Xos, Inc. has reported a record-breaking third quarter in 2023, boasting the delivery of 105 units to various global fleets and parcel delivery operators. Among these were the premier 2023 Xos SV Stepvans, showcasing the company’s advancements in electric vehicle (EV) design and production.
Why It Matters
This third-quarter performance signals not only Xos’s highest delivery volumes to date but also marks their debut in distributing positive gross margin units. The 2023 Xos SV Stepvan is set to rival or even surpass legacy diesel trucks in several key performance indicators. This achievement positions Xos as one of the pioneering commercial EV manufacturers with a positive gross margin, propelling them closer to their goal of positive free cash flows.
Key Points
- Xos’s estimated GAAP gross margin for the third quarter ranges between 8% to 15%.
- Unit gross margins of the new 2023 Xos SV Stepvan lie between approximately +10% to 20%, contingent on the configuration.
- Several factors bolstering this accomplishment include:
- Xos’s proprietary software technology that ensures top-tier performance.
- Strategic long-term supply agreements with major global Tier 1 battery cell and electronics suppliers.
- Enhanced design, engineering, and testing methodologies that optimize manufacturing expenses.
- The 140kWh Xos Stepvan is tailored for most last-mile delivery routes, while the 280kWh variant offers an extended range suitable for longer routes or increased payloads.
- Recent partnerships concerning component cost and warranty have facilitated greater savings for Xos compared to prior models.
- The debut of Xos’s profitable vehicles poses a direct challenge to diesel last-mile delivery vehicles in terms of total ownership costs. Factoring in available subsidies further intensifies these cost benefits. The 2023 Xos Stepvan promises an estimated savings of 30-40% in comparable markets.
Bottom Line
Xos’s landmark performance this quarter underscores the rising demand and potential for medium-duty EVs in the commercial sector. Liana Pogosyan, Xos’s acting Chief Financial Officer, commended the collaborative efforts across teams and expressed optimism about the brand’s trajectory, “We expect margins will continue to improve and be sustained as the tailwinds and demand for medium-duty EVs grow.”
