Aeva Technologies - Q3 2023

Transcript

Operator (participant)

Good day. My name is MJ, and I will be your conference facilitator. I would like to welcome everyone to Aeva Technologies' third quarter 2023 earnings conference call. During the opening remarks, all participants will be in listen-only mode. Following the opening remarks, we will conduct a question-and-answer session. As a reminder, today's conference call is being recorded and simultaneously webcast. I would now like to turn the call over to Andrew Fung, Director of Investor Relations. Andrew, please go ahead.

Andrew Fung (Director of Investor Relations)

Thank you, and welcome everyone to Aeva's third quarter 2023 earnings conference call. Joining on the call today are Soroush Salehian, Aeva's Co-founder and CEO, and Saurabh Sinha, Aeva's CFO. Ahead of this call, we issued our third quarter 2023 press release and presentation, which we will refer to today and can be found on our investor relations website at investors.aeva.com. Please note that on this call, we will be making forward-looking statements based on current expectations and assumptions, which are subject to risks and uncertainties. These statements reflect our views only as of today and should not be relied upon as representative of our views as of any subsequent dates. These statements are subject to a variety of risks and uncertainties that could cause actual results to differ materially from expectations.

For a further discussion of the material risks and other important factors that could affect our financial results, please refer to our filings with the SEC, including our most recent Form 10-Q and Form 10-K. In addition, during today's call, we will discuss non-GAAP financial measures, which we believe are useful as supplemental measures of Aeva's performance. These non-GAAP measures should be considered in addition to and not as a substitute for or in isolation from GAAP results. The webcast replay of this call will be available on our company website under the Investor Relations link. With that, let me turn the call over to Soroush.

Soroush Salehian (Co-Founder and CEO)

Thank you, Andrew, and good afternoon, everyone. It's been an incredibly exciting time at Aeva. As the adoption of FMCW LiDAR continues to build, Aeva is leading this trend, delivering production wins in both automotive and industrial. With growing interest for Aeva's unique 4D LiDAR-on-chip technology and continued advancement on a number of large opportunities, we have strategically positioned Aeva to be in the strongest position for success and to secure additional wins. I would like to highlight key accomplishments which are summarized on slide four. First, I'm thrilled to share that Aeva was selected by May Mobility to be the exclusive production supplier of long-range LiDAR for their autonomous vehicles. This is a multi-year production agreement, where Aeva's 4D LiDAR will replace conventional time-of-flight long-range LiDAR, and was selected to help May Mobility further scale by enabling a broader operational design domain.

Second, Aeva was also awarded a multi-year production program with Nikon for their high-precision industrial inspection products. We have been working with Nikon for some time now, and we're excited to leverage our LiDAR-on-chip technology with micron-level precision to advance to the production phase and open new opportunities in the established and growing industrial automation market. Third, we continue to make strong progress with the top 10 OEM and are now in the final phase with this OEM. This quarter, we received the OEM's highest available rating for manufacturing readiness. This paves the way to be a potential direct supplier to the OEM and is a clear indication of Aeva's ability to support major global automotive programs. We expect the OEM to make the production program award decision over the next quarter. And fourth, we further strengthen Aeva's position for success. We are pleased to welcome Dr.

Stefan Sommer, former CEO of ZF Group and board member at the Volkswagen Group, responsible for procurement, to Aeva's board to help further advance our automotive OEM opportunity. And last, as we move to the production phase, on the heels of our two multi-year production wins in automotive and industrial, and our continued momentum with top global OEMs, including a top ten OEM, we're making a strategic decision to further bolster our already strong balance sheet with a raise of new capital of $145 million through an approximately $20 million private placement and a $125 million preferred share facility with existing long-term stockholders. This strengthens Aeva's position to win additional OEM programs and support them beyond their startup production in a way that minimizes near-term dilution.

I would now like to provide more color on our recent business developments, which begin on slide six. Let's start with our production win in auto with May Mobility, a leader in the development and deployment of AV technology. The company has strategic partnerships with some of the largest automotive and transportation companies in the world, including with Toyota, where they currently provide paid autonomous rides on the Toyota Sienna Autono-MaaS vehicle platform. Through long-term contracts with transit agencies, municipalities, and other businesses, May Mobility operates transit services across a growing number of markets in the U.S., including Michigan, Texas, Minnesota, Arizona, and upcoming in California. To date, May Mobility has provided more than 350,000 rides using its proprietary Multi-Policy Decision Making, autonomous vehicle technology, with additional deployments planned to begin in 2024.

