Dragonfly Energy Q2 2023 Earnings Call Transcript

Quartr
Provided by Quartr
August 21, 2023

There are 6 speakers on the call.

Operator

Afternoon. My name is JP, and I'll be your operator today for Dragonfly Energy's 2nd quarter earnings call. This call can be accessed along with earnings press release and SEC filings on the Investors section of the Dragonfly Energy website found at www.dragonflyenergy.com. As a reminder, this conference call is being webcast and recorded. All attendees are in a listen only mode at this time.

Operator

During this call, the company will be making forward looking statements based on current expectations. Actual results may differ due to factors noted in the press release and the periodic SEC filings. Management will reference some non GAAP financial measures. Reconciliations to the nearest corresponding GAAP measure can be found in today's release on the company's website. I'll now turn the call over to Doctor.

Operator

Dennis Fares, Chief Executive Officer of Dragonfly.

Speaker 1

Thank you, and thank you to everyone joining us today. For those who are new to our story, DragonFly Energy was founded in 2012 and today is a comprehensive lithium ion battery technology company. We have operations that span the development of proprietary and patented battery cell manufacturing processes, the design and assembly of battery packs as well as the integration of these tax and other ancillary components into full energy storage systems. We market and sell these systems into a wide range of consumer and industrial markets and uses, including the recreational vehicle, marine and off grid solar sectors. Traditionally, these markets have relied on lead acid batteries for energy storage.

Speaker 1

However, lead is toxic and remains a widespread problem in our environment. DragonFly's lithium ion battery technology provides customers with a safer, cleaner and better performing storage solution that also provides 2 to 3 times more power, lasts over 10 times longer, is 1 5th the weight, charges faster and requires no maintenance. We are proud of our patent portfolio, innovations and growth to date. We are achieving growth within our core markets, while continuing to expand our reach into new market adjacencies. The headwinds we continue to face in our core markets, which are dominated by consumer discretionary spending, are well documented and remain challenging.

Speaker 1

The RV industry in particular has experienced more severe unit declines than previously expected with deliveries expected to fall to volumes not seen in a decade. As a result of this industry weakness, our largest RV customer has instituted a decontenting strategy that ultimately changed our premium energy storage offering from a standard install to a dealer option. In light of this change, we have removed all previously forecasted revenue from this customer for the remainder of the year. Although this has materially reduced our current year expectations, we do believe it is ultimately a matter of timing as this customer has not moved to any competitive product and just as importantly, we have continued to win market share within the industry as a whole. The RV Industry Association or RVIA is forecasting a slow recovery through 2024.

Speaker 1

And with our new customer wins, we expect to command even more of the industry as it recovers. We are also gaining traction with large customers in adjacent with transportation emerging as a promising source of future growth. We have more than 10 pilot or prototype programs underway across the fleet, long haul trucking, rail and work truck markets, and our expectation is that we will be able to announce several new contracts in these markets before year end. Importantly, these are large lead acid replacement market opportunities, where our experience in the RV markets has enabled us to engineer full system solutions that are unique and differentiated. We believe these opportunities set the stage for additional growth in future quarters years.

Speaker 1

More importantly, Dragonfly Energy has begun to execute on the aspect of the company that is less widely known, but we expect to be far more impactful. Briefly, we are at the start of our expansion to include cell manufacturing. This is significant for a number of reasons. First, it represents the deployment of our innovative and proprietary dry electrode manufacturing process that we have perfected over the last decade. We have demonstrated our ability to scale through our recent announcement of the application of our pilot line to the production of graphite anodes.

Speaker 1

2nd, our cell manufacturing is an American innovation deployed for domestic production energy storage. Such activity has been identified by the U. S. Government as crucial to our energy future. Incentives such as the IRA and grant opportunities for the development of domestic manufacturing infrastructure are key to this support.

Speaker 1

And finally, Cell manufacturing is the ultimate diversification for the company.

Speaker 2

Although we will continue to

Speaker 1

grow in our historically core markets, chemistry agnostic and scalable cell manufacturing enables opportunities for faster growth into large developing markets such as grid storage. I will now turn the call over to John to provide a review of our Q2 financial and operational results as well as a more detailed look for the Q3 of 2023.

Speaker 2

Thank you, Dennis. In my remarks today, I will compare results from the Q2 of 2023 for the Q2 of 2022. All figures are GAAP unless otherwise noted. DragonFly generated net sales of 19 point $3,000,000 in the Q2, in line with our $18,000,000 to $22,000,000 revenue guidance. Our revenue declined by $2,300,000 from $21,600,000 in the Q2 of last year as growth from our OEM customers was offset by declines in our direct to consumer business.

