Envirotech Vehicles, Inc. (NASDAQ:EVTV) Q2 2022 Earnings Conference Call August 15, 2022 5:00 PM ET
Company Participants
Jane Belodeau – Vice President, IMS Investor Relations
Christian Rodich – Chief Financial Officer
Phillip Oldridge – Chief Executive Officer
Conference Call Participants
Craig Irwin – ROTH Capital Partners
Steve Bokor – PI Financial Corp
Dave Hammond – Private Investor
Operator
Good day, ladies and gentlemen, and welcome to your Envirotech Vehicle Incorporated Second Quarter 2022 Earnings Call. All lines have been placed in a listen-only and the floor will be open for your questions and comments following the presentation.
At this time, it is my pleasure to turn the floor over to Ms. Jane Belodeau, VP of IMS, Investor Relations. Ms. Belodeau, the floor is yours
Jane Belodeau
Thank you, operator, and once again good day and welcome to Envirotech Vehicles’ second quarter 2022 earnings call. Let me begin the call by reading the safe harbor statement. All statements made on this call with the exception of historical facts may be considered forward-looking statements within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. Although Envirotech believes that the expectations reflected in such forward-looking statements are reasonable on the basis of current expectations, Envirotech can make no assurances that such expectations will prove to be correct.
Also, these forward-looking statements are subject to a number of risks, uncertainties, assumptions and other factors that could cause actual results to differ considerably from Envirotech’s current expectations due to changes in operating performance, technical and economic factors, and other risks and uncertainties disclosed in Envirotech’s annual report on Form 10-K, quarterly reports on Form 10-Q, and other reports filed by Envirotech from time-to-time with the Securities and Exchange Commission. Any forward-looking statements including in this earnings call, are made only as of the date of this call. Envirotech does not take undertake any obligation to update or supplement any forward-looking statements to reflect new information, subsequent events or circumstances except as required by law. Envirotech cannot assure you that projected results or events will be achieved.
Now I’ll turn the call over to Christian Rodich, Chief Financial Officer of Envirotech. Please go ahead.
Christian Rodich
Thank you, Jennifer. Phil is with us today. He is on the call, but he is with his terminally ill mother right now in Canada and our hearts, thoughts and prayers go out to him and his family today. And we wish him nothing, but the best and I will begin. Second quarter was truly a breakout quarter for Envirotech Vehicles. As we saw a significant uptick in vehicle deliveries, which drove the substantial increase in revenue both year-over-year as well as sequentially when compared to first quarter of 2022. During the second quarter, we delivered 21 vehicles compared to just two vehicles delivered in the same period of the last year. And to date in 2022, we’ve delivered 33 vehicles. So we’re seeing strong momentum, which we intend to build upon.
To give you some more color around our shipment activity, as we mentioned on our last call, during the first quarter we ordered 100 Class 5 cab and chassistrucks, and 100 Class 4 vans with deliveries beginning in Q3. We anticipate deliveries will continue through the end of the year with final assembly at our new facility in Osceola, Arkansas. The Class 5 trucks are in high demand, and we are pleased to have the ability to provide those to the marketplace. We’re seeing increasingly strong order volume for our electric trucks and vans across the board as more businesses and municipalities look to begin transitioning their fleets to a cleaner alternative.
For several months now we’ve seen the benefits in the form of heightened interest and voucher approvals from our status as an approved vendor for state incentive programs like the New Jersey Zero Emissions Incentive Program, or NJ ZIP. With The Senate’s passage of the Inflation Reduction Act last week with provisions including a new commercial clean vehicle credit, we believe the industry will see a game changing acceleration in the switch to clean energy fleets. We are very optimistic about the ongoing evaluation, I mean, evolution from combustion engine fleets to electric trucks and vans, and believe that EVT is extremely well positioned to continue to benefit as the pace of transformation gains speed.
Renovations continue at the Osceola facility and we’re excited about the progress we’re seeing every day. As we’ve mentioned, we chose Osceola for its proximity to highly capable regional workforce as well as its favorable location, close to the Mississippi River, as well as several interstates, which provide us flexible shipping alternatives. In addition to these attributes, we’ve received strong support from the state, and we recently announced our partnership with the Arkansas Economic Development Commission and will provide EVT with an economic incentive package valued at up to $27 million. With our operations in Osceola, we’re also – we’re only licensed vehicle manufacturer in the state.
