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Exro Technologies CEO Sue Ozdemir hosts a live shareholder update highlighting business updates, technological accomplishments, projects, and the leadership team. CEO Sue Ozdemir and President of Manufacturing Simon Strawbridge give a tour of the state-of-the-art manufacturing facility's clean room in Calgary AB, Canada.
Sue Ozdemir: Good morning, everybody. And thank you to everybody for joining us and for all of your continued support on Exro. Today I'm excited to tell you that I am joining you live from our new manufacturing facility. And I'm really excited to share what we have and walk you through what we do. And so, as you think about how we're working with Exro and I'm just going to start in and we're going to talk a lot about our first half year review, what's coming up in the days and months and weeks ahead of us and then we're going to go for a live walk.
So, for anybody that's new to the story, they're not quite sure of joining us for the first time today, Exro is a power electronics company. And what we really think of ourselves as are experts in the power electronics industry and we're really driven to try to use minimum energy for maximum results. As we think about what our company is made up of, we have patented technology that covers motor and battery control, we currently have over a hundred employees and we're publicly listed on the TSX and the OTCQB, we have a combination of software and hardware that we work on to get our products to market and we're currently partnered with tier one automotive Linamar and a variety of partners in the e-mobility space from SEA Electric and Vicinity bus to evTS and Zero Motorcycles, we have working product in three continents right now where we're integrating our products into the existing systems and we're working through multiple new projects and excited about what we have ahead of us and the future that we're building here at Exro.
So, a good part for me as I thought about what do I want to hear as a shareholder of Exro, what do I want to share with our shareholders of Exro and so I'm going to give a little bit of a report card on ourselves as a company and over the past six months what we've accomplished and what's going on. And I know that it's a really frustrating market right now and I know it's difficult to look and think about our market value at comparison to what we do. And we are building something that is going to take market share, we are building something that's going to transform the way that we look at energy consumption and that's not a straight-line path. And so, when I look back over the six months that we've had, sure, we have some delays that I know have caused you all frustration as you wonder. But they're not causing frustrations to our customers, they're not causing frustrations to our employees because we know that the journey that we're on is not an easy one and we've de-risked our attack and made sure that it's working. And so, we've got a tedious set of things to do but not a risk-full set of things to do. And so, we were able to sign two of our first purchase orders building our backlog and multi-year sales agreements with our partners Vicinity bus on our high voltage drives and evTS on our low voltage drives. I was privileged to be able to go out and drive the evTS and see just what type of performance our Coil Driver gives firsthand, and it was a great drive and we're super excited to see that product come to fruition next year. And as we look to those projects, what you really want to think about is that's things that we can multiply many times over. So, Vicinity represents that electric bus, commercial trucking market. But there's many other players in that industry that are engaged and targets for us. And so, we don't need to start from scratch there. We can work now through what we have both from a product and from a commercial agreement perspective. And so, we anticipate, we're pretty optimistic that you're going to start to see MSAs become a standard for us as we bring our customers out of NDA. We have successful testing results with TSA. They're still ongoing, of course, but remember: What we've achieved and what we've shared in our April shareholders update was the fact that on our high voltage drives we already exceed the best in class in the industry. We have the best-in-class high voltage drive available today for commercial trucking and busing. We have to finish the environmental testing, but the tech is done the validation. So, as we finish that testing, what we're really doing is showing how much more we can exceed above that. And that testing is ongoing, and we'll talk to that. We've been able to share our test results with Zero as we continue to now get from simulations to test bench results to dyno chassis results (that means that you put the motorcycle itself with the drive on the chassis) to on-road testing, which you've seen our videos, and we shared lots of videos this year so far, to now doing actual data point testing. And it's a long process but we're doing great at getting through it. And we have customers like Zero and others in the space that are anxiously waiting for us to get to that next step and be able to start getting product into their motorcycles. We've commissioned our new mid-size dyno in Mesa, Arizona. The Mesa facility is still on track, which is good. We're still planning that opening in the fall of this year. But the dyno is actually commissioned, the team is working on testing and it's in use. So overall, although we don't always reflect that when we look at our share price, what we've accomplished in the year is nothing short of amazing. And now we look at what's ongoing. I call it the less-than-good. I don't consider these failures. I don't consider them things that weren't anticipated as far as we didn't anticipate everything was going to go perfect. But we had great risk mitigation and we managed through it and what we're managing today as a leadership team and as a company like Exro is totally unprecedented. Whether you look at what's happening in the world with pandemic and how we manage travel and cross-global relationships in our supply chain, or how we deal with supply chain that has weeks of delays on the day that it's due. And so that means that you have to be really good at long-term planning, that means that you have to have a team that's really fluid and able to move and make decisions and go with what we're doing. And more importantly you have to have a team of people behind you that are as committed to your vision as I am. I'm proud to say that we have all of that at Exro. And so what I think we could probably work on and get better at is just our overall communication. It's the biggest thing no matter what you do in life and different people and diverse staff means that you're communicating in different ways. Our shareholders come from all different types of places so the same thing. And so, we'll be starting fireside chats, we'll be starting newsletters, and we'll be starting other pieces of communication and opening up our doors to be able to share with you all the progress that we've been making as a company as we work forward to get market share. Our product has matured beyond what we ever imagined in a way that it's executing exactly to the roadmap. And