Monica Gould: And this is Monica Gould, Investor Relations for Microvast. We do have a few questions that came in through the web, and we would like to ask those now. So first, is your Clarksville capacity spoken for already?
Craig Webster: You just broke up a little bit at the end, Monica.
Yang Wu: The question is the Clarksville. Clarksville factory will be ready at the end of this year scheduled. And we are on the fast speed in those for the construction. And equivalently, it’s fabricating in China. And I saw €“ actually, I went there last week. I saw all the equipment laying on the floor for SAT and factory testing. Right now, the after factory testing, it’s qualified. We are going to ship to U.S. and install in the U.S. The expectation is going to be end of this year to produce the battery.
Monica Gould: Okay. And I am sorry, I am not sure if you heard me clearly enough, but the investor was asking if the capacity is spoken for already.
Craig Webster: Yes. Getting very close to spoken to already for 2 gigawatt hours. And we are already planning to add an additional 2 gigawatts. And when we do that, it’s based on actual contracts.
Monica Gould: Okay. Great. So, another question that came in is about the current status of the DOE grant, if you could talk about that.
Yang Wu: Yes. DOE grants that we are working on right now, it’s very close to close the deal, and you have seen a contract negotiating stage. We still need to engage a contract with DOE. That’s €“ we are in the first batch of the negotiation, and we will see the results.
Monica Gould: Okay. Great. I think we addressed this mostly in the prepared remarks about our China 3.1 expansion capacity if that’s producing cells already and when we will begin production, but maybe just want to review that one more time.
Yang Wu: Yes. The €“ I am in the China factory right now, and we have a little bit delay. Maybe end of this month. We already produced the first cell. We just need the ramp-up, slowly ramp up to the process. To reach the full production design and production, it takes a few months, and we are producing small volume right now.
Monica Gould: Okay. Great. And the last question, going back to gross margin progression, 2023, the investor was curious about the impact of the automated production on our gross margins.
Craig Webster: I think we will definitely see it, let us show you the actuals from Q2, Q3 onwards. As we just said, right, we are really looking out to focus around one core technology on fully automated lines, efficiency of production planning, negotiating with suppliers. And we are confident that we will report that progression throughout the year.
Monica Gould: Terrific. And the final question has to do with our 2023 guidance and how much of that €“ what’s the assumption for ESS in the guidance.
Craig Webster: It’s about around 20% to 25% is ESS, the rest is commercial vehicles. So, commercial vehicles still growing like really positively. And as we mentioned, we still expect really strong showings from like India, China. And getting into the back end of the year, like it’s more €“ we have just got capacity constrained to actually grow the revenue beyond that.
Monica Gould: Great. So that does it in terms of our questions. I would like to turn the call back to Mr. Wu for any closing remarks.
Yang Wu: Yes. In general, you might find us targeting the high growth for our business. I am so happy right now. The €“ I don’t see any problem for the cells side. And the only €“ the concentrate on our business is delivery. We need to deliver as much as possible, our products and finding money and to do expansion. I think €“ I am seeing that the multiple year high growth. This is a very positive for our makers, so we are busy. Thank you all. Thank you all for joining this meeting.
Operator: Thank you. And that concludes today’s conference. All parties may disconnect. Have a great evening.