We’ve also recently expanded our sales presence by adding Jonesboro-based DaVinci Innovations as our first commercial electric vehicle dealer. Our goal is to continue adding strong partners to create a robust dealer network for the sale and distribution of our heavy duty electric trucks and vans to fleets across the state of Arkansas. Finally, in early July, EVT uplisted to the NASDAQ Capital Market, a milestone achievement for the company and this uplisting has been a very long time in the coming ambition of many of our founders and Phil himself. He was very thrilled for this opportunity to ring the NASDAQ opening bell with other members of the team and the board. The uplisting is a combination of heavy lifting and hard work that has driven our considerable growth over the past year, highlighted by exceptional increased sales numbers, multiple completed deliveries and construction of our new manufacturing facility and our successful efforts to attract new customers. We believe our presence on NASDAQ will enhance our visibility and brand recognition in a marketplace and introduce EVT to a broader audience of investors.
So concluding this section over the presentation, as we move through the back half of 2022, we’re energized about the opportunities we’re seeing and remain focused on driving operational execution to ramp production and get more of our commercial EVT – EVs on the road to our customers. This is an exciting time for our industry and our company. And we look forward to growing our leadership position as a premier provider of zero emission trucks and vans and as a facilitator of the evolution of a greener commercial transport.
And now, I will go into the financials. Sales for the quarter were $2,087,700 for the three months ended June 30, 2022, compared to only $188,266 for the three months ended June 30, 2021. The sales increase was primarily related to the sale of the 21 vehicles noted earlier versus the two vehicles in prior year. For the six months ended June 30, 2022, sales were $3,196,200 compared to the $659,059 in the same prior year period. Total net operating expenses for the second quarter of 2022 increased by approximately $902,000 compared to the second quarter of 2021. The increase in expenses during the quarter is primarily related to our sales and marketing efforts as well as ramped up research and development and engineering costs related to our new school bus offering and Class 5 truck, which we expect will be available by the end of the year.
We also added headcount in the second quarter as we continue to ramp up production and operations. For the first six months of 2022, total net operating expenses were $4,780,714 compared to $1,527,507 in the first six months of 2021. This includes approximately $1.65 million of non-cash charges related to stock-based compensation expense and depreciation expense here in 2022. Net loss in the second quarter for 2022 was approximately $1 million or a loss of $0.07 per basic and diluted share compared to a net loss of approximately $900,000 or a loss of $0.06 per basic and diluted share in the second quarter of 2021.
For the first half of the year, net loss was approximately $3.5 million or a loss of $0.24 per basic and diluted share compared to a net loss of $1.6 million or a loss of $0.19 per basic and diluted share in the first half of 2021. As of June 30th, the company had cash, cash equivalents, restricted cash and marketable securities of approximately $6.4 million, total liabilities approximated $1.1 million and working capital was approximately $20 million.
This concludes my remarks on the financials and we can now open up for questions. Operator?
Question-and-Answer Session
Operator
Thank you. If – my apologies. Thank you. [Operator Instructions] And first we go to the line of Craig Irwin with ROTH Capital Partners. Please go ahead.
Craig Irwin
Hi, good evening and thank you for taking my questions. So congratulations on the strong quarter. You guys are ramping quite nicely now. The inventory position exiting the quarter of $5.6 million suggests that there’s the opportunity to continue to ramp those deliveries, given that demand and available subsidies seem to be materializing pretty nicely out there. Can you maybe describe for us what’s in inventory in that $5.6 million, approximately how many vehicles are available to deliver over the next couple months? And then can you just discuss the $4.5 million in deposits, how this can be turned into revenue?
Phillip Oldridge
Hi, Craig. Good afternoon. This is Phillip Oldridge. As far as the inventory goes now, Craig, where we stand and Christian jump in and I’ll give you some round numbers because I don’t have it right here in front of me, but I think we have about 60 Class 3/Class 4 vans that are completed and ready and around, if I’m not mistaken, 25 trucks that would represent the stuff that’s inbound that’s coming to us. In terms of our little trucks, in terms of our Class 3 and Class 4 trucks now, we only probably have about 15 or 20 of those left. Is that correct, Christian?
Christian Rodich
Yes, that’s correct. Yes, we have about 15 or 20 of those right now.
