8-K
PHOENIX MOTOR INC. (PEVM)
United States
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Form 8-K
Current Report
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
March 29, 2023
Date of Report (Date of earliest event reported)
Phoenix Motor Inc.
(Exact Name of Registrant as Specified in its Charter)
| Delaware | 001-41414 | 85-4319789 |
|---|---|---|
| (State or other jurisdiction of<br><br> incorporation) | (Commission File Number) | (I.R.S. Employer Identification No.) |
| 1500 Lakeview Loop<br><br> <br>Anaheim, CA | 92807 | |
| --- | --- | |
| (Address of Principal Executive Offices) | (Zip Code) |
Registrant’s telephone number, including area code:
(909) 987-0815
N/A
(Former name or former address, if changed since last report)
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
| ¨ | Written communications pursuant to Rule 425 under the Securities Act |
|---|---|
| ¨ | Soliciting material pursuant to Rule 14a-12 under the Exchange Act |
| --- | --- |
| ¨ | Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act |
| --- | --- |
| ¨ | Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act |
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Securities registered pursuant to Section 12(b) of the Act:
| Title of each class | Trading Symbol(s) | Name of each exchange on which registered |
|---|---|---|
| Common Stock, par value $0.0004 per share | PEV | NASDAQ Capital Market |
| x | Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter). | |
| --- | --- | |
| ¨ | If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. | |
| --- | --- |
Item 2.02 Resultsof Operations and Financial Condition.
On March 29, 2023, Phoenix Motor Inc., a Delaware corporation (the “Company”), issued a press release announcing the Company’s financial results for the quarter and year ended December 31, 2022. A copy of this press release is furnished as Exhibit 99.1 and is incorporated herein by reference.
A copy of the earnings release conference call transcript, dated March 29, 2023, reporting the Company's financial results for the quarter and year ended December 31, 2022, is furnished as Exhibit 99.2 and is incorporated herein by reference.
The information in this Current Report on Form 8-K (including Exhibits 99.1 and 99.2 attached hereto) is being furnished and shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended, or otherwise subject to the liabilities of that section, nor shall it be deemed incorporated by reference into any filing by the Company, under the Securities Act of 1933, as amended, or the Securities Exchange Act of 1934, as amended, except as expressly set forth by specific reference in such filing.
Forward-Looking Statement
The earnings release conference call script contains forward-looking statements as defined by the Private Securities Litigation Reform Act of 1995. Forward-looking statements include statements concerning plans, objectives, goals, strategies, future events or performance, and underlying assumptions and other statements that are other than statements of historical facts. When the Company uses words such as “may,” “will,” “intend,” “should,” “believe,” “expect,” “anticipate,” “project,” “estimate” or similar expressions that do not relate solely to historical matters, it is making forward-looking statements. No assurance can be given that the net proceeds of the Offering will be used as indicated. Forward-looking statements are not guarantees of future performance and involve risks and uncertainties that may cause the actual results to differ materially from the Company’s expectations discussed in the forward-looking statements. These statements are subject to uncertainties and risks including, but not limited to, the following: the Company’s ability to convert concept trucks and vans into production and sales; the Company’s product development timeline and expected start of production; development of competitive trucks and vans manufactured and sold by the Company’s competitors and major industry vehicle companies; the Company’s ability to scale in a cost-effective manner; the Company’s future capital requirements and sources and uses of cash; the Company’s ability to obtain funding for its future operations; the Company’s financial and business performance; changes in the Company’s strategy, future operations, financial position, estimated revenues and losses, projected costs, prospects and plans; the implementation, market acceptance and success of its business model; expectations regarding the Company’s ability to obtain and maintain intellectual property protection and not infringe on the rights of others; and other risks contained in the Company’s definitive Rule 424(b)(4) initial public offering prospectus on Form S-1 dated June 9, 2022, the Company’s definitive Rule 424(b)(3 definitive prospectus on Form S-1 dated December 20, 2022 and other reports filed by the Company with the SEC. For these reasons, among others, investors are cautioned not to place undue reliance upon any forward-looking statements in the earnings release conference call transcript. Additional factors are discussed in the Company’s filings with the SEC, including those set forth in the Risk Factors section of the Company's registration statements and other reports, which are available for review at www.sec.gov. The Company undertakes no obligation to publicly revise these forward-looking statements to reflect events or circumstances that arise after the date hereof.
