Aeva Technologies Q3 2023 Earnings Call Transcript

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Provided by Quartr
November 8, 2023

Key Takeaways

  • May Mobility Production Win: Aeva was chosen as the exclusive supplier of its AVA 40 long-range FMCW LiDAR for May Mobility’s autonomous vehicle fleet with multiyear volume commitments through 2028 and production ramping into 2025.
  • Nikon Industrial Partnership: Aeva secured its first industrial automation production program with Nikon to integrate LiDAR-on-chip technology for high-precision inspection products with micron-level accuracy, targeting startup production in late 2024.
  • Top 10 OEM Advancement: Aeva achieved the OEM’s highest manufacturing-readiness rating, advancing to the final selection phase for a potential direct Tier 1 supply award expected next quarter.
  • Board Enhancement: Automotive veteran Dr. Stephan Sommer, former CEO of ZF Group and VW Group board member, joined Aeva’s board to bolster its automotive engagement and procurement expertise.
  • $145 Million Capital Raise: Aeva strengthened its balance sheet with $145 million in new funding—$20 million in common stock and a $125 million non-voting preferred share facility—to support production ramps and minimize near-term dilution.
AI Generated. May Contain Errors.
Earnings Conference Call
Aeva Technologies Q3 2023
00:00 / 00:00

There are 8 speakers on the call.

Operator

Good day. My name is MJ, and I will be your conference facilitator. I would like to welcome everyone to AIVO Technologies Third Quarter 2023 Earnings Conference Call. During the opening remarks, all participants will be in listen only mode. Following the opening remarks, we will conduct a question and answer session.

Operator

As a reminder, today's conference call is being recorded and simultaneously webcast. I would now like to turn the call over to Andrew Fung, Director of Investor Relations. Andrew, please go ahead.

Speaker 1

Thank you, and welcome, everyone, to Aeva's Q3 2023 earnings conference call. Joining on the call today are Suresh Salahyan, Aeva's Co Founder and CEO and Saurabh Sinha, Aeva's CFO. Call. Ahead of this call, we issued our Q3 2023 press release and presentation, which we will refer to today and can be found on our Investor Relations website at investors. Aeva.com.

Speaker 1

Please note that on this call, call. We will be making forward looking statements based on current expectations and assumptions, which are subject to risks and uncertainties. These statements reflect our views only as of today and should not be relied upon as representative of our views as of any subsequent date. These statements are subject to a variety of risks and uncertainties that could cause actual results to differ materially from expectations. Call.

Speaker 1

For a further discussion of the material risks and other important factors that could affect our financial results, call. Please refer to our filings with the SEC, including our most recent Form 10 Q and Form 10 ks. In addition, during today's call, we will discuss non GAAP financial measures, which we believe are useful as supplemental measures of Aeva's performance. Call. These non GAAP measures should be considered in addition to and not as a substitute for or in isolation from GAAP results.

Speaker 1

Call. The webcast replay of this call will be available on our company website under the Investor Relations link. And with that, let me turn the call over to Suresh.

Speaker 2

Thank you, Andrew, and good afternoon, everyone. It's been an incredibly exciting time at AIVA. Call. As the adoption of FMCW, LiDAR continues to build, Aeva is leading this trend, delivering production wins in both automotive and Industrial. And with growing interest for AIVA's unique Fortiliter on chip technology and continued advancement on a number of large opportunities, call.

Speaker 2

We have strategically positioned AIVA to be in the strongest position for success and to secure additional wins. I would like to highlight key accomplishments that are summarized on Slide 4. First, I'm thrilled to share that Aeva was selected by Maine Mobility to be the exclusive production supplier of Long Ridge LiDAR for their autonomous vehicles. This is a multiyear production agreement call for Aeva's 40 lidar will replace conventional time of flight long range lidar and was selected to help main mobility program with Nikon for their high precision industrial inspection products. We have been working with Nikon for some time now and we're excited to leverage our LiDAR on chip technology with micron level precision to advance to the production phase and open new opportunities in the established and growing industrial automation market.

