Nathan Kroeker: No, I think we’ve been pretty consistent the last couple of quarters and saying getting to full automation is critical for us to get to positive gross margin. The added scale that you for that fully automated line is a key component. When we talk…
Joseph Osha: What I’m trying to say — I’m sorry, what I’m trying to understand is, is that still the case if you add the 45x revenue back.
Nathan Kroeker: Yes, yes.
Joseph Osha: Okay. And then last question buyback…
Joseph Mastrangelo: More color on that, Joe. Some of the cost-out initiatives that we’re working on dwarf the 45x credit. So as we think about the path to profitability, it’s really around scale, automation and driving cost out of the product.
Joseph Osha: Okay. And then do you have some plans — obviously, those credits are transferable now. Do you have some plans to go out and monetize those as they become available on the 45x guide?
Nathan Kroeker: Yes. We’re in discussions with a couple of different counterparties to be able to monetize those as we earn them in 2024.
Operator: And we have a follow-up question from Vincent Anderson from Stifel.
Vincent Anderson: I just wanted to touch on a couple of the supply chain comments that you made earlier, Joe. So I assume the DOE loan includes the budget for bringing some of this stuff in-house, like I think you mentioned electrolyte mixing and maybe injection molding as well. But is the Westinghouse property permitted and cited for either both of those activities or are those songs that are going to be contemplated with future lines?
Joseph Mastrangelo: So we have multiple pieces that we’re looking at, Vincent. There is the ability to do it here on the current facility, and that’s been our plan. The permitting you require, I mean, there’s no additional permitting that we need that’s already contemplated. So that’s one of the things that we’re also working through and more to come on that as we go through this. What is not from a permitting standpoint, but in the area, what could be the best site from a logistics standpoint, from trucking in and out of the facility. So there’s multiple things we’re looking at with our current landlord that makes the most sense for us to scale the Company over the long term.
Vincent Anderson: Okay. All right. That makes sense. Sorry, it just seems still rare to not have permitting issues. But the electrolyte mixing benefit, I assume that’s maybe more about flexibility on the working capital side by being able to stock individual raw materials than it is maybe a big cost out? Or are there more cost savings and mixing than maybe I’m appreciating here?
Joseph Mastrangelo: No. Look, I think the biggest thing is the formula of the electrolyte being simplified over time. One of the things that we’ve learned as we switched over to conductive plastics in the bipolar is that you get better zinc plating and there are some things that we had in the electrolyte without getting into the details that you don’t really need when you have — when you’re not using titanium. So there’s a lot of things you can get from a manufacturing stability standpoint with using the conductive plastic versus using the former titanium that allow us to simplify like cost out. From a mixing standpoint, there’s going to be multiple — there’s multiple — when you look at the scale and when we scale the Company as orders come in, you’re going to need more than one Company mixing the electrolyte just from — and you’re going to want that from a supply chain security standpoint.
We’re going through on what the right let’s say, what the right mix of mixing needs to be.
Vincent Anderson: Sure. Yes. Okay. And then last quick one. Injection molding, maybe it’s fair to say it’s a little bit outside of the manufacturing expertise of the current workforce. So I’m just wondering about…
Joseph Mastrangelo: We’re not in-sourcing injection molding. This is about diversifying the injection molders that we’re using. We’re trying to do is, we’ve worked with a lot of companies over a period of time and the people that stuck with us when we were an R&D Company or they stay with us. We believe in long-term relationships. But at the same time, as you scale the Company, you need more than capacity of any one supplier and you’re going to want more than one supplier to be able to do this. So the thing that we’re doing on the injection molded and the injection molded parts is not in-sourcing-that’s not contemplated anywhere in our plan and not what our core comp put in.
Operator: And for your last question, it comes from the line of Thomas Curran from Seaport Research Partners.
Thomas Curran: Thanks for going to know over time here and taking my questions. Nathan, could you just tell us how much of Z3 did you ship in September just in megawatt hours? And then for as long as you remain on the semi-automated line, what would be the maximum you would ship in a given month? Just given Joe’s comment about the step-up from September to October. Just trying to help us set expectations and fine-tune the modeling parameters here between now and when the ERCOT automated line is fully commissioned and up and running.
Nathan Kroeker: Yes, Tom. So Joe did a pretty good job, I think, of walking through the priorities that we’re balancing on this line. We’re ramping up the line. It serves multiple purposes. One is to help work out some of the details in the manufacturability of the product so that when we do get the state-of-the-art line, it meets or exceeds our expectations from day one. And so continuing to learn and make improvements off the semi-automated line. The second one is to deliver on critical customer shipments, so we can get product in the field so we can collect cycling data. Obviously, there’s ERCOT in particular, might be in over time. And so we have several projects that we’re trying to get delivered before you get into ERCOT summer. And so really, it’s just working with customers, balancing their delivery schedules with our production capacity and the necessary capital. And so we’ll continue to balance those as we get towards the fully automated line.