Item 9.01. FinancialStatements and Exhibits.
(d) Exhibits
| Exhibit No. | Description |
|---|---|
| 99.1 | Press Release dated March 29, 2023 issued by Phoenix Motor Inc. |
| 99.2 | Earnings Conference Call Transcript |
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
| PHOENIX MOTOR INC. | ||
|---|---|---|
| Dated: March 29, 2023 | ||
| By: | /s/ Chris Wang | |
| Name: Chris Wang | ||
| Title: Chief Financial Officer |
Exhibit 99.1
Phoenix Motor Inc. Announces UnauditedFourth Quarter and Full Year 2022 Financial Results^1^
Anaheim, California (March 29, 2022) – Phoenix Motor Inc. (Nasdaq: PEV) (“Company” or “Phoenix”), a leader in manufacturing of all-electric, medium-duty vehicles, today announced its unaudited results for the fourth quarter and full year ended December 31, 2022. The audited financial statements for the year ended December 31, 2022 will be publicly filed by March 31, 2023.
Financial Highlights for the Fourth Quarterof 2022
| · | Net revenues totaled $1.8 million in the quarter, an increase of approximately<br>35% compared to the prior-year period of $1.3 million, principally due to increased sales of electric vehicles and electric forklifts. |
|---|---|
| · | Gross profit increased to $0.3 million in the<br>quarter, compared to a gross loss of $0.4 million in the fourth quarter of 2021, primarily driven by a shift in the product mix and improved<br>gross margin on electric vehicles. |
| --- | --- |
| · | The net loss decreased to $4.5 million in the<br>quarter, compared to a loss of $8.2 million in the prior-year period. |
| --- | --- |
Financial Highlights for the Years Ended December31
| · | Net revenues for 2022 were $4.3 million, a 45%<br>increase compared to 2021, primarily driven by an increase in the sales of electric forklifts. |
|---|---|
| · | Gross profit increased to $0.8 million for 2022,<br>compared to a gross loss of $0.6 million for 2021, and the gross margin rose from -19% to 19%, driven by higher margins across all products<br>categories, particularly a significantly improved margin on electric vehicles from -31% to 5%, and the 19% margin of electric forklifts. |
| --- | --- |
| · | Net loss decreased to $12.7 million during 2022,<br>compared to a net loss of $14.6 million for 2021. |
| --- | --- |
| · | Total assets were $20.4 million as of December<br>31, 2022. |
| --- | --- |
Recent Company Highlights
| · | In March 2023, Phoenix and Matthews Specialty<br>Vehicles signed a Memorandum of Understanding to jointly build and deploy Class 4 electric specialty vehicles for commercial applications<br>including mobile healthcare, bloodmobiles, bookmobiles, classrooms, public safety and shuttles. |
|---|---|
| · | Also in March 2023, Phoenix announced it is now<br>a qualified manufacturer for the commercial clean vehicle credit under the Inflation Reduction Act. |
| --- | --- |
| · | In February 2023, Phoenix delivered three all-electric,<br>zero emission medium-duty trucks and Level III charging stations to the City of Salinas, CA. |
| --- | --- |
| · | In January 2023, Phoenix and Fermata Energy announced<br>the signing of an Equipment Testing Agreement, to pair Fermata’s V2X bidirectional chargers and AI-driven software platforms with<br>Phoenix’s zero emission drive systems. |
| --- | --- |
^1^The financial statements for the fourth quarter and full year ended December 31, 2022 herein the press release have not been audited or reviewed by the Company’s independent registered accounting firm. The audited financial statements for the year ended December 31, 2022 to be disclosed in the Company’s Form 10-K may have discrepancies with the above-mentioned unaudited and unreviewed financial statements.