Phillip Oldridge
And the rest are sold and we’re just finalizing the upfitting on those in terms of – and they they’re being outfitted with various boxes and stuff like that. So – and then the inbound inventory, deposits for inbound inventory are on our new Class 5/Class 6 trucks of which we are scheduled to have delivered before the end of the year, at the start of Q4. All of those have five Class 5 and Class 6 trucks. There is about 25 of them. And we are scheduled by the end of the year got willing to have five school buses, 84 passenger school buses on the ground.
Craig Irwin
Excellent. Excellent. That’s really nice traction. So can you maybe recap for us what the available vouchers or other subsidies were – that were matched with the sale of 21 units in the quarter? Where have you been successfully procuring vouchers with your customers? And do you expect additional funding as we look into the back end of the year?
Phillip Oldridge
Sure. So the voucher programs come from two states in the last – in the last quarter, we had a lot of vouchers out of New Jersey, which we are continuing to see growth and expand our sales in New Jersey are very strong. We also had sales in the state of California and we’re seeing continuous applications for those vouchers, albeit those vouchers are a lot less money, but they are still available in the State of California. And so, we’re doing very well in those areas there. And then some of our sales growth came from customers that are – don’t even have voucher programs available to them, they’re just actually buying the vehicles in there. So, we have three banks right now that have approved our product and approved our lines and provide financing on our vehicles.
Craig Irwin
Okay. Excellent. Excellent. So then Phil, can you maybe talk a little bit about the Osceola facility? How production there is starting to take shape? When would we expect material commercial deliveries out of that facility? And how do you recognize the $27 million in the incentive package that you have from the state?
Phillip Oldridge
Well, with reference to the incentive package on the $27 million, I will let Christian get into that for you, but with respect to the commercializations of the plant, so we’ve been actively busy in cleaning up the plants and people say what do you mean cleaning up the plant, what does that entail. Well, formally it was a fruit of the loom facility, so as you could imagine the complete opposite of anything that do with vehicle manufacturing. So we have removed numbers of walls, complete cleanup inside, got the whole building, the building is vacant for a long time. So we’ve got the whole building to a point where it’s cleaned up and pretty much usable. Now we are storing vehicles. We’ve cleaned up, completely cleaned one side of the facility, which is representative of about 50,000 to 75,000 square feet, where we’ve got vehicles that are being stored there and vehicles that are having final assemblies done to them with respect to tires, wheels, modifications, boxes installed, flat decks installed, all these types of stuff that depending on who they’re going to, what’s happening with the building with respect to, how is it being developed and built out.
So the first thing that we’re doing right now and we’re getting very close to finalizing that. But the first thing is, is we are replacing the entire roof on the establishment of the building so – and that encompasses about 580,000 square feet of roof. So you could imagine it’s a very arduous task. But so before we could actually even pull the trigger on that we had to get an engineering study done and roofing out and stuff like that. And so in replacing that roof and the reason that we’re replacing that roofing is because during the replacement of that roof, we’re going to be making some structural changes to the roof as well. We’re getting it ready to have solar panels and stuff that would be up on the roof as part of the – as the build – part of the build out.
So we’ve been getting ready for that. And so that’s almost ready to have the trigger pulled on it. Now we’ve got two, three quotations back on it. We have some approvals from our board on what we think we want to do with that. And so, we’re ready to go there, but we’ve had the roof inspected and gone through and looked at how we’re getting that organized. In terms of the actual manufacturing of vehicles with inside the building that probably is going to be an 18 month window before you’d actually see full blown production coming out of one line there, it will take us about five months to do the roof, get that ready, and then we’ve got to get solar installed and up and done. We are currently upgrading electrical, electrical switching panels and control boxes and stuff like that for the old trunking switches and we’re getting all of that underway now.
There will be some repairs that need to be done to the concrete flooring because of where some of the walls were removed and some of the old [indiscernible] draining ditches that were used inside the plant facility. So we’ll wind up with a solid smooth floor. So – but most of that has been inspected, done, completed. We have a scope of work drafted and drawn against that and we have approvals to move forward with that. So that will all be underway. And I think you’ll see a good portion of that starting within the next four weeks.
Craig Irwin
Thank you for that. Christian, do you want to make a Quick comment on the $27 million? How that’s recognized if you could please?
