Qichao Hu: Thank you.
Operator: Our next question comes from Shawn Severson from Water Tower Research. Shawn, your line is now open. Please go ahead.
Shawn Severson: Great. Thanks and good morning, everyone. Qichao, I was wondering if you could talk a little bit about the air mobility space. And I’m trying to understand, I guess lack of a better word, the synergies between the automotive and transportation side and what you’re doing in air mobility. And then extending from that a little bit of the timeline of what we’d be looking at in the urban air mobility space.
Qichao Hu: Yeah, Shawn, that’s a really interesting question. So all the work that we are doing with the EV OEMs in A-sample and B-sample, building up the line, improving the quality, improving the cell design, the safety, the performance. Almost all of that get transferred to the eVTOL. Because eVTOLs, the urban air mobility need all the parameters that the EV OEMs require. The safety actually, even more rigorous safety requirements, the cell design, the quality, they need all of that. And then what’s better is that for the OEMs you have — I mean even though the EV OEMs are very committed to lithium-metal, you still have the incumbents like LG, CATL, Samsung, SK, the big companies that are very much invested in the EV space.
Whereas for eVTOL, it’s blue ocean. And then some of the bigger companies are less interested in the eVTOL because the near-term market — they think the near-term market is smaller. But then for us, for next-gen batteries, it’s really exciting, for example, say one eVTOL is about two cars in terms of batteries, right? So in the EV B-sample, we build 10 cars worth of batteries. That’s just the B-sample for EV. But 10 cars worth of batteries, that’s by eVTOLs worth of batteries. If we supply five eVTOLs worth of batteries to the likes of Joby And Archer, the eVTOLs companies, then that’s actually considered commercial. And the volume is smaller, but then the margin, the economics are much more favorable. And also, it’s a new market. So the standards have not been set yet.
And then we have the opportunity being the first mover in lithium metal for eVTOL, we have the opportunity to set the standards. And once you set the standards, then the FAA or Europe, yes. Then they will adopt the standards. Then our lithium metal could be the first FAA-certified lithium metal battery for UAM. And then once we set the standards, then we influence the next five, 10 years of certification process in this field. So the impact is really big.
Shawn Severson: That’s very interesting. And would you be able to assume through this process, get a lot of data, right? A lot of operating data that would apply back to transportation, is that correct?
Qichao Hu: Absolutely, absolutely. And then I mean, we love working with the EV companies, but then those companies tend to be bigger, right? And then the EV companies are more entrepreneurial and more like-minded and similar size. And we work together and we share data, and we also tune our business model to fit what the market wants. So it’s actually a really exciting market and eVTOL is actually happening much faster than we expect. I mean next year, the summer Olympics, one eVTOL company will do a demonstration fly. And then several cities around the world are, do you need to have these eVTOLs demonstrations. So it’s actually happening much faster.
Shawn Severson: Thanks. And my last question is we’ve had the supply chain shift in place for several quarters now in terms of pushing towards domestic supply, right, and qualifying for IRA. What’s the progress report there? Have you seen things materially change? I know you have some special relationships in your supply chain. But are you seeing that this move is being made? And as far as your strategic outlook, you feel very comfortable that you’ve got everything that you need at this point going forward.