| · | In November 2022, Phoenix received a nomination<br>letter from CATL (Contemporary Amperex Technology Co., Limited), the world’s largest EV battery manufacturer, forming a strategic<br>partnership and outlining the terms for the procurement of K-Pack batteries and related products for Phoenix’s product lines. |
|---|---|
| · | In October 2022, the Company and Pegasus Specialty<br>Vehicles announced the formation of a strategic partnership to jointly develop Class A electric school buses, targeted for the North American<br>market. |
| --- | --- |
| · | Also in October 2022, the Company engaged IAT<br>to advance engineering and design work for Phoenix’s Gen 4 EVs, to maximize cost efficiencies, speed time to market and ensure the<br>highest quality standards. |
| --- | --- |
“The commencement of production for our fourth-generation vehicles, as well as the expectation to achieve first delivery during the summer of 2023, is an exciting milestone for Phoenix,” Phoenix’s CEO, Dr. Lance Zhou commented. “We are executing on time and on budget and have built a strong order book for our Gen 4 vehicles. Our latest vehicle development provides a number of advantages compared with prior generations, such as lower costs and the ability to achieve mass production and is the bridge to our Gen 5 ground-up chassis vehicles, which will enable the Company to achieve chassis independence and is expected to begin production and sales during 2024.”
Start of Production of Gen 4 Vehicles thisSummer
In the summer of 2023, Phoenix anticipates the start of production of its fourth generation vehicles for the medium-duty EV market. The Gen 4 development will provide several advantages versus our current Gen 3 models, specifically:
| · | Asset Light Business Model: Gen 4 will<br>mark the deployment of the Company’s “asset light” business model both upstream and downstream. Upstream, Phoenix will<br>leverage its strategic partnerships with R&D partners and engineering suppliers to more efficiently and quickly develop its product<br>line. Downstream, Phoenix is partnering with both customers and third party manufacturers to develop manufacturing and assembly facilities<br>at strategic locations around the country. |
|---|---|
| · | Scale: The Company anticipates efficient<br>scaling of its production, utilizing customer and third-party assembly facilities. Phoenix is reconfiguring its current Anaheim manufacturing<br>facility to increase production capacity and to utilize it as a showcase facility and training center to ensure its processes and procedures<br>are standardized across its entire partner-operated production network. |
| --- | --- |
| · | Reduced Costs: Gen 4 is expected to achieve<br>lower production and materials costs compared to Gen 3 vehicles, benefiting from standardization of processes and procedures, as well<br>as components and sub-assemblies—a benefit which will carry over to Gen 5 production as well. |
| --- | --- |
| · | Battery Supply: The Company expects it<br>will benefit from its recent partnership with CATL for long-term strategic supply of K-Packs and related products for its Gen 4 electric<br>vehicles. |
| --- | --- |
Gen 5 Will Offer Chassis Independence in 2024
Design, development and production planning for Phoenix’s Gen 5 vehicles will leverage on Phoenix’s experience and benefit from the development of its Gen 4 line of vehicles. Unique highlights of Gen 5 are expected to include:
| · | Ground-up Chassis Design: The Company<br>will be producing its own ground up, purpose-built chassis in 2024. |
|---|---|
| · | Chassis Independence: The development<br>of Gen 5 will provide Phoenix with chassis independence, overcoming one of the major impediments facing the industry. |
| --- | --- |
| · | Lower Costs: Phoenix should be able to<br>produce its chassis for far less than the cost it is paying to acquire chassis today. |
| --- | --- |
| · | Increased Design Flexibility and CustomerSatisfaction: Phoenix’s ground up chassis will enable it to customize vehicle designs to meet specialized needs, while maintaining<br>standardized processes and procedures, increasing the Company’s capacity to accommodate customer requirements and meet the evolving<br>needs of the transforming electric vehicle market. |
| --- | --- |
EdisonFuture: The Platform for Growth in 2025 and Beyond
Phoenix continues to make progress in the design and development of its EdisonFuture line of light-duty electric vehicles. This product line is anticipated to provide the market with both consumer and commercial pick-up trucks, SUVs and delivery vans. The development of EdisonFuture will, much like Gen 5, benefit greatly from the development of prior generations, which will further lower costs and speed time-to-market.
