Hello, and welcome to the Romeo Power Second Quarter 2021 financial results and webcast call. My name is Charlie ph. and I will be coordinating your call today. [Operator Instructions]. I will now hand you over to your host, Lauren Webb, Chief Strategy and Commercial Officer to begin. Lauren, please go ahead.

Thank you, Charlie. Good afternoon, everyone. And thank you for joining us today for Romeo Powers Q2 Earnings call. Before we begin, I want to remind everyone that this conference call will contain forward-looking statements, including our expectations of future results, sales, cost of inputs, market dynamics, etc. Our actual results may differ materially and adversely from those projected in these forward-looking statements. Additional information concerning factors that could cause the results to differ materially and adversely from those forward-looking statements are contained in our press release that went out at approximately 1:10 PM, as well as the disclosures in our public filings with the SEC. Today's call will also include a discussion of non-GAAP financial measures as that term is defined in Regulation G. Non-GAAP financial measures should not be considered in isolation from or as a substitute for financial information presented in compliance with GAAP. Accordingly, at the end of today's press release, we have provided a reconciliation of these non-GAAP financial measures to the Company's financial results prepared in accordance with GAAP. Before getting into the quarter, I want to take some time to introduce you to some of the new faces and leadership at Romeo Power. As we previously announced, Kerry Shiba has joined us as our Chief Financial Officer, and you'll get a chance to hear from him shortly. Kerry is a highly experienced public Company CFO, with decades of experience driving financial strategy for Companies going through major growth and change. In the few weeks he's been at Romeo he has already made strong contributions to the team. In addition, we are all happy to welcome Susan Brennan, who joins us today as our President and Chief Executive Officer. As a director of the Romeo Power Board, I've been asked by our Chairman, Bob Mancini, to convey to you that we could not be more pleased to have named Susan as the new Romeo Power CEO at the conclusion of our nearly three months long robust vetting process. Our experience working with Susan on the Board gives us valuable insight to know she possesses a highly relevant experience, innate abilities, and the disposition necessary to lead Romeo Power into the future. Susan most recently held the role of Chief Operations Officer at Bloom Energy Corporation, a pioneering energy solutions business focused on decarbonization through innovation and environmental stewardship, where she helped lead it through substantial Growth from a relative startup to an approximately $4 billion market cap Company. Prior to joining Bloom, Susan was Vice President of Manufacturing at Nissan Motor Company, where she ran the highest output automotive manufacturing plant in the world at that time. Prior to her tenure at Nissan, Susan spent 13 years at Ford Motor Company, including as the Director of the Global Manufacturing Business and as a Plant Manager. Susan's unique experience makes her the ideal leader as Romeo enters his next phase of growth. The first success in technology and energy startup environment, and in leadership roles that some of the largest automotive OEMs in the world offers a rear perspective into how to scale and early-stage disruptor effectively, and what a successful public Company infrastructure looks like after going through that process. Susan's insights, experience, and drives make her an exciting addition to our leadership bench. I hope you'll all join me in welcoming Susan to Romeo. With that, I'll turn it over to Susan to introduce herself before Kerry and I talk a bit more about the quarter.