Speaker 2

3rd, we continue to make strong progress with the top 10 OEMs and are now in the final phase with this OEM. This quarter, we received the OEM's highest available rating for manufacturing readiness. Call. This paves the way to be a potential direct supplier to the OEM and is a clear indication of Aeva's ability to support major global automotive programs. Call.

Speaker 2

We expect OEM to make the production program award decision over the next quarter. And 4th, we further strengthened EVA's position for success. We are pleased to welcome Doctor. Stephan Sommer, former CEO of ZF Group and Board Member at the Volkswagen Group responsible for procurement to AIVA's Board to help further advance our automotive OEM opportunity. And last, as we move to the production phase are the heels of our 2 multiyear production wins in automotive and industrial and our continued momentum with top global OEMs, call, including a top 10 OEM, we're making a strategic decision to further bolster our already strong balance sheet with a raise of new capital of $145,000,000 through an approximately $20,000,000 private placement and $125,000,000 preferred shares facility with existing long term stockholders.

Speaker 2

Call. This strengthens AIVA's position to win additional OEM programs and support them beyond their startup production call in a way that minimizes near term dilution. I would now like to provide more color on our recent business development, call, which begins on Slide 6. Let's start with our production win in auto with May Mobility, a leader in the development and deployment of AV Technology. The company has strategic partnerships with some of the largest automotive and transportation companies in the world, including with Toyota, where they currently provide paid autonomous rides on the Toyota Sienna Autonomous vehicle platform.

Speaker 2

Call. Through long term contracts with transit agencies, municipalities and other businesses, Maine Mobility operates transit services across call. A growing number of markets in the U. S, including Michigan, Texas, Minnesota, Arizona and upcoming in California. To date, Maine Mobility has provided more than 350,000 rides using its proprietary multi policy decision making autonomous vehicle technology with additional deployments planned to begin in 2024.

Speaker 2

To further scale, Maine Mobility has been looking call for next generation sensors that can enable expansion of their operational design domain. They selected AIVA 40 LIDAR because they believe in the unique capabilities of FMCW Technology and want to leverage AIVA to scale their operations. Compared to time of flight lidar, Abo's combination of long range and direct velocity measurement for every pixel call. Detect and classify small hazardous objects faster and more accurately to provide the necessary reaction time across a broader range of conditions. Call.

Speaker 2

And together with ABA's ultra resolution, which utilizes our proprietary velocity to data, differentiates stationary from dynamic points, We offer near camera level resolution, bringing more reliable reception that provides the confidence to expand. Call. We believe other inherent benefits of FMCW also bring value to Main Mobility's AV stack. Call. To provide some real world examples, retroreflector blooming and road signs and interference from other sources of light call, such as the sun can challenge time to fly lighter performance.

Speaker 2

FMCW is inherently immune to retroreflector blooming and ambient light, call. These are just some of the differentiated capabilities we hope to bring to our partner May Mobility. As part of our production program win, AVA 40 LIDAR will be the exclusive long range lidar on main mobility autonomous vehicles globally and replaces the conventional time of flight call. The agreement includes 5 year volume commitments through 2028 with deliveries already starting this quarter and production ramping into 2025. Moving now to Slide 7.

Speaker 2

We achieved an important milestone in industrial automation with the award of our first production program with Nikon to use AIVA's LiDAR on chip technology to power the next generation high precision industrial inspection products. This suite of product is used for industrial metrology and quality control during high volume manufacturing and Nikon's current generation is already deployed to customers across the automotive, aerospace and renewable energy industry, including some of the largest OEMs such as BMW, Stellantis and other automakers. Being the same silicon photonics chip architecture used for our automotive application, but with different algorithms to achieve micron level precision, Abo's technology will enable Nikon to offer a faster and smaller solution than is currently available, bringing added value to Nikon's current customers as well as opening new opportunities for additional applications. The production award comes after 2 years of close collaboration with Nikon, develop and validate our LiDAR on chip technology meets Nikon's Stringent performance requirement. Aeva startup production is on track to the target we set 2 years ago and is planned for late 2024.

