Wallbox N.V.
Q4 2022 Earnings Call Transcript

Published: 1 Mar 2023

[Operator:]

Hello everyone, and welcome to Wallbox’s Fourth Quarter and Full-Year 2022 Earnings Conference Call and Webcast. My name is Charlie, and I'll be your operator for today's call. At this time, all participants' lines have been placed in listen-only mode to prevent any background noise. After the speakers' remarks, there will be a question-and-answer session. [Operator Instructions] I would now like to turn the call over to Matt Tractenberg, Wallbox’s Vice President of Investor Relations. Matt, please go ahead.

[Matt Tractenberg:]

Thank you for joining today's webcast to discuss Wallbox’s fourth quarter and full-year 2022 results. This event is being broadcasted over the web and can be accessed from the Investor section of our website at investors.wallbox.com. I am joined today by Enric Asuncion, Wallbox’s CEO; and Jordi Lainz, our CFO. Earlier today, we issued our press release announcing results from the fourth quarter period ended December 31, 2022, which can also be found on our website. Before we begin, I’d like to remind everyone that certain statements made on today’s call are forward-looking, that may be subject to risks and uncertainties relating to future events and/or the future financial performance of the company. Actual results could differ materially from those anticipated. The risk factors that may affect results are detailed in the company's most recent public filings with the U.S. Securities and Exchange Commission, including in the Post-Effective Amendment No. 3 to our Registration Statement on Form F-3 filed on December 14, 2022, which can be found on our website at investors.wallbox.com and on the SEC website at www.sec.gov. We will be presenting unaudited financial statements in IFRS format that reflect management's best assessment of actual results. Also, please note that we use certain non-IFRS financial measures on this call and reconciliations of these measures are included in the presentation posted on the Investors section of our website. Also, a copy of these prepared remarks can be obtained from the investor relations website, under the Quarterly Results section, so you can more easily follow along with us today. So, with that out of the way, I'll turn it over to Enric.

[Enric Asuncion:]

Thank you, Matt, and thanks everyone for joining us today. In addition to reviewing highlights from the fourth quarter and full-year 2022, I will also discuss the rationale and intended impact of the recently announced cost reduction program and offer some recent commercial wins. Jordi will then step-in and offer additional detail on our quarterly performance and some recent fundraising transactions, as well as some guidance on expenses and CapEx. And finally, I will return to the current market outlook and how it impacts our guidance for the first quarter and full-year 2023. We will end by taking questions from our covering research analysts. We have a lot to get through today, so let's get started. Looking at the full-year 2022, I thought it may be helpful to revisit a few of the wins we saw last year, because while it's important to focus on what’s ahead, it's equally important to celebrate and recognize your wins. And there were a lot of wins in 2022. We expanded into an additional 21 countries. We announced strategic partnerships with leading global brands like Nissan, Fisker, Lyft, and Polaris, and expanded existing partnerships with Uber. We launched new distribution channels like City Electric, Svea Solar & Ikea, and Napa Auto Supply. We strengthened relationships with utilities like ENI, EDF, BeCharge, Atlante, and Iberdrola. We opened a state of the art manufacturing facility in Barcelona, which allowed us to immediately begin shipping our new DC public charger, Supernova. While bringing one new factory online is a difficult task, we also opened a second factory, this one in the U.S. to provide products for the North American market. That facility opened in the fall, and continues to ramp up production, putting us in an enviable position to qualify for meaningful government investment. We acquired two attractive companies, ARES Electronics, a leading PCB supplier, and Coil, a North American installer, both of which provide competitive strength. And we navigated a challenging supply chain without ever being in an out of stock position. In summary, 2022 saw its highlights and its challenges, but we believe the market outperformance illustrates we are executing well and are well-positioned. Revenue for the full-year 2022 was approximately €147 million, representing growth of more than 100% over 2021. Crossing €100 million of revenue at our age is something we’re very proud of. There are not many businesses of our size who can point to that type of growth, but we can, and we did. And while we’re proud of what we’ve achieved, we’re even more excited about what’s ahead. 2022 market share gains in both North America and Europe were solid, as illustrated by our ability to grow consolidated revenue four times faster than the overall market. As you can see from our regional competitors, this is not easily achieved. Execution versus the competition has been strong and will remain so, of that we are confident. But performance versus your expectations is important as well, so we’re working to better understand how our customers behave in volatile economic environments. Attractive gross margins are something we’ve been able to deliver, and we delivered 40.5% on a full-year basis. Introducing several new products with drastically different financial profiles, customers, and market drivers adds a new level of complexity, but we are confident that in the long run, we can move margins back into the range you’ve come to expect from us. That operational leverage is a critical element in our path to profitability, and you’ll hear more about that today as well. The fourth quarter finished slightly below our expected range, impacted by three main drivers