Thank you so much, Lauren, and good afternoon to everyone. I'm excited to be here alongside Lauren and Kerry, who, as Lauren mentioned, recently joined the Romeo Power team as CFO. It has been my great pleasure to be part of Romeo Power's Board since we became a public Company last year. I have a personal passion for businesses, initiatives, and people that are committed to improving the world we live in, including by cleaning up the environment for both us and for future generations. I had the opportunity to follow this passion at Bloom Energy. And now I have an even greater opportunity as the leader of Romeo Power to continue down this path. During the COVID pandemic, we all have seen the benefits of reduced miles driven by internal combustion-powered vehicles. It's as simple as enjoying the cleaner air that we breathe while we also understand the longer-term benefit on our climate of reduced greenhouse gas emissions. Romeo Power is well-positioned to support and participate in the electrification of commercial truck fleets with our current focus on heavy-duty vehicles. I couldn't be more eager to engage and help the Company execute on its commitment to continued innovation and expanding access to green energy solutions. In the past six years, Romeo Power has made important strides critical to safe and cost-effective electrification and operation of the heavy-duty fleet that will certainly be applicable in other industrial applications. As we enter full commercialization, our projects have been thoroughly validated. We have approximately 3,000 battery modules and road test vehicles that have driven an estimated 750,000 miles in total, while also being subjected internally to strenuous simulations of environmental and other end-use conditions. Safety is a must and always has been a key priority in our product design. When combined with superior energy performance, our products bring unique value to our customers. Our advanced software management system works together with our patented thermal management technology to create this exceptional performance. We also have a differentiated and flexible approach to scaling our products to meet a wide range of different power requirements. Our approach is designed to shorten time to market, which is a clear advantage for customers in this rapidly developing environment. I have been at this long enough to know that taking technology -- technological innovation through commercialization and scale-up does not happen without an incredibly talented and hard-working team. It takes a combination of visionaries, scientists, engineers, and strong business practitioners to achieve success for Romeo. I have been impressed with the blend of team members possessing these talents. Now, we are entering a pivotal moment for our Company and industry. as customers are increasingly demanding safe, effective, affordable, and sustainable EV solutions. With my decades of experience in running large and complex organizations, crystallizing vision into strategy, and continuing to build an aligned organization to execute when I am honored to take the reins to lead Romeo Power to continued success and to build shareholder value. In a moment, I'll hand it back over to Lauren, who will talk more in-depth about the past quarter. As you likely know, following Kerry's appointment, we were in transition to a new leadership role as Chief Strategy and Commercial Officer. Lauren will continue to use her vast institutional knowledge and deep understanding of Romeo Power to develop and drive our business strategy, key contract negotiations, and overall growth initiatives. Lauren has been a key partner to Kerry and me as we integrate into the team at Romeo. She will present today's business overview, and of course, we'll be here to answer questions. Now, over to Lauren.

