Shawn Severson: Great, thank you. Good morning, everyone. Qichao, I wanted to go back to the B-samples this year, and look at kind of what gives — two things, what gives you the confidence that they’ll be achieved this year. And then second to that, has this economic environment or, let’s call it, the volatility, do you sense any changes in how OEMs are looking at things and timing or if they’re just kind of ploughing right through this because they have to?
Qichao Hu: Yes, on the first one, well so — I mean, A-sample, B-sample, these are not really magic, right? There is a formula behind it. It’s a step-by-step, very clear — a process behind it. And so, last year, we were in A, and then we had a lot of quality issues, and the volume was just not so high. So, we’ve addressed and solved lot of them and then also to accelerate the learning, so lithium-metal is a totally new thing. And then, before the industry put lithium-ion into cars, lithium-ion was using consumer electronics and laptops and other industries for a long time. So, the automotive industry already has a lot of data and then a lot of experience with lithium-ion now because lithium-metal is totally new and also we improve the quality and manufacturing feasibility to a level so that we were ready to take this to a new level so that we can actually manufacture more cells and then collect more data.
One of the key reasons of doing A-sample is of doing B-sample is A-sample was still not fast enough and just the amount of data and the amount of experience that we and our OEM partners collected just was not fast enough. So, we want to go to B-samples, so we can have this data and learning much faster. So, and this is why we are preparing to enter into B. We couldn’t do that earlier because we still had some pretty key quality issues and then it didn’t make sense to enter into B without solving these issues. But now we’ve solved a lot of the core quality issues and also we are putting systems and then also upgrading the organization. So, it’s time to enter into B, it will be accelerated learning compared to A-samples. So, yes, this is what we and the OEM partners are planning to enter into B.
It’s not magic.
Shawn Severson: Great. And then, the fact — and nor is that economically sensitive or anything like that. This is just a natural progression that isn’t going to be really delayed for any reason, I guess because like you said, it’s all formulaic, right?
Qichao Hu: Correct, and I mean the economic environment so far hasn’t really played, hasn’t really impacted A-sample, B-sample decision.
Shawn Severson: And in your conversations with OEMs, I know it’s a bit of a guessing game, but when you look out when they’re thinking model year production for something like this, if you’re in A and you’re going to B this year, what does that translate into timing, when in their minds they’d be thinking about production scale?
Qichao Hu: Yes, I can’t really go into details of that. If you think about we’re going to be this year and then end up ’24 it is about ’25, ’26 basically new model vehicle being introduced.
Shawn Severson: Introduced, okay. Last question is on the supply chain. Obviously, lots of focus in the industry, domestic production and all the things we all know very well. And you’ve been focused on that for even before the Inflation Reduction Act and all of these things. Just wanted an update, are you seeing that really come together? I mean, has there been a good push, as you see it through your supply chain to meet those deliverables when the time comes for large scale production?