[Jordi Lainz:]

Thank you, Enric. Good morning and good afternoon to everyone. Given the continued challenges the EV market is experiencing and the supply chain disruptions that we work through, I’m satisfied with our quarterly results and know that 2023 will be an even better year. For the fourth quarter 2022, revenue was €37.3 million, a 44% increase from the year-ago period, driven by volume, new products, and M&A, slightly offset by end of year pricing discounts. The seasonal pattern we saw as we moved from the third quarter to the fourth, was disrupted by the channel inventory dynamic Enric discussed earlier, but we anticipate that being solved in the first half of the year. EV deliveries improved quarter-over-quarter, but still fell short of earlier estimates. However, our goal is to grow in excess of the Europe and North American markets combined, and we achieved that once again in the recent quarter. Now, let me share with you some key highlights that drove our results. First, our regional mix, now with more than 113 countries, continues to improve upon the benefit of geographic diversification. North America accounts for 25%, up from 7% in the prior year period, and Europe now represents 66% of our revenue mix, down from 88% last year. Asia-Pacific is currently 6%, 2 points higher than last year. And Latin America is 3%, up 2 points as well. We expect this shift to North America to continue, as EV adoption accelerates and U.S. subsidies take hold. Second, gross margins on a full-year basis of 40.5% were resilient in the face of continued component shortages, but in the quarter were impacted by product mix shift from AC to DC. As we have said all year, as Supernova ramps up, we will see downward margin pressure, and this did occur. But it did occur more than anticipated, largely due to the lower mix of AC sales in Europe. We continue to aggressively cost engineer Supernova, now in Gen 2, and believe we can make meaningful improvement this year. However, just as Supernova is going through its post-launch engineering process, Hypernova will enter. We will provide as much color as we can to ensure you understand the drivers of our margin performance. Adjusted EBITDA loss for the quarter was €29.1 million, up on a sequential basis driven by lower revenue and gross margins, and higher headcount costs. Adjusted EBITDA loss for the year was €88.3 million. As we review our growth trajectory and our revised cost basis following the actions Enric discussed, we believe we can reduce this materially, by more than half in 2023, and into positive territory next year. We have sharpened our focus on profitability here. Philosophically, profitable growth is one of the key [tenets] [ph] that drive our strategy, equally important to operational excellence and innovation. To our shareholders, we are committing to you this renewed focus and look forward to proving this out. We were also very busy improving our balance sheet in the fourth quarter. As you may have seen, Wallbox raised approximately $43 million through a sale of ordinary shares to a group of investors, including Enric, board members, and early private holders, who believe in the long-term value we are creating here. In addition, we completed a loan of €16 million and expanded working capital by €15 million. Our balance sheet remains solid, with almost €90 million of cash and equivalents available at quarter-end. In the first two months of 2023, we’ve also brought on an additional €25 million of cash through loans and other financing instruments. Opening two new factories, accelerating Hypernova to market, and building a robust supply chain for Supernova in Europe to support the demand we see ahead, requires capital, but we do not intend on spending at this rate. CapEx is relatively light going forward as well. Additionally, we continue to evaluate opportunities to bring additional capital onto our balance sheet, and believe we have access to the cash we need to run the business until we generate positive free cash flow in 2025. And finally, as we discussed last quarter, we hold more finished goods, work-in-process, and raw materials, than we would in a normally functioning supply chain. Our intention is to continue to work through those components as we progress through the year. We ended the quarter with €44 million of long-term debt, which now incorporates assumed debt from recent acquisitions and other additional facilities. As of December 31st, there were more than 1,250 full-time Wallbox employees around the world. Any headcount additions we do this year will be done in key areas of growth. CapEx for the quarter was €17 million, of which €6.5 million was PP&E. For the full-year, we spent €36 million of PP&E. We would expect approximately €26 million of PP&E in 2023, as our factories are up and running, and do not require significant additional investment until 2024. With that, I will now turn it back to Enric to provide you with some commentary around the fourth quarter.