Christian Rodich
Yes, really – and really that’s going to be over the next eight to 10 years. A lot of that is sales tax rebates, different types of employee rebates as well that we’re going be getting with the state. As we ramp up and we expand operation, those employee taxes and stuff, we won’t have – we’ll get refunds on all that. So, it’s really that the state encouraging us and lowering taxes and eliminating those things to give us credits through the course of our operations as we really grow through the next eight, 10 years, but that’s where it’s all going to be coming back for the most part. And then there is also various other incentives that the state is going to be giving us as well through different bonds and things like that. So it’s things will be coming down the pipe as we move along and we’ll be reporting out on that.
Craig Irwin
Understood. Understood. So last question, if I may is around gross margins, I know I ask this every call, but it’s important. Can you maybe describe for us what you’re doing different versus all your peers out there that allows you to have such impressive gross margins, such healthy gross margins? And how you see this as sustainable? Any color there is helpful. Thank you.
Phillip Oldridge
Well, first of all, our CEO doesn’t draw seven figure salary. I’m just messing with you, but yes, so I – and there’s a lot of truth to that. We don’t have any multi-million dollar salary earners in our company. We have modest five and six bigger income earners. And I think that – and you can see from our cash position, and if you look at our financing from two years ago, we control and handle our cash very well. So we have great cash controls. And I think that we – albeit that it’s kind of cost us a little bit of money and we are just now starting to put money into marketing and advertising and really getting it out there, we focus primarily on that – on making sure that we had a vehicle that was a functioning vehicle, a great vehicle that worked and was homologated and done and now were there.
So – and our margins are really good margins. I think that between myself and my brother and some of our engineering staff and people that we have on that side of the team, we do a great job at sourcing product knowing where to find it, knowing what works, what doesn’t work in, and a lot of that engineering that would normally be outsourced by most people or other companies that that are going out to, a lot of that engineering is just completed in-house by people like myself and my brother and some of our engineering staffs. So our costs for homologation and certification and stuff, we just understand that that side of the market very, very well. And so, I think, we have great cost controls that way.
So will we continue to see those margins? I believe we will. I think that to be honest with you, they may even improve slightly right now shipping out of Taiwan and Malaysia and places like that. And Asia is very, very expensive and that will all go away. So we’re very anxious and very excited to get our infrastructure in place and start to build on what we’ve got. And I believe that Northwest Arkansas will provide us a great opportunity there too. Some of the tax incentives are giving us an employee training and stuff like that for wages and so on. I think we’ll continue to see those great margins.
Craig Irwin
Excellent, well. I’ll take the rest of the questions I have offline. Thanks again for addressing those and congratulations on the progress.
Phillip Oldridge
Thank you.
Operator
[Operator Instructions] Next, we go to the line of Tyler Collins [ph] with Washington Street Capital. Please go ahead.
Unidentified Analyst
Hey guys. Thanks for taking my questions. So great quarter, congratulations. You – so you significantly increased the number of vehicles you delivered in second quarter compared to both last year and compared to the first quarter. So my question is how should we think of the delivery cadence going forward specifically, do you expect to continue to increase deliveries each quarter?
Phillip Oldridge
Yes, great question. So if I have my way, and I will tell you this. We are on target to double our sales from the last quarter in the third quarter. So we did 21 units in the second quarter. And I will believe that – I believe that we will do 40 plus in Q3. Can’t guarantee it, but we are on target for it. We’ve got delivery scheduled. We’ve got orders in the pipe and stuff like that. So to answer your question, yes, I think we’re going to have an even stronger third quarter and that will continue to flow into the fourth quarter. So we have great deal flow right now and we’re very excited about what’s happening.
Unidentified Analyst
Great. thanks. That’s it for me. Congrats on the quarter.
Phillip Oldridge
Thank you.
Operator
Next, we go to the line of Dave Hammond, a private investor. Please go ahead.
Dave Hammond
Hi, Phil and Christian and team. Thanks for taking my questions and congrats on another progressive quarter. My first question is actually related to the previous one and how we should think about sales and the pipeline and such. With this 100 unit press release and DaVinci. I’m looking for color why this structure and if they’re, and are there end customers represented in that a 100 units, or if there isn’t with this structure in place, how should we think about what the disclosures are going to look like as those sales are completed?
