Nikola Corp (NKLA) 2022 Q1 法說會逐字稿

Good morning. Welcome to Nikola Corporation First Quarter 2022 Earnings Call. (Operator Instructions) We will begin today's call with a short video presentation, followed by management's prepared remarks. A brief question-and-answer session will follow the formal prepared remarks. (Operator Instructions) As a reminder, this conference call is being recorded.

It is my pleasure to introduce Nikola's Director of Investor Relations, [Henry Kwon]. Thank you. [Henry,] you may begin.

Thank you, operator, and good morning, everyone. Welcome to Nikola Corporation's first quarter 2022 earnings call. With me today are Mark Russell, Chief Executive Officer of Nikola, Kim Brady, Chief Financial Officer, and Michael Lohscheller, President of Nikola's Motor Division. During today's call, we will share our views on the business environment and our financial results for Q1 2022, and our outlook for Q2, and the full year 2022.

The press release detailing our financial results was distributed shortly after 6 am Pacific time this morning. The release can be found on the Investor Relations section of the company's website, along with presentation slides accompanying today's call.

Today's presentation and Q&A include certain forward-looking statements within the federal securities laws. Forward-looking statements are predictions, plans, and other statements about future events, based on current expectations and assumptions, and as a result, are subject to risks and uncertainties. Many factors could cause actual future events to differ materially from the forward-looking statements in this communication.

For more information about factors that may cause actual results to materially differ from forward-looking statements, please refer to the first page of the presentation, the earnings press release, as well as the risk factor section of our annual report on Form 10-K and our quarterly report on Form 10-Q filed with the Securities and Exchange Commission in addition to the company's subsequent filings with the SEC. Forward-looking statements speak only as of the date they are made, and readers should be cautioned not to put undue reliance on forward-looking statements. We will now begin a brief video presentation followed by prepared remarks from Mark Russell and Kim Brady.

(presentation)

Thanks for joining us, for our first-quarter call. We're so grateful for the overwhelmingly positive customer feedback you just saw in that video. Everything we've done over the years has been focused on getting to the point of delighting our target customers like this. We're anxiously engaged every day, and continuing to build on this kind of customer success.

A big thank you to everyone at Nikola and our partners for their exceptional and extraordinary efforts, especially in these last few months to ensure that our production and delivery targets were met, despite every obstacle, including a supply chain crisis that just won't quit, the war in Ukraine, and COVID-related shutdowns in China have put new and additional pressure and uncertainty on the global manufacturing landscape.

I'm very grateful to be part of a team that has made steady and remarkable progress in achieving our milestones in spite of all of this.

All right, let's review our progress on the vehicle side of the business since we talked to you last quarter. Slide 4, the final 10 TRE-series BEVs came off the assembly line and [finished] during the quarter, which completed our total TRE-series fleet of 40 trucks. These continued to be utilized in customer pilot test programs, dealer demos, and our own continued R&D testing.

The TRE BEV pilot program at TTSI's Southern California port operations was successfully completed in April. These 2 trucks accumulated over 11,000 combined miles with TTSI at 93% total uptime and using an average of only 25% of their state of charge to go 102 miles every day.

As we previously agreed with TTSI, they began issuing POs with the first 10 submitted under the California HVIP incentive program.

We also completed a pilot with Univar Solutions in April resulting in POs for 6 trucks utilizing California HVIP. Pilots underway but not yet complete include Covenant Logistics amongst others. We're now gaining significant traction with our launch customers and from here we'll be looking at shorter demo and pilot programs.

Let's go to Slide 5. Since cereal TRE BEV production started on March 21, we received 134 California HVIP purchase orders through April. And the total of all Nikola TRE BEV purchase orders and otherwise we've received to date is 510 which is just over our upside target for production for this year.