[Enric Asuncion:]

2022 was a volatile year, of that we can all agree, and that gives us a greater sense of caution as we look at 2023. Market volatility occurred for many of the obvious reasons, including the war in Ukraine, persistently high inflation, supply chain disruptions, OEM capacity constraints, fears of a recession, etcetera. We do not believe that most of these are long-term, systemic issues. We do believe that we will begin to turn the corner late in the second half of the year. And as we look into 2023, we focus on two data points

[Matt Tractenberg:]

Welcome back everyone. To our analysts we ask that you post one question with a follow-up if needed, then re-enter the queue if there is more. This will allow each of you to ask your questions upfront and we’ll get to as many questions as time allows. So, Charlie, I think you have some additional instructions.

[Operator:]

Thank you. [Operator Instructions] Our first question comes from George Gianarikas of Canaccord Genuity. George, your line is open. Please go ahead.

[George Gianarikas:]

Hey, good morning, everyone. Thank you for taking my questions. So first, just focus on what you've seen in the marketplace over the last call it 90 days. I want to make sure I understood it. You saw a weakening of demand past your – the last time we spoke in November, and you think that's a function of two things of lower than expected EV demand and also inventory in the channel. Is that an accurate portrayal?

[Enric Asuncion:]

Hi, George. Thank you for attending and thank you for the question. This is Enric. So, in Q4, basically, we were able for the full-year and [by the] [ph] year to grow more than the market. So, that's important to note because our markets grew 37% in Q4 and we were able to grow 44%. So, we kept our path to acquire more market share and more percentage in the market. However, it didn't grow as expected Q4 because we had some channel inventory in our partners. But given the reduction in the last 60 days from industry forecast in EV deliveries, they were more cautious on stocking for the next quarter. You have to think that they buy the products that are going to be delivered the following quarter many times. So, they have stores, they have to replenish many centers, many retail stores. So basically, we outperformed the market. That's very important. We grow more than 400% in the U.S., but in Europe, we are seeing and we saw that industry forecast for 2023 were dropping 23% for EV deliveries and that made our partners to be more cautious.

[Matt Tractenberg:]

Do you have a follow-up, George?

[George Gianarikas:]

So just – yes. Just so on the inventory, how confident are you that you've cleared it? I mean, you mentioned that your partners felt like they needed to de-stock relative to the industry forecasts? I mean, what sort of – what levels of channel inventory do you think we have today?

[Enric Asuncion:]

So, we are monitoring this with our partners and we expect to see still some reduction in inventories during this first quarter.

[Jordi Lainz:]

Yes, George, we think we will be through that inventory through the first half within our channel partners. First quarter, sorry. And, but we are having good discussions with our channel partners in terms of what that right level is. And certainly industry forecasts impact that, right?

[Enric Asuncion:]

You have to think that, for example, Q1 2023 is, in terms of EV deliveries in Europe is half of the EV deliveries in Q4. So that obviously impacts the consumption of [inventory] [ph]. That's why we have even the guidance for Q1.

[Matt Tractenberg:]

George, anything else? Sorry, Charlie. We’ll take the next.

[Operator:]

[Operator Instructions] Our second question comes from [indiscernible] of Bank of America. [Indiscernible], please go ahead.

[Unidentified Analyst:]

Yes. Hello. Thank you very much for taking my question. I had a question on the growth in North America. It was a bit lower than we might have expected. Was it due to this inventory channel you mentioned or have you seen some slower investment in the [net course] [ph] level perhaps with a delay in investment patterns around the people waiting for the IRS funding? Thank you.