yes, things are delayed by a quarter here or six weeks there, but it doesn't change our target for production. And so, the fact that we are a few days late for supplying a high voltage integration into a large customer doesn't mean that we don't have that customer or that we don't get to production, and we don't get to revenue next year. So, the end goal is the same and so for me that's what I stay focused on. And so, I think that our product has matured, we've got through such a high level of testing and we're moving into those phases that our customers are working with us and collaborating with us, and it's just getting faster to get product to market versus slower. And as we look to our large dyno, like all of you that have supported us for a long time know, we ordered that dyno last April for delivery in April of 2022. We've experienced multiple delays on our large dyno and we're now expecting it in September. What the large dyno does is provide us the ability to test the low torque ratings of our high voltage drives. So, it doesn't hold us back from production, it doesn't hold us back from getting commercial deals, but it holds us back from validating that high performance that we have that, again, exceeds everything in the market today and it's another indication of why you have invested in a company that's not making a standard product. We are not a standard three-phase drive. We are a next generation tech that will change the way we look at energy consumption. That means that the test equipment that we need to test isn't readily available to companies to go and rent space on. So that dyno was a big investment that we were able to make with our resources last year and so what we have done is worked with our partner TSA to be able to provide the test results that you've all seen so far, and our team is heading out there again next week to finish the next stage of testing. We've also been able to find an independent test laboratory in the US that will allow us to do another set of testing that comes close to what we could do with our own dyno. And in addition to that, our Linamar project will be tested in final stage in the Linamar facility. So, we've been able to mitigate that risk. And although there's a little bit of delay, again, it doesn't put off our long-term goals. And so, the team did a great job of finding alternative solutions to get through that one and that large dyno we fully anticipate will be on time this time, which is the end of September. That will give us about an eight-week period to get it commissioned, running and start testing through the end of the year and the first week of January. And then, of course, we have our eAxle program for Linamar, which I'll talk to a little bit. It's still on schedule as we announced in April for September to delivery. We've completed a lot of the testing that we do in-house on the stand-alone drive, and we remain waiting for the electric motor. The motor is on schedule to be delivered this month, which would put us on schedule to finish the testing that we need to do before we do the collaboration testing with Linamar. So, we'll talk a little bit about that, and we've talked about our partnerships with long-term partners like Vicinity and SEA Electric. And for those of you that follow me on LinkedIn and social media, you know that Tony, the CEO of SEA Electric, was out visiting our engineering services division, our EVS division in Detroit. Brian and Tony started talking about what that integration looks like and we're close. We're feeling great about how that partnership rolls out but both SEA and Exro wants to make sure that we're rolling that out in the way that makes sense and brings value to all of our shareholders, and all of our stakeholders, our customers. So, we're pretty excited about what the near future holds for that.
Next, I want to jump into if I look at how we've done, and where we need to improve, and how we make sure that you get to feel what I feel and what all of our team feels every single day we come to work, I thought maybe I would talk a little bit first about what that market strategy is, how we actually have targeted the market. A little bit of a reflection of where we've been and where we're going. And I'll do a project update in this section.
So, as we look to the TAM in just the short two and a half plus years that I've been here, even the TAM itself has changed. So, for those of you that can see the screen and can share, it's up in front of you right now. For those of you that can't there'll be a link to it this afternoon on our website. And so, as you think about the TAM, what you want to think about is there's a targeted strategy that we've long been going after, and it's executing actually exactly as we thought. Yes, timing-wise, but we never thought that timing would be actually 100% because bringing great tech from IP to product is not linear. And so, it's actually executing exactly as we wanted. And as you look at it, what I like to think about is, if you think about the e-mobility segment, which is our first target market segment. Not our only target market segment just our first one. As we think about that segment, you can split that, and you can think about passenger vehicles. So that high volume business makes up about 50%, just over 50% and everything else, commercial trucks in particular, which we've long said is one of our real strong target markets where we have a really strong value proposition, where we've been focusing and laser focusing in our commercial projects, and our engineering teams is the other half. And then you've got two wheel and power sports vehicles. On the right-hand side what you actually see is the CAGR, the growth rate. And so that is really instrumental because if you think about the growth rate, the growth rate in that commercial trucking industry is over 30% on medium over 40%. This isn't where it's a lifestyle choice. This isn't where we're thinking about, what the sticker price is. This is about total cost of ownership. This is about businesses that need to continue to be profitable and are being pushed towards government regulations that say you have to be net zero. This is about taking advantage of the incentives that are being offered to go to electric fleets and this is about making a better world and putting our children into buses that are electric and putting our products on roads with electric vehicles. So, as we look at how we focus, we cover that entire target market. With a focus on the high voltage products that become our core products and a focus on development projects with companies like Linamar that cover that more automotive segment. And then, of course, we have our battery control, which I'm super excited to share with you later today, all the progress that we've made there and something that's a little bit ahead of schedule. And we have a huge market that's just going to get bigger. As we think about the effects of climate change and we think about brown outs and blackouts that are happening all over the world, having battery storage to be able to protect businesses, to be able to put business out, is going to be key and there's going to be a market that's created just because you need supply, which we're going to be able to do. So, I just wanted to ground everybody back to why this is our target market.