Turning to the TRE FCEV program on Slide 6. At the end of April, we successfully completed the TRE FCEV alpha pilot program with Anheuser-Busch in California. These trucks logged over 12,000 miles and hauled 2 million pounds of freight [NAB] operations. We'll start FCEV alpha pilot testing with TTSI by the end of May. All the learnings from the alpha pilot testing will be incorporated into our beta truck builds with the first batch of 6 beta trucks set to commence production by the end of this quarter. By the end of Q4, we should have a total beta fleet of 19 TRE FCEVs. Beta validation testing is scheduled to continue through the first half of 2023, followed by serial production in the second half of the year.

As of the end of April, we had 1,010 TRE FCEV trucks under either contract or [LOI].

Let's go to Slide 7 and update you on the energy business. We selected our first dispensing station location with our station partner TravelCenters of America during the quarter. We intend to jointly build hydrogen refueling infrastructure within the relatively large footprint of TA's existing station in Ontario, California, adjacent to Interstate 10.

Along with our partner TC Energy, we're very close to sharing the location of our first hydrogen production hub in Arizona, which we plan to break ground on this year. This hub is intended to supply hydrogen to our joint TA station and Ontario and many others in the region, utilizing the groundbreaking hydrogen production electric rate schedule put in place by APS here in Arizona.

TC Energy also announced in April the evaluation of a hydrogen production hub in Crossfield, Alberta. This hub could produce an estimated 60 tons of hydrogen per day and will be able to scale up to 150 tons per day in the future. Nikola is committed to being the hub's anchor customer. This is an excellent opportunity for TCE to continue investing in low-carbon hydrogen solutions while providing Nikola with a significant hydrogen fuel source for our long-haul FCEVs in the region.

Onto Slide 8. We completed the Phase 1 assembly expansion area in Coolidge during the quarter, which gives us a production capacity of 2,500 units per year there. We started the phase 2 expansion in April, and we expect that to be completed in the first quarter of 2023. Phase 2 will provide us with a 20,000 unit annual capacity and Coolidge and from there, Phase 3 will take us to our original announced nameplate capacity.

Next slide. In March we announced an expansion of our partnership with Alta Equipment Group with an agreement for them to also cover the Arizona sales and service territory. Our sales and service network now covers 27 states and over 127 locations. We're looking forward to our expanded partnership with Alta and to the continued growth of bar sales and service footprint through additional partnerships. We believe the strength and expertise of our extraordinary dealer network sets Nikola apart in customer conversations.

In March, we also entered into an agreement with ENGS Commercial Finance Company to help facilitate the sale of Nikola vehicles. ENGS will work directly with the Nikola dealer network to offer customers financing solutions for the purchase of Nikola vehicles, charging assets, and infrastructure.

All right, over to Kim now to go over the numbers.

Thanks, Mark, and good morning, everyone. Let's begin with our Q1 2022 results. In the first quarter, we reported revenues of $1.9 million from the sale of 10 Nikola mobile charging trailers, while we do not expect MCT sales to become a key growth driver for us in the coming years. The product generates approximately 20% gross profit margin which we expect to be sustainable.

Research and development expenses were $74.6 million, including $8.7 million of stock-based compensation expenses. R&D expenses consist of costs incurred in developing building testing and validating Nikola TRE BEV and fuel cell trucks. SG&A expenses were approximately $77.2 million, including $44.8 million in stock-based compensation and $14.1 million in legal and regulatory costs, which we back out for non-GAAP reporting. The net loss was $152.9 million basic and the diluted net loss per share for the quarter was $0.37. Basic and diluted non-GAAP net loss per share came to $0.21.

On a non-GAAP basis, adjusted EBITDA totaled in negative $79.2 million. Adjusted EBITDA excludes, one $53.5 million in stock-based compensation; 2, $14.1 million for legal matters related to expenses for Mr. Milton's attorney's fees under his indemnification agreement, and $3.1 million in depreciation and amortization.