Conference Call Information
Phoenix Motor will host a conference call today at 5:00 PM ET to discuss these results. Interested investors and other parties may access a live webcast of the conference call which will be available on the Events and Presentations page on the Investor Relations section of Phoenix’s website at https://phoenixmotorcars.com/investor-relations/events-and-presentations/default.aspx. The call can also be accessed live via telephone by dialing (888) 660-6373 or for international callers (929) 203-1975 and referencing Phoenix Motorcars.
An archive of the webcast will be available after the call on the Events and Presentations page on the Investor Relations section of Phoenix’s website, along with Company’s earnings press release.
About Phoenix Motor Inc.
Phoenix Motor Inc., a pioneer in the electric vehicle (“EV”) industry, designs, builds, and integrates electric drive systems and light and medium duty EVs and sells electric forklifts and electric vehicle chargers for the commercial and residential markets. Phoenix operates two primary brands, “Phoenix Motorcars”, which is focused on commercial products including medium duty EVs (shuttle buses, school buses, municipal transit vehicles and delivery trucks, among others), electric vehicle chargers and electric forklifts, and “EdisonFuture”, which intends to offer light-duty EVs. Phoenix endeavors to be a leading designer, developer and manufacturer of electric vehicles and electric vehicle technologies. For more information, please visit: www.phoenixmotorcars.com.
Forward-Looking Statement
This press release contains forward-looking statements as defined by the Private Securities Litigation Reform Act of 1995. Forward-looking statements include statements concerning plans, objectives, goals, strategies, future events or performance, and underlying assumptions and other statements that are other than statements of historical facts. When the Company uses words such as “may,” “will,” “intend,” “should,” “believe,” “expect,” “anticipate,” “project,” “estimate” or similar expressions that do not relate solely to historical matters, it is making forward-looking statements. No assurance can be given that the net proceeds of the Offering will be used as indicated. Forward-looking statements are no guarantee of future performance and involve risks and uncertainties that may cause the actual results to differ materially from the Company’s expectations discussed in the forward-looking statements. These statements are subject to uncertainties and risks including, but not limited to, the following: the Company’s ability to convert concept trucks and vans into production and sales; the Company’s product development timeline and expected start of production; development of competitive trucks and vans manufactured and sold by the Company’s competitors and major industry vehicle companies; the Company’s ability to scale in a cost-effective manner; the Company’s future capital requirements and sources and uses of cash; the Company’s ability to obtain funding for its future operations; the Company’s financial and business performance; changes in the Company’s strategy, future operations, financial position, estimated revenues and losses, projected costs, prospects and plans; the implementation, market acceptance and success of its business model; expectations regarding the Company’s ability to obtain and maintain intellectual property protection and not infringe on the rights of others; and other risks contained in the Offering prospectus and reports filed by the Company with the SEC. For these reasons, among others, investors are cautioned not to place undue reliance upon any forward-looking statements in this press release. Additional factors are discussed in the Company’s filings with the SEC, including those set forth in the Risk Factors section of the Company's registration statement and Offering prospectus, which are available for review at www.sec.gov. The Company undertakes no obligation to publicly revise these forward-looking statements to reflect events or circumstances that arise after the date hereof.
Investor Relations Contacts:
Mark Hastings, SVP & Head of Investor Relations
Sioban Hickie, ICR Inc.
PhoenixIR@icrinc.com
Phoenix Motor, Inc.
