Company Participants

John Gibson – Chief Financial Officer

Raj Das Gupta – Chief Executive Officer

Conference Call Participants

Amit Dayal – H.C. Wainwright

Eric Stine – Craig-Hallum

Aaron Martin – AIGH Investment Partners

Shawn Severson – Water Tower Research

Orin Hirschman – AIGH Investment Partners

Operator

Good day, everyone, and welcome to the Electrovaya’s Second Quarter 2023 Financial Results. [Operator Instructions] It is now my pleasure to turn the floor over to your host, John Gibson, Chief Financial Officer of Electrovaya. Sir, the floor is yours.

John Gibson

Thank you. And good evening, everyone. Thanks for joining us today on the call to discuss Electrovaya’s Q2 2023 financial results.

Today’s call is hosted by Dr. Raj Das Gupta, CEO of Electrovaya; and myself, John Gibson, CFO.

Today, Electrovaya issued a press release concerning its business highlights and financial results for the three- and six-month periods ending March 31, 2023. If you would like a copy of the release, you can access it on our website. You want to view our financial statements and management discussion and analysis, you can access those documents on the SEDAR website at www.sedar.com.

As with previous calls, our comments today are subject to the normal provisions relating to forward-looking information. We will provide information relating to the current views regarding market trends, including their size and potential for growth and our competitive position within our target markets. Although we believe that the expectations reflected in such forward-looking statements are reasonable, they do obviously involve risks and uncertainties, and actual results may differ materially from those expressed or implied in such statements.

Additional information about factors that could cause actual results to differ materially from expectations and about material factors or assumptions applied in making forward-looking statements may be found in the company’s press release announcing the Q2 fiscal 2023 results and the most recent annual information form and management discussion and analysis under Risks and Uncertainties as well as in other public disclosure documents filed with the Canadian security regulatory authorities.

Also, please note that the numbers discussed on this call are in U.S. dollars unless they are otherwise noted.

And now I’ll turn the call over to Raj.

Raj Das Gupta

Thank you, John. And good evening, everyone. Electrovaya is becoming a serious player in the North American battery space. Whether this be on the technology side, where we have recently had a third-party lab validate the exceptional cycle life performance of our Infinity battery technology, or on the operational side where we have just demonstrated that we can scale production in a profitable manner.

Our fiscal year second quarter was an important marker in our recent history. Not only did we achieve a quarterly record for revenue, but we have also made both an EBITDA and net profit. I can’t think of too many clean tech or specifically battery tech companies that have reached this milestone. This is a testament to Electrovaya’s commitment to focusing on high-margin applications for our unique battery technology and retaining a frugal mindset overall with respect to how we conduct our operations.

In today’s risk-averse environment, I hope this will become a more valuable and apparent metric for the public and our investors. Our operations team have been doing a phenomenal job in executing our growing order book while navigating continuing challenges with respect to the global supply chain.

With respect to purchase orders, we are seeing an accelerating adoption, which is demonstrated in our receipt of over $20 million worth of purchase orders for the quarter. One trend we have noticed is that the overall sales cycle is reducing. For instance, one recent Fortune 100 customer order, which we received was achieved without a physical trial, which used to be a feature as a standard part of the sales cycle.

Customers are also becoming more familiar with lithium-ion battery technology in general and Electrovaya’s specific performance advantages. I believe material handling customers have come to realize that Electrovaya holds the crown in the space for product quality, safety and longevity. And there really is no comparable battery technology in the industry that I know of.

If you consider our list of end users, we have the majority of the large U.S. retailers and a growing list of Fortune 500 and Fortune 100 customers. Just looking at the Fortune 100 company list. We have 10% of these companies using Electrovaya batteries in their operations. Considering that many Fortune 100 companies don’t operate warehouses at all, this is a very significant share. These corporations all represent significant potential new sales opportunities as we are currently just scratching the surface of their warehousing fleets.

Furthermore, they also offer a pathway to other applications for our battery technology, including energy storage and other vehicle applications. Our relationship with Raymond Corp. and the Toyota Industries Group in general, continues to grow. At ProMat, a material handling trade show that we exhibited at this past March, we had Electrovaya built batteries powering nearly every Raymond vehicle in addition to vehicles made by Bastian Solutions, a robotics and AGV manufacturer who is also owned by Toyota Industries.

We are also actively working on new products. We recently commissioned a new innovative automated assembly module line at our Kitimat location, which will allow us to manufacture a variety of module configurations and will initially be focused on our new high-voltage module. This module will be used in our upcoming high-voltage battery packs, which are being optimized for electric bus and truck applications in addition to high-performance energy storage applications.