Turning to the balance sheet, we ended the first quarter with $385 million of cash and cash equivalents, including restricted cash balances. In addition, we also have approximately $409 million available liquidity through our 2 equity lines with Tumim, providing us with roughly $794 million of total liquidity as of March 31st.

Our capital expenditures totaled $33.5 million year-to-date and comprised the construction of our Coolidge Greenfield Manufacturing Facility, equipment purchases, renovations for office space expansion and hydrogen storage testing building in Phoenix, hydrogen mobile, fuelers, and supplier tooling, and investments made into our European JV. A large part of what we had anticipated in our Q1 capex guidance came in significantly below due to the timing of spending. Our full-year capex guidance remains unchanged.

On May 2nd, we announced an agreement with an institutional investor to invest in Nikola by purchasing $200 million of senior convertible notes. We expect the notes to fund in early June. We view this investment as a validation of the recent accomplishments our company has made on the operational and strategic funds, including the $200 million of convertible notes, Nikola would have had a total cash and liquidity position of approximately $1 billion as of March 31, 2022. The net proceeds from the sale of notes along with our other liquidity sources are expected to be used for business expansion related to scaling truck manufacturing, and tooling setup, accelerating the development of our hydrogen infrastructure, as well as for general corporate purposes. We ended the quarter with approximately 418.3 million shares outstanding.

Weighted average basic and diluted shares for the first quarter were approximately [$415.2] million. Our head count as of March 31, was 1,040 employees. We continue to grow as we hire new talent in engineering and product development, manufacturing supply chain, IT, and other corporate functions.

Moving on to our Q2 2022 guidance, we anticipate we will produce and deliver 50 to 60 Nikola TRE BEVs for revenues between $15 million to $18 million. We anticipate gross margin to be negative but improve as fixed costs are spread over an increased number of units as we scale production. We began shipping saleable TRE BEV to our dealers on April 29th for delivery to customers and look forward to continuing deliveries of our zero-emission trucks at scale.

Estimated R&D expenses for the second quarter are in the range of $72.5 million to $77.5 million, which includes approximately $11 million of stock-based compensation. SG&A expense ranges are estimated between $72.5 million to $77.5 million, including roughly $48 million of stock-based compensation. Actual SG&A expenses will likely be higher due to legal fees associated with Trevor Milton's defense. These fees are difficult to predict, so we do not forecast them. And for non-GAAP guidance, they are excluded.

Capex for the second quarter is in the range of $85 million to $90 million. At the end of Q2, we anticipate having approximately 433.5 million shares outstanding and a weighted average shares outstanding of 426.5 million. We made no revisions to our full-year 2022 guidance concerning deliveries, revenue, gross margin, or expenses. However, weighted average shares outstanding could fluctuate depending on the market conditions as we draw down on our equity line with Tumim or if we raise additional capital. Additionally, going forward, we are expanding the activities of our European joint venture with IVECO to include EU product development activities. Previously, the JV acted solely as a contract manufacturer.

Accordingly, the R&D expenses within the JV are expected to increase by 50% of that increase will flow through our earnings in the equity in net earnings or loss of affiliate line item. This will result in increased losses for the remainder of the year.

Next, I would like to provide some color on supply chain challenges embedded in our guidance. The ongoing war in Ukraine and the recent COVID outbreak in China were factors that we did not anticipate when we last discussed supply chain issues back in February. The zero COVID policy in China has led to additional bottlenecks and cost pressures in more recent months.

While there is still uncertainty about the magnitude and duration of any other supply chain impact from this event, we continue to have full supplier commitment and are confident in our ability to achieve our full-year target range without making revisions. Based on our current line of sight, we reconfirm the key electrical components available to meet our delivery targets. Battery cells to build more than 500 Nikola TRE BEVs, and battery packs to build 300 to 500 Nikola TRE BEVs.