To further scale, May Mobility has been looking for next-generation sensors that can enable expansion of their operational design domain. They selected Aeva's 4D LiDAR, because they believe in the unique capabilities of FMCW technology, and want to leverage Aeva to scale their operations. Compared to time-of-flight LiDAR, Aeva's combination of long range and direct velocity measurement for every pixel, detect and classify small, hazardous objects faster and more accurately to provide the necessary reaction time across a broader range of conditions. Together with Aeva's Ultra Resolution, which utilizes our proprietary velocity data, differentiates stationary from dynamic points, we offer near camera-level resolution, bringing more reliable perception that provides the confidence to expand. We believe other inherent benefits of FMCW also bring value to May Mobility's AV stack.

To provide some real-world examples, retroreflector blooming and road signs, and interference from other sources of light, such as the sun, can challenge time-of-flight LiDAR performance. FMCW is inherently immune to retroreflector blooming and ambient light, enabling Aeva's LiDAR to detect critical objects with no degradation in these scenarios and with clearly defined object segmentation. These are just some of the differentiating capabilities we hope to bring to our partner, May Mobility. As part of our production program win, Aeva 4D LiDAR will be the exclusive long-range LiDAR on May Mobility's autonomous vehicles globally, and replaces the conventional time-of-flight long-range LiDAR. The agreement includes a five-year volume commitment through 2028, with deliveries already starting this quarter and production ramping in 2025. Moving now to slide seven.

We achieved an important milestone in industrial automation with the award of our first production program with Nikon to use Aeva's LiDAR-on-chip technology to power the next-generation, high-precision industrial inspection products. This suite of products is used for industrial metrology and quality control during high-volume manufacturing, and Nikon's current generation is already deployed to customers across the automotive, aerospace, and renewable energy industries, including some of the largest OEMs, such as BMW, Stellantis, and other automakers. Being the same silicon photonics chip architecture used for our automotive applications, but with different algorithms to achieve micron-level precision, Aeva's technology will enable Nikon to offer a faster and smaller solution than is currently available, bringing added value to Nikon's current customers, as well as opening new opportunities for additional applications.

The production award comes after two years of close collaboration with Nikon to develop and validate our LiDAR-on-chip technology that meets Nikon's stringent performance requirements. Aeva's start of production is on track to the target we set two years ago and is planned for late 2024. This production agreement includes minimum volume commitments from Nikon over the multi-year program. Beyond this, we continue to be engaged on additional opportunities in the industrial space. As we have previously discussed, the industrial automation market is an established and growing multi-billion-dollar opportunity, and high-precision measurement is a growing field within industrial automation, where we are seeing strong interest for Aeva's unique capabilities. Because of this pull from the market, we developed a perception platform for high-precision measurement that utilizes software to adapt performance for different requirements across multiple non-automotive applications.

Nikon will be the first to use this perception platform, and we look forward to bringing additional applications to the market. Let's turn to slide 8 to discuss the latest in our collaboration with the top 10 OEM. This quarter, we continued to make strong progress with the OEM. Most notably, the approval of Aeva's manufacturing processes and ability for Aeva to be a potential direct supplier to the OEM. I am incredibly proud to say that Aeva received the OEM's highest rating category for manufacturing readiness, which the OEM indicated is only given to a small percentage of their supplier base. The rating is based on a comprehensive audit of Aeva's manufacturing team and processes, and an on-site assessment of Aeva manufacturing partners' automated production facility. This is a clear validation of Aeva's maturity and ability to operate as a direct Tier 1 supplier for large global automotive programs.

Over the quarter, this OEM continues to expand their vehicle fleet with Aeva 4D LiDAR to support their milestones and overall AV stack. We remain highly encouraged by our progress and ability to help the OEM achieve their stringent requirements and use cases. This has resulted in Aeva being further down-selected to the final phase with this OEM. We expect the OEM to award the production program in the next quarter and hope to have more to share soon. Moving now to slide nine. We are excited to have Dr. Stefan Sommer join Aeva's Board of Directors. Stefan brings an extraordinary breadth of experience as an automotive industry veteran with a history leadership career in automotive....

