Proterra Inc. (NASDAQ:PTRA) Q4 2022 Earnings Call Transcript

Gareth Joyce: I understand the question. We haven’t seen any significant impact on demand as a result of that. On the transit side of the business, there has been a healthy demand that is well supported by the Infrastructure Act. In addition to that, we’ve seen with the introduction of the Inflation Reduction Act, obviously, continued demand forming beyond the Transit bus segment. And so when you have demand side incentives that come with the IRA on the one hand and on the other hand, the supply side incentives in the form of the credits for modules and sell, the combination of those factors is certainly buying demand, and we haven’t yet seen an impact of financing for end customers as being a sort of demand suppressant. So we’re not seeing that yet.

Operator: Our next question comes from Greg Lewis from BTIG.

Gregory Lewis: It sounds like we have a pretty good handle on how we’re thinking about 2023 transit bus revenue guidance. So I guess what I’m wondering is as we think about the low high end of guidance, that looks like it’s going to primarily be driven by Powered 1. And so kind of curious how we should be thinking about the production ramp sounds like it’s underway and progressing nicely. So as we think about those kind of puts and takes around revenue guidance, is it more volume? Is it pricing? Any kind of color around that, I think, would be pretty helpful.

Gareth Joyce: Yes. Thanks, Greg. As I mentioned just now, we see some modest growth on the transit revenue side. And so this is the year where Powered & Energy’s growth accelerates very nicely. And so its growth in Powered & Energy that will be fueling the bulk of that growth. Volume is a key dimension of that. And obviously, when you build a large production facility, we’re eager to get higher production throughput there in order to get the efficiency that one would expect from a high output production facility. But equally, as I mentioned, when Steven asked the question, we’ve also been working at our — at the commercial side of the business to make sure that we are very methodical about building out our order book. And so we have, for a number of years now, had some target customers that we believe will help us grow our order book with a healthy balance of new incumbents and established OEMs where we know we have both the healthy demand, but also a healthy commercial relationship that allows us to continue to build out positive gross margin in our business.

Gregory Lewis: Okay, great. Go ahead.

Karina Padilla: I can add things that was focused on Powered. I can add a little bit of color on the Transit side because I think it correlates to a previous question on maybe, I’d say, slowdown or both slowed to go fast, right, from a cash consumption perspective. On the Transit side, Gareth alluded to modest revenue growth. I’ll tell you that it really looks from a volume perspective, I’ll say, more; I’ll say, flat on volume because we want to make sure we focus on becoming efficient, and we’ll be transitioning the manufacturing from California to South Carolina, but we have been successful at pricing the new contracts that are coming into our ’23 build plans with richer configs and higher prices. So I’d say it on, let’s call it, relatively flat volume in terms of units for Transit, you’re going to see modest revenue growth.

Gregory Lewis: Okay. Great. Yes. And then I did want to touch on, and I realize it’s early days, but I was hoping for a little bit more color around the initial investment in the LFP investment and really just kind of how you’re thinking about that and in terms of how we should be thinking about that over the next, I don’t know, 1, 2, 3 years in terms of like how we should be thinking about that from a potential revenue opportunity perspective?