Daniel Lai's questions to LEV leadership • Q1 2024
Question
The analyst asked for clarification on the Q1 gross margin dynamics, including the impact of new product launches, and inquired about the recent workforce reduction and the company's comfort with its current headcount.
Answer
The negative gross margin in Q1 was attributed to low volumes and initial costs from launching the Lion5, LionD, and in-house batteries, with volatility expected to continue in the short term. The company is comfortable with its current headcount after rightsizing, which primarily affected overhead and was a necessary adaptation to subsidy delays. The focus is now on execution and reaching positive EBITDA and free cash flow.