From there we looked at it as a very systematic and methodical go-to-market strategy and for our long-term shareholders that have heard me say from a very long time, we never picked an easy path to execution three years ago. We knew that our path would be a little bit bumpy, and we knew that our path would be a little bit long-term. But as we get to that mountain, as we put our flag up top there, which is coming up around that corner, we're going to be having a business that can scale as large as we need, that meets the customers that we know build our long-term future, and that provide multi-year revenue. And so we really went about it to attack it in waves and to think about how do we learn about segments and work with partners that are new growth companies like ours that are specialists in electric bikes, that are specialists in electric vehicles, and what does it mean to have a million miles driven like a company like SEA Electric and to be able to know what exactly are the pain points in that industry. And we made sure that our product is going to become a need-to-have, not a want-to-have. And then we looked at our product and we scaled it and you're going to see some of that today. And we went from a really big product to a design for manufacture version. So, you're not investing in a company that has great tech and we got to figure out how to manufacture it. We've already done all of that. We started, our CTO Eric started with a design-to-manufacture philosophy, so we were engaging our supply chains with our engineering teams to collaborate as we went through. Our production supervisor, Simon, was working with them already to look at how we produce that so we're not going to face the hurdles that some of the companies are facing now on how we get our product to market. We know exactly how this product gets to market. And so, we expanded our technology to be able to scale with our design-to-manufacture philosophy. And then we have a track record, we have independent validation with companies like AVL, we have product awards with companies like Edison, and we have more coming that we're working on that will be able to demonstrate our impact and our ability to be agnostic to battery electric, to hybrid, to any propulsion type and any trend in the motor type. We can go rare-earth, we can go IPM, we can go something that we're not thinking about today, we can go hydrogen fuel cell and we're proving that we can simulate and bring those results to real world applications and exceed our simulated results. We're within, our target has been to be within 5%. On Zero, we're within 4%. Some of our on-road has exceeded some of our test bench. So, it's been a long but successful journey for us. And then we're really increasing our penetration within the market and within our NDAs and there was a lot of questions that came in around what does that mean, so I'm going to talk to that today. I'm going to give you some specifics around the NDAs that we're engaged with and let you know why I'm so excited about the future. And then there's other opportunities that are coming up. We've received in our first projects through our EVS division and Brian, and Justin and the team have done a great job of getting services work that builds our presence and our loyalty within customers, but also builds our future. It's getting us integrated into design work early on. And as we start with our first projects what we've been able to see there is nice small revenue that starts to build a little bit for ourselves around our services group.
Then we thought, okay, let's attack it. This isn't for the weak of heart. We're a nimble startup and what we really want to do is be first, be fast and be unforgiving. And so, we want to make sure that we're taking market share in the future and as we took that market share our waves boiled down into three things. We're going to target our specific market share and our penetration. We're going to start with our pilot and prototype and innovation centers, and our current Calgary facility, but what we're really targeting is mass production. Whether we look at that as the hundred thousand units per shift that we can do in-house that gets us in early or the partnerships and collaborations that we'll do with strategic partners in our future that allows us to meet the mass production. We're offering technology diversification. The technologies you see today has progressed and it's maturing and we're already working on new technology that we'll be releasing that comes out of our R&D. And the landscape of Exro that you know today will be a completely better, more progressed, bigger view for our landscape in two and three years. And so, we're continuing to innovate. So that worked through our technology. We did that in waves as well. We started with our low voltage Coil Driver. We've received the independent testing; we worked through that, and we've been building a silicon carbide 800-volt inverter before anybody was putting it in the media. We were talking about our silicon carbide fast switching. Don't get caught up in in what you read in the marketing as far as-silicon carbide has become the standard for 800-volt. That's fast switching, that's soft switching, that's efficient drives, that's all standard three-phase drives, and there's great technology out there that's doing that. But there's not technology like Coil Driver where we're designing it from scratch, where we're building discrete components that allow you to scale it where you're able to get torque and speed in one drive. There's just such a list of features there. So, we were scaling from a product maturity perspective. And then what we did was we went from that core product that builds our first pillar of revenue. That's repeatable revenue that we don't have to do design work with. That we don't have to find multiple products with. That you can essentially buy, do slight customizations like most of the OEMs do, and put it right into your electric truck. And then we moved from there and we said, okay, let's work with actual collaborations. When we think to passenger vehicles, and we think to that side of the marketplace those are usually owned by a tier one or an automotive that are building an axle. That means you're putting the motor, all your electronics, your gearbox, your inverter with your gearings in the mechanical into your axles. And so, if we could scale that Coil Driver into an axle, we're opening up a whole new market. There's a whole bunch of axle tier ones. There's a whole bunch of in-house built OEMs. But you have to be able to show that your product can scale because, again, the products on the market today can't do that. So, with our partnership with Linamar was a strategic choice for us. It was a strategic choice for Linamar to get next generation tech and it was a strategic choice for us to pick a partner that has an appetite for the risk involved in first stage of collaboration and then for sharing in our vision of how we make an eAxle that's an entry into the commercial trucking industry that isn't available today in class four to six. And Linamar had, they're doing that in stages. They had it at the ACT show recently in May. And we're really optimistic about our results. We're all very much progressed into the testing. We have a little bit left to go as we pass off to Linamar in September but that really opens up the door for us for any eAxle manufacturer globally. And then finally that flexibility, that diversification and product and how we make sure that, whether it's an axle or a high voltage or a low voltage or, there's all kinds of opportunities that are coming in today to see how can we utilize our Coil Driver to make that smarter. The hardest thing in front of us right now as a team beside meeting shareholders' expectations and delivering, as we all want to deliver on time, is really choosing the projects, choosing the projects that build our future. So, looking at everything that's coming in and saying, which ones can we take that makes sense for us and which one do we have to take a pause on right now.
