 and and be well positioned to take advantage of the recently announced initiatives under the Inflation Reduction Act, or the IRA.

製造設備的交付和安裝在第三季度開始。我們的工作重點是提高產量以滿足非常強勁的訂單，尤其是我們新的 LBC 電池。我們目前預計 Clark 將在 2023 年第四季度開始批量生產，並且能夠充分利用最近宣布的《降低通貨膨脹法案》或 IRA 下的舉措。

Please turn to Slide 11, which details some of the most significant benefits of the IRA to Microvast, the most notable of which is a tax credit of $35 per kilowatt hour for battery cells and $10 per kilowatt after battery modules, both of which will be produced in our global facility. This translates to a potential tax credit of $45 million per gigawatt hour of cell and module production with the initial phase of cluster supporting 2 gigawatt hours.

請轉到幻燈片 11，其中詳細介紹了 IRA 給 Microvast 帶來的一些最重要的好處，其中最顯著的是電池單元每千瓦時 35 美元的稅收抵免和電池模塊後每千瓦 10 美元的稅收抵免，兩者都將是在我們的全球工廠生產。這轉化為每千兆瓦時電池和模塊生產的潛在稅收抵免 4500 萬美元，集群的初始階段支持 2 千兆瓦時。

Given the level of customer interest in this facility across our energy storage and commercial vehicle solutions, we are already planning to increase this to 4 gigawatt hours. Aside from the clear technological advantages of the 53.5 Mpower cell that is produced at Clarksville, there is the added benefit of this qualifying of domestic content under the IRA which allows some of our customers to obtain an incremental 10% investment tax credit.

鑑於客戶對我們儲能和商用車解決方案中該設施的興趣程度，我們已經計劃將其增加到 4 吉瓦時。除了 Clarksville 生產的 53.5 Mpower 電池的明顯技術優勢外，根據 IRA 對國內成分進行資格認證還有一個額外的好處，它允許我們的一些客戶獲得 10% 的增量投資稅收抵免。

With that, I will turn it back over to Sascha to review the outlook.

有了這個，我將把它轉回給 Sascha 來審查前景。

Thanks, Craig. Please turn to Slide 14. We are tightening annual revenue guidance for the full year, which is expected to be in the range of 35% to 40% for 2022. Our forecasted contracted revenue remains strong as our business with Western customers is poised for further growth. We continue to be optimistic about opportunities to grow market share and penetrate new markets, both geographically and with future innovative products. We look forward to the full deployment of our recently launched products, which are expected to drive sales growth in 2023 and beyond as they are incorporated into much anticipated upcoming vehicle launches.

謝謝，克雷格。請轉到幻燈片 14。我們正在收緊全年的年度收入指導，預計 2022 年將在 35% 至 40% 的範圍內。我們的預測合同收入仍然強勁，因為我們與西方客戶的業務有望進一步發展生長。我們繼續對增加市場份額和滲透新市場的機會持樂觀態度，無論是在地理上還是在未來的創新產品上。我們期待著我們最近推出的產品的全面部署，這些產品預計將在 2023 年及以後推動銷售增長，因為它們將被納入備受期待的即將推出的車輛中。

Accordingly, we have a good visibility on 2023 as a result of 2 large SOP projects for deliveries to commercial vehicle customers in Europe which we currently estimate at [$80 million] in revenue with potential upside and as well across our new energy storage business, which will add further positive momentum to our 2023 outlook. We are, therefore, planning for sustainable global increase in customer volume next year, which truly sets the platform for future years of growth.

因此，由於 2 個向歐洲商用車客戶交付的大型 SOP 項目，我們對 2023 年有很好的了解，我們目前估計這些項目的收入為 [8000 萬美元]，具有潛在的上升空間，以及我們的新能源存儲業務，這將為我們的 2023 年展望增添進一步的積極勢頭。因此，我們計劃明年在全球範圍內實現客戶量的可持續增長，這將真正為未來幾年的增長奠定基礎。

Execution continues to be critical, and to achieve our targets, we are focusing our efforts on, first, revenue growth through new multiyear supply contracts with existing and new customers; second, completing capacity expansion projects to service increasing customer demands; and third, driving margin improvement as we scale the business. We are very excited to begin planning our new earth-based (inaudible) separator facility in collaboration with General Motors for which we recently received a $200 million grant from the Department of Energy. This not only validates our leading-edge technology but also sustainably expand our addressable market.

執行仍然是至關重要的，為了實現我們的目標，我們正在集中精力，首先，通過與現有和新客戶簽訂新的多年供應合同來增加收入；二是完成產能擴建項目，滿足日益增長的客戶需求；第三，隨著我們擴展業務，推動利潤率提高。我們很高興開始與通用汽車合作規劃我們新的地面（聽不清）分離器設施，為此我們最近從能源部獲得了 2 億美元的贈款。這不僅驗證了我們的領先技術，而且可持續地擴大了我們的目標市場。

As our team works hard to execute significant progress has made over the last few months with multiple new U.S. government funding programs. We expect the inflation Reduction Act of 2022 to be important to inflation, advancing clean energy initiatives and helping to reduce carbon emissions in the U.S. while creating even more exciting direct and indirect business opportunities for Microvast going forward.

