8-K

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

August 18, 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
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(Address of Principal Executive Offices)	(Zip Code)

Registrant’s telephone number, including area code:

(909) 987-0815

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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
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¨	Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act
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¨	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).
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¨	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.
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Item 2.02 Resultsof Operations and Financial Condition.

On August 14, 2023, Phoenix Motor Inc., a Delaware corporation (the “Company”), issued a press release announcing the Company’s financial results for the quarter ended June 30, 2023. 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 August 15, 2023, reporting the Company's financial results for the quarter ended June 30, 2023, 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.

Item9.01. Financial Statements and Exhibits.

(d) Exhibits

Exhibit No.	Description
99.1	Press Release dated August 14, 2023 issued by Phoenix Motor Inc.
99.2	Earnings Conference Call Transcript
104	Cover Page Interactive Data File (embedded within the Inline XBRL document)

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: August 18, 2023
	By:	/s/ Chris Wang
		Name: Chris Wang
		Title: Chief Financial Officer

Exhibit 99.1

PhoenixMotor Inc. Announces Second Quarter 2023 Financial Results

Anaheim,California (August 14, 2023) – Phoenix Motor Inc. (Nasdaq: PEV) (the “Company” or “Phoenix”), a leader in manufacturing of all-electric, medium-duty vehicles, today reported financial and operational results for the second quarter of 2023.

Second Quarter 2023 Financial Highlights

·	Net<br> revenues decreased 23% to $1.2 million, compared to $1.5 million in Q2 2022, as a significant<br> increase in revenue from electric vehicle sales was more than offset by a decline in forklift<br> sales.
·	Gross<br> loss amounted to $0.1 million, compared to gross profit of $0.3 million in Q2 2022.
·	Net<br> loss was $3.2 million, compared to a net loss of $2.0 million in Q2 2022.

Recent Company Highlights

·	In<br> July, Phoenix announced a purchase order for 13 Zero Emission Vehicles from Los Angeles<br> World Airports (LAWA). The order was executed through National Auto Fleet Group (NAFG)<br> and will include various battery configurations and Phoenix’s inverter package which<br> offer AC power for tools, compressors and other auxiliary loads, powered straight from the<br> high voltage DC batteries. The all electric, zero-emission trucks are funded, in part, by<br> the Hybrid and Zero-Emission Truck and Bus Voucher Incentive Project (HVIP) program.
·	Also<br> in July, Phoenix announced<br> the recent delivery of an all-electric, zero-emission service truck to the San<br> Bernardino City Unified School District.<br> This electric vehicle was funded in part by the California HVIP voucher program.
·	Earlier<br> in July, Phoenix announced that it had expanded its EV<br> shuttle bus fleet at Los Angeles International Airport with WallyPark Airport<br> Parking with the delivery of three new all-electric shuttle buses to the airport parking<br> service provider. The addition of these new vehicles augments WallyPark’s current fleet<br> of over 30 electric shuttle buses and supports its mission to lower fleet maintenance costs<br> and to support the energy transition by providing cleaner air.

“We continue to make progress on the development and sales of our fourth-generation vehicles, which are currently undergoing validation testing here at our Anaheim facility. We expect to launch production and commercial sales during 2023,” the Company’s CEO, Xiaofeng Denton Peng commented. “We have built a tremendous order backlog and have executed multiple partnerships to further support the sales pipeline of our Gen 4 vehicles over the next several years. We are also expanding our Retrofit Solutions business and are exploring multiple additional paths to create shareholder value. We are confident in our business model and excited about our future growth prospects,” Mr. Peng continued.