Phillip Oldridge
Great question. And I can answer that for you and yes, it does seem a little strange, but – and there’s a very simple answer for it. We are the first auto vehicle manufacturer in the State of Arkansas. And for a long, long, long time, the State of Arkansas has had regulations on its books that basically does not allow for an automobile manufacturer or a vehicle manufacturer to sell directly to its customers or end users. You must go through a dealer network.
Now, before I get into that further, I will tell you that we have legislation that’s being drafted right now, and a couple of local senators that are working very, very closely with us to change that law so that we can sell vehicles direct. So to answer your question, DaVinci that has a 100 vehicles on order with us that’s a real order and he’s got real clients and real customers, some of them are actual from the state themselves, some of them are from local clients and people that he has.
And as a matter of fact, I believe before the end of this month, sometime next week, he’s taking delivery of his first two vehicles that we’re finishing and we’ll accelerate that out throughout the year. So – but that’s the reason why we have that dealer network, because we have a lot of activity. And a lot of customers that are inquiring about our vehicles within the State of Arkansas, one specific customer is the Arkansas Department of Transportation or a ADOT. And so – but we must, until with that law is changed, we must sell and deliver our vehicles through a far arrangement through a factory authorized rep/dealer.
Dave Hammond
Okay. So as deliveries unfold that were ultimately related to sales via DaVinci, will you continue to press release them as this – as if they’re your own or will there be some other, how will that unfold?
Phillip Oldridge
Well, that’s great. That’s another great question. And so – and it’s a combination of both to tell you the truth. DaVinci has some sales of his own that we will – that of his own, that we will press release. And we have some sales of our own that we are putting through DaVinci because they’re going into the stake. So I hope that answers that – I hope that answers it for you, but we have them all in that 100 pipeline. So we know – so we won’t be counting the same vehicles two and three times. That’s why we have a backlog and we know that those 100 are going to come together. So we’re very secure about that.
Dave Hammond
Okay. Okay. Thank you. Just shifting gears, just one other question, and I always cringe at asking questions related to the balance sheet. But I have to do it because it’s on everybody’s mind. It’s certainly on mine. Well, firstly, congrats on the NASDAQ up list, because you said you were going to do it and you did it. And it took a long time in a tough market. And yet here we are. So my question relates to the financing, because that’s to me looked like the last big piece of the puzzle that looked like it was positioning to happen after or in conjunction with the uplift. But then it kind of fell away amidst this market. I get it. But and it’s sensitive topic, but can you speak to what’s going on either it’s sell side support you’re getting and or maybe it’s an uptick in the buy side institutional interest that you’re getting post the up list. What can you share to give us a sort of a feeling for what what’s going on?
Phillip Oldridge
Well, I think the best way to answer that, we’ll tell you that in two parts. The first part would be is, do we see a financing in our future? Yes, we do. And when will that come together? It will probably come together in Q3/Q4, but probably in Q3. Why didn’t it happen at the time of the up list? Quite frankly, that we had financing an arrangement in place. The terms and conditions under which that was arranged were probably not the most favorable at the time and I say that in good faith, not just for us, but also from the other side, the markets as you know, at that time, took a – there was a lot of press around other companies that were having failures, other companies that were not doing what they were doing.
And now the EV market took a real big, hard hit there for a while. So – and we were asked if we would consider waiting a quarter or two before the up list and just stay on the exchange that we were on. And that was something that we had considered, but we decided not to do it in the last moment. And we were just going to go without a concurrent financing. And the reason that we did that was, is as you know, it’s is very costly and varying an expensive, very, very expensive to get these types of upliftings done. And so we’d already invested substantial amount of money into illegals [ph] and fees and stuff like that. And we just didn’t want to redo that.
So we decided that we were going to go anyway. And so – but do we see a financing in our future most definitely. And why do I know that? Well, we’ve had a really good second quarter compared to where we were, our third quarter, I know, is even going to – it’s probably going to be twice as good as our second quarter. And that’s what we really need. We had an okay first quarter, but we were off a different exchange, but with two good quarters under our belt off the NASDAQ, and we seem to be holding our own, I believe that we’re going to see that there. And so – and because of the way we’ve managed our cash flow and sort of managed our funds in hand, it wasn’t like we needed immediate money anyway. So – but yes, I believe that you’ll see a financing or an announcement of some financing around something that we’re going to do by into Q3.