Thank you, Susan. We hope you've had a chance to review our second-quarter earnings press release issued at approximately 01:10 PM. During today's call, we will walk you through key updates regarding sales supply, our customer activity, and our outlook on our talents. Let's start with cell supply. Last week we filed a Form 8-K disclosing that we have secured a long-term cell supply contract with a tier-one battery cell supplier. The content of that 8-K is accurate and we were required to file it with the SEC because it is a material contract to us. However, we are sensitive to the business environment related to cylindrical battery cells, and we want to respect our partner's competitive position. So, in this call, we will not discuss the details of that contract. What we can and will say is that we are excited to have signed a long-term agreement with a top-tier global supplier of battery cells, and we look forward to the possibility of expanding that relationship in the future. We are excited about the path ahead supplying Romeo's customers with premium batteries and we are very pleased to have reached this agreement. However, we also are in discussion with additional potential partners to secure further commitments for cell supply, including cells manufactured in the U.S. We continue to deepen strategic relationships to ensure we are well-positioned to be the best battery partner to scale with our customers as they execute their electrification initiatives. Next, I'd like to provide an update on our customer activity and outlook. The team at Romeo Power has been heavily engaged with customers and strategic partners to understand how we can work together to mitigate supply headwinds and expedite the process of getting our electric solutions to the market. As an emerging Growth Company, there are many details that need to be addressed as we prepare to ramp up our production and manufacturing capacity. Accordingly, we take a deliberate approach to finalizing customer commitments. We anticipate being able to update you on future calls. The urgent need to electrify all types of transportation on a large scale is rapidly gaining attention. We're seeing this increased sense of urgency more and more in the stated goals of our customers and in various pieces of existing and proposed state and federal legislation focused on enabling electrification. We are taking pragmatic steps to meet increasing customer demand, in the near term and through 2022, in the most cost-effective ways available. We seek to balance short-term demand fulfillment with the need to implement systems and processes to scale our operations for the long run. As the entire industry continues to face high material and logistics costs and supply constraints, we are actively shoring up alternative suppliers for key components, and making strategic advanced purchases for long lead time or increasingly scarce items. I'd also like to mention an exciting new development in our long-term electrification strategy. We've recently executed an MOU with the government of the U.S Virgin Islands energy office to participate in their efforts to adopt green energy solutions. This mutually beneficial relationship allows Romeo to support the development of the electric infrastructure in the Virgin Islands in two ways: first, by assisting with various aspects of fleet electrification; and secondly, helping to establish a pilot program in the future for second-life applications using Romeo Power batteries to provide stationary energy storage within the territory. Lastly, let's talk about talent. In addition to bringing on Susan and Kerry, Romeo Power has been busy building a team of seasoned leaders in all areas of our business who will take the Company into its next exciting phase of growth. The expanded team includes several impactful new hires. As we announced in July, Matt Sant has joined us as General Counsel and Yun Han has become our Chief Accounting Officer. Other important additions to our organization include Vice President of Manufacturing, Vice President of Cell Engineering, and Vice President of Global Supply Chain. These hires are an important validation of our commitment to an expectation for Growth. I will now turn the call over to Kerry Shiba, our CFO, to discuss our second-quarter results in greater detail.