We are expecting to start deliveries of some of these systems this calendar year. The company is also well underway with the development of custom integrated high-voltage battery systems for our new material handling vehicle series. This system will utilize Electrovaya’s next-generation battery management system, which allows increased IoT capabilities amongst other features. This next-generation BMS will also feature in all Electrovaya material handling products next year.

Finally, with regards to our solid-state battery development, our team at Electrovaya Labs is making great progress, and we will be providing a more detailed update at our battery technology event on May 17.

Electrovaya is rapidly growing, and we will ultimately need additional capacity. This was one of the driving factors for our U.S. manufacturing expansion in Jamestown, New York. In March, we acquired the site at one Precision Way by purchasing the shares of Sustainable Energy Jamestown.

We are also making good progress with respect to reaching an agreement with a government-backed finance institution to provide the necessary funding to outfit the first phase of our planned gigafactory. One of the requirements of this institution is to provide a detailed independent engineering review for which we have engaged with a leading engineering consultancy. Their initial analysis is well underway, and we expect to receive it later this month. The Jamestown gigafactory will be key in enabling Electrovaya to grow further and also access new incentives tied to the inflation Reduction Act.

I’ll pass it back to John.

John Gibson

Thanks, Raj. To give everyone a brief highlight of the financials, revenue for Q2 fiscal 2023 was $10.5 million compared to $4.3 million in the fiscal second quarter ended March 31, 2022, an increase of 144%. As Raj mentioned, this quarter represents a record for the company in recent history. We are looking to build on this momentum and continue to break these records. We are on track to meet our 2023 guidance of $42 million and we are anticipating continued sales growth in fiscal year 2023 as production continues to scale to meet demand.

The impact of supply chain issues and inflationary pressures continued during the quarter.

Gross margin was 25.6% for the quarter, a slight increase from the December quarter, which was 25.2%. Q2 was the last quarter where customers were locked into historical prices from the summer of 2021. In addition to the price increases carried out during 2022, the company has locked in pricing from key suppliers for 2023 deliveries, and we’ll be taking advantage of volume discounts where available. We expect to see an increase in the gross margins in calendar 2023.

Adjusted EBITDA for the quarter was $0.8 million compared to a loss of $1.1 million in the prior year.

Furthermore, we recorded a net profit of $0.2 million in the quarter compared to a loss of $2.3 million in the quarter ending March 31, 2022. We anticipate the company maintaining a positive adjusted EBITDA position for the remainder of fiscal year 2023 with an overall positive figure for the full year.

As Raj mentioned, in March 2023, the company completed its purchase of Sustainable Energy Jamestown, which owns the building that will be the location of our U.S. operations. The company took on the assets and liabilities, including a $3.9 million vendor note, which bears a below market interest rate. In return for the purchase, the company issued a promissory note for $1.05 million. Further details of that transaction are included in the financial statements and the MD&A.

At March 31, 2023, the total debt was $16.8 million, which includes these additional debts from the purchase of Sustainable Energy Jamestown, compared to $16.6 million from the prior year. The company is actively managing our cash to reduce our interest charges. Company believes its available liquidity along with a collection of $8.2 million of accounts receivable and conversion of $5.1 million of inventory into salable finished goods as well as receiving an additional $4.7 million of inventory in process for which deposits have been recorded in prepaid expenses is adequate working capital to support our anticipated growth.

That concludes the brief financial overview, and I’ll now turn the call over to Raj for the concluding remarks.

Raj Das Gupta

Thank you, John. I’d like to start my concluding remarks with a short update regarding our NASDAQ application. The company is well underway with the application process, and we are of the opinion that we are compliant with respect to their listing requirements with the exception of the current share price. Earlier this year, we received nearly 99% shareholder approval for a share consolidation, which would lead to an adjusted share price that would meet the NASDAQ listing requirements. At the time when management believes we are imminently close to executing on the NASDAQ listing, we will act on this authorization and move forward with a share consolidation.

I personally believe that by listing on NASDAQ, we will improve the company’s overall visibility and enable a much larger pool of investors to consider Electrovaya.

In conclusion, it has been a successful period at Electrovaya. We are on track to hit our fiscal guidance, have met our internal goals with respect to deliveries and profitability and are also setting the stage for our U.S. expansion.

I believe our technology offers a unique value proposition, especially with regards to the cycle life and safety of our lithium-ion battery products. This technology differentiation is vital to the company’s ability to retain strong gross margins and expand our business into new heavy-duty markets.