Speaker 2

This production agreement includes minimum volume commitments from Nikon over the multi year program. Beyond this, we continue to be engaged on additional opportunities in the industrial space. Call. As we have previously discussed, the industrial automation market is an established and growing multibillion dollar opportunity and high precision measurement is a growing field within industrial automation, but we are seeing strong interest for Aeva's unique capabilities. Because of this pull from the market, we developed a perception platform for high precision measurements that utilizes software to adapt performance for different requirements across multiple non automotive applications.

Speaker 2

Nikon will be the first to use this perception platform and we look forward to bringing additional applications to the market. Let's turn to Slide 8 to discuss the latest in our collaboration with the top 10 OEM. This quarter, we continue to make strong progress with the OEM, most notably the approval of AIVA's manufacturing processes and ability for Aeva to be a potential direct supplier to the OEM. I am incredibly proud to say that Aeva received the OEM's highest rating category for manufacturing readiness, which the OEM indicated is only given to a small percentage of their supplier base. Call.

Speaker 2

The rating is based on a comprehensive audit of Aeva's manufacturing team and processes and an on-site assessment of Aeva Manufacturing Partners' automated production facility. This is a clear validation of Aeva's maturity and ability to operate as a direct Tier 1 supplier for Large Global Automotive Program. Over the quarter, this OEM continues to expand their vehicle fleet with AVA 40 LIDAR to support their milestones and overall AV stack. We remain highly encouraged by our progress and ability to help the OEM achieve their stringent requirements and use cases. This has resulted in AIVA being further down selected to the final phase with this OEM.

Speaker 2

We expect OEM to award the production program in the next quarter and hope to have more to share soon. Moving now to Slide 9. We are excited to have Doctor. Stephane Zomer join AIVA's Board of Directors. Call.

Speaker 2

Stephane brings an extraordinary breadth of experience as an automotive industry veteran with a history leadership career in automotive. Call. Stefan's past leadership roles include some of the largest global automotive call makers, including member of the Board of Volkswagen Group and Head of Components and Procurement at the VW Group as well as leading some of the most renowned automotive Tier 1 suppliers, call, including as a CEO of ZF Group, where he led and executed a strategy that helped grow ZF to become one of the world's largest Tier 1 suppliers. Call. With AIVA's commercial momentum in automotive, Doctor.

Speaker 2

Sommer's experience will be invaluable as we work together to bring automotive programs to SOP and work toward winning additional opportunities. Given his deep knowledge of the automotive industry, Doctor. Sommer's interest to join ABA's Board point to the significant potential of AIVA's differentiated technology. We look forward to working together to accelerate adoption of AIVA's 40 LIDAR. Call.

Speaker 2

And with that, let me turn the call over to Saurabh to discuss the financials.

Speaker 3

Thank you, Surush, and good afternoon, everyone. Let's turn to Slide 11, which summarizes Eeva's financial results for Q3 2023. Revenue for Q3 was $800,000 which continued to be driven by growing deliveries of Ares 2. Call. Non GAAP operating loss was $30,300,000 as we maintained a deliberate and strategic approach call to R and D and other operating spend.

Speaker 3

Reflecting on our cash spend for the quarter, gross cash use, which we define as operating cash flow less capital expenditure was 29,100,000 Our balance sheet remains strong with $233,700,000 of cash, call, cash equivalents and marketable securities at the end of Q3. And weighted average shares outstanding in the quarter was 222,800,000. To sum it up, Eeva is maintaining strong financial discipline, while making significant progress on our commercial momentum. Call. As we move to the important stage of preparing for start up production, we will continue to be thoughtful in managing our capital with a focus on positioning Aeva to support our existing customers as well as winning additional programs.