Start of Production of Gen 4 Vehicles thisYear

Phoenix expects to achieve SOP (start of production) of its fourth-generation vehicles for the medium-duty EV market during 2023. The Gen 4 development will provide several advantages versus the current Gen 3 models, specifically:

·	Asset Light Business Model: Gen 4 marks the deployment of the Company’s “asset<br> light” business model both upstream and downstream. Upstream, Phoenix is leveraging<br> its strategic alliances with R&D partners and engineering suppliers to develop Gen 4<br> more efficiently. Downstream, Phoenix is partnering with both customers and third party manufacturers<br> to develop manufacturing and assembly facilities at strategic locations around the country.
·	Scale: The Company anticipates scaling of its production, utilizing its current Anaheim facility<br> as well as customer and third-party assembly facilities. The Anaheim manufacturing facility<br> is being reconfigured to increase production capacity and to utilize it as a showcase facility<br> and training center to ensure processes and procedures are standardized across the entire<br> production network.
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·	Reduced Costs: Gen 4 is expected to achieve lower production and materials costs compared to<br> Gen 3 vehicles, benefiting from standardization of processes and procedures, as well as components<br> and sub-assemblies—a benefit which will carry over to Gen 5 production as well.
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·	Battery Supply: The Company expects it will benefit from its partnership with CATL for the long-term<br> supply of K-Packs and related products for its Gen 4 electric vehicles.
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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 will be producing its own ground up, purpose-built chassis<br> in 2024.
·	Chassis Independence: The development of Gen 5 will provide Phoenix with chassis independence,<br> overcoming one of the major impediments facing the industry.
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·	Lower Costs: Phoenix should be able to produce its chassis for far less than the cost it is<br> paying to acquire chassis today.
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·	Increased Design Flexibility and Customer Satisfaction: Phoenix’s ground up chassis will<br> enable it to customize vehicle designs to meet specialized needs, while maintaining standardized<br> processes and procedures, increasing the Company’s capacity to accommodate customer requirements and meet the evolving needs of the transforming<br>electric vehicle market.
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Conference Call Information

Phoenix Motor Inc. will host a conference call and webcast on Tuesday, August 15^th^ 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 Statements

This press release contains forward-looking statements, as that term is defined in the Private Litigation Reform Act of 1995, that involve significant risks and uncertainties. Forward-looking statements can be identified through the use of words such as “may," "might," "will," "intend," "should," "could," "can," "would," "continue," "expect," "believe," "anticipate," "estimate," "predict," "outlook," "potential," "plan," "seek," and similar expressions and variations or the negatives of these terms or other comparable terminology. Readers are cautioned not to place undue reliance on these forward-looking statements, which reflect the Company's current expectations and speak only as of the date of this release. Actual results may differ materially from the Company's current expectations depending upon a number of factors. 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 associated with managing the growth of the business, and those other risks and uncertainties that are described in the "Risk Factors" section of the Company's 2022 annual report filed on Form 10-K filed with the Securities and Exchange Commission. Except as required by law, the Company does not undertake any responsibility to revise or update any forward-looking statements.

InvestorRelations Contact

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Mark Hastings, Senior Vice President & Head of Investor Relations

909-984-0815

PHOENIX MOTOR INC.

CONDENSED CONSOLIDATED BALANCE SHEETS

(In thousands, except for share and per sharedata)

ASSETS			December 31, 2022
Current assets:	382		$	139
Cash and cash equivalents	1,771			1,510
Accounts receivable, net	2,190			4,560
Inventories	1,041			1,344
Prepaid expenses and other current assets	250			—
Amount due from a related party	75			168
Total current assets	5,709			7,721
Restricted cash, noncurrent	—			250
Property and equipment, net	2,775			2,492
Security deposit	208			208
Right-of-use assets	3,423			3,797
Net investment in leases	217			—
Intangible assets, net	1,394			1,704
Goodwill	4,271			4,271
Total assets	17,997			20,443
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable	2,031			1,359
Accrued liabilities	648			650
Advance from customers	1,650			1,230
Deferred income	486			503
Warranty reserve	302			325
Lease liabilities - current portion	294			—
Long-term borrowing, current portion	761			719
Total current liabilities	3			3
Lease liabilities - non-current portion	6,175			4,789
Long-term borrowings	2,809			3,225
Total liabilities	1,170			—
	143			147
Commitments and contingencies (Note 10)	10,297			8,161
Equity:
Common stocks, par 0.0004, 450,000,000 shares authorized, 21,181,924 and 20,277,046 shares issued and outstanding as of March 31, 2023, and December 31, 2022, respectively*	8			8
Additional paid-in capital	42,209			40,836
Accumulated deficit	(34,517	)		(28,562	)
Total stockholders’ equity	7,700			12,282
Total liabilities and stockholders’ equity	17,997			20,443

All values are in US Dollars.