So how did that build for us? So, there's a lot of logos on the screen right now. And we're not saying that we have partnerships with all of these. I'm not even saying that I have NDA with all of these. What I'm telling you is that on the left-hand side of those columns is the current partners that we have. But in that grouping is all the different types of brands that we'd all recognize that are potential partners for us. And yes, a majority of those partners have NDAs with us. So, there's a lot of questions around the NDA. So, let's talk a little bit about what an NDA means to Exro. Any good company that has a strong patent position and a strong strategy position, make sure that you're signing a very good NDA as soon as you start having that conversation. So, after that initial cup of coffee and after that initial drink where you acknowledge that you want something, there's a synergy with your customer we go into an NDA. So, the number of NDAs that we have signed isn't the important number. And I don't want to make false hopes around that with you. That's why I'm pointing that out. We sign multiple NDAs every single week, if not every single day. What matters is when you start to get into that collaboration phase. So now you go from that NDA, and when I say collaboration what I mean is that customer is sharing some data with me, they're giving me their motor data, they're giving me log data from real world driving and we're able to actually simulate and say, if you used Coil Driver this is what we would see. That's step one. Step two is, if you use Coil Driver and you want to optimize these are some solutions that we can do. This takes time. This takes us weeks, sometimes months to get through. And then from there we would look and say, again, our design-to-manufacture strategy. Is this a product that we're going to be able to take to market? That we're going to be able to make money on? That we're going to be profitable on, not just revenue, profitable on? And does it build other customers for us or is it for a single customer? So, there's a big commercial, there's a lot of disciplined innovation going on in Exro. And so, once we get through all of that, that's what we start referring to as NDAs. These are customers. It's no guarantee. This is not, hey, because we got this far it's going to work out for sure again. Our unprecedented world goes for our customers too. So, what is a priority for a customer today may not be the same priority they have in three months from now. So, we also have to respect their journeys. So, it's never a guarantee. But there's things that you know when you have experience. I have a long history in the commercial side. There are things that you know that you can tell if this deal is going to get across the table. So, when I think about those deals I would say that we have about half a dozen really strong NDAs today that we're quite progressed into. Of those half a dozen NDAs, I fully anticipate taking four of them out to market by the end of the year. And with that it would be a combination of our core products that we've been building, and you've been investing in over the past year. So, our high voltage 400 volt like what we have with Vicinity, our 100 volt that we have with the customers like Potencia, Zero and evTS. We'll see some customers come out of there and it could be more. And I know you're saying, why can't it be even more? Because each customer, again, takes us time. And so, we're methodically thinking about how we do that. The time is coming. And it's right ahead of us. And yes, I have my running shoes. That's going to be just coming one after the other after the other. And then on the strategic side we anticipate one additional strategic partner like a Linamar before the end of this year. We're feeling very optimistic about that. We have multiple NDAs in that segment alone that allow us to decide which one is the best future for Exro. That's not going to be the only one. We need a dedicated squad when we work with those types of partners. We need a squad that knows the customer as well as it knows our product to make sure that our product is functionally safe, is quality, meets very specific standards, that our facility can produce the standards that those customers want, and it is an absolute collaboration. And so, we want to make sure that if we're investing our resources into that collaboration, we're going to get the biggest return we can out of it. We don't need to prove that the tech works. What we need to do is prove that the tech is going to go to market and make profit. And so that's why we're making sure that the one that we pick is the right one. And then next year we'll have additional strategic partners that come in as we're able to then scale in more strategic partners. So that's where we sit today. That's how we sit with the NDAs. It's a day by day, moment by moment. And there's so many milestones that we're preparing to hit for our customer base. And so many things that I wish I could share with you. I can't. So, I'm going to keep sharing what we have and let you know that those NDAs are going to be coming out and you're going to be seeing that news and you're going to feel the excitement that I feel as soon as we can share that with you.