[Jordi Lainz:]

Yes. So, actually in terms of Wallbox, thank you, [indiscernible], by the way. In terms of Wallbox performance in Q4 in North America was exceptionally good. We were able to grow [425%] [ph]. So, we overperformed clearly in the market, [indiscernible] on double-digits. And we even got as we explained orders and agreements with OEMs in North America. So that really fuel sales in the market. So, the market may have not performed well or not, but as Wallbox – as Wallbox we overperformed really well. The market is growing more than 400% in North America. Does that help?

[Unidentified Analyst:]

Okay. But so if, yeah, I'm just trying just trying to see if you look into maybe a bit longer term 2024, 2025, what type of growth you're expecting in the U.S. given there is this IRS funding that might increase the investment of your customers?

[Matt Tractenberg:]

Sorry, I want to make sure we understand your question. Are you asking for a better view into 2024 and 2025 in terms of North America?

[Unidentified Analyst:]

Yeah. Basically, just a better view on your growth in North America and what you're expecting?

[Enric Asuncion:]

Yes. We are seeing a big uptake – actually a big growth in fast-charging pre-orders in North America coming from the [Navy program] [ph]. The fact that we have a factory in Texas already up and running and has been commented and approved by the [White House] [ph] as one of the few ones that are ready for the Buy America requirements. It's obviously impacting very well in our future sales for next year in terms of fast-charging in North America. So, in that regard, we already have collected more than $30 million on LOIs and pre-orders for Hypernova. The fast-charging product we are launching in the U.S. later this year. So, we are seeing a lot of potential growth in the U.S. given the fact that we are already in the [indiscernible] factory, and we have the right products that fulfill the government requirements.

[Jordi Lainz:]

And [indiscernible], the impact of both NEVI and the Inflation Reduction Act is really exceptional. And so, while it's hard to give you a number for 2024 and 2025 on a regional basis, we feel like we're ready and we feel like we have the right products to sell. So, we're excited about next year.

[Unidentified Analyst:]

Okay. Thank you very much.

[Matt Tractenberg:]

Anything else? Charlie?

[Operator:]

Perfect. Thank you. Our next question comes from Maheep Mandloi of Credit Suisse. Maheep, your line is open. Please go ahead.

[Maheep Mandloi:]

Hey, good morning. It's Maheep Mandloi from Credit Suisse. Thanks for taking the questions. On the margin versus your target, I think, like for Q4 and Q1, could you talk about, like, is that mix shift or is it just some pricing discounts? I'm just, like, wondering if it's possible to, kind of like see some pressure on pricing to enable a faster de-softening in the market?

[Enric Asuncion:]

Yes. Thank you, Maheep for joining us the call today. Basically, the gross margin in Q4 was just impacted because of the mix of sales. Basically, you know that we are on a ramp up of Supernova sales, which is our public charging new product. And as the last quarter, Supernova DC sales has represented higher percentage versus the total sales than expected through the EV market in Europe was not as expected. It makes that how we are on the ramp up of production, it has been impacted on gross margin. However, we are expecting as we have announced today that we will maintain this excellent gross margin for the total 2023.

[Jordi Lainz:]

Yes. I’d like to add, thank you, Maheep for the question. So, this is something that you have to expect from us as we are launching new products. We are focusing on time-to-market. We launched a new product like Supernova and the first six months, few months, gross margin is really lower. After that, which we are now in that phase. We do engineering improvements and [operations improvements] [ph] to radically improve gross margin. So, right now, we are launching Generation 2 Supernova, which is higher power, but also higher gross margin, lower cost product. All the things we've learned, all the operational things we could do, we will design some parts like we always do every time we launch new product to improve gross margin. So, during this month of March, we will start delivering the first units of Supernova Generation 2. And next quarter, we will start seeing have a more positive impact of gross margin and fast margin sales. And all this transition to Gen 2 is going to be almost over at the end of the year. But the volume of Gen 2 obviously is growing and it has a much better gross margin, but this is normal in our case. New products, but that has just been launched, have lower margin. But after 6 months to 8 months, we are back on our expected gross margin.