PHOENIX MOTOR INC.

UNAUDITED CONDENSED CONSOLIDATED STATEMENTSOF OPERATIONS

(In thousands, except for share and per sharedata)

	Three Months Ended
	June 30, 2023			June 30, 2022
Net revenues		1,158			1,499
Cost of revenues		1,219			1,174
Gross profit:		(61	)		325
Operating expenses:
Selling, general and administrative		3,100			2,290
Operating loss		(3,161	)		(1,965	)
Other income (expense):
Interest income (expense), net		(2	)		(2	)
Others		8			54
Total other income, net		6			52
Loss before income taxes		(3,155	)		(1,913	)
Income tax provision		(22	)		(12	)
Net loss		(3,177	)		(1,925	)
Net loss per share of common stock:
Basic and Diluted		(0.15	)		(0.11	)
Weighted average shares outstanding*		21,261,704			17,984,615

PHOENIX MOTOR INC.

UNAUDITED CONDENSED CONSOLIDATED STATEMENTSOF CASH FLOWS

(In thousands)

	6 Months ended June 30
	2023			2022
Cash flows from operating activities:		(5,955	)		(4,247	)
Net loss
Adjustments to reconcile net loss to cash used in operating activities:		843			855
Depreciation and amortization		(99	)		-
Gain on sales-type leases		—			(54	)
Reversal of doubtful accounts		10			-
Provision for inventories		98			-
Forgiveness of PPP loan		—			(586	)
Stock-based compensation expenses		146			115
Warranty reserve		(23	)		(20	)
Amortization of right-of-use assets		491			-
Changes in operating assets and liabilities:
Accounts receivable		(271	)		(49	)
Inventories		2,002			(1,607	)
Prepaid expenses and other assets		405			(3,213	)
Accounts payable		672			567
Accrued liabilities		(2	)		101
Deferred revenue		(17	)		(227
Advance from customers		420			(9	)
Lease liabilities		(491	)		-
Amount due from a related party		93			-
Net cash used in operating activities		(1,678	)		(8,374	)
Cash flows from investing activities:
Net cash used in investing activities		(493	)		265
Cash flows from financing activities:
Repayment of borrowings		(4	)		(5	)
Proceeds from IPO					13,438
Proceeds received from capital injection by shareholder					7
Proceeds received from convertible notes		1,464
Proceeds received from standby equity purchase agreement		1,227
Net cash generated from financing activities		2,687			13,440
Increase in cash, cash equivalents and restricted cash		243			5,331
Cash, cash equivalents and restricted cash at beginning of the period		389			2,683
Cash, cash equivalents and restricted cash at end of the period		632			8,014

The accompanying notes are an integral part of these unauditedcondensed consolidated financial statements.

Exhibit 99.2

Transcript: 2Q 2023 Earnings Call

August 15, 2023

Operator

Welcome to the second quarter 2023 Phoenix Motors Inc. earnings conference call. My name is Briana 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.

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, Brianna, and welcome everyone to our second quarter 2023 earnings call.

I will be joined for Q&A session after the call by Denton Peng, our Chief Executive 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 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 commercial vehicle line which will offer pickup trucks, delivery vans and SUVs, which 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, delivered our first trucks nearly a decade ago and our vehicles have logged more than 4 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.

For those of you who do not know CEO Denton Peng yet, he has a long history of more than 20 years in the renewable and clean energy and transportation space. He was a pioneer in the solar business and has founded and led several NYSE and NASDAQ-listed public companies. We will hear from Denton later.

I would first like to say a few words about the progress we have made with our Gen 4 vehicles and other exciting company developments. Next, I will spend a couple of minutes discussing our second quarter financial results and then will wrap up by providing a high-level overview of our strategic plans.

The Phoenix team has been working diligently to bring Gen 4 to market efficiently, cost effectively and quickly, with start of production expected to be achieved this year. Furthermore, we expect Gen 4 production to ramp fairly quickly to 20-25 units per month in the first half of next year.