Unaudited Consolidated Statement of Operations
For the Year Ended December 31, 2022 and December 31, 2021
(Dollars in thousands, except per share data)
| **** | Year Ended | **** | Year ended | **** | ||
|---|---|---|---|---|---|---|
| **** | December 31, | **** | December 31, | **** | ||
| **** | 2022 | **** | 2021 | **** | ||
| Net revenues (including revenue from a related party of $168 and nil for the years ended December 31, 2022 and 2021, respectively) | $ | 4,330 | $ | 2,977 | ||
| Cost of revenues | 3,510 | 3,540 | ||||
| Gross profit (loss): | 820 | (563 | ) | |||
| Operating expenses: | ||||||
| Selling, general and administrative | 13,970 | 13,750 | ||||
| Operating loss | (13,150 | ) | (14,313 | ) | ||
| Other income (expense): | ||||||
| Interest expense, net | (7 | ) | (3 | ) | ||
| Others | 461 | (287 | ) | |||
| Total other income (expense), net | 454 | (290 | ) | |||
| Loss before income taxes | (12,696 | ) | (14,603 | ) | ||
| Income tax provision | (9 | ) | (11 | ) | ||
| Net loss | $ | (12,705 | ) | $ | (14,614 | ) |
| Net loss per share of common stock: | ||||||
| Basic and Diluted | $ | (0.65 | ) | (0.84 | ) | |
| Weighted average shares outstanding* | 19,664,273 | 17,500,000 |
Phoenix Motor, Inc.
Unaudited Consolidated Balance Sheet
As of December 31, 2022, and December 31, 2021
| December 31, | |||||
|---|---|---|---|---|---|
| 2021 | |||||
| ASSETS | |||||
| Current assets: | |||||
| Cash and cash equivalents | 139 | $ | 2,683 | ||
| Accounts receivable, net | 1,510 | 1,201 | |||
| Inventories | 4,560 | 2,225 | |||
| Prepaid expenses and other current assets | 1,344 | 528 | |||
| Amount due from related party | 168 | — | |||
| Total current assets | 7,721 | 6,637 | |||
| Restricted cash, noncurrent | 250 | — | |||
| Property and equipment, net | 2,492 | 2,205 | |||
| Security deposits | 208 | — | |||
| Right-of-use assets | 3,797 | — | |||
| Intangible assets, net | 1,704 | 2,323 | |||
| Goodwill | 4,271 | 4,271 | |||
| Total assets | 20,443 | $ | 15,436 | ||
| LIABILITIES AND STOCKHOLDERS’ EQUITY | |||||
| Current liabilities: | |||||
| Accounts payable | 1,359 | $ | 1,786 | ||
| Accrued liabilities | 650 | 779 | |||
| Advance from customers | 1,230 | 803 | |||
| Deferred income | 503 | 714 | |||
| Warranty reserve | 325 | 360 | |||
| Lease liabilities - current portion | 719 | — | |||
| Long-term borrowing, current portion | 3 | 10 | |||
| Total current liabilities | 4,789 | 4,452 | |||
| Lease liabilities - non-current portion | 3,225 | — | |||
| Long-term borrowings | 147 | 756 | |||
| Total liabilities | 8,161 | 5,208 | |||
| Commitments and contingencies (Note 14) | |||||
| Equity: | |||||
| Common stock, par 0.0004, 450,000,000 shares authorized, 20,277,046 and 17,500,000 shares issued and outstanding as of December 31, 2022 and 2021, respectively* | 8 | 7 | |||
| Subscription receivable | — | (7 | ) | ||
| Additional paid-in capital | 40,836 | 26,085 | |||
| Accumulated deficit | (28,562 | ) | (15,857 | ) | |
| Total stockholders’ equity | 12,282 | 10,228 | |||
| Total liabilities and stockholders’ equity | 20,443 | $ | 15,436 |
All values are in US Dollars.
Exhibit 99.2
Transcript:4Q and Full Year 2022 Earnings Call
March 29, 2023
Operator
Welcome to the fourth quarter 2022 Phoenix Motors Inc. earnings conference call. My name is Nael and I'll be your operator for today's call. As a reminder, this call is being recorded and all participants are in a listen-only mode. All questions can be directed after the call to PhoenixIR@icrinc.com.
It is now my pleasure to introduce Mark Hastings, Senior Vice President of Corporate Development and Strategy and Head of Investor Relations.