And then, of course, that third stage is how do we get to the big numbers. Our facility here can do a hundred thousand units per shift depending on the size. It allows us to do our first stages of development. It allows us to prototype. It allows us to take niche markets at high profitability. It allows us to work with customers that are growing and help to support the transition to electrification by being able to do that. It allows us to supply when some of the incumbents are too busy today to supply. So again, there's a business model coming just from customers that say, can you supply me. Yes, I can supply you. Okay let's start talking. And so, as we think about that kind of mass production, we're going to do that through partnerships, partnerships like Linamar where they're a tier one automotive supplying. Linamar currently supplies to VW ID.4. They supply to most if not all of the brand names that we know today. And so that means that we don't need to go fight and hassle and struggle. We've built our partnership. We've got great responses and great relationships and great supplier scores that allow us to know that our customers are pleased with the way our team is handling and behaving and delivering to them. And so, as we look to Linamar and continue to build that relationship, what you're going to see is us delivering in September. Linamar has the dyno that they can put it on to do the final testing. They're going to put it through an enormous and rigorous amount of testing because they're an experienced automotive tier one. And so, they've been out to audit our facilities. They know what our capabilities are. We know what their capabilities are and together we're going to put out an eBeam axle that will change industry for commercial trucking. And so, as we look to that product the next stage after we deliver is, of course, finalizing the contracts and what that looks like. And we anticipate that that should happen before the end of the year. That's with all the testing on time. Yes, there's a little bit of risk that that testing could be three or four weeks either way. We could get ahead, we could go great. It could get delayed because something has to be retested, not because it's failing, not because there's a problem, not because we have any worry. Because that's how you take tech to market. You test, you test, you test, and you test again. And you make sure that it's the safest product you could possibly put on the road. And we're not taking any shortcuts with the quality of our product. And we remain on target even with all those delays. This is where our leadership team did a great job of making sure that we weren't not thinking about these possible risks that we face. So, we may not-as far as our forecasting we still remain on target for the revenue that we forecasted with first models coming out next year. That's more prototype first models that will go on the road. We'll get road validation, and it will probably be late 2024 when you start to see the revenue coming in from the Linamar projects.
And then we are not just flexible and scalable. We have absolute diversification in our products. And what I mean by that is when I say it's not a standard three-phase drive I'm sure for those that are still learning about drives, you wonder what does that mean. I see companies saying silicon carbide. I see other companies saying module and 800-volt. I see companies saying soft switching and fast switching and look I'm 90% efficient or I'm 99% efficient. Well, first of all, if you're comparing it to what's in the market today, it's a different technology. So, anybody can achieve that just from going from the current market technology to silicon carbide, on an 800 volt I'm referring to. So, there's just physics of electronics. Then you assemble your components. You buy, there's lots of electric, electronic components inside a drive. So, you're buying those components and you're assembling them. Not Exro. Eric, Spyros, and the engineering team are designing our boards. And so, we have discrete components that are built to make our drive that are able to scale up or down as we feel is the best value for our shareholders. We have things like eAxles, which we know is what's trending and they're called three-in-ones and there's different names for them globally. And we already have that. And so, we're going to have that model before the end of the year with our partnership for Linamar. So that demonstrates that our product can scale not only in the form factor that we have it in today but in form factors that the market demands. Then you pull all of that together from an e-mobility segment and, of course, you have to have the skill set to be able to know how to do system integration. How do you make these talk to the current electronics that are inside of a vehicle? And that's where Brian and Justin and the EVS team comes in. And the amount of knowledge and expertise that that team of engineers has is unbelievable. And I'm told very regularly that the conversations that are being had across our engineering teams are some of the most qualified engineers that companies are talking to. And these are the big brand names that you and I would recognize. And then, of course, our new Battery Control System, which as I said is slightly ahead of schedule actually. And so, the BCS team and Tung have done a phenomenal job of being able to take that product and see, how do we expedite here a little bit? We've had delays somewhere else. How do we make a critical path that gets us a little bit ahead here? So, we've got some testing on way now that has exceeded our expectations. We've got a product which I'll talk to market strategy as we go in that is good for commercial industrial buildings. And we're going to be marketing through integrators. We are on track to deliver our first pilots as soon as we have that solidified. Again, we could be months, we could be days, we could be minutes. So, we have some partnerships agreements that we're looking and negotiating and into the final stages on. So, we should have a partnership pilot agreement within this quarter and then our first production. Again, the bigger picture there remains is actually ahead we were going right to the end of 2023. We'll probably be at the beginning of the second half of 2023. Now, we don't need to wait for all of the UL certification to be completed. We have to wait until a certain stage that's about three months away right now. Once we hit that stage then we can be in parallel to the certification. We can be out commercializing the entire product. We'll have what's called a spec freeze. So, we've got complete diversification which gives us a complete end-to-end Exro ecosystem.
So, as I thought about talking about the tech, I'm not going to dive into what is the Coil Driver and what is that tech. If you're new to the story and you feel like you don't really understand what the Coil Driver is, you have my word that we're going to be doing fireside chats just around those types of things. Why is the Coil Driver what it is? And Eric will join me for that one. Why is our production-we've got some surprises there with us with how we're going to walk through our production. How do we think about different things throughout the industry? How does our marketing team get our analytics? Those types of things. We'll have all kinds of chats that we share with you. And as we do that you can dig in. So, if you feel like you don't know enough about our Coil Driver, please reach out to us at firstname.lastname@example.org or to whoever your contact is and we'd be happy to set up a time to walk that through with you.