Speaker 2

And our OEM customers accounted for approximately 48% of sales in the quarter compared to 34% of revenue in the Q2 of 2022. OEM revenue increased by $2,100,000 year over year as a result of increased adoption of our products by new and existing customers, several of whom have begun to design in our batteries in various RV models as original equipment or have increased purchases in response to end customer demand for safer, more efficient batteries and as a replacement for traditional red acid batteries. However, as Dennis mentioned, Given the steeper than expected downturn in the overall RV market, our largest LG OEM customer has informed us that beginning in the current quarter, that we would no longer install our storage solutions as standard equipment, but rather return to operating those solutions as an option to dealers and customers. While this customer is not moving to a different solution or competitor, we do not have visibility into the timing or size of future orders. As a result, We have decided to be conservative and remove approximately $30,000,000 of expected revenue from our forecast from this customer through the remainder of 2023.

Speaker 2

Our direct to consumer business, or DTC, represented approximately 52% of sales in the quarter, down from 67% of sales in the same quarter a year ago. The year over year decline of approximately $4,400,000 was in line with expectations as demand for our products has been negatively impacted by inflation and rising interest rates. While we continue to see signs of stability, of $4,100,000 compared to $7,000,000 in the Q2 of 2022. The decrease in gross profit was primarily due to the change in revenue mix that included a larger percentage of lower margin OEM sales and a lower percentage of higher margin DTC sales as well as an increase in material costs as we continue to absorb some higher priced inventory, particularly our imported battery cells. Operating expenses in the Q2 were $12,500,000 in line with our guidance and an increase compared to $7,600,000 in the Q2 of 2022.

Speaker 2

2nd quarter operating expenses included increases of roughly $2,000,000 for professional services, compliance and insurance costs as well as $1,100,000 of higher sales and marketing personnel costs. In addition, severance, stock based compensation and materials and supply expenses were higher in the quarter relative to a year ago. Earnings in the 2nd quarter were within guidance with a net loss of 11,700,000 or $0.25 per diluted share compared to a net loss of $1,500,000 or a negative $0.04 per diluted share in the Q2 of 2022. The result in 2Q was negatively impacted primarily by the lower DTC sales, increased cost of goods sold, higher operating expenses and other increased other expenses due to the higher interest costs, partially offset by the fair value adjustment for warrants. And the Q2 EBITDA was a negative $7,300,000 in 2023 compared to a negative $300,000 in the Q2 2022.

Speaker 2

Adjusted EBITDA, excluding stock based compensation, costs associated with our offering in June and the impact of separation agreements and changes in the fair market value of the company's warrants was a negative $5,500,000 in the quarter compared to a positive $200,000 in the same quarter a year ago. For a reconciliation of EBITDA to adjusted EBITDA, Please refer to our earnings press release. Dragonfly ended the quarter with approximately $33,000,000 in cash and retains a strong financial flexibility, including access to $150,000,000 equity line of credit. Now I'd like to turn our attention to our expectations for the Q3 of 2023. As discussed on previous calls, We expected new OEM program wins, particularly among RV customers, to drive revenue growth in the second half of twenty twenty three.

Speaker 2

While we have been successful in winning these new customers with announcements like Airstream and New Camp as a couple of examples, rather than the standard install. Our DTC business, while stable, continues to face headwinds with customers focused on macroeconomic challenges such as rising interest rates and inflation. Given those dynamics, We expect Q3 revenue to be in the range of $16,000,000 to $20,000,000 We expect gross margin to improve modestly on a sequential basis as we expect a more favorable mix and we will return to more normalized material costs following the utilization of some of the higher priced buffer inventory. And operating expenses in the September quarter are expected to be in the range of $10,000,000 to $13,000,000 and we expect total other income and expense to mean an expense in the range of $4,000,000 to $4,500,000 We expect to report a net loss in the 3rd quarter in the range of $10,000,000 to $13,000,000 or a negative $0.21 per share to a negative $0.27 per share based on approximately 48,000,000 shares outstanding. We are also now expecting our 2023 revenue to be in the range of 70 to $80,000,000 down from our prior outlook of $112,000,000 to 122,000,000 As mentioned earlier, we are moving approximately $30,000,000 expected revenue from the second half of the year due to the change from our largest customer, and we are also now expecting approximately $10,000,000 less than previously expected from new customer and new program wins as the volumes of these new awards are running below prior expectations given the deeper cuts to industry units from previously forecasted.