Mark Hastings,SVP & Head of IR, Phoenix Motorcars
Thank you, and welcome everyone to our fourth quarter earnings call.
I am joined on the call today by Dr. Lance Zhou, our Chief Executive Officer, and Chris Wang, our Chief Financial Officer.
For those who are new to our story, Phoenix Motorcars is headquartered in Anaheim, California. Our goal is to be a leader in sustainable and zero-emission medium-duty transportation, with a range of products available to our customers, including shuttle and transit buses, school buses, delivery vans and work trucks.
We market our medium duty vehicles through our brand, Phoenix Motorcars. In addition, we also offer a full range of EV chargers and electric forklifts, as well as telematics solutions for fleets, EV infrastructure solutions and electric vehicle maintenance and service programs.
We also are currently developing a light-duty consumer and commercial vehicle line which will offer pickup trucks, SUVs and delivery vans, that will be marketed under our EdisonFuture brand.
We are not a pre-revenue company like many others in our sector. We were founded in 2003, we delivered our first trucks nearly a decade ago and our vehicles have logged four million zero-emission miles on the road. As a result, we have a stable and loyal customer base, and we offer our customers vehicles, charging and telematics solutions and complete vehicle maintenance and service support.
Dr. Lance Zhou, our Chief Executive Officer, will speak next. For those of you who don’t know Lance yet, he has a long history of success in the full vehicle development arena. He has taken 3 different vehicles all the way from concept, through design, production and into sales. In addition, Dr. Lance, as we affectionately refer to him, has a particular expertise in mass production, which is one of the most important of the many attributes he brings to our company.
With that, I will turn that call over to Lance who will say a few words about the progress we have made with our Gen 4 vehicles since the time of our third quarter call.
DrLance Zhou, Chief Executive Officer, Phoenix Motorcars
Thank you, Mark, and thank you all for joining us today.
I am very excited to report that since receiving the Board of Directors’ approval for our Gen 4 Development program, we have been hard at work executing on our implementation plan to bring Gen 4 to market efficiently, cost effectively and quickly. As a result, I am proud to report that we anticipate the start of production for Gen 4 vehicles, as well as first delivery, to be achieved this summer. Furthermore, we expect Gen 4 production to ramp to 20-25 units a month when at full production, which we expect to achieve by year end.
We are excited because we expect Gen 4 to be a game changer for Phoenix. These vehicles will benefit from our “asset light” business model, which allows for lower costs and shorter production times than we have had before. We have developed a standardized design and production process, which has enabled us to ramp production quickly and reduce required production hours. In addition, Gen 4 will serve as our bridge to Gen 5, which will see the Company produce its own purpose-built chassis, thereby achieving chassis independence, at a lower cost and with design flexibility and increased customer satisfaction.
We look forward to providing more detailed information regarding our progress in the coming quarters for both our Gen 4 and Gen 5 vehicles.
Now, I will now turn the call back over to Chris Wang, our Chief Financial Officer, who will discuss our fourth quarter and full year financial results; after which we will take some time to provide additional information about our products and update you on our current growth and development plans.
Chris.
ChrisWang, Chief Financial Officer
Thank you, Lance.
Turning to the fourth quarter, for the three months ended December 31, 2022, our net revenues were $1.8 million, compared to $1.3 million for the same period in 2021. This represented an increase of approximately 35%. Results in the quarter benefited not only from the resolution of the previously reported software-related issues and battery supply constraints, which delayed the delivery of some vehicles in the third quarter, but also from forklift sales.
For the full year 2022, our net revenues were $4.3 million, a 45% increase compared to the prior year driven, primarily by an increase in the sale of electric forklifts.
For the fourth quarter of 2022, our cost of revenues was $1.5 million, compared to $1.7 million in the year-ago period. Cost of revenues dropped by $0.2 million, primarily due to lower costs for EVs, partially offset by an increase in forklift sales.
For the full year 2022 our cost of revenues was $3.5 million, which was unchanged compared to 2021, despite an increase in revenues as we lowered costs significantly in our electric vehicle business.