We continue to expect Gen 4 to be transformative for Phoenix. Gen 4 will benefit from our “asset light” business model, which allows for lower costs and shorter production times than we have ever had before. We have designed a standardized production process, which will enable us to ramp production quickly and reduce production hours. In addition, Gen 4 will serve as the bridge to Gen 5, which will include our own purpose-built chassis. Once Gen 5 is in production, we will have achieved chassis independence, at a far lower cost per chassis than we are currently paying and with greater design flexibility.

We are also growing our Retrofit Solutions business, which enables our customers to take existing internal combustion engine vehicles off the road and retrofit them with clean-burning, zero-emission drive systems, lowering the customers’ carbon footprint and saving them thousands of dollars per vehicle per year in operating expenses.

We look forward to providing more detailed information regarding our progress in the coming quarters for not only our Gen 4 and Gen 5 vehicles, but also our Retrofit Solutions business and the many other exciting opportunities that we are pursuing. Turning to the financials…for the three months ended June 30, 2023, our net revenues were $1.2 million, compared to $1.5 million for the same period in 2022. This represented a decrease of 23%. Results in the quarter benefited from a significant increase in electric vehicle sales which resulted in a revenue increase of nearly 80%. This increase was, however, more than offset by a considerable decline in revenue from the sales of electric forklifts. To provide a little more context to the revenue decrease, I would like to point out that over ½ of our vehicle deliveries in the recent quarter were leases to a large repeat customer…had those leases been classified as vehicle sales, then our total net revenues would have been about one million dollars higher, or $2.2 million, an increase of nearly 50% versus the year-ago period.

Our cost of revenues in the second quarter was $1.2 million, essentially the same as in the second quarter of 2022.

Gross loss in the second quarter of this year was 61 thousand dollars, compared to gross profit of 325 thousand dollars during the year-ago quarter. The decrease was driven by a decline in the gross margin from forklift sales, partially offset by an improvement in the gross margin generated by the sale of electric vehicles.

SG&A expenses in the second quarter were $3.1 million compared with $2.3 million in the year-ago quarter. The increase was mainly due to increases in payroll expenses.

As a result of the all the factors just described, the net loss for the second quarter of 2023 was $(3.2) million, compared to a net loss of $(2.0) million in the prior-year period.

Now, please allow me to recap what we do and highlight some of our strategies to increase shareholder value in the quarters and years ahead.

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.

Our customers are sourced from a wide range of industries, with applications such as airport parking, hotels, campuses, municipalities, ports and school districts. We serve over 50 commercial fleet customers, to whom we have deployed over 125 shuttle buses and trucks, with a combined distance traveled of more than 4 million miles.

We are nearing SOP, or Start of Production, for our fourth-generation drive system over the next few months. Gen 4 will see the first application of our asset light business model. We feel that our asset light strategy is a differentiating characteristic for our company.

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, more cost-effectively and with higher quality than we could ever hope to do 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.

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 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, 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 an example of our streamlined design architecture, our Gen 3 system had over 450 individual parts and components…with our new Gen 4 vehicles, we have reduced that number to 70. To reiterate, we have gone from 450 to 70, as a result of better front end development and design and a streamlined supply chain for our components and subcomponent assemblies.

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 for Gen 4 will benefit from the work we have put into the development of Gen 4. The benefits of our asset light business model, our partnerships and supply and production agreements, will transfer directly to Gen 5. In addition, 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 the BRIDGE to Gen 5. Our Gen 4 development will be profitable and carry high gross margins on its own, but its true value will be realized as we apply the 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, which will increase our ability 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 EdisonFuture as well. EdisonFuture will be a light-duty offering with a solar-powered component, marketed for commercial use in the form of pickup trucks, delivery vans and SUVs. The EdisonFuture pickup truck and delivery 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 Retrofit Solutions business is gaining traction and we are fielding inquiries from both existing and new potential customers, as fleet owners scramble to find new innovative ways to modernize and lower the carbon footprints of their fleets. Our solutions offer a lower cost and quicker way for these operators to achieve their goals.

At our 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 makes sense as 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. 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, putting us in an excellent position to execute in the high-growth, zero-emission commercial vehicle sector.

Thank you to everyone who joined the call today, we appreciate your interest in our company and look forward to sharing more about our progress in coming quarters. We now have a few minutes to answer your questions.