Xos, Inc. is a leading electric truck manufacturer and fleet services provider, committed to the decarbonization of commercial transportation. The company designs and produces Class 5-8 battery-electric commercial vehicles tailored for last-mile, back-to-base routes of up to 200 miles per day. Xos also offers comprehensive charging infrastructure solutions through its Xos Energy Solutions™ business, as well as fleet management software through its Xosphere™ platform.

Business Overview

Xos was founded in 2016 with the mission of accelerating the adoption of electric vehicles in the commercial transportation sector. The company has developed proprietary technologies, including the X-Platform, a purpose-built vehicle chassis platform, and the X-Pack, a modular battery system, to address the unique needs of medium- and heavy-duty commercial fleets.

Xos' "Fleet-as-a-Service" offering provides customers with a comprehensive suite of products and services to facilitate the transition to electric fleets. This includes the company's battery-electric vehicles, charging infrastructure, and fleet management software. By integrating these solutions, Xos aims to deliver a seamless and cost-efficient ownership experience for its customers compared to traditional internal combustion engine counterparts.

The company's product portfolio includes the Class 5-6 MD X-Platform and the recently launched Class 7-8 HD X-Platform, both of which can be customized with various body options to serve diverse last-mile applications such as parcel delivery, linen transport, food & beverage distribution, and armored cash transport. Xos also offers powertrain solutions for off-highway, industrial, and specialty vehicles through its Powered by Xos™ business.

Xos Energy Solutions™ provides mobile and permanent multi-application charging equipment, mobile energy storage, and turnkey infrastructure services to help customers overcome the challenges associated with electric fleet deployments. The company's Xosphere™ fleet management platform integrates vehicle operation and charging data to optimize fleet efficiency and reduce total cost of ownership.

Financials

For the full year 2023, Xos reported annual revenue of $44.5 million, a decrease from $55.2 million in the prior year. The company's net loss for the year was $75.8 million, compared to a net loss of $65.5 million in 2022. Annual operating cash flow was negative $39.3 million, and annual free cash flow was negative $40.7 million.

In the first quarter of 2024, Xos generated revenue of $13.2 million, a significant increase of 180% compared to $4.7 million in the same period of 2023. Gross profit for the quarter was $2.8 million, representing a gross margin of 21.2%, a substantial improvement from the gross loss of $0.9 million (negative 18.6% margin) in Q1 2023. The company's net loss for the quarter was $11.0 million, compared to a net loss of $24.3 million in the prior-year period.

Xos' balance sheet was strengthened by the acquisition of ElectraMeccanica Vehicles Corp. in March 2024, which provided the company with approximately $50 million in additional cash, net of certain costs paid at closing. As of March 31, 2024, Xos had $46.2 million in cash and cash equivalents, up from $11.6 million at the end of 2023.

Operational Highlights

During the first quarter of 2024, Xos delivered 60 vehicles and 2 powertrains, compared to 30 vehicles and 1 powertrain in the same period of 2023. The company's revenue mix consisted of 91% from vehicle and powertrain sales, 5% from Fleet-as-a-Service offerings, and 4% from ancillary revenue.

Xos' engineering, supply chain, and manufacturing teams have been focused on scaling production to meet growing customer demand and improving gross margins. The company's engineers have implemented refinements that have contributed to the strong gross margin performance in the first quarter of 2024.

To address the challenge of charging infrastructure delays faced by customers, Xos introduced the updated Xos Hub in the first quarter. The Hub combines 280 kilowatt hours of battery storage with four chargers, allowing each unit to support up to eight vehicles in typical last-mile fleet depot applications. By reducing the peak power drawn from the grid, the Hub can expedite the electrification process for fleets and minimize the impact of utility upgrades and charger installation timelines.

Xos is also pursuing a range of solutions, including bundling Hubs with vehicle orders, to improve the predictability of its vehicle deliveries. The company is preparing for production rates of up to eight Hubs per month in the second half of 2024 to meet the strong demand from customers, including Xcel Energy, FedEx Ground contractors, and SSA Marine.

Guidance and Outlook

For the full year 2024, Xos is reaffirming its guidance of revenue in the range of $66.7 million to $100.4 million, a non-GAAP operating loss of between $43.7 million to $48.7 million, and the delivery of 400 to 600 units.

The company believes it is well-positioned to capitalize on the growing demand for commercial electric vehicles, driven by factors such as increased regulatory pressure on fleets to adopt zero-emission technologies, the rapid growth of e-commerce and last-mile delivery, and the rising cost of fuel. Xos' industry-leading gross margins, comprehensive product and service offerings, and the additional liquidity provided by the ElectraMeccanica acquisition are expected to support the company's long-term success.

Risks and Challenges

Xos faces several risks and challenges, including ongoing supply chain disruptions, the ability to scale production to meet growing demand, and the need to continue improving its operational efficiency and cost structure. The company also operates in a highly competitive environment, with established OEMs and new entrants vying for market share in the commercial electric vehicle space.

Additionally, Xos' ability to access capital through the Standby Equity Purchase Agreement (SEPA) is currently limited, as the company must file a post-effective amendment to the Registration Statement on Form S-1 before it can fully utilize the remaining $119.5 million commitment. The company's long-term success will depend on its ability to secure additional funding through various sources, including debt financing, equity offerings, and strategic partnerships.

Conclusion

Xos is well-positioned to capitalize on the growing demand for commercial electric vehicles and charging infrastructure solutions. The company's comprehensive product and service offerings, industry-leading gross margins, and the additional liquidity provided by the ElectraMeccanica acquisition have strengthened its competitive position. As Xos continues to scale its operations and address the challenges of supply chain disruptions and infrastructure delays, the company's long-term success will depend on its ability to execute its strategic plan and secure the necessary funding to support its growth initiatives.