Stefan's past leadership roles include some of the largest global automotive car makers, including Member of the Board of Volkswagen Group and Head of Components and Procurement at the VW Group, as well as leading some of the most renowned automotive Tier 1 suppliers, including as the CEO of the ZF Group, where he led and executed a strategy that helped grow ZF to become one of the world's largest Tier 1 suppliers. With Aeva's commercial momentum in automotive, Dr. Sommer's experience will be invaluable as we work together to bring automotive programs to SOP and work toward winning additional opportunities. Given his deep knowledge of the automotive industry, Dr. Sommer's interest to join Aeva's board points to the significant potential of Aeva's differentiated technology. We look forward to working together to accelerate adoption of Aeva's 4D LiDAR.

With that, let me turn the call over to Saurabh to discuss the financials.

Saurabh Sinha (CFO)

Thank you, Soroush, and good afternoon, everyone. Let's turn to slide 11, which summarizes Aeva's financial results for Q3 2023. Revenue for Q3 was $0.8 million, which continued to be driven by growing deliveries of Aeries II. Non-GAAP operating loss was $30.3 million, as we maintained a deliberate and strategic approach to R&D and other operating spend. Reflecting on our cash spend for the quarter, gross cash use, which we define as operating cash flow less capital expenditure, was $29.1 million. Our balance sheet remains strong, with $233.7 million of cash, cash equivalents, and marketable securities at the end of Q3. And weighted average shares outstanding in the quarter was 222.8 million. To sum it up, Aeva is maintaining strong financial discipline while making significant progress on our commercial momentum.

As we move to the important stage of preparing for start of production, we will continue to be thoughtful in managing our capital with a focus on positioning Aeva to support our existing customers, as well as winning additional programs. As part of this focus, we made a strategic decision to further bolster our already strong balance sheet with additional capital, as summarized on slide 13. I would like to share more about what drove this decision. This year, we have been making significant progress on our objectives, from multiple production program wins to advancing on other engagements, such as with the top 10 OEM, and demonstrating the maturity of Aeva's manufacturing and ability to support production programs. Because of this, we continue to see growing interest for our 4D LiDAR and are near the final decision stage on a number of opportunities.

We believe the additional capital strategically puts Aeva in a stronger position to win additional programs by building OEM confidence in our ability to support multiple programs, including with other major automotive OEMs looking to select few suppliers who can support their high volume production programs beyond SOP. In total, we reached agreements for additional capital of $145 million with some of our largest and longest stockholders, Adage and Sylebra, demonstrating their continued strong conviction in Aeva's unique technology and potential. Importantly, the financing structure minimizes near-term dilution with approximately $20 million of the total through a private placement of common stocks. The remaining $125 million is a non-voting preferred shares facility that is currently undrawn and can be drawn at Aeva's discretion upon a new automotive OEM production win.

This flexibility will enable us to be strategic in how and when we may utilize the additional capital, demonstrating our continued focus on taking a prudent approach to capital deployment. With that, I will hand the call back to Soroush for closing remarks.

Soroush Salehian (Co-Founder and CEO)

Thank you, Saurabh. When we started Aeva, we set out to bring a unique perception solution to a broad range of applications, from automated driving to industrial automation and beyond. While the macro environment has been challenging, I can say that I've never been more convinced in Aeva's potential and future outlook. Our transition from development phase to production phase is gaining momentum with our latest production program wins with May Mobility and Nikon, highlighting both the broad applications for 4D LiDAR and us being on track for production deployments by 2025. And we believe this is only the beginning. We continue to advance on a number of other large near-term opportunities, such as with the top 10 OEM, expanding our board with leading automotive executive experience...

strategically bolstering our balance sheet to put Aeva in a further position of strength to secure additional production wins and support OEMs beyond their start of production. I would like to thank our talented and dedicated team at Aeva for enabling us to achieve these milestones. Together with our stakeholders, I am excited to continue executing on our mission and bring 4D LiDAR to market. With that, we will now open the line up for questions.

Operator (participant)

Thank you. To ask a question, you may press star, then one on your telephone keypad. If you're using a speakerphone, please pick up your handset before pressing the keys. To withdraw your question, please press star then two. Please limit yourself to one question. At this time, we will pause momentarily to assemble our roster. Today's first question comes from Joe Moore with Morgan Stanley. Please go ahead.

