Dragonfly Energy Holdings Corp. (NASDAQ:DFLI) Q2 2023 Earnings Call Transcript

John Marchetti: 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 what have you, right? They are getting a sense for how order books are shaping 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. 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 of that with a grain of salt, but they do seem to feel like with the levels 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. 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 it can scale up relatively quickly again on the other side of this downturn.

Brian Dobson: Yes, very good. And just a final question. As you’re set to begin cell production in the United States, has the DOE been a meaningful partner in that segment. Do you think that government funding will continue to serve growth and user demand in that segment over the course of the next 12 to 18 months.

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

Brian Dobson: If the DOE was a supportive partner and it’s identified that segment as a meaningful industry within —

Denis Phares: 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 DOE a partner in the future, but it’s not something that we can claim at the moment.

Operator: There are no further questions at this time. I will now turn the call back to Dr. Denis. Please continue.

Denis Phares: 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.

Operator: Ladies and gentlemen, this concludes today’s conference call. Thank you for your participation. You may now disconnect.