That concludes our remarks this evening. John and I would be pleased to hold a question-and-answer session. Matthew, please open the line for questions.

Question-and-Answer Session

Operator

Certainly. [Operator Instructions] Your first question is coming from Amit Dayal from H.C. Wainwright. Your line is live.

Amit Dayal

Thank you. Good afternoon everyone. So Raj, with respect to the Jamestown facility, once this engineering report is completed, what’s the timeline from that point to you guys moving forward on the next steps? And what are those milestones?

Raj Das Gupta

So, I would expect us to execute on the term sheet pretty much right away when the engineering review is complete, assuming the engineering review is favorable. There’s that risk, but so we’re pretty close to executing on this turnkey.

Amit Dayal

Understood. Okay. And in terms of the facility the U.S. government facility that you are trying to obtain for this, what’s the size? I don’t know if you have shared that previously, like how much are we looking for to get this up and running?

Raj Das Gupta

So ultimately, this facility will be over a gigawatt hour in capacity. That said, the first phase of the project, we’ll be looking at more like a third of that capacity because that’s what the existing building can handle, and that’s what we’re looking to finance in this first phase.

Amit Dayal

Okay, understood. And then just with respect to the operating expenses for the remaining two quarters for this year, are you expecting any increases? Or should we expect steady state relative to current levels?

John Gibson

Yes, I expect it to be relative to current levels. We don’t see any significant increases in the coming months. We’ve got good visibility from a production standpoint. I don’t expect to see any one-offs.

Amit Dayal

Okay. Thank you, Raj and John. And then just maybe one last question. Congrats on some of the positive results for the Infinity battery technology. Would there be any overlap with the SSB offering that you guys are also developing in terms of when the applications or markets you may be pursuing for these two different batteries?

Raj Das Gupta

I would say they’re complementary. So the Infinity battery technology is unique. It’s got extremely long cycle life, and it’s got energy density comparable to typical automotive-grade lithium-ion battery technologies. And on the cycle life, we’re four, five times the cycle life of a typical lithium-ion battery. In fact, if you compare it to your cell phone battery, you’re looking at even higher multiples.

The solid-state battery platform that we’re developing, that has got completely different performance attributes. So in terms of energy density, you’re looking at almost doubling the energy density especially on a volumetric basis. But when it comes to cycle life we’re not targeting anything near the Infinity Battery technology.

So it is targeting different applications altogether. While the Infinity Battery platform is targeting heavy-duty one or more cycle per day applications, the solid-state battery platform will be targeting high-performance vehicles, which are looking for extremely high energy density for long range or high performance or even new applications like electric aircraft. That said, the solid-state battery platform is definitely still in development. We’re not at a stage where we can predict the commercializability of it just yet.

Amit Dayal

Okay, understood. And then is the Infinity Battery ready for pilot type testing with potential customers? Any interest? Any inbounds on that one so far?

Raj Das Gupta

You mean the solid state or the Infinity?

Amit Dayal

Infinity.

Raj Das Gupta

So the Infinity, that’s present in all our production today. So it’s going into all the material handling applications. We have also been providing that cell to some other specialty applications in the – for instance, in the defense sector, there are two companies who are evaluating the technology. We are looking, of course, as we publicly said, looking to expand into the electric bus market, especially in the energy storage market, and we – and there are companies who are evaluating the technology for those applications as well.

Amit Dayal

Okay. I understand. That clarifies it for me. Thank you. Appreciate it. That’s all I have guys.

Operator

Thank you. Your next question is coming from Eric Stine from Craig-Hallum. Your line is live.

Eric Stine

Hi, Raj and John.

John Gibson

Hey Eric, good to hear you.

Eric Stine

Hey thanks for the chance. So, I just want to come back to the cycle like test results. I know that, that was underway for, I think it was two to three years. Just curious, any prospective customers that were tied to that data, waiting for anything triggered on that? Or would you kind of characterize that more as now you can go-to-market with these. I mean, I guess they’re not necessarily new results that you kind of add on to results you’ve had third-party and other in the past. Just maybe how should we think about that?

Raj Das Gupta

Well, first of all, the testing has taken over three years to spread this data. So, it’s a major effort on the part on the lab and us to make sure that testing is continuing for that longer period. The way I look at it is it’s a third-party validation of what we’ve been telling the market and telling our customers.