For the fourth quarter of 2022, our gross profit was $0.3 million, which improved significantly compared to a gross loss of $0.4 million during the year-ago quarter. The increase was driven by a shift in product mix and significant improvement in the gross margins from electric vehicles.
For the full year 2022, our gross profit was $0.8 million, which was significantly improved compared to a gross loss of $0.6 million for the full year 2021. The gross margin, defined as gross profit divided by revenues, rose from negative 19% to +19%, driven by higher margins across all product categories, particularly a significantly improved margin on electric vehicles from negative 31% to +5%, increased margin of services and maintenance from 14% to 56% and the 19% margin of electric forklifts.
Selling, general & administrative expenses in the fourth quarter were $4.8 million compared with $7.5 million in the year ago quarter. The decrease was mainly due to a one-time charge of the EdisonFuture prototype development costs in Q4 2021.
For the full year 2022, our SG&A was $14 million, compared with $13.8 million in 2021. The slight increase in operating expenses is primarily due to the increase in salaries and wages, and costs related to being a public company, partially offset by a decrease in research and development cost. The increase in salaries and wages is driven by an increase in headcount from 55 to 60 to beef up capacity in engineering, production and service, and prepare for an expected production expansion. The decrease in research and development cost reflects our change of approach to product development in alignment with our “asset light strategy” where we are outsourcing a significant portion of design and engineering work for Gen 4 product to third party vendors and partners.
As a result of the all the factors just described, the net loss for the fourth quarter of 2022 was $4.5 million, compared to a net loss of $8.2 million in the prior-year period.
The net loss for the full year 2022 was $12.7 million, which was an improvement compared to a net loss of $14.6 million for the full year 2021.
With that, I will now turn the call back over to Mark, who will provide a high-level overview of our strategic plans.
Mark.
Mark Hastings,SVP & Head of IR, Phoenix Motorcars
Thank you, Chris.
To recap again what we do, in addition to offering medium-duty electric vehicles, we also provide a full offering of EV chargers and electric forklifts. In addition, we offer telematics solutions for electric vehicle fleets, EV infrastructure solutions and service and maintenance programs.
Our legacy, all-electric, medium duty, commercial vehicle line is marketed under the Phoenix Motorcars brand and includes shuttle and transit buses, school buses, delivery vans and work trucks and box trucks. These are sold as complete vehicles, as well as in electrified kit form for our customers to add their truck body on.
Phoenix Motorcars’ customers are sourced from a wide range of industries, with applications such as airport parking, hotels, campuses, cities, municipalities, ports and school districts. We serve over 50 commercial fleet customers, to whom we have deployed well over 115 shuttle buses and trucks, with a combined distance traveled of 4 million miles.
Today we are manufacturing and selling our Gen 3 vehicles, but we are excited to share that we will be starting production, as well as achieving first delivery of our Gen 4 vehicles this summer, literally right around the corner.
We are excited to be executing on our asset light business model as we expand in the coming years. We feel that our asset light strategy is a differentiating characteristic for our company and the development of Gen 4 has seen the deployment of this strategy for the first time.
Our asset light model extends both upstream and downstream in our Gen 4 development. Upstream we have worked hard to cultivate partnerships and networks of suppliers across the industry and have leveraged their expertise, experience and staffing. These relationships have enabled us to bring this generation, and will also allow us to develop future generations of our vehicles, to market faster, cheaper and with higher quality than we could ever hope to do so by building the entire team on our own. As an example, we have been working hard with IAT, arguably the premier EV engineering firm in the world, to bring Gen 4 to market in a matter of months, not years. We are also working with Aulton to introduce our leading-edge swappable battery systems to our Gen 4 lineup.
Likewise, we are extending our asset light strategy downstream to the production side of the business as well. We are partnering with certain customers as well as with third-party manufacturing and assembly facilities in order to scale our production cheaper, faster and more capital-efficiently than we could ever hope to accomplish on our own. We will highlight specific partners in the months ahead.