[Maheep Mandloi:]

Got it. Thanks for that. And just a follow-up on the target EBITDA margin, which you, kind of talked about on the prepared remarks on the slide deck. Just curious like what's the timing on that, I mean since 2024, you expect positive EBITDA margin, but how should we think about that ramp from the breakeven in Q4 to achieving the target for you guys?

[Jordi Lainz:]

Yes, I don't think – so, we're not providing guidance for 2024. I think that mid-term is, sort of a 1-year to 3-year range and obviously we'll ramp up as we make our way through that period. But we do think that we'll breakeven as we exit this year and next year, it'll probably be at the lower-end of that range and continue to move up from there. And that – there are a lot of variables that will determine how quickly we move up, including the market forecast. And as you know, market forecasts have been changing, fairly drastically over the last couple of quarters. And so, I think we want to take quarter-by-quarter and year-by-year and we'll give you a better idea as we come out of 2023, if that's okay, Maheep.

[Maheep Mandloi:]

Absolutely enough. Thanks for that. And I look forward to catching up. Thanks. Bye.

[Matt Tractenberg:]

Thank you. Charlie?

[Operator:]

Thank you. Our next question comes from Brian Dobson of Chardan. Brian, your line is open. Please proceed.

[Greg Pendy:]

Hey, it's Greg Pendy in for Brian Dobson. Thanks for taking my question. Just wondering, can you kind of help us understand on the gross margins on where they came in? Can you maybe give us a little bit of color or some numbers? How much of this was mix to the OEMs? How much of it is from Supernova and then also just [indiscernible] where we are in Supernova and where you think – how long do you think it'll take to get to kind of their peak margins?

[Matt Tractenberg:]

Hi, Greg. Thanks for the question. And I'm just looking through the data now, Jordi and Enric are just looking through our bridges. And so, I would say the biggest impact to gross margin sequentially was from volume, and then we're looking at mix. And so, that lower volume of AC relative to what we expected, and then the volume of DC was not more than we expected, but obviously when you compare the two that product mix shift did drive that gross margin lower than we had thought. I wouldn't say, there's a material, I wouldn't say it's a material impact from channel or from end of your pricing, but they did come into play.

[Jordi Lainz:]

And in Q2, well, [thanks for that] [ph]. In Q2, Gen 2 is going to be already available in the market. As I said, this month of March, we are delivering the first units of Gen 2 to select the customers. And it starts with the margin closer to the 40%. So, we expect that to ease already in Q2.

[Greg Pendy:]

And Enric, Gen 1 is different from Gen 2, how?

[Enric Asuncion:]

Well it allows higher power charging, so Gen 1 Supernova can charge up to 60 kilowatts. Gen 2 came up to 150 kilowatts. So, it can be used for commercial centers, but also for highways. And it has all the improvements in terms of uptime, quality service, and cost to – that we learned from Supernova Gen 1. And maybe one important difference is that it doesn't have [indiscernible] charging. So, Gen 2 is a split CCS product that doesn't have [indiscernible], but at the end, it's an improvement in power and technology from what we have been selling the last year in for Supernova. Does that help, Greg?

[Greg Pendy:]

That helps a lot. Thanks a lot. I appreciate the color.

[Matt Tractenberg:]

Sure. Charlie?

[Operator:]

Thank you. Our next question comes from Alec Scheibelhoffer of Stifel. Alec, your line is open. Please go ahead.

[Alec Scheibelhoffer:]

Thanks and good morning everyone. Thanks for taking my question. So, if you can hear me, just to kick us off here. So, was wondering if you could provide a little bit more color on your production capacity. You said during the call that there's 20,000 units in aggregate for Supernova and Hypernova, I was just wondering from a breakdown perspective how much of that is more so on the Supernova Gen 1 side versus hybrid? And also, if that's primarily U.S. production capacity or is that more global, including Barcelona?