Thank you, Lauren. And good afternoon to everyone joining us today. Like Susan, I am incredibly excited to join the team at Romeo during this formative period in the Company's history, as the world transitions to vehicle electrification. As Susan also mentioned, Lauren has been incredibly important to help me transition into the Company and get up the learning curve as quickly as possible. So, my personal thanks to Lauren, as she takes over a very important and exciting new role in her own transition. My past experience in manufacturing and public companies has included periods of rapid change and Company growth that I'm excited to drop from as we progress Romeo strategy. With our blended visionaries and technical expertise, combined with strengthening our leadership bench. It is Incumbent on us to drive strong execution throughout the Company, to generate positive returns for the Company and its shareholders. While I'm still a relatively new face of Romeo Power, I have been working closely with Lauren and the rest of the team, as I mentioned, to get up to speed quickly on the Company as well as its financial position to prepare us for what lies ahead. For the many reasons Lauren just discussed, not the least of which is the long-term cell supply agreement, the second half of 2021 is expected to be the beginning of a period of the ramp-up of sales and operating activity for us. But keep in mind that while we are pleased to have hit this inflection point, there still are many variables that will affect the final revenue outcome for the year. With our current focus on the electrification of large commercial vehicles, we are working in a marketplace ecosystem that is fundamentally still under development. Despite being on the verge of a volume ramp up relative to our past, our customers, suppliers, and as a result, Romeo, all face similar challenges. These challenges require quick reaction and adjustment. We are reaffirming the revenue guidance provided last quarter, which to ramp -- remind you is $18 million to $40 million for the full year 2021. I recognize this range may seem pretty wide based on where we are in the year. However, the size of the range reflects the nature of the underlying variables we must consider, especially given the vast bulk of this revenue was coming in the back half of the year, and frankly, in the fourth quarter. as much as I would love to have high predictability of demand and its related timing, we are a tier 1 supplier and don't control the pace of end-market product acceptance and sales volume. I don't mean to make excuses or bore you with stating the obvious, but I do want to be sure everybody understands what we control and what we do not control. The shape of our estimated sales curve coupled with the near-term dynamics I just discussed also creates operating challenges when balancing cost against preparedness. The focus, of course, is on serving the customer no matter what it takes. As a result, you should continue to expect the rate of increases for expenses, that's the rate of increases for expenses, more directly tied to volume to run ahead of the rate of our revenue growth as long as the growth curve remains steep. Despite lower volumes in a developing market and business, lead times are less predictable and may lead to overtime expense and higher costs to expedite shipments both into and out of our factory. Similarly, we have the same challenge when managing working capital. More specifically, our investment in raw material, purchase components, and finished goods. Finally, as discussed in prior calls with you, we will continue to invest in research and development and closely aligned product engineering. We also must continue to strengthen our bench and infrastructure, and we will continue to incur both permanent and temporarily higher cost associated with becoming a public Company. Let me address the next subject before you ask. We believe securing our long-term cell supply agreement mitigates to some degree the wildcard of availability for our most important product component. However, the fundamental demand driver in our market, which is the pace at which end-users purchase heavy-duty commercial battery electric vehicles, will remain the most overriding variable upon which longer-term revenue guidance relies. Romeo's share of this developing market also was in the developmental stage, adding one more important variable to the eventual outcome. As a result, we are not offering revenue guidance for 2022 at this time. Now let's quickly walk through the second quarter financial results. I also will provide some references to sequential comparisons. Revenue in the second quarter was $926,000, which compares to $1,129,000 in the same quarter last year. The sequential quarter-to-quarter comparison basically is similar. We have continued to prepare too - scale manufacturing and our cost of revenues in the second quarter was 5.9 million up from 2.4 million in the same quarter last year. Sequentially, the cost of revenues in the first quarter of this year was $4.8 million. SG&A expense for the second quarter was 22.9 million, which compares to 20 -- 2 points -- I'm sorry, 2.5 million in the prior year and $18.0 million sequentially. The prior-year comparison, as I believe you know, reflects the Company prior to becoming public and much further back from the impending sales volume ramp-up. As I mentioned earlier, we are preparing for rapid Sales growth. So, we are investing to increase the strength and capacity of our team, while also incurring costs related to becoming a public Company. The resulting operating loss in the second quarter was $29.7 million, which compares to a $5.34 million operating loss in the same quarter last year, and a $25.5 million operating loss in the first quarter. Moving down to P&L, the change in the fair value of public and private placement warrants in the second quarter was a positive $2 million and resulted from the decline in the price of both our common stock in the public foreign since the end of Q1, as well as the public warrant redemption that occurred on April 5th, 2021. Sequentially, this item was substantially equaling a $116.1 million favorable in the first quarter of this year and primarily resulted from the decline in the price of our common stock in the public warrants during that period. The items just noted were the principal items bringing our net loss to 28.7 million for the Second Quarter of this year. This compares to a net loss of $7 million for the same quarter last year and $90 thousand of net income sequentially. Our loss per share was $0.22 for the second quarter of this year and compares to a $0.09 loss per share in the same quarter last year. The sequential comparison is 70% -- I'm sorry, $0.70 per share in net income. This per share amounts all are on a basic rather than a diluted basis. We also provided an EBITDA and GAAP reconciliation. There's a table at the back of our Earnings announcement. The large items included in the reconciliation, I have already commented on and include stock-based compensation, as well as the change in fair value of public and private placement warrants. Moving onto the Balance sheet. Cash, cash equivalents, and investments total approximately $267.7 million at the end of the second quarter of this year. This compares to approximately 287.5 million at the end of the first quarter. And as it was at the time of our last call, our backlog under contract stands essentially the same at $554 million. This concludes our prepared remarks and we will now address your questions. So, Charlie, I will turn it back over to you to take questions.