Speaker 2

Let me now turn the call back over to Dennis to provide some additional color on operational highlights and goals for the remainder of the calendar year.

Speaker 1

Thank you, John. As mentioned earlier, Dragonfly is a comprehensive lithium ion battery technology company with activities ranging from the development of cell manufacturing processes to the design and assembly of battery packs and integration of those packs and other ancillary components into fully integrated energy storage systems. In addition, Dragonfly seeks to provide top tier customer service. In June, we announced a new certified dealer program in order to provide our Battle Born Batteries customer base with access to trusted dealers and installers who have been vetted by our internal technical team. And the company continues to make progress in several other development and operational areas.

Speaker 1

In July, the company was informed it would be granted a patent for the design of its GC3 battery pack, which provides for more flexible custom installation solutions. Also in the Q2 as part of our longer term planning for domestic cell manufacturing, DragonFly announced a commercial offtake agreement with Ionir, a lithium boron producer. This agreement will enable us to strengthen and integrate our U. S. Battery supply chain, while investing in the production and manufacturing of Nevada Source Lithium.

Speaker 1

Our longer term goal remains to enable safe, affordable microgrid storage, and that goal continues to drive our research and development work. As such, we are pleased to report that in June, DragonFly was informed it was being granted a new patent pertaining to our preparation and powder film deposition of pre coated powders, representing an important achievement in bringing non flammable lithium iron phosphate storage batteries to market in a scalable manner within a smaller manufacturing footprint, reduced time frame and at a lower cost. And I'm happy to report that in July, we achieved completion of our U. S.-based lithium battery cell pilot program. We have begun deploying dry depositing anode electrodes using our patented manufacturing process.

Speaker 1

This achievement is a critical first step to large scale domestic battery cell production. And we anticipate to be able to deliver full cells across a variety of chemistries to prospective customers by year end with domestic capacity of up to 150 megawatt hours of lithium iron phosphate battery cells annually off of of 1 pilot line, which is then scalable with the addition of production lines. In summary, we remain very excited about the progress we have made to date as well as the opportunities that remain in front of us. With that, I will turn the call over to the operator who can open the line for questions. Operator?

Operator

Thank you. Ladies and gentlemen, we will now conduct the question and answer session. You will hear a 3 tone prompt acknowledging your request. Your first question comes from the line of Vincent Anderson from Stifel. Your line is now open.

Speaker 3

Thanks and good afternoon gentlemen. John, if we could just go through gross margin for a minute. So looks like 3Q 2023 guidance implies maybe being down a bit year on year. Is that basically all just slower work down of higher cost sell inventories under the lower revenue guidance? Or Is there other components to that, that we should be keeping an eye on as we move into the end of the year and into 2024?

Speaker 2

No, I think that's fair, Vince, and thanks for the question. I mean, we do expect, obviously, a sequential increase in that gross margin as I indicated and part of it on a year over year basis is really just finishing up the use of some of some of that buffer inventory that we increased as we were going through a significant portion of last year and into this and now with supply chains running a little bit more smoothly, some things like that. We've made a real effort to streamline some of that and reduce some of the buffer inventory that's there. So as we finish using up those cells, I would expect here in the not too distant future. Those in particular are having a bit of a negative impact, then we would expect that to be back to a more normalized level as we continue through the remainder of this year and into next.

Speaker 3

Okay. That's helpful. If I think about cell costs in general and maybe how they'll start working with their OEM customers. So cell supply eased the key components of those cells, those prices have come down, but are still pretty elevated. Maybe it's too early, but in your discussions with OEMs, is there an opportunity to put into these contracts something along the lines of like an add or something of that nature whereby you can pass through some of this volatility in sell costs now that the industry is getting a bit more established, but also still quite volatile on the pricing side.

Speaker 2

Sure. I would say, Vince, I mean, for us, that variability historically has not been as big on the particularly on the cell manufacture or the cell cost side, I should say, as what we've seen or what we did see last year, particularly around the spikes that happened really sort of mid year last year, whether that was in response to what was going on in the Ukraine and some other things like that when some of the commodities and material markets really went kind of sideways on everyone. Historically, we've actually been able to bring down on a year over year basis the cost of ourselves as we've been importing. And at least in our early negotiations for pricing on next year, I don't anticipate that it's going to be a big issue for us. If we were to see a spike like we saw in 2022, We do have that ability to have those discussions with customers and make sure that we're able You don't get still get reasonable margins on those products as we work with our OEM customers.