Speaker 3

Call. As part of this focus, we made a strategic decision to further bolster our already strong balance sheet with additional capital, as summarized on Slide 13. I would like to share more about what drove this decision. Call. This year, we have been making significant progress on our objectives from multiple production program wins to advancing on other engagements such as with the top 10 OEMs and demonstrating the maturity of Eeva's manufacturing and ability to support production program.

Speaker 3

Because of this, we continue to see growing interest for our 4 d LiDAR and are near the final decision stage on a number of opportunities. We believe the additional capital strategically puts call. EVA in a stronger position to win additional programs by building OEM confidence in our ability to support multiple programs, call, including with other major automotive OEMs looking to select few suppliers call, who can support their high volume production programs beyond SOB. In total, We reached agreements for additional capital of $145,000,000 with some of our largest and longest call. Stockholders, Adade and Celebro, demonstrating their continued strong conviction in Aeva's unique technology and potential.

Speaker 3

Importantly, the financing structure minimizes near term dilution with approximately $20,000,000 of the total through a private placement of common stock. Call. The remaining $125,000,000 is a nonvoting preferred shares facility that is currently undrawn and can be drawn at Eeva's discretion upon a new automotive OEM production win. Call. This flexibility will enable us to be strategic in how and when we may utilize the additional capital, demonstrating our continued focus on taking a prudent approach to capital deployment.

Speaker 3

Call. And with that, I will hand the call back to Suraj for closing remarks.

Speaker 2

Thank you, Saurabh. When we started AIVA, we set out to bring the unique perception solution to a broad range of applications from automated driving to industrial automation and beyond. Call. While the macro environment has been challenging, I can say that I've never been more convinced in EVO's potential and future outlook. Call.

Speaker 2

Our transition from development phase to production phase is gaining momentum with our latest production program wins with main mobility and Nikon highlighting both the broad applications for Vodafidar and us being on track for production deployments by 2025. Call and we believe this is only the beginning. We continue to advance on a number of other large near term opportunities call such as with the top 10 OEM, expanding our board with leading automotive executive experience and strategically bolstering our balance sheet call to put AIVA in a further position of strength to secure additional production wins and support OEMs beyond their start up production. Call. I would like to thank our talented and dedicated team at AIVA for enabling us to achieve these milestones.

Speaker 2

Together with our stakeholders, I am excited to continue executing on our mission and bring Forti Lidar to market. Call. With that, we will now open the line up for questions.

Operator

Thank

Speaker 4

Call.

Operator

Call. We will pause momentarily to assemble our roster. Today's first question comes from Joe Moore with Morgan Stanley. Please go ahead.

Speaker 4

Great. Thank you. I wondered if you could talk about the progress with the Tier 1 win that you talked about. I guess if you're going to be able to make the announcement in the next quarter. Does that mean that the business has already won and that the announcement is kind of more of a formality?

Speaker 4

I guess, will you be able to disclose who the customer is at that in this next quarter timeframe.

Speaker 2

Hey, Joe. Yes, happy to answer the question. Look, what I can say is Call. As we talked on the call and as we have talked throughout the past few months, we have continued to make step by step Progress in a stronger and stronger way with this OEM. In the past few months, the past quarter, they have deployed additional vehicles using our LiDARs with our technology on the road.

Speaker 2

And What we are now is really in that final phase of the discussions, the negotiations, the commercial topics as it goes towards the production award. It has not been awarded yet, but As mentioned, we're feeling strong about that and we intend to receive the nomination award decision from the OEM in the next quarter. And of course, we fully hope that we can also talk about and name the OEM at that time. So, and obviously this is a top 10 OEM. So we think this is definitely a very important program that we've been working towards for some time.

Speaker 2

And on the heels of some of these wins and all the announcements we talked about today, we continue to make progress with this OEM, but also other Now, we talked about what we ended up with the rest and advancing with across automotive as well as industrial applications.