[Operator Instructions] Our first question comes from Gabe Daoud of Cowen. Your line is open. Please go ahead.

Hey afternoon, everyone. Thanks for all the prepared remarks. I was hoping you could start on the cell supply side. Understand is only so much you can say, but could you maybe just give us a sense of timing around additional agreements last quarter, you'd spoke about being in negotiations with I believe about 4 parties and now you have the LG agreement in hand. So, we're just curious -- another tier 1 supplier would be Samsung, if there's an update there, and then you mentioned talking or securing potential U.S. supplies, is that also coming from a tier 1 supplier, or is that qualifying additional suppliers beyond just tier 1?

Thanks, Gabe. Hello. We're not going to talk about specific agreements or details there, but I will reiterate that our strategy is a multi-pronged, multiyear approach. So, we continue to pursue and further discussions with Tier 1 suppliers, as well as more up-and-coming suppliers. And those conversations include cell supply outside of the U.S. and in the U.S. So that is a very important part of our strategy and U.S. line discussions will be something that we hope to talk about in the coming quarters.

Okay. Thanks, Lauren. Just a quick follow-up. So, in the prepared remarks, Susan, I think you mentioned -- I know it was in the release too -- just the number of miles the test packs have kind of experienced to date or kind of hit to - date. Is that -- if I think about the energy density that was talked about while Romeo was coming public, I think you'd promise 200-watt hour per kilogram. Is that what's currently being tested on the road today or what's being seen in some of the prototypes today, that 200-watt hour per kilogram number?

That's a great question. I believe what's on the road in a variety of different measurements so we'll have to get back to you with the best-blended average there, and we'll take that to get back to you.

Okay. Okay. Sounds good. Thanks, Lauren. Just maybe the last one. Could you just remind us what manufacturing capacity is coming out of the LA facility today? Is it -- is it about a gigawatt-hour? I'm just curious if I look at Capital spend, it's implied that you have a big ramp in the second half, and so just curious, how does capacity grow, and how does that play into Capital spend for the rest of this year?

Yes. That's accurate, what you've quoted. So, it's expected to be at a run rate about a gigawatt by the end of the year and you are correct that our anticipated largest portion of the ramp, as Kerry noted, is in the second half of the year, and in Q4 to a large degree.

Okay. Thanks, Lauren.

Yes. Thanks for the questions, Gabe.

Our next question comes from Jon Lopez of Vertical Group. Your line is open, please go ahead.

All right. Thanks very much, I just wanted to start on that last topic again, because your -- your calendar Q2 Capex was pretty significantly below what we had modeled. So, I guess two things. One, are you still planning on spending, let's call it mid-40s, for the calendar year? Start there.

Yeah, I think Jon, a couple of things. As far as the size of the Capex we've incurred through this year, as you know, we had some volume push-off since and delays since the viewpoint that you reference, which was the original model looking at the business. So, I think it was appropriate that we continue to adjust capital spending in accordance with that. With respect to going forward, we're currently in the process of reassessing -- I think what's very natural is you think about Susan's background with all of her operating and manufacturing experience. And one of the first things she wants to look at as she comes in is, let's go through the assessment of our future capacity, how we're going to do it, what kind of equipment, et cetera. And so, we're reassessing at this point in time and giving Susan to chance to get our arms around that, before we reaffirm where we're at as far as that expectation is concerned.

Okay thanks. That helps a bit. I guess kind of the same set of questions around R&D, which again, sort of wasn't quite where we expected it to be. Are you reassessing there as well or can you give us any feel for the cadence on that line item between say here and the end of the calendar year?

Jon, I think it's a couple of things. First off, the importance of R&D in our view has not changed. We're going to continue to recruit and sign up the best and the brightest that are out there. And quite honestly, I'd include manufacturing engineering on top of R&D, both incredibly important resources. So, the commitment remains. Similar to what I just mentioned with regard to Capital expenditures, once again, this is something that Susan needs a little bit of time to get her arms around. She has significant technology and start-up experience as you can also tell, so it's very natural that she wants to understand the pace of our investment in this area as well as how it integrates directly with our manufacturing capacity plans. We're going to be looking at that altogether; we're going to look at it fast. But we're just not in a position today. It's Susan's first day with the Company, so we'll get an update when we can, but we're not there today.

Understood. Sorry, my last one. It feels like you guys might've handed me this answer, but I guess the thinking on our side, didn't -- you had this kind of chicken and egg problem. And now you have one or the other. I don't know if the chicken or the egg, but now that you have the cells, are you able to comment at all on customer engagements, to what extent were customer engagements inhibited by the lack of visibility on sales? Is there a potential for some of that activity to maybe move from discussions to perhaps the more commercial type of terms? Could you guys just talk conceptually about that -- where you are in the cycle of that evolution?