Our supply chain team is working closely with the battery pack supplier to ensure no gaps in the battery module chip supply, so as to not disrupt Nikola's build schedule. ECU and subcomponents to build more than 500 Nikola TRE BEV displaced to build more than 500 Nikola TRE BEVs. [E-axles] to build more than 500 Nikola TRE BEVs, and inverters to build more than 500 Nikola TRE BEVs. We continue to strengthen our supply chain team by adding talent and growing head count during the first quarter. We strive to ensure we have the critical components necessary for TRE BEV production and TRE fuel cell beta builds.

We are pleased to report that we shipped production Nikola TRE BEV trucks to dealers for revenue in April and successfully completed TRE fuel cell electric vehicle alpha pilot testing with AB on our Q4 earnings call. We established 5 milestones to hit in 2022. And we are well on our way to achieving the strategic and operational goals.

One, deliver 300 to 500 production TRE BEV trucks; 2 successful fuel cell EV alpha testing with an Anheuser-Busch and TTSI; 3, build, validate and test TRE fuel cell beta trucks; 4, announced location, break ground, and commence construction of the first hydrogen production hub in Arizona, and 5, announce 2 or more dispensing Station partners in California.

This concludes our prepared remarks. We will use the remainder of the time to address your questions. Operator, please open the line.

(Operator Instructions) Our first question is from Chris McNally with Evercore ISI.

Okay, so wanted to talk about the progression of the unit deliveries over the course of the year. Appreciate the Q2 numbers. Wanted to see if you could confirm at the Analyst Day you kind of gave broad comments about producing one truck per day now getting to 2 trucks per day by the end of Q2 and that progressing all the way to the end of the year, hopefully, something like 5 trucks per day. Does that give a general sense of how we can pace out Q2 to Q4 Do those numbers still hold? And also if you can just put a little bit of (inaudible) behind what is the key things that you have to do internally to ramp from one or 2 trucks towards 5 over the next 8 months?

Chris, thanks for the question. If you recall, when you were actually on-site visiting our facility in Coolidge, what we have stated was that when it comes to transition from Q2 to Q3 and Q4, it's really not about manufacturing ramp. It's really about supply chain issues. And we have also stated previously in our earnings call, that deliveries are [skewed] towards the second half of the year.

So what we have suggested is that approximately 20% of the delivery for this year based on 500 units are going to be delivered in Q2, and Q3 and Q4 will represent about 80%. And that's really due to the timing of our battery packs, as well as certain chip supplies that will be available in the second half of the year.

So as we have confirmation and easing up a supply chain with respect to chips, then we can actually build more trucks and has nothing to do with our ability to actually scale at our manufacturing plant.

Kim, that's great. Is the best way than to paraphrase that, of all the components that you just described, the only one that really had that variability between the 300 and the 500 appears to be the packs, I guess chips on secondary. And if you could just remind us which of the chips are in the variability. And that really is -- as an external issue for the Q3 into Q4 ramp. Because it's obviously a big range but most of that will fall in terms of just timing to if you get the packs because you'll have the sales by year-end. Is that a good paraphrase?

Yes. And I think what we have stated was that the 2 main risks are the delivery of the modules and packs. And so when it makes sure that we're working closely with our supplier when it comes to manufacturing efficiency and yield. And then the second, when it comes to BMS chips, there are a couple of boards, and there are a couple of hundred components. But there are a few chips and microprocessors that are critical and important. And we're trying to make sure that we have a supply of those such that there's no disruption in our build.

Perfect, and then just one housekeeping. Given -- I think you mentioned again, in Phoenix, $650 million is the new sort of financing number that you would expect to bridge to the end of '23, 200 to the convert. Just wanted to make sure that reiterated that essentially implies 450 at this convertible.

I think that's reasonable. What we have stated is that we are always looking to ensure that we have adequate liquidity for the following 12 months of operation. And we have also stated that by end of this year, that we are targeting to have anywhere from $900 million of cash and liquidity on hand to $1 billion. So I think that's reasonable.

Our next question is from Mike Shlisky with D.A. Davidson.