As part of this strategy, we are reconfiguring and streamlining our existing Anaheim manufacturing facility. We will use this plant as a showcase facility and training center, where our third-party manufacturing partners will send their technicians to learn our standardized processes and procedures, in order to ensure maximum efficiency and quality across our entire production network.
In addition to achieving faster time-to-market and lower development costs as a result of our asset light model, we are also achieving lower production and bill of materials costs compared to our Gen 3 vehicles, by utilizing standardized processes and procedures, better designs for our components and sub-assemblies and a streamlined supply chain process.
As most of you know two of the major hurdles that we and other similarly positioned EV manufacturers face are first, security of battery supply, and second, access to an adequate number of Ford E450 chassis to meet our production and sales pipeline.
On the battery side, we have cleared the first hurdle with our Gen 4 development by securing a supply agreement with CATL, the world’s largest EV battery maker, for the long-term procurement of K-Packs and related products for our Gen 4 vehicles. We are also working on additional battery partnerships as well.
On the chassis side, we recognize that the medium duty EV market is heavily dependent on the supply of Ford chassis, and, as the industry continues to grow, we foresee a supply shortage and are moving quickly to plan for our Gen 5 ground-up design, which we expect to introduce during 2024. This will help us clear the second hurdle as we achieve chassis independence.
The development of our Gen 5 vehicle line, which will follow closely on the heels of SOP (or start of production) for Gen 4 will benefit immensely from all the hard work we are putting into the development of Gen 4. All the benefits of our asset light business model, our partnerships and supply and production agreements, will transfer directly to Gen 5. In addition, most of the components and sub-assemblies that we have developed for Gen 4 will be used in Gen 5 as well. For these reasons, we view Gen 4 as a BRIDGE to Gen 5. Our Gen 4 development will be profitable and carry high gross margins in its own right, but its true value will be unlocked as we apply the learnings and principles to our Gen 5 ground-up chassis design that will ensure not only security of battery supply, but also chassis independence.
Two other positive features of our Gen 5 vehicles, in addition to battery and chassis supply security, will be even lower costs than Gen 4 and greater design flexibility to meet the needs of our customers. We expect to produce our new chassis for far less than the cost we are currently paying to acquire chassis and we will have the ability to customize our vehicle designs to meet specialized needs, while maintaining standardized processes and procedures, increasing our capacity to accommodate customer requirements and meet the evolving needs of the transforming electric vehicle market.
We look forward to sharing more about our Gen 4 and Gen 5 vehicles in the coming quarters, and to telling you more about our exciting plans for our EdisonFuture vehicles. EdisonFuture will be a light-duty offering with a solar-powered component, marketed for personal and commercial use in the form of pickup trucks, SUVs and delivery vans. The EdisonFuture pickup truck and van debuted at the 2021 LA Auto Show to much fanfare and broad acclaim. We expect to bring EdisonFuture to market sometime during 2025.
Our goal is to create a vehicle lineup that will have tremendous reliability and be cost competitive, without subsidies. Our ability to be cost competitive is a key focus as we seek to meet future market demands, as the markets and EV technologies move from an emerging market phase to a steadier state market phase.
At its core, Phoenix is an engineering-focused company with patented technologies that address the market’s need for the next generation of zero-emission vehicles. We have constructed our company to be flexible and asset light. We have talked a lot about our asset light model, which is logical since it is central to everything we do and something which sets us apart from other EV manufacturers.
We have an exciting road ahead, with the launches of Gen 4 this year, Gen 5 next year and EdisonFuture in 2025. But we are not developing these product lines as an academic exercise--we are building a scalable business, that endeavors to maximize returns on shareholders capital, while also deploying industry-leading technology. We've put together a management team that's seasoned and established in the EV sector and incentivized to overachieve, putting us in an excellent position to execute in the high-growth, zero-emission commercial and consumer vehicle sector.
If you have any questions, please direct them to PhoenixIR@icrinc.com. Thank you to everyone who joined the call today, we really appreciate your interest in our company and look forward to sharing more of the Phoenix story and our progress in the coming quarters.
Operator
This concludes our call. You may now disconnect.