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Electric Last Mile Solutions CEO on public debut, the future of EVs

Electric Last Mile Solutions CEO Jim Taylor joins Yahoo Finance Live to discuss the company’s plans to ramp up EV production amid the pandemic, ELMS' public debut on the Nasdaq and assessing the state of the EV market.

Video Transcript


- Electric last mile debuted on the NASDAQ today making it yet another upstart EV company to go public via SPAC transaction. The EV maker says it will begin delivering its first electric vehicle, a van called the urban delivery later this year. Also plans to reveal a class three electric vehicle very soon Electric last mile solutions co-founder and CEO, Jim Taylor, joins us now as part of our series looking at the future of electric vehicles sponsored by BMW. Jim, good to see you. Congrats on the listing today. The urban delivery van, how much does that cost and how many orders do you have for it?

JIM TAYLOR: The cost point is to the ultimate customer at $25,000 and that's really a byproduct of 325 sales price but the compliments of the $7,500 tax credit, it lands at 25 which is about making it exactly the same price as the comparable gas vehicle today. But actually running costs of that vehicle are about 30% less, so it's a good business proposition for people that are using vehicles in that segment. Use that as a patch to your second part of the question, we have over 45,000 preorders.

And again, part of that reason is it's a compelling business proposition but in addition to that, we have major, major companies declaring that they're going to make a very quick transition. Companies like FedEx to electric vehicles. We have states of course like California putting in mandates with the federal government saying with their transition pace is going to be and then public companies declaring very aggressive ESG goals. So all of that we feel is contributing to the net interest and demand and therefore over 45,000 pre orders.

- When you say that 45,000 preorders, should an investor looking at your company view that as you have sold 45,000 trucks or vans in this case?

JIM TAYLOR: No. Absolutely not. Let me clarify that. These are preorders. Non-binding in legal terms. In addition, I translate that to hand raisers, reservations, expressions of interest, and really at an early stage with a company like ours you need to some way to gauge demand.

And so when we look into the analytical part of the segment like I just mentioned, it looks like there's overwhelming demand. But we have to translate that somehow to our shareholders to say what level of interest. As we're working right now with each of those preorder customers, we go through a whole set of steps to give them the product, visit our plant here, and then finalize our actual orders later this summer.

- Jim, you mentioned a couple of the major international brands that are talking about electrifying their fleets. Some of the mandates have gone into place. I think we all maybe have our own conception of what the full term or the full opportunity is here for electrified delivery, type vans. How do you guys think about it as the area that is most attractive growing fastest, and maybe most durable in terms of part of the fleet that you can replace quickly?

JIM TAYLOR: Right. Well, what it starts from is really as we all know, as individuals COVID and during COVID is, the move towards e-commerce is just exponential and so the market that we'll be feeding, the so-called class one at the very bottom of the band spectrum is the area that we're seeing a huge amount of interest in. By definition, it's very short range. It's for delivery.

Although our range is 150 miles, the average duty cycle in this is really around 50 miles. They all go back to the same location at night that simplifies charging and infrastructure. So we think it's really a perfect application for the transition to the electrified future we're heading towards.

- And then Jim and thinking about all the different class of trucks, we've had a lot of electric vehicle type plays come on here and some of them say we're going to deliver the moon. We're going to do everything. We want to have a platform. We want to have a class A consumer.

All this stuff. Are you guys just focused on that one to three class van that they're not that hard to drive. We've all rented a U-Haul, familiar with the form factor there. And you're not going to worry too much at this point about longer haul trucks, a consumer segment, other business lines like that?

JIM TAYLOR: Well, I'm glad you asked because we are really focused and have a very narrow market view. First off, we're solely commercial. We're not trying to go into both commercial and retail. And as you said we're initially launching in this class one space. There are no other competitors today. There are no announced competitors coming there as soon as we will. So we have first mover advantage.

And then as we said at the beginning of the show, our second vehicle will go into the bottom end of the class three so we're very, very focused. Also from a business plan standpoint, the volumes that we projected are not huge we feel. Less than 5% or 6% the actual market share that we'll achieve in the out years. And also from a finance standpoint, we have very conservative use of cash given that we're using the existing plant where I am here today in Indiana and also coming off existing OEM platforms.

- Jim. You're making these vans out of the former Hummer plant. Now, Lordstown is also using a former GM plant to build its trucks. Why are you able to make electric vans and start producing them, I believe in the third quarter, and you have a company like Lordstown who may not make anything this year? Is it more complicated to make a truck as opposed to a van?

JIM TAYLOR: That's two things Brian. First off, when we enter this existing plant, one of the things that took place with the prior owners is that they'd already spent all the capital to transfer to transition this plant from the prior of course, gas vehicles to electric. So that investment's behind us. Second is part of our business model that I mentioned. We're coming into market with call it an existing platform with existing parts, suppliers already in market overseas.

And so these vehicles come to us and call it a semi completed state. And so the actual manufacturing requirements for us as it relates to unique tooling, stamping, startups, all of the traditional things that go on, bring assembly plant up we don't have to do. So that's why we're able to reach market here very, very quickly in the fourth quarter and also have a very, very low cash requirement to introduce the vehicle.

- How much cash do you anticipate having after this transaction? And do you think just to ramp up your production further, you will need to raise more cash next year?

JIM TAYLOR: Yeah, our final numbers haven't come in yet but we had estimated in our proposition, that we need slightly less than 200 million to do our overall business plan to launch, first, this vehicle and then also the one next year. And we have, when all of the numbers are in, more than adequate cash to do that business plan. So at this point in time, if we stick again to the business plan that we proposed we wouldn't be looking for more cash in the short term.

- All right, we'll leave it there. Good luck on your journey. Electric last mile solutions co-founder and CEO, Jim Taylor. We'll talk to you.