I want to follow up on some of your comments about Europe. Did I hear this correctly? Are you developing a truck with IVECO, that will be an IVECO badge for Europe, or will it be a Nikola badge and all the expenses related to that new to their previous guys you have last quarter?

Thanks, Mike. This is Mark. The output of the joint venture in Europe will be all badged Nikola. Everything that we produced there will be from the joint venture will carry the Nikola brand name. And then the joint venture remains a 50-50 proposition in terms of the specific numbers, I'll refer to Kim. Go ahead.

And Mike, what we're doing is that we're expanding our JV relationship, which will include the development of European version of trucks. What that means is that we are actually given greater responsibility to the JV. And so, what that means is that going forward, both IVECO and Nikola will be making additional investments for R&D. Most of this R&D is related to personnel, as well as outside engineering services.

So it will impact in terms of loss from -- before relates to our equity, from our affiliates. And we will be able to give you better guidance. Right now, we are going through an exercise where we are working through the details of what the incremental costs and investment would be in the JV. And in Q2, the impact will be minimal. So going forward, Q3 and Q4, the impact will be larger. And we'll be able to share with you what that guidance will be.

Okay, great. If I switch to the Alberta location, (inaudible) have you and your partners identified for a new hub. Can you let me share? Is it really far from any of the other features talking as far as distance and dispensing stations? Because it might be located on the property of TC? Could some of the hydrogen coming out of that facility flow in a pipeline? Or will that be trucked into the various dispensing stations in that area?

Great question, Mike. The location is strategic in that it's close enough to Canada One -- Canada Highway One is the transcontinental route that goes all the way across Canada from Pacific to Atlantic. And that's the major route in Canada. And then of course, we can move hydrogen throughout the region because this should be a very cost-effective operation for producing hydrogen and potentially capturing carbon.

And yes, one of the reasons for the strong logic of a partnership with TC Energy is they do control substantial pipeline assets across North America. There are also pipeline assets near where we were going to be locating things here in Phoenix in Arizona eventually. And eventually, the pipelines that now carry natural gas are very likely to be destined to carry hydrogen at some point in the future. And I would, defer you to -- refer you to TC Energy Investor Relations for some of that planning.

Most of the industrial uses of natural gas today can't be replaced by direct electricity, something substituting natural gas will have to be -- needs to be developed and, and pretty much everybody's agreeing that's going to be hydrogen. So being close to a pipeline is important in the long run. In the short run, we will be the anchor customer.

We have to demand. You might have seen some of the press materials that came out of a recent conference in Calgary that we participated in, actually had a fuel cell truck up there, we have a lot of customer demand up there. So that will be an early launch geography for us, particularly since we are looking confident, feeling confident about the fuel from this new Crossville facility.

Okay. Maybe one last quick one for me. I don't want to get too granular here. But I appreciate your guidance this quarter, on the FCEV testing that you're still planning to get through the ones we have with AB TTSI. That's great. Last quarter you had mentioned in that same part of your discussion, it was AB TTSI and others. You dropped the end on this part this quarter, is there any change to the other tests you're running besides those 2 potential customers?

No, there will be others. As we mentioned earlier in this presentation, Covenant is also in the current test pilot. And there will be others. As we gain more confidence, as I said in my prepared remarks, as we gain more confidence with customers, which we are doing daily at this point, the length of the testing and pilot programs and demos will reduce. We don't have to do the long, really long ones like we're doing now.

(Operator Instructions) Our next question is from Joseph Spak with RBC Capital Markets.

Got a couple of questions and clarifications. Just going back to the liquidity. Kim, I know you should have ran through the math you need and then a little bit more over 400 which, which is I guess, equal to the amount you have left on the [ELOC]. So -- that so if you need it, I guess you get it, is that your sort of current understanding? I mean, you might look for additional sources, but that -- that's sort of available to you ELOC ?