Dave Hammond
Okay. Okay. Thank you. My last question, and I sort of did this, the last call too. I always try to pick your brain a little bit on the behemoth opportunities that you guys are going after, whether it’s postal or reading of what’s going on with canoe. But the one that’s peaking my interest here is this 84 school buses. You touched on it and on the site, it’s just coming soon. Is that, I mean, 84 buses sounds like a pretty big commitment. Are you already out there marketing? And is this a vehicle we have not seen before completely new design? Or how is that? What’s the plan to sort of splash the street? What’ that look like? And I’ll jump back into queue and thanks very much for taking my questions.
Phillip Oldridge
Yes, no problem. So it’s not actually 84 school buses, it’s 84 passenger school buses. And we have five of them that are completed that will be delivered by the end of the year. So yes, it’s a brand new vehicle for us. It was – it’s been a substantial build for us and we are super excited about it. We’re really looking forward to getting it into our hands. We have a substantive number of inquiries about that bus and we don’t have anything sold yet because we don’t have it in our hands. But those of you that know my background from before we saw what we did there. And this would be me telling you that this is Level 2 of what we did past there.
So what we have coming is I believe will be a game changer for us in the school bus side. So we’re very excited about it and we will look to get it by the end of year. We have already started marketing and we do have some presentations coming up that we will be back in Washington, D.C. in September. And we will be presenting some of our vehicles in Washington, D.C. At this time, I can’t tell you who they’re being presented to, but they will include our right hand drive vehicle. That we’ll call little post office delivery vehicle or something like that at this time. We’ve also built a series of those vehicles in left hand drive as well, which we’re very excited about. And our Class 5 and Class 6 trucks will also be arriving.
We already have seven scheduled test platforms on those trucks ready to go with a substantial size company. And are the far dealer that has arranged those for us is TRUCKMAX out of Florida who has four or five locations in that state. So they are currently testing our van right now with a lot customers who we’re super excited about that. And I’m happy to share with you right now that in the next 12 days to 14 days we will be traveling out to Georgia. We’ll be meeting with the state there, and the head sheriff for that state within certain counties that we have – we will be unveiling our first prisoner transport van, and that is currently we’ve delivered it to the state already. And they’re currently decaling it up right now with Sheriff’s logos and stickers and lights and stuff, and we will be unveiling and presenting that, and that will be going into service for a 15-day test period. And if all goes well from there, then we believe that we’ll see some great orders on the prisoner transport vehicle. And that’s one of several states that we’ve been talking to, but Georgia will be the first to test it.
Dave Hammond
Excellent. That’s it.
Operator
Next, we go to the line of Steve Bokor with PI Financial Corp. Please go ahead. Your line is open.
Steve Bokor
Thank you. I hope you guys can hear me mute, great quarter. You guys can hear me, hello?
Christian Rodich
Sure. Can.
Phillip Oldridge
Loud and clear.
Steve Bokor
My partner thought we might be on mute. I just want to get a couple of bits of information. Some of it’s already been answered here. You mentioned David Oldridge has he still consulting for the company?
Phillip Oldridge
Yes, he is. Yes. He’s with us.
Steve Bokor
Okay, great, great, great. And can you comment on, I saw a couple of line items about lawsuits and whether there is the situation with green power has been completely put to bed, or is that thing continuing to circle like Dante’s Nine Circles of Hell.
Phillip Oldridge
Well, I don’t know if we would call it that, but on the line items with respect to lawsuits, we have settled all of our lawsuits with the exception of the green power lawsuit. And I don’t think that we are – there was an offer on the table to settle that. And at this moment in time, we are not inclined to settle that, the EVT is not inclined to settle that lawsuit.
Steve Bokor
Okay. And can you give us a picture of what percentage of the components are coming from China versus Vietnam versus North America?
Phillip Oldridge
Well, we have very little out of China itself. Most of our stuff comes out of Taiwan at this time. And out of Malaysia we have sourced and continue to source now our axles drive motors and all the rest of those things are coming out of North America. And that’s why we are excited to move the entire plant and get the entire plant open because the right up the road from us, three quarters of a mile from where we are in Arkansas is Big River Steel or U.S. Steel now. And so we’ll be able to source all of our steel there. We won’t need to get that anywhere else anymore, our axles and our entire brake assemblies and all the rest of that, including our drive motors can all be sourced and are currently being sourced in the United States now.