We have really strong customer relationships and the cell supply challenges have had a very limited impact on our ability to attract new business. We've been very deliberate in the timing of executing commitments to both new and existing customers as we've been working through securing the cell supply, but those conversations are very strong were in -- a number of them that we anticipate being able to talk about soon. The -- right now, a lot of our customers are going through electrification for the first time and they're really taking steps to educate themselves about the technology and the operational considerations, and one of the things that Romeo is pleased to do and proud of as somewhat of, we see as a differentiator, is that we really do facilitate that education and work closely with customers to identify the precise solution that suits their needs. And that takes more time than selling them something that is more off-the-shelf. So, we are very encouraged by the increasing engagement that we get from existing and prospective customers.

Got it, really helpful, thanks.

Our next question comes from Greg Lewis of BTIG. Your line is open. Please go ahead.

Yes, thank you and good afternoon, everybody. I guess I just wanted to talk a little bit about -- and you touched on it in the prepared remarks about maybe some of the inflation pressures that you're having to deal with. As we think about whether it's -- is there any kind of way to parcel out, hey, there's some steel that goes into the -- into your -- into your battery pack? There's obviously supply and logistics. Is there any kind of way to parcel out the different kind of pressure points you're seeing in terms of in -- on the inflation side and really just as we talk about sales going forward, knowing that you can -- you do have that backlog? Are there any cost adjustments to the agreed prices that could kind of be a little bit of a pass-through?

So, Lauren, did you under -- we have a bad connection. Part of your question went in and out. Did you get enough to make a comment?

John, if I understood correctly, you're asking about -- I'm sorry, I didn't mean John, I meant Greg. Thank you. Greg, if I understood correctly, you are asking more about the cost drivers and challenges there? We're having a really hard time understanding you.

Sure sorry. Hopefully, this is a little bit better. My question was around the various point -- pressure points you might be dealing with in inflation and so what I'm trying to understand is, if it's like a raw material cost, is that -- versus say a supply logistics cost, or would maybe a raw material cost be something that's easier to pass through to your customer than kind of what we're dealing with right now in terms of -- on the transportation side or is it all pass-through or is it none of it pass-through? Just trying to understand how we should think about what looks like it's going to be a challenging environment for the next couple of quarters.

Yes, Greg, thanks for clarifying and for repeating that. We heard you much better the second time. As we're negotiating our long-term supply agreements, the pricing is partly dependent on the fluctuations in the raw material indices and we've built that into a number of our -- our contracts. You're right, though, it's not just the material. There are a number of other variables and drivers in the fluctuation. and so, to the greatest extent possible, we're trying to balance that risk in an appropriate way with all of our customers and our suppliers. And that's dependent a little bit on timing and the actual product mix that we're supplying. There's not a blanket solution there, but we are pricing into a number of our new agreements, as well as -- have already done so in current agreements, these protections against spikes where we would see those annual raw materials for landing costs. basically.

So, I think the other thing to keep in mind of -- keeping your mind is as we go through the ramp-up period, we're working also on getting to run-rate economics. So that is going to affect the cost of components and materials that we buy, certainly directionally favorably. And as we go from the prototype to the ramp-up or through the ramp-up, we hope to implement some changes in manufacturing methods with our suppliers that are going to certainly help mitigate the cost of commodity type of increase from [Indiscernible].

Okay, great. And then just as I --

Well more than mitigate, I guess should've been the way I should've put it.

Okay. Thanks for that. And then just one more on batteries sales. I guess it's a two-part question. One is, as we look at this and we kind of see what's happening out there. Is that really being driven by one customer? I guess year-to-date, how many customers have we actually delivered batteries to? And if it is multiple, does any of that protest invalidation, or is at this point we're adjusting delivering batteries to customers that are ready to take them and then start deploying?

Great question, is it actually a mix of customers that we have under contract and then also some that are validation or demonstration units that we would expect to open the door for production contracts over the long run. You've seen the list of key customers that we've disclosed, and then there is, I would say, another half a dozen that we are delivering prototypes to under various forms of smaller agreements or pre-agreement if you will. Was there a second part to your question?