Right. And Joe, I think we made it clear, that's part of our spending plan for 2022. We anticipate fully drying down on our existing [ELOC] one and 2. And we have approximately $400 million remaining on our ELOC one and 2.

Okay. So I guess just building upon that, and I know, we sort of have to take it, especially in this environment, sort of like day by day. But if I look at your guidance. And you know, look at sort of the expected cash burn, it looks like and this is about working capital, I guess you could add a little bit more. But looks like it comes to about $180 million a quarter. I think which I would suggest if it's higher that sort of what 5-6 quarters if you have availability of liquidity. And I think it's reasonable to assume that the burn probably goes higher before it goes lower, as you sort of continue to ramp.

So how do like -- with -- as you clearly want to ramp supply chain and might constrain your pace. But how do we think about the needs here beyond sort of the balance of this year, that's what sort of really gets you towards the early stages of production, but when you really need to go at a much higher or want to go at a much higher level into next year?

Joe, we have not provided any guidance for 2023 yet. But we have clearly stated that we will have adequate liquidity we believe for 2022 operation by end of 2022 based on the capital raise that we are contemplating. And we have stated, when you look out for 2023, we believe that there will still be some supply chain issues with respect to battery cell availability as well as packs what we have stated previously, is that we have enough cells to build approximately 2,300 trucks for next year.

So that cell volume has been secured. We have some idea in terms of what our CapEx are going to be as well as operating expenses. While we have not sure that at this point, we feel confident that approximately having $1 billion of liquidity will be able to address 2023. Any capital that we raised in 2023 is really planning for 2024.

Okay, thank you for that. And then just the clarification on the shares, which I don't think that guidance change, but that does. I'm just reading the footnote it says, it considers future purchase notices issued to Tumim. So that does contemplate a further drawdown of the [ELOC]. And then also, what about the convert? And how are you going to be accounting for that are as a sort of converted? Or how should we how are you going to handle that.

So, with respect to the drawdown for Tumim, we have already anticipated that. As we have suggested, there can always be somewhat of fluctuation, depending on the stock price at the point where we drawdown. But we make some general assumptions about what the stock price may be during the period. When it comes to converting when it happens and obviously, we will adjusting a sheer number.

Our next question is from William Peterson with JPMorgan.

I have some questions on the BEV program. And some of this kind of more near term, but just want to get some understanding. So I think last time you mentioned 98% uptime, you mentioned 93 for TTSI. Just can you provide some context around that? I guess, how important is it just for one hand?

And then again, I think in the Investor Day you mentioned that SAIA was going to be starting in April, but you didn't mention that one here. So I guess one (inaudible) the Hamburg still on schedule for June? You talked about 7 plus I guess -- into second quarters. Just trying to understand what the near-term outlook looks like for the BEV program. And then, what kind of, applications (inaudible) are still interested in just things like that nature.

Bill, thank you. Great question. The BEV uptime is critical. Any Class 8 uptime is critical. As you know. These are the machines that our customers base their business on. If they don't operate, they don't make money. And we're very pleased with the results of the pilots we've run so far with TTSI, and others.

We have a lot going on this front that we haven't publicly disclosed. We are working with lots of customers. Our dealers are working with lots of customers, all dealers have trucks at this point, and are running demos and working with customers.

So the demand is pretty seismic. If you can get somebody a zero-emission truck that is reliable and capable, like ours is, then everybody wants one. And then becomes a discussion about the terms at this point. So we're very pleased with how we're doing so far.

As you saw in the video, the feedback we're getting so far, it's just tremendous. These trucks are proving very reliable and very capable, and the drivers love them. So in the case of TTSI, they tested more trucks than anybody I know of, more than 20 different zero-emission trucks, reduced emission trucks, and alternative fuel trucks that they have tested, they say. And as you saw the feedback in the video, those are the leaders of TTSI that we were interviewed on the video.