由於我們的團隊努力執行，在過去幾個月中，多項新的美國政府資助計劃取得了重大進展。我們預計 2022 年的通貨膨脹減少法案將對通貨膨脹、推進清潔能源計劃和幫助減少美國的碳排放產生重要影響，同時為 Microvast 創造更多令人興奮的直接和間接商業機會。

Our global Microvast team, our focus-oriented culture and our ability to execute has been and will be a competitive advantage of Microvast. And I would like to thank personally the Microvast team for their tireless work and commitment to our mission before turning the call back over to the operator to start the Q&A session.

我們的全球 Microvast 團隊、我們以專注為導向的文化和我們的執行能力已經並將成為 Microvast 的競爭優勢。在將電話轉回接線員開始問答環節之前，我要親自感謝 Microvast 團隊的不懈努力和對我們使命的承諾。

(Operator Instructions) Our first question is from Colin Rusch with Oppenheimer & Co.

（操作員說明）我們的第一個問題來自 Colin Rusch 和 Oppenheimer & Co。

Can you give us a little bit of a sense of the cadence on gross margin improvement? I'm really happy to see the progress that you made during the quarter, even at lower revenue levels. But curious how you see that playing out through the balance of 4Q and into the early part of 2023.

您能否讓我們了解一下毛利率提高的節奏？我真的很高興看到您在本季度取得的進展，即使收入水平較低。但很好奇您如何看待從第四季度到 2023 年初的平衡。

Thanks for that, Colin. I'd say, look, we're starting to see a lot of interest in the products is we're increasing prices. We're increasing prices customers were expecting this. Those negotiations have gone well. It really underpins like our forecast for next year. And tied into that as well is that as we have a lot of visibility around this 5 3.5 Mpower cell, it incredibly helps with production planning so we get the scale effect, volume effect and we really see that playing out into 2023.

謝謝你，科林。我會說，看，我們開始看到很多人對產品感興趣，因為我們正在提高價格。我們正在提高客戶期望的價格。這些談判進展順利。它確實支持我們對明年的預測。與此相關的是，由於我們對這個 5 3.5 Mpower 電池有很多可見性，它對生產計劃非常有幫助，因此我們獲得了規模效應、體積效應，我們真的看到它會在 2023 年發揮作用。

Excellent. And then in terms of customer engagement around medium and heavy duty, obviously, some of these ramps have been mixed in terms of timing given any number of issues around supply chain. But I'm curious what you're seeing so far in terms of the move into production on these programs and the ability of these customers to take product in anticipation of their production ramps. .

出色的。然後就圍繞中型和重型的客戶參與而言，顯然，考慮到供應鏈周圍存在的許多問題，其中一些斜坡在時間上是混合的。但我很好奇你到目前為止在這些項目的生產中看到了什麼，以及這些客戶在預期他們的生產坡道上採用產品的能力。 .

Colin, you probably have heard on the IRA this year on (inaudible) the biggest global commercial vehicle trade show. The CEO of Iveco announced the start of production of Iveco Daily. And as everybody knows, we are the battery supplier. So the SOP starts already in December, and we have further upcoming SOP projects, as I mentioned already, in that field at beginning of next year. So electrification is starting. There was a delay through the pandemic, and now it's moving ahead. That's the reason why we really have a positive outlook into the future.

科林，你可能在今年的 IRA 上聽說過（聽不清）全球最大的商用車貿易展。依維柯CEO宣布開始生產依維柯日報。眾所周知，我們是電池供應商。因此，SOP 已於 12 月開始，正如我已經提到的那樣，明年年初我們將在該領域開展進一步的 SOP 項目。所以電氣化開始了。大流行有一個延遲，現在它正在向前發展。這就是我們真正對未來抱有積極展望的原因。

And so you're seeing real live activity right now. Are they going through kind of a measured slow start here so far? Or are you seeing them really go full force out of the gate?

所以你現在看到的是真實的現場活動。到目前為止，他們是否正在經歷一種緩慢的起步？還是您看到他們真的全力以赴？

You have in every SOP, you have a classical ramp-up phase. So they are ramping up. So '23 will be the ramp-up phase, moving ahead, moving forward, backed up by a lot of governmental projects. They need -- every commercial vehicle manufacturer has to improve his CO2 footprint. So everything plays into our cards, and we are very confident in that case over the next years that there will be a quick ramp up in that area.

在每個 SOP 中，您都有一個經典的加速階段。所以他們正在加速。因此，'23 年將是加速階段，在許多政府項目的支持下，向前推進，向前推進。他們需要 - 每個商用車製造商都必須改善其二氧化碳足跡。因此，一切都在我們的考慮範圍之內，我們非常有信心在未來幾年內在該領域快速發展。

That's super helpful. And then a final one for me is just with this DOE grant, which is obviously went through a fairly competitive process, can you talk a little bit about the customer engagement since that announcement? Obviously, I think it's an important validation of what you guys are up to. But curious as to how that response has been so far. .