Speaker 4

Yes. I wanted to ask them about that. I mean, to the extent that you're this close to making an announcement With 1 top 10 OEM, when you look at the kind of capability that your technology brings, I would think that would start to create that enthusiasm. What kind of timeframe? How long should we expect it to take if you get interest from other OEMs?

Speaker 4

How long would it take to kind of move that into something that could drive revenue down the road.

Speaker 2

Yes. So as we have talked about, the programs that we're talking about here, first of all, the Two wins that we actually announced this week are both for mid decade SOPs, right? So Maimovility in 2025, Nikon in 2025, different industries. We've been talking about this for some time. We said we're going to go to production in 2025.

Speaker 2

Now we are showing a validation and these are I think 2 big points that are showing that. Additionally, there's other OEM programs including top end OEM also has similar mid decade type SOPs. We have not We shared that yet and at the right time once we can talk about it we will, but that's when things are going to also start transitioning as we go along. As we're moving now from this kind of development phase towards the production phase, we believe that is going to start to translate towards those increasing revenues and also growth in our actual shipments and sales with multiple of these customers. So that's what I can say right now, but I think from a timing standpoint, those timelines remain as we have discussed before.

Speaker 4

Great. Thank you very much.

Operator

Thank you. The next question is from Colin Rusch with Oppenheimer. Please go ahead.

Speaker 5

Thanks so much guys. As you've gotten OEMs trying to work with some of this velocity data in a little bit more detail, can you talk about what you're seeing in in terms of how they're using it and what it's allowing them to do in terms of differentiating between different types of objects as well as simplicity and navigation systems?

Speaker 2

Yes, Colin, happy to answer that. So look, I think we have been talking about kind of the general transition from perception and sensing standpoint over time, which is not overnight, but over time from more time of flight, especially in the long range sensing towards FMCW. And this is in automotive, but also in other applications, industrial that's also we're seeing. I think With the announcements we've been talking about this week, with validation that we see, with the production deal with Maim Mobility, for example, and with Nikon, We are seeing some of those actually form and really put in place. But in automotive, for example, there is Number of reasons that OEMs go and look at actually switching over to AIVA or really expanding with it.

Speaker 2

We don't have the necessary seat always about switching. It's actually also more about being able to do what they cannot really do before, which is really enable, right? It's enabling How they actually can expand their operating design domains. So as you go from lower speed to higher speed, to highway speed, As you're able to do that, there are a number of use cases that need to be met. And especially, in working with a number of OEMs and customers pass so far.

Speaker 2

They have always had challenges in resto regardless of the technology they used before. And when they started using AIVA and our MCW approach, That's when it starts to click using the velocity dimension, having the advantages of no interference, The long range sensing and the old resolution features, it starts to actually it's not about the specs and the seeds, it starts to actually help them solve Actual use cases to deploy safe, highway autonomy type applications. And That's where I think is from what's very exciting for us is seeing that actually happen on the road with relatable testing. So and that's the case, for example, with top 10 OEM. And main mobility's case, as we've briefly mentioned, They are looking to also scale their operating design domain, right?

Speaker 2

And with The existing solutions they had, that was challenging proposition. With our approach, They see the potential with the velocity and FMCW approach to be able to actually do that and scale their operations. So That's in automotive and industrial separately. We also see the opportunity which really highlights the flexibility of the technology To continue expand in industrial applications where performance, size and cost all have to be continuously improved and that's where we see some of that potential and the momentum we've gained, for example, Nikon Now validating it and really moving towards the production phase. So, it's about enabling new use cases.

Speaker 2

It's about helping the customer solve what they Not before and that's, I think what we're all about. So if that, I hope that answers your question.

Speaker 5

Yes, it's incredibly helpful. And then on the manufacturing side, if you ramp up with Fabrinet, can you talk about where the real Meaningful challenges are for you guys right now between now and when you have to start delivering the Nikon. It would seem that you guys have to be getting awfully close. So I want to understand what sort of hurdles are remaining before you feel really confident on scaling up?