So, internally, we have, of course, test results, which mirror what we’ve been seeing at this third party. But really having a third-party validation is a very good thing to have. It makes sales effort that make it easier for OEMs to select this technology. I think this definitely also will help in providing better residual values for battery systems. So, for instance, currently, Electrovaya is selling the vast majority of battery systems, whether that be direct sales or through our OEM partners.

If our OEM partners decide to lease battery systems, this kind of data will really help improve residual values. The ultimate end result will be a much wider adoption of this technology, because if you can have a very strong residual value, even if you have a higher CapEx, this can ultimately be a lower energy storage costs. So, that could be a game changer. I think these are the factors which feed nicely into that.

Eric Stine

Got it. Then maybe sticking with the Infinity and if you’re thinking about the high-voltage product, I mean maybe – obviously, that’s underway. I mean, maybe just kind of where we stand there. I know that you have – I believe you’ve been kind of have bid for in the – you’ve got a large project that you’re potentially after. And then I’m particularly interested in just the opportunity with some of your Fortune 100 in retail customers on the stationary or backup side?

Raj Das Gupta

Yes, for sure. So, the high-voltage product line can really be applied to a wide variety of applications. So, electric buses, delivery trucks and energy storage would all use something similar. So, we’ve been developing this product for some time. And I think the market timing couldn’t be better, right? For the last couple of years, there have been companies in the space who have almost subsidized battery system pricing to win contracts. Of course, that type of mentality can no longer be in place. So those companies are suffering or no longer existing as a result of that.

And so the need for – of course, the need for batteries is increasing. So the timing is good for us to launch this product line. We have an earlier version of it being trialed on a bus right now. But back to your question, yes, so some of these Fortune 100s have asked us to – about our technology being implemented in some of their energy storage projects, for instance, and even some other potential delivery truck applications. So, it’s a nice intro into those types of new applications for us.

Eric Stine

It would seem to me, too, that I mean, the attach rate with some of the customers, I mean, given that they’ve got stationary power needs that they’re doing that already with something else. I mean, is it fair to say that you would expect potentially a pretty high attach rate?

Raj Das Gupta

We could. It’s too early to say exactly, but we are actively in discussions with a number of these parties with respect to energy storage in particular. So we still have a little bit of engineering development work to do in order for us to be ready to make deliveries to those types of projects. That said, I think we alluded to this last quarter as we did with a large energy storage developer on a pretty substantial project. And we hope to – we haven’t received word yet on the outcome of RFP, but there are new opportunities coming up with respect to energy storage.

Now in the current fiscal year, we’re pretty tied up with the orders and projects that we have to execute on. So it’s really – these are things that you should be considering for fiscal 2024 and fiscal 2025. Fiscal 2023 essentially fully booked for material handling projects.

Eric Stine

Yes. No, understood on that. Maybe last question for me, and this might be tough to answer, but I know maybe a representative customer I mean you’re clearly at really early stages. I mean you’re starting to see the growth pick up quite a bit, but you’re at early stage of the penetration. I mean is there any way to kind of take a representative customer and say, hey, we’ve got whatever percentage of that may be? Just trying to get a sense of how early it is and what the growth opportunity is.

Raj Das Gupta

Yes. So these customers, especially these Fortune 100 companies, they – in some cases, they operate hundreds of warehouses. And each warehouse is an opportunity size of let’s say, on average, about $2 million. So it’s a huge pool that we’re potentially playing in. For the most part, these companies are early in their adoption. Some of them are at one warehouse. Some of them are at multiple warehouses. But we have a lot of room to grow with these customers.

And I’d say in terms of penetration, yes, we’re definitely around that. In some cases, under 5% and in some cases, a little bit more. I’ll give you one other example, this Fortune 100 company who recently placed their first orders with us, these are for new distribution centers that they’re building. And most of these types of companies have mandates now that all new distribution centers will go lithium-ion or other next-gen technologies. And they do have plans to retrofit existing sites down the line.

Eric Stine

Got it. Okay, great color. Thanks.

Operator

Thank you. Your next question is coming from Aaron Martin from AIGH Investment Partners. Your line is live.

Aaron Martin

Hi, John. First of all, I want to say thank you to Eric for allowing someone else to ask the question. Appreciate it. In terms of the revenue this quarter, I know you consider it still part of material handling, but how much revenue was from Non Forklift in this quarter?

John Gibson

Just over $100,000.

Aaron Martin

Okay. So still not material. And then on the gross margin, obviously a step in the right direction, and I heard what you said in terms of pricing finally working through the old POs with the lower pricing. Where should we expect gross margin to go? And is that purely coming from pricing increases? Are there other stuff that’s happening there on the gross margin in terms of the supply chain working better that adds to that?