Speaker 3

Okay. No, that's good to know. And then if I could just turn it over to Dennis for a second here. First, congrats on the very quick ramp up of the dry room testing. I'm curious what kind of volume of anodes you have produced so far.

Speaker 3

I don't know if maybe square meters is the right measurement. And then just at this stage with just a single electrode, how thoroughly are you able to test before you have a full pilot cell in terms of estimating your manufacturing yields and how those have been trending since start up?

Speaker 1

Sure. Thanks for that question, Vince. First of all, I want to clarify, it is not a dry room that we have completed. It's a pilot line that is meant to produce conventional electrodes and cells. So we're not using it for the solid state until we have the dry room built, which is not done yet.

Speaker 1

What we have been able to produce is anode film at so we estimate that 150 megawatt hours annually, which is based on the rate we were able to deposit. So we've basically been depositing continuously, and it was at a rate of about 20 centimeters per second for a typical third of a meter width, something like that. And since we are not actually making full pouch sales off of that line, we're basically in a position where we're able to run all kinds of analysis in terms of the adhesion of the film, the thickness, the uniformity, the porosity and then our ability to cut and produce coin cells out of it. And at that point, we were we felt comfortable making the announcement because of the fact that everything was in line with industry standard. So the anode, of course, is one part of it.

Speaker 1

The next step is the cathode. Cathode is a little different than anode. We're talking about different particle sizes, different types of binders, and we do expect to have the cathode done at some point this quarter and then being able to move on to complete cells right after that is I won't say it's trivial, but it doesn't require new innovation. Once we have those electrode tapes produced then producing pouch cells is really application of known processes.

Speaker 3

Okay. No, that's very helpful. So just a quick and I'll pass it over, but just a quick follow on to that. So You're testing at a pouch or at a coin cell level now, but it sounds like you're all ready to move to a more commercially relevant pouch form factor once both electrodes have been produced successfully.

Speaker 1

Yes, that's correct.

Speaker 3

Excellent. All right. I'll pass it over. Thanks again.

Speaker 1

Thanks, Hans.

Operator

Your next question comes from the line of George Genarikis from Canaccord. Your line is now open.

Speaker 4

Hi, good afternoon. Thanks for taking my question. Just so I can clarify here on your guidance for the year, You've talked about $70,000,000 to $80,000,000 in revenue and that's reducing $30,000,000 from a customer that I'm going to assume is Keystone and then $10,000,000 from a customer that I'm going to assume is Airstream. Is that kind of the is that the new guidance relative

Speaker 2

of any one customer, but across that overall RV market segment, right, we're just we are really operating still at much lower volumes than we had originally expected. So we've won a lot of the new customers that we expected to win and we've announced a handful of those. There's a couple of others that we haven't even announced. And those customers have come in, in terms of awarding us programs that we expected to win. But it's just the overall industry volumes are much lower than originally expected.

Speaker 2

I mean, the industry came into this year predicting a return to sort of 2019 levels, which would have been, let's call it somewhere in the 415,000 to maybe 420,000 trailer range. And now the industry is predicting something much closer to $300,000 as an industry. So as we've gone through this year, those revisions continue to be worked out. The industry body, the RV Industry Association, the RVIA, it seems to be expecting that The worst is behind it in terms of year over year declines, but isn't really expecting much of an uptick until we get into probably early 2024. So we're trying to be thoughtful about where we are with a lot of these customers, but the biggest driver by far is with that one largest customer who has moved to a, moved back to being an option rather than putting us on as a standard install.

Speaker 4

Now, Is this strictly a reflection of weaker demand or is there also inventory in this one large customer?

Speaker 2

No, there's not a lot of inventory there to be fair, George. I mean, this was we get POs on a fairly consistent basis from the customer. So it's not as if they are holding a fair bit of inventory that they need to work down. To be fair, this is really a situation now where we have to have either the end customer or the dealer place that order with our batteries on as an option and then that has to then come through to us from the OEM. So like as I mentioned on the call, we just thought to rather than try to make an estimate of where those might be and go back to sort of earlier 'twenty two levels where We had a little bit better visibility into what that demand might be from and add on perspective.