I'm going to talk a little bit about our patent strategy and like I alluded to earlier on we have over 40 patents both granted and pending. Our Coil Driver has the granted patents, and our Battery Control has the patents pending. Our new Coil Driver charging feature that we released in July of last year is, of course, still a patent pending. We cover ourselves globally. This has long been a strategy of Exro since before I joined. Our current executive chair, Mark Godsy, did a phenomenal job of making sure that we were protected from a patent-protect a patent perspective. So, as you think about the infringement case, it doesn't take up any of my time right now and I'm not going to let it take up any of your time right now. We have issued our release to say that we filed the IPR. We stand by our position that we are not infringing on the tech. And that what we have created and what we have a granted patent on is our Coil Driver. And we feel very strong, as does our legal team, that we will be able to execute, as do our customers. So, it hasn't held me up on any level and I'm just going to keep going from there.
Why does our Coil Driver new feature charging matter? What does that mean to all of you? First of all, this is not a generational change of Exro. We don't need to go back to square one and start designing again. This is a feature that is native to Coil Driver that we've realized as we were in R&D on the initial Coil Driver different features we're working through. We have additional patents we'll file throughout the rest of this year and into next year as it comes out of R&D, but the core product is still the Coil Driver. What it does is allows that Coil Driver to natively be a charging feature. So that means you don't need what's called an onboard charger in high voltage applications. And so, there's a really great value proposition in that kind of big segment that we talked about earlier on.
How does that play out? If you imagine a charging station for an electric bus-and we'll just use how the typical is today. What would happen today is an electric bus manufacturer would supply an electric bus to a project. That manufacturer would be responsible for the entire solution. So, what that means is-this is the typical example. I'm not saying this is a 100% of the time but this is the majority of the time-they would be responsible for that infrastructure, that charging station, and the bus itself so that that bus becomes a totally independent system, it can charge, it can work, it can replace a combustion engine. And so, there's two pieces. The battery of the bus is a given. It's the boss. You can only charge as fast as your battery capacity allows you to. And then you have your infrastructure. You have to have brought in the power to do DC fast charging. Not all companies do DC fast charging. You can do depot charging, you can charge overnight, you can do-there's a lot of other options, good options to charging. But currently everybody's moving to DC fast charging. Why? Because they want to make sure that they have a better total cost of ownership. They want to make sure that they can drive that vehicle, put it on the road, charge it up in three hours and keep going. It can do multiple routes. You can have night shifts. So, as we think about it as a fleet vehicle, what it would mean is if a bus uses the Exro drive they could eliminate the on-board charger, giving the bus manufacturer a savings for that onboard charger. And an onboard charger, depending on your economy of scale, could go anywhere from just under $1000 to over $4000 depending on what you're buying, how you're buying, how your powertrain is. So, they get an immediate powertrain savings, bringing down their total cost of ownership. But now on the DC charging side, on the infrastructure side, instead of having to supply a DC charging station, which averages somewhere between $30,000 and $50,000, they could do the equivalent of an AC charger. We call it AC fast charging here at Exro because we're giving the charge time of DC, so that bus is going to charge in that three and a half hours is the typical time for a bus. But it doesn't need that charging station. So now the infrastructure solution is 90% cost reduction. So instead of that $30,000 to $50,000, you're going to spend $3000 to $5000. And now you multiply that by the number of charging stations that you're going to see from multiple buses or multiple trucks. That's just in the commercial fleet truck industry. Now think about if we look and work, which we're doing, with trade organizations and government lobbying, to talk about what the future could look like if in the right applications we use, utilize passenger vehicles to be able to AC fast charge. And how could that change the way we look at infrastructure and cost and investment into infrastructure? And how could that be different? And there's a lot there too. And a lot we can get into. But that's the basic idea there. That is a huge value proposition, a direct impact on total cost of ownership for fleet commercial vehicle, a direct impact on total cost of ownership for you and I that's looking to buy an electric vehicle and doesn't want to pay a huge price, doesn't want to have our tax dollars going to a lot of DC charging everywhere. There's a great place for DC charging, I'm not saying there's not. I'm saying that there's opportunity for us to look at different ways and AC fast charging is one of those different opportunities.