John Gibson

Yes. It’s probably a combination of three things. It’s our price increases that were initiated last year, locking in supplier prices and then operational efficiency. So we’re getting to our group now in terms of what’s actually happening on the floor. There’s very little overtime in that quarter, which is very different from where we were at the end of fiscal Q4 last year. We had a lot of overtime to hit that $9.9 million, but we’re getting better with how we’re doing things.

We’re seeing some prices come down, and we’re seeing some supplier prices go up. So it’s hard to see where they’re going to be by the end of next quarters into Q3. But what we’re seeing right now is we expect it to creep up – the gross margins to creep up as we continue to progress through the year.

Aaron Martin

Okay. Based upon what you just said that we’re not doing any over time, Raj talked about us being basically at capacity for this year. That’s not running extra shifts or anything like that. If we had to could be run extra shifts and obviously, that would be at lower gross margin. It’s over time, it’s slightly more – less cost efficient. But could we do that if need be?

John Gibson

Yes, we could. So, we currently run one shift here in the plant. If we wanted to increase that, we can run a four-day, ten-hour shift to give everybody full-time hours and add another shift on top of that. So, we would not be – we still wouldn’t be recording any overtime, but we can increase the output that would involve us hiring more people. But that’s inevitable as we kind of increase our output from the plant on a monthly and weekly basis.

Raj Das Gupta

Yes, Aaron, we’ve also been making some building infrastructure upgrades here to enable higher throughput. So we have quite a bit of room to grow still before we max out capacity here in Mississauga. But we do see – we’re looking even six months. We do see us adding capacity limits and are getting close to it. So having that operation, a mirrored operation in Jamestown sooner than later is what we’re planning.

Aaron Martin

Okay. I mean, obviously, in terms of driving with your annual guidance, which you’re basically booked for without doing these things, it’s – and you’re talking about going meaning more capacity. It seems like you’re being conservative there, but I won’t back you into the corner.

Just a question for John on the purchase of the building or the entity that owned the building, Obviously, you added the asset and the liabilities to your – to the balance sheet and then increase the equity. The net income of $170,000 or $180,000 that is not including any non-cash gain from that asset coming on to the balance sheet?

John Gibson

Correct. There is no unrealized gain or revaluation surplus within that $170,000.

Aaron Martin

So your – that net profit is the net profit from operations, it’s not including the investment?

John Gibson

Yes.

Aaron Martin

Okay.

John Gibson

Correct.

Aaron Martin

All right. Thank you very much, and congratulations on the progress.

Raj Das Gupta

Thanks, Aaron.

Operator

Thank you. Your next question is coming from Shawn Severson from Water Tower Research. Your line is live.

Shawn Severson

Great, thank you. Raj, I was wondering if you could talk a little bit about the pricing you saw. I understand you locked up the supply chain and some supply agreements for this year, for the rest of the year. I’m just wondering on average, is that – are prices up higher or lower relative to the 2022 prices? So are things going up, down or the same? I mean is the battle to keep things the same, but are you actually getting pricing down?

Raj Das Gupta

I think it’s going in both directions. It depends on the commodity in question. So the net results is our bill of material costs is more or less unchanged.

Shawn Severson

Okay. And second question is, I know you got a lot of balls in the air, both in stationary power and in the Commercial side. But if you were to boil it down to a couple of milestones in each of them that we should look for to kind of – what should we expect the type of news. So obviously, I’m not asking when, but the type of news flow that we would see coming from each of those respective markets as they develop for you?

Raj Das Gupta

So, on the high-voltage side, for instance, on energy storage, look out for potential partnership announcements, maybe even distribution announcements. And then on the bus and other vehicle applications that would be what we’re seeking really our OEM partnerships. So those take time. We’re working diligently to get a few and they will – we hope we’re going to be successful in getting some new OEM customers for those applications.

And that also said – we’re making wins on the additional OEM partners on the OEM – on the material handling side of things as well. So, whether that be just material handling or even on the robotics side. I mentioned in the call that Bastian Solutions, which is another Toyota company, had our batteries operating at ProMat. We’re starting to market to them as well. So we’re seeing, I would say, additional OEMs in that sector as well.

Shawn Severson

Great, thank you for the color. And last question is on the Commercial side on the bus side. In general, are these – are you displacing an incumbent battery provider or these types of OEMs that you’re talking to are – is there going to be a new product launch, let’s say, a new line launch, and you’re going to be on that? I’m trying to understand are these already well established in your displacing? Or are these going to be new programs that OEMs?

