Truck Maker Xos Bolsters Finances as Deliveries Ramp Up
Classes 5-8 electric truck maker Xos obtained a $48.5 million capital infusion from serial e-mobility investor ElectraMeccanica, the companies said.
Los Angeles-based Xos is to acquire all of the issued and outstanding common shares of ElectraMeccanica, thereby taking control of its partner’s cash assets, and strengthening the truck maker’s balance sheet.
Xos had $23.4 million cash and equivalents on hand at the end of the third quarter of 2023, compared with $89.3 million at the end of 2022, the company said Nov. 9 when releasing Q3 results. It posted a $14.1 million net loss in Q3 and a $23.6 million loss in the second quarter of 2023.
The truck maker did, however, post a gross profit of $1.99 million in Q3 2023 compared with a $10.75 million loss in the same period a year earlier. Xos delivered 105 trucks in Q3, a 176% jump compared with Q2 and the biggest total in the company’s history until then.
Xos delivered 110 trucks to customers in the fourth quarter of 2023, including FedEx Ground, UPS Inc. and Loomis, a 90% year-over-year jump, the company said Jan. 11.
We are pleased to announce the delivery of 105 units to end customers in Q3 2023, marking the highest quarterly delivery volumes to date for the company and the first quarter delivering positive gross margin units. Read more in our latest press release: https://t.co/dU006VB87u pic.twitter.com/0A9NfAkHB1 — Xos (@xostrucks) October 18, 2023
“We believe leveraging ElectraMeccanica’s assets will strengthen Xos’ leadership position in the robust commercial truck market and allow Xos to scale profitable vehicle sales,” CEO Dakota Semler said.
Chief Financial Officer Liana Pogosyan added: “We believe Xos’ combination with ElectraMeccanica will significantly strengthen our cash position and provide significant growth funding and runway to execute our business plan.
Semler
“We believe that the cash provided in the transaction, combined with the reduced cash burn we have achieved as we have improved our margins, will provide runway to achieve our goals.”
Joining forces with Xos is ElectraMeccanica’s second attempt to enter the U.S. commercial vehicle space in the past six months. The first with U.K.-based Tevva Motors Ltd. quickly dissolved into acrimony and threats of legal action.
ElectraMeccanica and Tevva originally planned to build a hybrid electric and hydrogen-powered Class 8 truck in Arizona.
Burnaby, British Columbia-based ElectraMeccanica began seeking a new partner as soon as the Tevva partnership began to fall apart.
Docherty
ElectraMeccanica CEO Susan Docherty said in December the company had held talks with 20 firms and narrowed down the list of potential partners to a “handful of electric businesses.”
“We believe the proposed combination with Xos would achieve our management team’s objective to generate revenues, achieve credible long-term profitability and improve shareholder value,” Docherty said in the Jan. 11 joint statement.
“Today, we couldn’t be more pleased with the proposed combination with Xos, given its clear track record as an EV OEM with industry-leading gross margins; its proven ability to service demanding, large-fleet customers like FedEx Ground, UPS and Loomis; and its talented, disciplined management team,” she added.
We are excited to announce our proposed combination with @xostrucks , a leading electric truck manufacturer and fleet electrification services provider. For important information, please visit: https://t.co/RADd3XQFS3 — ElectraMeccanica (@ElectraMecc) January 11, 2024
After the deal closes, ElectraMeccanica shareholders will own about 21% of Xos. The combined company’s board will consist of nine directors, including six designated by Xos. The deal is expected to close in the first half of the year.
ElectraMeccanica’s partnership with Tevva originally had been expected to close by the end of 2023, but after the cross-Atlantic threats, the two closed out the year by settling their differences.
Peter Vaughan Schmidt of Torc and Joanna Buttler of Daimler Truck discuss the timeline for autonomous trucks entering the market and how they could blend into existing fleet operations. Tune in above or by going to RoadSigns.ttnews.com.
In late November, the companies said it was in their “mutual best interests to resolve any litigation relating to the arrangement agreement with no attribution or admission of wrongdoing by any party.”
Meantime, ElectraMeccanica’s 235,000-square-foot facility in Mesa, Ariz., where Docherty in September told Transport Topics that serial production of a 19-metric-ton (41,888-pound) truck would commence in 2027, will be subleased after two attempts to begin manufacturing there, the company said Jan. 11.
Teaming up with Xos is ElectraMeccanica’s third overall venture in the e-mobility space. The company’s original electric vehicle — a three-wheel electric micromobility vehicle known as the Solo — was abandoned after facing numerous hurdles.
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