So that's the lay of the land there. And you'll be hearing a lot more about more customers as we ramp up production. And there's a lot going on this front right now.

But it does sound like some demos either were pushed or pulled or whatever. But just to get it feels like at least based on what you said 6 weeks ago something's hatched it?

No, we haven't we haven't stopped any demos. We haven't pulled any demos and nothing has not -- we haven't, no. Everything's going forward.

So Bill, we'll be able to show you no additional information but I would say that we have actually expanded our demo and pilot testing.

Dramatically, as I said our dealers have their own programs going right now in addition to our direct fleet work.

Okay. Just I guess on the cost, it's good to see the reiteration really for the full year including in the margin guide. Considering, for example in an inflationary environment. I assume the redirection is largely because maybe some of the taker pay agreements you've had, and some of the inventory you've collected thus far.

But I guess, how should we think about the gross margin trajectory, as we look into next year? I know you wouldn't want to provide full guidance. But given that DC battery price and materials, minerals increasing, how should we think about the impacts broadly from this sort of inflationary and supplies constrained environment, as we look into next year?

And Bill, it's challenged, as you know. And it's somewhat premature, in terms of exactly where we will be for next year. But what we have guided is that when it comes to Nikola freight there for 2023 by end of 2023, we plan to be in a positive gross profit margin territory. We are working hard, and we have line of sight as well as visibility, we have targets by components and categories. And we know where we can put pull deliver.

As we talked about a couple of the biggest challenging areas are with respect to battery cells, and the pricing and raw materials related to that, as well as certain chip components. And we'll have to see in the second half the year have to shake out. And whether there will be soft enough demand with respect to sales and what kind of pricing approaches that we may see when it comes to raw materials. And then what we will see when it comes to chip supply.

But we have stated and we haven't backed away at this point with respect to where we want to be by the end of 2020.

Our next question is from Jeff Osborne with Cowen and Company.

Had a couple of questions on the HVIP process. I think the 2 orders you announced are both under 10, which I guess is part of the small fleet -- small fleet provision. Is there any risk to the guidance that folks that might want more than 10 trucks and the ability to get funding for larger orders?

Jeff, hey, great question. As we said the total of the HVIP covered purchase orders we've gotten so far 134. That's obviously a big number for the program. And we're working on others, depending on how the program goes. Again, this is completely under the control of the state officials in California. But we have a lot of customers who are interested in taking advantage of it. We're working with them directly. And we have a great team on this, by the way. And that's the reason why of the 500 trucks we're targeting to deliver this year up to 500 trucks. And we've got 134 so far that are covered by HVIP. That's pretty good, I think.

Absolutely. But are any of the orders for an individual fleet over 10 trucks?

I don't know the answer to that. We'll check and see if we can get today there for that before we hang up here. Hang on.

No worries. And then is there -- as we think about pricing, are you -- pricing at one level in California and perhaps a different level everywhere else, just given California is anywhere between called a third to 20% of the guidance?

Jeff, we're definitely looking at that. And we should anticipate that there will be pricing for different geography. And we have guided in our guidance $300,000. We can tell you that the actual pricing that we're realizing is higher than that.

Yes, then the last one I had is just on the 93% of time. Could you share like what the number one and 2 reasons for the downtime was? 93 is obviously still a great number, but I'm just curious, like what the leading factors for downtime were and what you're doing to address those.

We have a [Pareto] of the downtime causes and it's a number of factors. I don't have the distribution in front of me. But everybody's super pleased with the uptime. That's the same customer that was highlighted in the video.

Hey, Jeff, we want to make sure that --- we want to set some expectations even for diesel trucks, if you're achieving uptime anywhere from 90 to 95 is actually pretty good. So while we are trying to improve our performance, we want to make sure that we set the right expectation that we are hitting the target that our customers are looking for.

We have reached the end of our question-and-answer session. I would like to turn the conference back over to management for closing comments.

Thanks for participating in our call. And we will talk to you next quarter.

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