So that would really leave us on the vans, the stamping of the vans, which we believe we could have those stamped at our own facility or under some kind of a joint venture product with one of the steel companies that we’re having discussions with. In terms of the – on our cab over truck, that is an OEM cab, and we buy that cab that comes out of Korea. And so we’ll continue to ship that cab from Korea because it’s sort of universal cab. It fits on our Class 3, Class 4 and Class 5 platform. Our Class 6 cab will be something different and we have not sourced or we have not permanently sourced where we want to get that from yet. So we’re working on that. In terms of our school buses when they arrive, the school bus will be a build that can be once we get the plant up and running a 100% built out of Osceola, it’s – it will be an aluminum.
We’re looking at an aluminum structured body on that vehicle and in terms of how the chassis and the rails and stuff goes, all of that steel, and it can easily be sourced at U.S. or Big River and the entire components, drive system components, and everything will be sourced within the U.S. here. So the only thing that requires us that would be still a requirement for outsourcing would be with respect to batteries and harnesses. We do have an agreement in place with a battery company right now. We are having discussions with lithium suppliers in Arkansas for around lithium and rare earth materials. So we haven’t got that figured out yet, but I will share with you this much. We most certainly have the space available to us within our new manufacturing facility to be able to house and accommodate up to 150,000 square feet for battery manufacturing.
Steve Bokor
Okay. That was one of my next questions. So thank you very much. At one point you guys were looking at getting into electric powered forklifts, is that business continuing is a significant portion of revenue or planned revenue and same with, I guess right hand drive vehicles?
Phillip Oldridge
So for us, we’ve never been in the forklift business. We know of an affiliate company that does that. But for us personally at EVT, Envirotech Vehicles, we’ve never been in the forklift business. But and right hand drive vehicles, we are now in case you didn’t know, we are the first licensed right hand drive vehicle manufacturer within the U.S. And so we are very excited about that and we will have a separate line for right hand drive vehicles. Right now we only have a right hand drive vehicle in our van, soon that will be a right hand drive vehicle in our truck. And we started that project initially because we wanted to be able to provide something for the post office. But as a result of our certification and home allegation of that vehicle, we’ve started to receive some calls now from albeit very small and they’re just inquiries, but we have started to receive some European calls with respect to those vehicles on the right hand drive side, which we’re excited about.
Steve Bokor
Okay, great. And just to clarify the factory, you figured it’ll take 18 months before you’re up and running in full – at full capacity?
Phillip Oldridge
Yes. I think that the build out, like by the time you finish the roof and then sourcing of equipment, we’ve already sourced a lot of where we need to get the equipment from in terms of funding for that. And so on, we’re not concerned about that. We already – we have received an approval already for an industrial bond. And so we’re not worried about that at all. It’s just making sure that we’re prepared for it, that type of equipment, once you get it set up, if you could imagine, it’s where it gets placed and how it gets set on the floor. It’s not something like you can easily move it around or push it around. Those are some very big pieces of equipment there that do stamping and stuff. So right now we’re making sure that our roof is properly secured that we’ve got power up on the roof and solar power and stuff that’s going in there.
And in terms of the way that our building is now some of the trunking and cabling and electrical stuff is all being addressed and taken care of. So once we’re ready to pull a trigger on that, and we’ve got smooth floors, which are underway they’re coming shortly, then we can place that equipment and get it permanently attached and get it ready to go. So I believe, if the world stays the way that it is, that will be an 18-month, potentially two years, but God willing, we could have one full line up and running within 18 months.
Steve Bokor
Okay. That’s fantastic. Thank you very much. That’s all I’ve got. So I’ll wait for somebody else.
Operator
[Operator Instructions] At this time, we have no further signals, we’ll turn to Christian Rodich for closing remarks.
Christian Rodich
All right. Thank you. Thank you, Phil, for joining us for questions here at the end. We’ve been greatly appreciate it. And as I said before, our thoughts and prayers are with you and your family. And thank you everyone for joining today. We greatly appreciate each and every single one of you. And we look forward to speaking with you next quarter. Goodbye, everyone.
Operator
This concludes today’s teleconference. We thank you for your participation. You may disconnect your lines at this time. Have a great day.
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