Xos, Inc (XOS)

[WeTheMarket]

Xos Achieves Largest Quarter with Profitable Deliveries to National Fleet Customers
October 18 2023
https://ih.advfn.com/stock-market/NASDAQ/xos-XOS/stock-news/92304996/xos-achieves-largest-quarter-with-profitable-deliv

Xos, Inc. (NASDAQ: XOS) is pleased to announce that it has delivered 105 units to end customers in the third quarter of 2023. The period marks the highest quarterly delivery volumes to date for the company and the company’s first quarter delivering positive gross margin units to customers. Vehicles delivered in the third quarter include the first 2023 Xos SV Stepvans delivered to customers. The new Xos 2023 stepvan is designed to meet or exceed margin performance of legacy diesel trucks on a host of performance metrics. This makes Xos among the first gross margin positive commercial EV manufacturers in the entire commercial EV industry and propels Xos towards its stated objective of positive free cash flows.

For the third quarter of 2023, Xos' preliminary estimate of GAAP gross margin is between 8% to 15%. This result was driven by unit gross margins of the new 2023 Xos SV Stepvan that range from approximately +10% to 20% per unit, depending on configuration. Three pillars underscore this milestone achievement:

- Proprietary software technology;
- Long-term supply agreements with one of the largest global Tier 1 battery cell and electronics suppliers; and
- Robust design, engineering, and testing processes that reduce manufacturing costs.

Proprietary technology enables Xos vehicles to deliver top performance to customers from a more cost efficient battery system. Xos’ 140kWh Stepvan fulfills the needs of most last-mile delivery routes at a competitive purchase price. Xos’ long-range 280kWh stepvan option doubles the usable range for fleets with longer routes or heavier payloads.

Recent long-term agreements with battery suppliers and other vendors governing the cost and warranty of critical components enable Xos to achieve significant savings per truck compared to previous Xos stepvan models.

Lastly, Xos’ robust design, engineering, and testing processes contribute to lower manufacturing costs by reducing required labor input and reduced service costs through improved vehicle quality.

The first profitable Xos vehicles compete directly with diesel last-mile delivery vehicles on total cost of ownership—a principal factor fleet customers incorporate in purchase decisions. When combined with available subsidies the cost advantages become even more significant. Compared to similarly equipped last-mile ICE delivery vehicles, the new 2023 Xos Stepvan offers an estimated 30-40% savings in those markets.

“We are proud of achieving a positive GAAP gross margin in the quarter due to the efforts of various teams, including engineering, supply chain, and others. We expect margins will continue to improve and be sustained as the tailwinds and demand for medium-duty EVs grow,” said Liana Pogosyan, acting Chief Financial Officer for Xos.

About Xos, Inc.
Xos is a leading technology company, fleet services provider, and original equipment manufacturer of Class 5 through Class 8 battery-electric vehicles. Xos vehicles and fleet management software are purpose-built for medium- and heavy-duty commercial vehicles that travel on last-mile, back-to-base routes of up to 270 miles or less per day. The company leverages its proprietary technologies to provide commercial fleets with battery-electric vehicles that are easier to maintain and more cost-efficient on a total cost of ownership (TCO) basis than their internal combustion engine counterparts. For more information, visit www.xostrucks.com.

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