Raj Das Gupta

So, everything is a little bit new because this is a new sector. That said, the projects that we’re looking at currently are displacing other players.

Shawn Severson

Great. Thanks Raj. Congratulations as well. Thank you.

Raj Das Gupta

Thanks Shawn.

Operator

Thank you. Your next question is coming from Orin Hirschman from AIGH Investment Partners. Your line is live.

Orin Hirschman

Hi, congratulations on the progress as well. A couple of additional questions. Aaron, thank you for letting me ask some questions. Let’s say, for example, the bus application Infinity technology, is that critical in the bus application where that’s differentiated for you? Or is that it’s not as critical for the bus application? And what I mean to say is it’s very easy to understand sort of stationary application for energy storage, how it can make a massive difference in terms of lifetime and finance ability, et cetera. But does it make as much of a difference on the bus side?

Raj Das Gupta

Surprisingly, it does. So, buses, they traditionally are looking for at least 12-year life on these buses and sometimes up to 16 years, and they’re doing at least one cycle on the battery system per day. So, there’s – basically, no battery system other than ours that’s going to last the lifetime of the bus. So that in itself is a major selling point.

The second thing that is happening on the bus side is again, this is a nascent industry in terms of having electric buses, especially in North America. And there have been some safety incidents in the industry. So we believe that the bus OEMs are going to start placing a higher emphasis on safety, and that also plays well into Electrovaya’s hand.

So, those two factors, I think, are going to beat the capital costs of the solution. So, this is a good example of a market getting more mature in what they’re looking for.

Orin Hirschman

Meaning, you’re saying the capital costs, meaning that it’s not just price that makes the difference. You don’t have to beat on price because of the advantages on the lifetime really the IRR is what you’re saying and the safe safety, which is intangible?

Raj Das Gupta

Exactly. We never want to be anyone on price. We want to sell things at a higher price. So that’s why we’re profitable. That’s why we want to remain profitable. So we’re selling a technology, not a commodity.

Orin Hirschman

Okay. On the stationary for energy storage, I know you still have some work to do. Do you have any idea yet on the calculations or maybe you won’t until you’re running a durable system for amount – a certain amount of time in real life six months of a year to understand just the extension of the life cycle, just how far it can go. And what that means? And is for the stationary application is the safety aspect come off yet when you’ve had preliminary discussions?

Raj Das Gupta

It does, to some extent, they have some – there are some new standards coming up, for instance, in New York, where they require some of these new fire propagation tests, which, again, plays in our favor. But energy storage, for the most part, it’s all about the numbers. And again, it fits well with this technology. So they’re – we’re talking to our, I guess, our prospective developer partner, they’ve been informing us. There are certain markets where there are more than one cycle per day applications for energy storage. One example was the Texas market, and there are a few others.

So, again, this is similar to the bus segment, where there’s a certain degree of maturity forming with respect to the selection criteria of the battery technology. So it’s no longer just dollar per kilowatt hour, what’s the cheapest solution from my energy storage side, it’s now I’m looking at life cycle cost, you’re looking at how many cycles you can do on the battery and even on – a little bit on the safety side of things as well.

Orin Hirschman

Okay. And my last two questions. One is the component side. Is there anything we’re having trouble sourcing, the potential for trouble sourcing components particularly and any power-related semiconductors to be silicon carbide – unfortunately, I should be, but I’m not familiar what goes in electronics side, if there’s anything that might be an engaging factor and will that change at all on the stationary?

Raj Das Gupta

I’d say, for the most part those concerns are definitely being late, right? So we did have – last year, we had a chip shortage for certain microprocesses that we were using in our battery management system. And our engineering team was very quick in redesigning our BMS to use more easily obtainable chips. So, that was a good example of how nimble our team has been. Now those types of challenges are definitely decreasing. So not to say it couldn’t happen again. But right now, we don’t see any significant supply chain shortages with those key electronic parts.

Orin Hirschman

Are there any exotic material semis and systems look on car body or anything like that?

Raj Das Gupta

No. Not that I know of offhand.

Orin Hirschman

Great. Okay, thank you so much.

Operator

Thank you. There are no further questions in the queue.

Raj Das Gupta

Thank you, everybody, for your participation. That will conclude today’s conference call. Thank you very much and have a good evening.

Operator

Thank you, everyone. This concludes today’s event. You may disconnect at this time and have a wonderful day. Thank you for your participation.