RE:RE:RE:Looking Down The RoadI will say right off the top that I am very pleased with this arrangment with Re:Build. From all reports, they are a first class organization.
Further, there can be no questioning the fact that Exro absolutely had to partner up with a manufacturing partner to bring the Cell Driver to scale.
What is not clear to me, and I have highlighted certain provisions below, is exactly what is the revenue model to Exro?
For the sake of argument, let's say an Cell Driver unit ultimately sells for $1,000. What slice of that pie comes back to Exro?
What does the term "Exro will provide Re:Build with the battery control system power electronics" mean? What does Exro get in return?
Surely Exro will participate to a greater extent than "50% of any savings created by the manufactuing process". Presumably this would include any tax credits but how big is this number expect to be?
The NR further states that "Pre:Build will also set up and manage a highly efficient supply chain that will include components it manufactures and those it purchases, and it will assemble and test the finished products." It has been suggested that Pre:Build with be building the cabinets only and that Exro will be providing the "guts" to include in the assembly. What exaclty are the components? More than cabinet sheet metal i'm guessing.
As has been suggested, we get the bare minimum in terms of details on these types of NR's but we all need clarity on a number of issues associated witlh this deal.
I suspect the markets are trying to assess this as well.
"Under the partnership, Exro will provide Re:Build with the battery control system power electronics and Re:Build will be the exclusive manufacturer of Exro’s Cell Driver™ cabinets for an initial term of five years. In exchange for this exclusivity, Re:Build will pass along to Exro 50% of any savings created by the manufacturing process. Re:Build will also set up and manage a highly efficient supply chain that will include components it manufactures and those it purchases, and it will assemble and test the finished products. Re:Build will be responsible for all capital expenditures, supply chain, and inventory working capital requirements associated with manufacturing the Cell Driver™, thereby removing considerable future funding and working capital requirements from Exro’s balance sheet. Built in the United States, the Cell Driver™ will also qualify for ‘Buy America’ incentives available to customers"
GLTA