這非常有幫助。然後對我來說最後一個就是這筆 DOE 撥款，這顯然是通過了一個相當有競爭力的過程，你能談談自該公告以來的客戶參與度嗎？顯然，我認為這是對你們所做工作的重要驗證。但好奇到目前為止的反應如何。 .

Colin, it's been super positive. My colleagues, Dr. Mathis and Shane did an awesome job with DOE. That grant, it's a grant, we don't have to pay it back. It's a huge validation of Microvast, the technologies that we have. They want to have these technologies exclusively in the U.S. And then GM collaboration with us, again, they've been very close to the development of this technology. And we're looking forward to in exploring ways how we have to move this business forward. What we're hearing from them so far is that they like this is very much a stand-alone entity that they want to be very close to this technology. Other investors are also interested. And then if we do it like that, it really tees itself up that becomes a -- we run it separately and it will be spun off at some point.

科林，這是非常積極的。我的同事 Mathis 博士和 Shane 在 DOE 方面做得非常出色。那筆贈款，它是一筆贈款，我們不必償還。這是對我們擁有的技術 Microvast 的巨大驗證。他們希望在美國獨家擁有這些技術，然後通用汽車與我們合作，他們再次非常接近這項技術的發展。我們期待著探索如何推動這項業務向前發展的方法。到目前為止，我們從他們那裡聽到的是，他們喜歡這是一個非常獨立的實體，他們希望非常接近這項技術。其他投資者也很感興趣。然後，如果我們這樣做，它真的會自我調整，成為一個 - 我們單獨運行它，它會在某個時候被剝離。

(Operator Instructions)

（操作員說明）

And while we wait for additional questions to come in, I'll just read one that we received through the IR e-mail. And this is about our recently announced energy storage division, if you could talk a little bit about how that is being received and what kind of feedback you're getting from customers.

在我們等待其他問題進來的同時，我將閱讀我們通過 IR 電子郵件收到的一個問題。這是關於我們最近宣布的儲能部門，如果你能談談它是如何被接收的以及你從客戶那裡得到什麼樣的反饋。

Sure. Zach and his team did an incredible great job to develop that product solution. It's based o our 53.5% ampere-hour cell and just classical product highlights. Industry-leading energy density rate of 4.3 megawatt hours, long battery life of more than 10,000 cycles, easy transportation, installation and maintenance on a 20-foot container, this is market leading. And you can see already the customer feedback is there. They are highly interested in our solutions, and you will soon hear more about that. And thanks again to Zach and his team, they did an incredible job. It was a big success so far what we received as a market feedback.

當然。 Zach 和他的團隊在開發該產品解決方案方面做得非常出色。它基於我們的 53.5% 安培小時電池和經典產品亮點。行業領先的4.3兆瓦時能量密度率，超過10,000次循環的超長電池壽命，易於在20英尺集裝箱上運輸、安裝和維護，這是市場領先的。你可以看到客戶反饋已經存在。他們對我們的解決方案非常感興趣，您很快就會聽到更多相關信息。再次感謝 Zach 和他的團隊，他們做得非常出色。到目前為止，我們收到的市場反饋是一個巨大的成功。

Great. And then going back to the large DOE grant that we received, can you talk a little bit about the selection process and how Microvast was able to secure such a large grant?

偉大的。然後回到我們收到的大筆 DOE 贈款，您能談談選擇過程以及 Microvast 如何獲得如此大筆贈款嗎？

Sure. It's really down to the technology. It's a (inaudible) separator. It took a Microvast 10 years to perfect that technology. The separator is the most critical component in the battery for safety. Microvast is a safety-first company. It's the most critical part of the battery. We have large and extensive patent protection on that. And I think it was just a true recognition of, one, that we can develop technologies but, importantly, we can also commercialize them. And that's why we received such a significant grant.

當然。這真的取決於技術。這是一個（聽不清）分隔符。 Microvast 花了 10 年的時間來完善這項技術。隔膜是電池中最關鍵的安全部件。 Microvast是一家安全第一的公司。它是電池中最關鍵的部分。我們對此有大量廣泛的專利保護。我認為這只是對一個的真正認識，我們可以開發技術，但重要的是，我們也可以將它們商業化。這就是我們獲得如此重要資助的原因。

So that looks like that's it for the questions that we've received. Sascha, do you have any other closing remarks before we close up the call?

看來我們收到的問題就這些了。 Sascha，在我們結束電話會議之前，您還有其他結束語嗎？

Yes. I would like to thank the audience for participating today. And -- and I wish everybody a great evening. And we will report soon again with further positive news. Thanks a lot for being with us today.

是的。我要感謝聽眾今天的參與。而且 - 我祝大家度過一個愉快的夜晚。我們將很快再次報告更多積極消息。非常感謝今天和我們在一起。

Thank you. This does conclude today's conference. You may disconnect your lines at this time, and thank you for your participation.

謝謝你。今天的會議到此結束。此時您可以斷開您的線路，感謝您的參與。