And then we have our new Energy Storage System that's powered by our Battery Control System. So again, what we really do is power electronics. What we do is build boards and power electronics controls for motors and batteries. On our Coil Driver we're putting our motor control into the form factor of an inverter for an electric vehicle. That's the form factor of today. On our Battery Control System, we're putting it into an Energy Storage System. It can go into different form factors, there's different things that we could target. Currently we have it in commercial industrial units and that's because it's a niche market there's not a lot of players there and we're able to offer a novel battery energy storage system with patented technology on cell level control. Like a Coil Driver controls the core or the heart of a motor, our Battery Control System controls the core or the heart of the battery itself, the cell. And like our Coil Driver, where we use physics of motors to be able to get to where we are today with our Coil Driver, we use physics of batteries to get to where we are with our BCS. And while we're going into energy storage there's lots of ways that we could go in first life into vehicles, into different things we have to get our cost points in place there. So, as we look, if you think about the news and you think about what are we seeing today. What are we seeing today from a battery management perspective? What we're seeing is thermal runway fires and batteries that are going on fire for days and nobody wants that. And so, the core philosophy behind this technology was, how can we repurpose batteries and make them smarter in general? So, the first thing is that we can reutilize a battery and there's a whole strategy that goes with that. But in concept what we do is we repurpose a battery out of a vehicle and put it into an energy storage unit. That doesn't mean that that's the only model. We could buy a battery right from CATL, right from EVE, right from LG, put it into our energy storage unit and still have a better state of health and a better state of charge. You're just not going to see that huge savings from being able to use second life. Also, we know that battery supply is going to be a big issue, and the more vehicles that go on the road the bigger the issue is going to become because battery suppliers go to vehicle first and then energy storage second. And so, we have to make sure that the supply to energy storage is available through this repurposing of batteries. And so that's one with our cell level control. It means we can control that thermal runway. We can control that heat. So, there's a lot there beyond just repurposing the battery. So, this, the first one, is a 90-kilowatt hour system. It's targeting a commercial industrial. We can do other systems up and down. It's all about the UL certification on these ones now.
And then we have our manufacturing strategy. So, as we think to our manufacturing strategy and how we do that what we're really thinking about, how do we get our product to production? How do we get our product to our customers? How do you take a drive that's not like everything else in the market and get it produced and make sure that it's quality? And make sure that it's safe? You recruit the right people, and you build yourself a prototyping facility. So, thanks to all of our shareholders for supporting us through our build. We were able to build our world-class manufacturing center where I'm coming from live today and where we're going to be able to share with you as you walk through my steps as I walk through the facility. And so, as we think about how we do that and why we did that, I'm going to talk about as we walk over-before I do that and before we take a walk, what I want to just take a second-we had a lot of questions come in and I did my best to answer those questions as we went through.
One of the questions that I know you're all wondering is our capital strategy. And I continue to say if I had a crystal ball, I'd tell you exactly how we want to do this. But I feel really strong in our capital strategy right now. We remain committed to crossing some milestones that build value for all of us. We have a strong bank account still that will allow us to run for multiple months and allows us to really take the tech to the next level. In parallel to that we're talking about how we finance business, how we make sure that we're financing at the right time. And what we do, it's never going to be perfect. It's never going to be ideal and we're going to have to make choices that sometimes make us all frustrated. They make me frustrated too. But I need to keep the company running. I need to make sure that we become a market leader and I need to make sure that our vision is executed. And so for that I'm not stressed about where we are as a company because I know that we're on the brink of executing on quite a few things. So, the timing and how we do that we are fully committed to making sure that we do the best thing to bring you the most value that we can.
And with that, I'm going to talk a little bit about our manufacturing center. And what I'm super excited to tell you is, again, we are live, this is not pre-recorded. So, if you see a little bit of bump or bruise as I walk down, that's what it's caused by. I got a great team supporting me to do this and I'm going to have Simon, who is our president of production, walk you through today. He can't walk the entire facility just because of how we're doing it live today but we'll be sharing that throughout the coming weeks as we do it. The entire building, when you think about how the supply chain has been-how hard it's been to manage. We took this entire building, this entire 37,000 square feet from a shell and we design as a team how it looks, the culture for our employees to be able to come and have a place that they want to work. That's why we're able to recruit the best from around the world. We've recruited people from Canada, from right here in Calgary, from the US, from the UK, from Vietnam, from India. We've got world-class engineers, marketing, finance, commercial teams coming from all walks of life. And so as we walk down here, this walk right here, if you were looking to the left you'd see our office building where all our employees sit. But then we have huge, huge windows that look into our actual clean room. The clean room is a world-class clean room. There's a lot here for production efficiency that Simon's brought to Exro that allows us to be one-of-a-kind. And by one-of-a-kind, I mean that we're making automotive certified product here when we're in full production. Automotive certified product doesn't happen overnight. It takes multiple years to get there. We're going through our ISO certification which has been ongoing over the past year. We're on schedule to do that this year. After we get through ISO we start commissioning. Once we start commissioning, we have to produce product for non-automotive. Once you produce product for non-automotive for 12 months you move to automotive certification IATF certification. That takes time. That's why it's such a hard journey to get into here. We have a huge, huge step up in front of everybody. If we want to make sure that we have a North American supply chain, we need to have companies that are willing to do things like this.
And so, as we come on into our clean room, I am so excited to introduce you to Simon, our President of Production. And this vision has been Simon's as we started and as we aligned to what my vision of Exro is. So, I'm going to let Simon tell you all about it.
Simon Strawbridge: Thank you, Sue.
Sue Ozdemir: You're very welcome.