Speaker 2

Given the struggles in the industry right now, it just seemed prudent to remove that guidance altogether. And hopefully a quarter from now we'll be in a little bit of a better position at least to have a sense of how maybe some of those dealer orders are coming through with us as a request.

Speaker 4

Thank you. Okay. Maybe just to focus next on the cash and the burn. You talked about I mean, last quarter, you had about a loss of $6,000,000 in EBITDA, which I'm assuming is going to be about the same for this quarter based on your guidance and adjusted EBITDA. And then I'm just trying to understand if you have some interest expense there.

Speaker 4

So how should we think about the trajectory of your cash, $30 something,000,000 you had at the end of the quarter and where that issue is through. Go ahead, I'm sorry.

Speaker 2

Sure. Sure. So as you rightly point out, we are burning cash here until we can get revenue levels back up to where we had anticipated them being at. We do have that $150,000,000 equity line of credit. So as needed.

Speaker 2

We can certainly tap on to that as a way to supplement the cash over this intermediate term until we get revenue back up where it needs to be. But as Dennis sort of highlighted, we do have a fair number of, I think, very strong growth initiatives that are starting to really generate some traction, not just on the cell manufacturing side, but also on the revenue diversification front, particularly within that broader transportation market that he highlighted. I think we're certainly hopeful that we'll be able to announce for those here before year end, even if maybe revenue is a little bit more of a 2024 event. So I think that once we to get that revenue back up to where we need it to be, then we should be in a much more comfortable position there. But over this next quarter or 2.

Speaker 2

We do expect to continue to burn cash. And like I said, we do have that equity line of credit that we can tap into to augment it if we feel like we need to.

Speaker 4

Was there a, can you repeat those markets? You mentioned transportation broadly, also long haul trucking. And I think there's one more that I may have missed within that.

Speaker 2

So yes, in the broader sense, we kind of throw rail into that market. We have fleets, We have long haul trucking and we have work trucks, things like ambulances or equipment for utility companies, things along those lines. We lump all those together in the work truck category. But those 4 broad categories, if you will, we lump all under and transportation.

Speaker 4

Thank you. And then maybe last question, your pilot line working this should be making sales, full sales by the end of this year and you should have cells in customers' hands or prospective customers' hands to sample by the end of the calendar year.

Speaker 1

That's right, George. Conventional cells with conventional liquid electrolytes. We can deposit basically any type of anode or cathode. So we're not exclusively tied to lithium iron phosphate off of the pilot line. So that opens up some more diverse potential for us.

Speaker 4

Excellent. And have you what sort of interest have you seen for people to Get their hands on those cells and test them and work with them as you ramp up production.

Speaker 1

We've had some interest and what I can say that it was interest that was not necessarily pertaining to our core markets, which was pleasant pleasantly surprising for us.

Speaker 4

Thank you. Thanks for the questions.

Speaker 1

Thanks, George.

Operator

Your next question comes from the line of Brian Dobson from Chardan. Your line is now open.

Speaker 5

Hi, good evening. Thanks very much for taking my questions. So as you're looking out at the trucking market, Do you think you could perhaps put some type of ballpark TAM around the, call it, trucking battery replacement market? If you do announce an agreement later this year, do we expect to see revenue from meaningful revenue from that agreement in 2024.

Speaker 2

Sure. Thanks, Brian. I think the short answer to your second question is, We do expect meaningful revenue from that transportation market certainly in 2024. And then if we're able to announce a win or 2 before year end. We would expect those to be real contributors to growth for us next year.

Speaker 2

So we are very bullish on those opportunities and then what they hold for us here in the intermediate term. In terms of the overall TAM, I mean, it's very, very large depending on exactly how you want to break it out. I mean, As we look at things like fleet, for example, right, there's opportunities to do a lot of different in cabin or even in some cases in the back of these delivery vehicles for AC, for lighting or things along those lines because these are trucks that aren't allowed to idle at a delivery location or things along those lines, and they're increasingly looking at battery powered solutions to do that either from a retrofit or even from a new build perspective. In the long haul, you have opportunities to do in a way a lot of what we're already doing in the RV market in terms of powering the house side or the cab side of the long haul trucking market. So that as drivers either do crew rest or things along those lines, they don't have to idle trucks.