Speaker 2

Yes. So as we said, so maybe just talking briefly about The opportunity with Nikon and answer your question in that. So we've been working with Nikon, of course, for a couple of years now. And even about 2 years ago, we set out the target to go to production by 2025. This week, we announced that we are not only on track, we have Completed the validation and meeting the stringent requirements from Nikon to the Micron level precision, which by the way, is also a unique feature to FMCW to our I think from a timing standpoint, obviously, as we said, that means that we need to go start our production ramping for Nikon late next year.

Speaker 2

So that Nikon's product availability can happen by 2025. And we have been working on this for some time. So as we said earlier in the year, we set out to expand our manufacturing on the system side. We are continuing now to bring in additional automation on the manufacturing of our LiDAR on chip module, which is really the core and the heart of of the product that goes that we supply to Nikon addition with our processing. So that is the focus for us.

Speaker 2

I think in the next number of months as we get closer, we'll be talking about updates on this on the progress for this. But We have been working with Fabrinet and team we have on-site there to really prepare and continue expanding the outputs and focusing on the yields in our automated manufacturing line over there that you look towards. Thanks so much. Appreciate it.

Operator

Thank you. The next question comes from Suji Desilva with ROTH Capital. Please go ahead.

Speaker 6

Hi, Soroush. Hi, Saurabh. Question on the top 10 OEM as well for me. I just want to be clear, the one you're talking about here, is that the same one With the award win you announced and the perception stack, I just want to clarify that.

Speaker 2

Yes. This is the same. This is the same.

Speaker 4

It's all

Speaker 6

the same one. Okay.

Speaker 2

Yes. Call. Same one that we've been talking about. Great. It's not the only one that is raised obviously.

Speaker 2

Understood. This stage is a mess with multiple OEMs that are in there. Call.

Speaker 6

Understood. And then so for this OEM, have you specified whether this engagement is for A broad platform win for the OEM that will be multiple models and across or whether it's a target sort of vehicle. Just to understand if you've kind of clarified the breadth of your opportunity here.

Speaker 2

Yes. No, we have not discussed that. I think that will be, I think, the Right opportunity in the future as we go towards the final decision coming up. But what I can tell you is obviously the opportunity is from a top 10 OEM with large volumes and with production in middle of the decade as we've talked about. So this is not some sort of a pilot program or something like that that we're talking about here.

Speaker 6

Okay. That color definitely helps. And then lastly, on the OEM, or just in general with the auto OEM waterfall wins, Is there anything that gets easier after you secure this first one publicly and start kind of delivering to them in terms of the second, third and fourth win? Just want to understand How that might be or whether they're each kind of fresh starts?

Speaker 2

Yes. Well, first of all, I think Hopefully, you can see some of that trend already happening, right? So we've been talking about our progress and momentum in the space and converting additional programs to wins. This week we announced not 1, but 2 in each sector and we're really excited about that. And these are folks that, For example, in May's case have been using Temafide before and are familiar with Viner.

Speaker 2

So I think that's Where we see opportunity and the progress to actually be able to move faster because folks have experienced, they know what they're doing, they've been doing this for some time and so they can also appreciate the advantages in terms of what they can see that helps them enable them to expand their operations, scale up their deployments and all of that. So And we absolutely believe that with all the work that we're doing here with I think that really the breakthrough past few months that we've had on the heels of 2 OEM wins, expanding our Board of Automotive experience with Doctor. Sommer coming on and his renowned experience in the space as CEO of Zettas and Volkswagen as well as bolstering the balance sheet, All of this really helped us to position AIVA in a really strong position, to win additional programs as we go towards production and also give confidence to our customers that are looking at a select few players that can Not just win something, but also be there beyond their SOPs to support them. And that's really what We're doing here in a multi step approach. So that's what I can say.