Simon Strawbridge: Welcome everybody to our clean room here in Calgary. This is our manufacturing facility. The clean room is a positive pressure environment. Temperature controlled. Humidity controlled. It allows us to produce extremely high-quality products in a very repeatable way and also gives us the capability of handling bare die. Now, I'll walk you down the process. I won't go all the way down the line. You can see obviously the whole process behind me. So, the first thing we will do with our PCB assembly process is to load the product into an unloader. This particular unit will fire the units onto the line from the bottom of the stack. First process in our operation is the laser scribe. So, we put a unique serial number on every single board. This gives us the traceability that our end customers require. We also link this into our MES, our manufacturing execution system, which gives us total traceability of what we're doing and how we're doing it. After the product is laser scribed, we put the solder paste down. Solder paste is the glue that basically puts it all, holds it all together. We jet it, we don't screen print it. This is very, very new technology and we are one of the first in Calgary to actually deploy this solution. After we have jetted the solder paste, we need to inspect it. We have to confirm, we have to prove to our customers that where we say we're putting the paste we actually do. So, we have 100% solder paste inspection. These two machines will actually talk to each other, so if the solder paste inspection machine finds an error it will send the board back to the solder paste jetter, it will top it up and it will send it back for reinspection. And providing it passes the inspection, it then goes down the line. The next stage in our process is pick-and-place. Pick-and-place we take all the surface mount components, and we placed them on the board as they needed to be as per the designators on the board. Once we fully populated that particular board or that panel, we go into vacuum reflow. We have chosen to use vacuum reflow because we produce high power electronics. The solder joints need to be the best they can be. Vacuum reflow takes out voiding in the larger footprint components in order to give us the best solder joints. You also need a nitrogen environment, so on the other side of the east wall of our facility we generate our own nitrogen on demand. After vacuum reflow, the product goes into wash. Now a lot of facilities don't wash. We wash because the reflow process leaves flux residues and flux residues have a tendency over a longer period of time to cause likelihood of field failures. So, we remove those flux residues. The wash, again, we create our own DI water. We have a little plant, again, on the other side of the east wall. We bring our own water in from the city water. We de-ionize it. We put it through carbon beds, we put it through mixed beds, we recirculate it, we add the chemistry. It's the chemistry that cleans the flux residues, the DI water rinses the chemical residues away, and we dry it. Sue set me a particularly hard challenge at the beginning of this process, that she didn't want any water to go into, any wastewater to go into the water table. So, we've worked with our wash supplier to basically have a completely closed loop system. All of our wastewater gets pumped back out to a holding tank. That holding tank is linked to an evaporator. We evaporate off the water, and the waste material is then disposed of as per Alberta regulations. After the wash there is an AOI. Again, our customers demand or expect that we can prove that we 100% know that the product that the board is populated with the right components in the right location and the right orientation. So, all of that data that that machine captures will be loaded into our MES system and that will then be available forever and a day. After the AOI is basically offload. So, we offload into storage systems and put them into racks and keep them for future manufacturing. So that, in a very high level, is how our PCBA assembly process will work. So, I'll pass you back to Sue. Before I do though I will pick up a unit to give you a little insight into our Zero. And as we walk back you can basically see these PCB boards that we are talking about assembling here, there are multiple layers in this particular drive. There are boards underneath the boards that you can see on top. This is an incomplete unit so it's not fully functional, but this is the actual unit, believe me- correct me if I'm wrong, Sue-that is on that motorcycle that was test-driven not long ago.
Sue Ozdemir: That is. That is one of the exact units. And so, thank you so much, Simon.
Simon Strawbridge: You're welcome.
Sue Ozdemir: So, as you think about the facility and I know, believe me, I come through here quite often now and I think, wow. And then I think, I know it's a lot to take in, I know it's a lot to understand, what does this mean? And so, remember, this is one of very few of these facilities in North America. As electrification takes off-it’s still in its infancy-we're going to need these types of facilities to be able to produce the quality of boards that you need to be able to provide high voltage power electronics. We have that. We're going to be able to need to have expertise. As you can tell from Simon's voice, he's not from Canada, he's not from Calgary. He's joined us from the UK, where he spent over 18 years doing exactly what we have here. He joins a company like ours because he believes in the vision, and he knows that we're going to do something that's going to be able to provide what we see as our future.
So besides being able to talk to you all today about our ability to be able to execute, the ability to be able to say, hey, we've got the right product, we're scaling it. Yes, we know the journey hasn't been perfect. Besides that and the facility, we're going to be able to supply it. We're going to be able to manage supply chain. As we bring supply chain to North America, we're going to be able to serve the customers that want our product, that is demanding our product. But beyond that, it's not just me who you talk to all the time. As you can see in the back here, these are all the people and their teams that are making it happen. Just like me, they believe in our vision. Just like me, they have a why to why they're here, to what they're seeing and doing. From Eric, our CTO, to Darrell, who you met, to Spyros, our President of Engineering, to Alyssa, our Office Administrator, to Dominika, our Executive Administrator, to Matt-I don't have my glasses on for all our shareholders, so I am squinting right now to do the rest-from our supply chains team, to Tim Rostrup, from our corporate development team, to Gary, from our supply chain team, to Richard Meaux, our COO, to Sara, our CPA on our finance team, to Mo, from our marketing team, and we have Tung, from our BCS-as we were talking about our BCS today. This is some of our team. As we walk through and as we share our vision with you over the coming months, we'll share all our employees that are making it happen today because without them we just have great tech that doesn't go anywhere. Thank you very much for all your support. We hope we've provided an update that lets you see why we're excited about the second half of the year and what's ahead of us and we couldn't be doing it without your support. So, thank you very much and have a wonderful week.