Speaker 2

They're not wasting fuel. They're not they're certainly getting the benefits of being able to use batteries to power the in cabin home side of things, where today a lot of that, if it is lead acid, those batteries typically are not performing the way they're meant to or in a lot of cases you're running into situations where the driver is forced to idle the vehicle to power a lot of that and increasingly they're getting door knocks, but it's also obviously a big ROI opportunity for fleets and trucks because you don't have some of the engine wear and tear and you certainly have fuel savings that are associated with not having to idle the trucks to do that. Work trucks, it depends on kind of which category you're in about how battery dependent they are. And in rail, there's a lot of opportunities, not just in the trains themselves, but in a lot of the yard equipment, and some of the signaling equipment as well. So these are very big TAM opportunities, but we're looking to again be very methodical in where we are targeting ourselves because we see it as again a lead acid replacement opportunity within the majority of these markets.

Speaker 5

Yes, that's very helpful. Thank you. And then you mentioned that industry associations or your contacts within the RV industry Sales volumes flattening out in the near term with the potential for recovery in 2024. I guess, what gives them the confidence that the pace of sales is going to plateau here? Is it that Interest rates look to not be going much higher than current levels or is there something else?

Speaker 2

No, I think that really what it boils down to Brian is, as they pull the OEMs as a whole, right, whether it's all the way down to the brand level or what have you, Right. They are getting a sense for how order books are shaking out. They obviously do a lot of work within the dealer community itself to get a sense of what they're seeing from end customers, things along those lines. To be clear, they don't have an official 24 forecast out yet, so we'll see what it is. But the RV industry has been a cyclical industry.

Speaker 2

So there's plenty of history that I think they can pull data from as well. As I said, it's clear that this contraction this year has been more severe than they were originally forecasting. So we always do try to take some that with a grain of salt, but they do seem to feel like with the levels that they are now cutting to here that next year is likely to be a growth year. Now what the slope of that curve looks like, I think is still very much up for debate in terms of how much growth may be there. But I do think that they feel comfortable or at this point.

Speaker 2

And I think the other important thing is, It's an industry that because of the cyclicality of it or the historic cyclicality of it, didn't go out of its way to add a lot of new capacity or a lot of things that way that now has to be dismantled. So it really is just a function of cutting back on hours, cutting back on units and rightsizing itself that way. So I think the other side of it is and scale up relatively quickly again on the other side of this downturn.

Speaker 5

Yes, very good. And just a final question, as you're set to begin sell production in the United States, Has the DOE been a meaningful partner in that segment? Do Do you think that government funding will continue to spur growth and user demand within that segment over the course of the next 12 to 82 months?

Speaker 1

Brian, I'm sorry, I didn't hear that. Were you asking if the DOE was a partner?

Speaker 5

If the DOE was a supportive partner, it's identified that segment as a meaningful industry within the United.

Speaker 1

I mean, they certainly are a supporter of the goal to have domestic production of storage cells. There's no question about that. And obviously, right now, we are awaiting the new round of, solicitations, and we are preparing to participate. We certainly have been in contact with some folks there. And at this point, I will say that We are hopeful that we are going to be able to call Diawiya partner in the future, but it's not something that we can claim at the moment.

Speaker 2

There are

Operator

no further questions at I will now turn the call back to Doctor. Dennis. Please continue.

Speaker 1

Well, thank you everyone for joining us today, and we look forward to sharing additional details with all of you in the coming quarters. Have a great day.

Powered by Quartr

Key Takeaways

  • Q2 financial results: Net sales of $19.3 M (down from $21.6 M a year ago), net loss of $11.7 M, and adjusted EBITDA of –$5.5 M; Q3 revenue guidance of $16–20 M and 2023 guidance cut to $70–80 M from $112–122 M.
  • RV market headwinds: Largest RV customer shifted from standard install to dealer-option, removing ~$30 M of expected revenue, though Dragonfly continues to win market share and foresees a slow recovery into 2024.
  • Transport market expansion: More than 10 pilot or prototype programs underway in fleet, long-haul trucking, rail, and work trucks as lead-acid replacements, with several contract announcements anticipated by year end.
  • Domestic cell manufacturing: Completed U.S. pilot line deploying proprietary dry-electrode processes with scaled anode production sufficient for 150 MWh of LiFePO₄ cells annually and plans to deliver full pouch cells by year end.
  • Supply chain & IP development: Entered a commercial offtake agreement with Ionir for domestic lithium boron supply and was granted patents for its GC3 battery pack design and powder film deposition for non-flammable LiFePO₄.
AI Generated. May Contain Errors.
Earnings Conference Call
Dragonfly Energy Q2 2023
00:00 / 00:00