Great. That was perfect. Thank you very much.

Sure.

Our next question comes from Noel Parks of Tuohy Brothers Investment Research. Your line is open. Please go ahead.

Hi, good afternoon.

Hi Noel.

I just had a couple of things, I was wondering, could you talk a bit about the BorgWarner Partnership, where it stands in terms of helping international penetration. And I -- if memory serves me, there are some restrictions longer-term into JB about how much they might be able to independently compete with you in the same marketplace. I was wondering if you had any sense of whether they were trending aggressively in that or focusing more tightly on the Company relationship?

Our relationship with BorgWarner and our joint venture with BorgWarner remain in place since our commitment to the joint venture is entirely unchanged. We continue to develop business in the fields that are defined for the joint venture and those primarily focus on Europe at this time.

Okay, great. And one other thing. I wonder, in terms of how early the overall market penetration is for electrification of commercial vehicles, The Companies and the potential customers that are most visible, of course, are the early adopters, the folks who are getting ahead of the initiatives. I'm just curious, you have a sense of maybe some of the slower or next wave of adopters, maybe some of the fleets that are more in a wait-and-see mode? I'm just curious about, maybe as you look ahead to engagement by your sales force with them, just anything you could see as far as trends with maybe by vehicle type if you see any next way of looking like it might be shaping up to be strong?

Our focus continues to be right now in the heavy-duty commercial space and there's plenty of business there that we're working to win and prove ourselves in, but we also have begun discussions in a number of adjacent industries and we would expect to see movement in some of those as we've mentioned in the past, agriculture, mining -- our products worked very well in marine applications from what we're seeing. So, the off-road -- there are a number of things and right now, as I mentioned, there's an urgency to electrify in every vehicle type and there's a -- we're working strategically at the best places to deploy Romeo's batteries in the right sequence for the short, medium and long-term growth of the Company in the most cost-effective way.

I'd be interested in some clarification.

I was going to start to think another feature of how we've developed our product and our deploying it is that we have flexibility, I think, to adjust to the various positions in the market that Lauren talked about. So, to scale up our power requirements, scaling back down to smaller vehicles, that's one of the important features of how we've approached building our products so we can -- as we move our focus with whatever part of the market is running out ahead, we're very, very prepared to be able to get to market quickly.

Great. That's all for me. Thanks.

Thank you.

[Operator Instructions] We have a question from Evan Silverberg of Morgan Stanley. Your line is open. Please go ahead.

Hi all. This is Evan Silverberg on behalf of Adam Jonas. A few questions for you. First, how should we think about Capital commitments commensurate with securing long-term cell supply?

I'll speak to him directionally. As we mature, we're not going to go into specifics regarding our new agreement, but I think what we're seeing thus far in the market is with the capacity shortage, the structure of the agreement. Right now, is appearing to be similar, which is a quality -- it is a prepayment, technically, for the committed cell supply. Substantively, it is helping to fund the capacity investments that are being made. And then very important to remember, those prepayments are recouped over time as we are buying cells off that commitment. Thought

a big chunk of money is involved upfront and then recruitment over the life of the agreement is the way to think about it. I hope that the supply, demand balance evens out as time goes on in the future and that the structure that I just described is no longer required, but where we're at right now, I think a reflection of the tightness in the market.

That makes sense, thank you. And one follow-up, does the Company have a minimum cash target that you're working around? Thanks.

Yes. I think very specifically in response to that, when I think of minimum cash, it's a matter of how much cash do we have to keep sloshing around in the system. And we're a one-location Company right now. We're all focused on one country. And so minimum cash requirements for that tight structure are not really material. I'm not sure if that's getting to your question, but that's how I think about it when somebody asks me about the minimum cash that we need to have.

Great. Thank you.

There are no further questions on the lines at this time. So, I'll turn the call back over to Lauren Webb.

Thank you, Charlie. And thank you everyone for participating in our second-quarter earnings call.

This concludes today's call. Thank you for joining. You may now disconnect your lines.