[Matt Tractenberg:]

Sure. Yes. So, I think that – let’s put that number into context because that's a long-term aspirational number. I think we've been getting a lot of questions internally sorry, from analysts and investors in terms of what are our long-term capabilities, manufacturing capabilities when we think about the public charging portfolio. And so, it's going to be a mix. And I think that that mix is going to evolve based on customer preferences, based on projects, especially when we look at NEVI and IRA in North America. But by the time we get farther out onto the curve, you're going to be in future generations of Supernova. And remember, we're making some assumptions with that 20,000. We're making some assumptions in terms of continued capacity build-out, so expanding our factories right to their full footprint, adding production lines, doing full shifts, that is designed to give you, sort of an extreme boundary. And if the demand is there, we will continue to ramp that production up to meet that demand.

[Jordi Lainz:]

Yes. I think – thank you, Alec, for the question, but with this 20,000 number, which obviously has been dispatched by our operations team, we wanted to show the capacity that the current facilities and warehouse we have today – how much they can produce? Obviously, as Matt said, we will need to invest slightly additionally in assembly lines, but in terms of facilities and the factories, the footprint we have today and the CapEx we invested last year in Texas and in Barcelona. They allow us to have this capacity of 20,000, and we are talking about a 3-year to 5-year target for these productions. But the investment is already done, except for a few assembly lines.

[Alec Scheibelhoffer:]

Got it, got it. Thanks for the color there and for the clarification. Just as a follow-up as well, just, I don't know Matt, I think you touched on the NEVI funding. When do you think we're going to start to see some allocations of that? Is that going to be 2023 or is it more a 2024 story? And for those 300 units, I believe, of Hypernova they have in the pipeline, is that tied to the NEVI funding or you’re just starting to see some incremental demand for that product tick-up?

[Matt Tractenberg:]

Yes, that's a great question. So, those units are a mix between both U.S. and Canada. So, it's nice to see that they're not all tied to NEVI funding. And they, sorry, your question about maybe about the NEVI program. So, in terms of when those projects are going to hit the calendar, we believe that there are some infrastructure upgrades that need to make a place. I think Douglas has talked about this publicly. And we expect this year to have discussions publicly with regards to project wins and where we're going to participate. But installation and having it hit hardware vendors P&Ls, it's probably either late this year or first half of next year, that's when you're probably going to see disbursement of funds to where we are in the marketplace.

[Jordi Lainz:]

And, thank you for the question, Alec. The key here is that we have COIL as part of our portfolio, the company we acquired last year, they installed already in the U.S. And they are experts on upgrading the power, building the suites units, the other transformers, making more installations for fast charging. So, what we are working very hard now is to make sure we can provide a [indiscernible] solution that can be quickly adopted by our customers because their main challenge is not only the hard work, that is by America and we can provide that. Also, what everything what Matt was explaining, making the upgrades and everything. And we think we currently will be able to provide a faster track for our customers. So, it will help us to get more business.

[Alec Scheibelhoffer:]

Great. Thanks for the color. I'll turn it back.

[Matt Tractenberg:]

Charlie?

[Operator:]

Thank you. Our next question comes from [indiscernible]. [Abi] [ph], your line is open. Please go ahead.

[Unidentified Analyst:]

Yes. Hi. Thanks for taking my question. Just wondering on the Hypernova, I mean, from all your learnings that you have had so far from moving from Supernova to Hypernova, I'm just wondering like, maybe you can talk a little bit more about like how the learning has been and where the industry is heading? I mean do you see at some point we go to like carbon kilowatt system or do you think that even if, you know, technically feasible, it's not economically viable, or I'm just trying to understand like where the industry is moving and what you're learning has been and how difficult would it be to get to the [indiscernible] award? Are we reaching point of the machine returns already?

[Matt Tractenberg:]

Yes. I think Abi, what you're asking is, what does the roadmap look like in terms of electrification, in terms of needs, in terms of certainly our public chargers. And remember, Hypernova is a generation ahead of most other products coming to market this year. It goes up to 400 kilowatts. And so, we think that we've built in quite a bit of future proofing for our customers. We want to make sure that we preserve that long-term investment value for them. Some of this is dictated by the OEMs, right, what they're building into the cars. Some of it is dictated by battery technology. A lot of it, excuse me, is dictated by some of these subsidies that are going to be coming to market this year and next year. And so, I think for the next couple of years. I think that that 400 kilowatt for the next year or two at the very least that 400 kilowatt configuration is probably enough given what vehicles we see coming to market.