Speaker 2

And I think, Obviously, we do believe that with us delivering on a 1st large OEM program win, subsequent ones are going to be that much More streamlined to get and move on from there.

Speaker 6

Okay. Very helpful, Suraj. Thank you.

Operator

Thank you. The next question is from Richard Shannon with Craig Hallum. Please go ahead.

Speaker 7

Hi, guys. Thanks for taking my questions as well. Maybe we'll hit on the top 10 OEM here. Sure. I think your language was you were down selected in this past quarter here.

Speaker 7

Does that mean you're the only supplier remaining that they're looking at or are there others?

Speaker 2

So, look, at the end of the day, we never know in terms of what the end customer does and that is not Something that necessarily we look at, I think what we really look at is there's been actually multiple layers of down selection that's happened. Call. At this stage, we're in the final phase. And as I mentioned, with the decision coming up in the next quarter. But also importantly, we have been working with OEM for some time and they have already started deploying Our sensing technology on their vehicles, in which actually replaces some tomafly technology as we have talked about in the past, So that is what I can say right now.

Speaker 2

That gives us additional further information and support that we're looking for. So obviously, we're also working on around providing some of our perception and collaborating with the OEM on the perception to really utilize SMCW advantages including the velocity picture. And Since the last time we spoke, of course, the OEM has also deployed with our lidar on additional vehicles that they have continued to build. So a number of things happening, but I think I would stop there for the information.

Speaker 7

Okay, fair enough. Appreciate that color. My follow on question here is related to May Mobility. How do we think of them in terms of the ultimate scale of opportunity that exists within through 2028? I don't know if this is something that's Even within a magnitude of a typical automotive OEM you're going with, but any ways you could give us some color on how big that could be relatively speaking?

Speaker 2

Call. Sure. Happy to so let me give you a bit of color about May and answer your question hopefully there. So obviously, we're very excited about this. It's one of the first deployments for us in the automotive mobility sector, starting with the Ares II deployment already this year.

Speaker 2

And let me give you a little background about May and kind of give you some context about the size and the comparison you mentioned. So So first of all, May has been around for a long time, been working with a number of players. And they're partnered with some of the largest automotive companies, including Toyota. Their operating paid autonomous rides today across 4 states with more coming next year. And they have done over 350,000 rides And are taking a more measured approach when it comes to scaling, as compared to some of the other players, really through pay contracts in municipalities and cities.

Speaker 2

And in terms of scale, I may have talked about this. They're scaling the operations by 1,000 of vehicles in the next few years here. And again, what they see in AIVA is the unique FMCW approach and enabling them really to And their current ODDs or operating line domains from where they are now to really enable their scaling as they continue to expand. And so we're talking about here the multiyear production deal in which Aeva is the exclusive long lead lighter supplier for many vehicles globally. We have minimum volume commitments starting from this quarter every year through the end of 2028.

Speaker 2

And in terms of the size of this opportunity, We actually believe this is similar to the potential size of some of the initial luxury passenger vehicle programs that are coming to the market. And that's what we can say, again, may have probably talked about 1,000 vehicles. We're talking about multiple LiDARs per vehicle. And the other thing I think that's interesting here is as compared to the luxury passenger or initial dip on the luxury passenger cars to that, The mobility business model does actually enable us in a mutual beneficial scenario to have higher ASPs than typical passenger vehicle that are considerable, right. And so That is why in terms of the overall size, we're actually pretty excited about this.

Speaker 2

And also, This aligns with the timing of what we have always talked about 2025 with our solar production. So, we We're working hard towards delivering our commitments and really excited to partner with them for the next year.

Speaker 4

Okay. Appreciate that detail as well.

Speaker 7

I will jump out of line guys. Thank you very much.

Operator

Thank you very much. This concludes our question and answer session and the conference has now concluded. Thank you for attending today's presentation. You may now disconnect.

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