Electric Last Mile Solutions, Inc.

Electric Last Mile Solutions reported approximately $136,000 of revenue in Q3 2021 from delivery of 5 Urban Delivery vehicles. Net loss was $17.8 million, or $0.15 per share. Operating expenses were $22.3 million, including $5.6 million of R&D and $16.7 million of G&A; cash and restricted cash were $170.9 million. Management said shipping and logistics costs, including spot container rates as high as $25,000, pushed margins per vehicle from double digits to low single digits. For 2021, the company revised total operating expense to $60 million-$70 million and CapEx to $20 million-$25 million, and lowered expected production to 300-500 vehicles from 1,000. On guidance, management said production guidance would be provided on the next earnings call, fully certified Urban Delivery vehicles were expected to ship in December, and gross profit was expected by the second half of 2022 as logistics costs normalize and contracts are locked in.

James Taylor framed the quarter as a milestone, emphasizing that ELMS began production, generated revenue, and is now a revenue-generating company rather than a pre-revenue one. He was highly bullish on demand, saying customer response has been strong for Urban Delivery and Urban Utility, and repeatedly argued the company has a first-mover advantage in Class 1 and a potential early position in Class 3. He also highlighted the battery deal with CATL through 2025, plans for U.S. battery localization, expansion into Canada, and digital/telematics initiatives like EV Campus and ELMS Air.

Robert Song said Q3 results reflected first revenue of about $136,000 from 5 vehicle deliveries and a quarter-end cash balance of $170.9 million. He noted operating expenses of $22.3 million, split between $5.6 million of R&D and $16.7 million of G&A, and said 2021 operating expense is now expected to be $60 million-$70 million with CapEx of $20 million-$25 million. On margins, management said current freight costs are depressing vehicle margins to low single digits, but if 2022 contract freight rates are about 60% of spot, the company could save about $5,000 per vehicle and reach up to 15% gross margin by the second half of 2022.

Analysts focused on whether the production cut reflected plant issues or just supply/logistics; management said the factory, staffing, lines, and CapEx were on track and the problem was getting parts to the plant. They also asked about customer demand and the order pipeline, and management said demand remains strong, with many demos and pilots converting interest into firm orders, but the company is now focusing on conversions rather than taking new preorders. Other questions covered homologation, weekly build rates, and freight costs; management said certification verification tests are scheduled for early December, build rate was about 40 per week, and shipping contracts for 2022 could reduce freight costs materially.