[Jordi Lainz:]

Yes, exactly. So, this – hi, Abi, there’s today actually few vehicles that can charge up to 350 gigawatts, not even 400. However, we are seeing, especially in the U.S. that cars are getting bigger and bigger batteries. We are seeing the [indiscernible] coming with 200 kilowatt hours of battery, which means that it will take you half an hour to charge this battery with 400 kilowatt charger. Obviously, it has a long range, but it's maybe too much time for this kind of cars. So, in few years, as Matt says, maybe in the longer-term, power will be upgraded. But for this program and for the next 2 year to 3 years, 400 kilowatts with the current roadmap of [carbon fibers and technology] [ph] is more than enough and [it's future proof] [ph].

[Matt Tractenberg:]

Anything else Abi?

[Unidentified Analyst:]

Sure. Thank you. Can I have a follow-up? Yeah. Sure. Can I have a follow-up now?

[Matt Tractenberg:]

Yeah. Please do. Go ahead.

[Unidentified Analyst:]

Just one quick one, on this use of silicon carbide, you know, on your module, that is one of your differentiating factor. Just trying to find out like where do you think the industry is right now in terms of catching up and how long you think that technical mode, if you will, will be there? Or you have some technological differentiation that will keep the mode wide?

[Jordi Lainz:]

Yes. Thank you, Abi, for the question. So, it's not only, the silicon carbide MOSFETs allow us to work in higher frequency when doing the switches. So, these allow us to better – more efficiency and better form factor and lower cost. So, we think we are a couple of years advanced from competition and that it was obviously a very good head start. But I think it's going to have especially a huge impact in bidirectional charging because bidirectional charges for the home, which we are now and volume with OEMs in this direction with Quasar 2. You need a product that's compact, that's in the wall, that has a small form factor because it's a home charger, but work with DC. So, obviously for fast-charging, it's good in terms of course, and for factor, but it's even more important for bidirectional charging in the home. And that's where we believe we have the biggest advantage even more than 2 years in this area because we have the capacity to discharge, CCS cars, we have a product already available, which is Quasar 1. And Quasar 2 is soon to come. And it's going to be again the first home, CCS, residential chargers, Quasar 1 was the [indiscernible] chargers from home, [indiscernible] is the third one for CCS. So, we're very excited and the key of this advantage, I mean, the first is our technology that use a silicon carbon MOSFETs.

[Matt Tractenberg:]

Thanks, Abi. Charlie, we have one more.

[Unidentified Analyst:]

Sure. Thank you.

[Operator:]

Yes, that's correct. We have a follow-up from George Gianarikas of Canaccord Genuity. George, your line is open. Please go ahead.

[George Gianarikas:]

Thanks for taking a follow-up. I just wanted to make sure I understood the NEVI in orders of 300 unit, is that expected to hit your P&L in 2023 or is that a 2024 event?

[Jordi Lainz:]

So thank you, George, for the follow-up question. So, it basically depends on our capacity to deliver the product in this year. We are trying to accelerate the launch of the product to make sure, as much as possible from these otherwise can be delivered, but we don't expect the huge numbers for this year. So, not all the 30 million are going to be delivered during 2023. It obviously depends on also on U.S. certification, which is something we cannot control 100%. So, there's also opportunities to be more. And that's baked into our guidance, but I can see that not everything is going to be delivered here, but we will try to deliver as much as possible.

[George Gianarikas:]

Thank you.

[Matt Tractenberg:]

You got it. Anything else? Charlie, anybody else in the queue?

[Operator:]

We currently have no further questions registered by the telephone line. So, I'll hand back over to you, Matt Tractenberg for any closing remarks.

[Matt Tractenberg:]

Great. Well, I guess that's our last question then. So, thank you all for joining us today. We hope you found today’s call a good use of your time. Also, please note that we have several upcoming investor events in March, so watch our website for details if you’re interested in meeting us. Let us know if we can help you in any way. Have a great day everyone. Thank you.

[Enric Asuncion:]

Thank you.

[Operator:]

Ladies and gentlemen, this concludes today's call. Thank you for joining. You may now disconnect your lines.