EXCLUSIVE: Xos CEO Talks Flex Manufacturing, Customer Reach, Vehicle Deliveries On 'SPACs Attack'

Xos is set to go public via special purpose acquisition company NextGen Acquisition Corp NGAC in a deal that values the combined company at $2 billion. 

Xos co-founder and CEO Dakota Semler appeared on Benzinga's YouTube show "SPACs Attack" for an exclusive interview Wednesday.

The What & The Why: Xos is a manufacturer of medium- and heavy-duty commercial electric vehicles, Semler told Benzinga.

He said he recognized the opportunity to launch Xos after experiencing the challenges of operating a diesel fleet firsthand as a fleet operator, he said.

The ever-changing emissions regulations and the increasing price of fuel were just a few of the headwinds challenging diesel fleet operation, he said. 

Xos builds its own battery systems, which control and power its own vehicles on the company's own chassis, Semler said.

The company already has trucks on the road, he said, adding Xos is at the stage where it's putting capital to work in order to scale manufacturing and meet customer demand.

Customer Reach: The company aims to distribute its products across a "wide array of different customers," the Xos CEO said.

Xos has worked with United Parcel Service Inc UPS for multiple years, he said.

The company works with a number of other parcel delivery fleets and independent service providers, Semler said. Xos designed a platform for its vehicles that allows it to sell to a variety of different customers with multiple use cases, he added.

"We are bringing customers in daily."

Related Link: EXCLUSIVE: Xos Enters Strategic Agreement With UniFirst For Electric Delivery Vehicles

Deliveries: Xos plans to deliver 116 vehicles in 2021 and about 2,000 vehicles in 2022, Semler told Benzinga.

In 2023, the company plans to build around 8,000 vehicles, he said, adding Xos already has approximately 4,000 optional orders for 2023, which he said will be dependent upon the vehicle's performance criteria, efficiency, range and serviceability. 

See the full interview here: 

Flex Manufacturing: Xos deploys a flex manufacturing strategy that allows for rapid scale and flexibility.

The company went the flex route over a traditional automotive plant because of speed, the Xos CEO said.

Using flex manufacturing allows Xos to move some of the complicated processes to sub-suppliers, he said, allowing Xos' flex facilities to remain focused on final assembly.

Xos plans to build a separate battery manufacturing line next to its existing factory in Tennessee so that as vehicles reach final assembly, the company can "take the batteries from that building next door, drop them directly onto the vehicle and it drives out of there under its own power."

SPAC Notes: Last-mile delivery vehicle demand is accelerating as more and more people order things online, the Xos CEO said.

Going public via the SPAC route allowed the company to ramp up its manufacturing capabilities to meet the demand curve, Semler said.

Furthermore, the team at NextGen Acquisition Corp had experience and knowledge on how to scale a manufacturing business, particularly in the trucking sector, he said.

Pending shareholder approval, the company will be listed on Nasdaq and trade under the ticker symbol "XOS."

NGAC Price Action: NextGen shares were up 0.2% at $9.95 at the close Wednesday.