Joe Moore (Managing Director and Head of US Semiconductors)

Great, thank you. I wonder if you could talk about the progress with the Tier 1 win that you talked about. I guess if you're gonna be able to make the announcement in the next quarter, does that mean that the business is already won and that the announcement is kind of more of a formality? I guess, you know, will you be able to disclose who the customer is at that, you know, in this next quarter time frame?

Soroush Salehian (Co-Founder and CEO)

Hey, Joe. Yeah, happy to answer the question. Look, what I can say is, as we talked on the call and as we have talked, you know, throughout the past few months, we have continued to make step-by-step progress in a stronger and stronger way with this OEM. In the past few months, the past quarter, they have deployed additional vehicles using our LiDARs, you know, with our technology on the road. And then what we are now is really in that final phase of the discussions, the negotiations, the commercial topics as it goes towards the production award. It has not been awarded yet, but as mentioned, we, you know, we're feeling strong about that, and we intend to receive the nomination award decision from the OEM in the next quarter.

Of course, we, you know, fully hope that we can also talk about and name the OEM at that time. So, and you know, obviously, this is a top 10 OEM, so we think this is a definitely a very important program that we've been working towards for some time. And on the heels of some of these wins and all the announcements we talked about today, we continue to make progress with this OEM, but also other, you know, top global OEMs that we're progressing and advancing with across automotive, as well as industrial applications.

Joe Moore (Managing Director and Head of US Semiconductors)

Yeah, yeah. I wanted to ask them about that. I mean, to the extent that you're this close to making an announcement, you know, with one top ten OEM, when you look at the kind of capability that your technology brings, I would think that would start to create that enthusiasm. You know, what kind of time frame? How long should we expect it to take if you get interest from other OEMs, how long would it take to kind of move that into something that could drive revenue down the road?

Soroush Salehian (Co-Founder and CEO)

Yeah, so, so as we have talked about, the programs we're talking about here, first of all, you know, the two wins that we actually announced this week are both for mid-decade SOPs, right? So May Mobility in 2025, Nikon in 2025, different industries. We have been talking about this for some time. We said we're gonna go to production in 2025. Now we are showing that validation, and these are, I think, two big points that are showing that. Additionally, this other win program, including top 10 OEM, also has similar mid-decade type SOPs. We have not shared that yet, and at the right time, once we can talk about it, we will. But that's when, things are gonna also start transitioning as we go along.

As we're moving now from this kind of development phase towards the production phase, we believe that is gonna start to translate towards those increasing revenues and also growth in our actual shipments and sales with multiple of these customers. So, that's what I can say right now, but I think from a timing standpoint, those timelines remain as we have discussed before.

Joe Moore (Managing Director and Head of US Semiconductors)

Great. Thank you very much.

Operator (participant)

Thank you. The next question is from Colin Rusch with Oppenheimer. Please go ahead.

Colin Rusch (Managing Director and Head of Sustainable Growth and Resource Optimization Research)

Thanks so much, guys. You know, as you've gotten OEMs starting to work with some of this velocity data in a little bit more detail, can you talk about what you're seeing in terms of how they're using it and, and what it's allowing them to do in terms of differentiating between different types of objects as well as, you know, simplicity of navigation systems?

Soroush Salehian (Co-Founder and CEO)

Yeah, Colin, happy to answer that. So look, I think we, we have been talking about kind of the general transition from perception and sensing standpoint over time, which is not overnight, but over time from, you know, more time of flight, especially in the long-range sensing towards FMCW. And this is in automotive, but also in other application industrial that's also we're seeing. I think with the announcements we have been talking about this week, with the validation that we see with the production deal, with May Mobility, for example, and with Nikon, we are seeing, you know, some of those actually form and really put in place. But in automotive, for example, there is a, you know, number of reasons that OEMs go and look at actually switching over to Aeva or really expanding with Aeva.

We don't want to be necessarily always about switching. It's actually also more about being able to do what they could not really do before, which is really enabling, right? It's enabling, how they actually can expand their operational design domains... So as you go from lower speeds to higher speeds, to highway speeds, as you're able to, to do that, there are a number of use cases that need to be met. And especially, you know, in working with a number of the OEM and customers we have so far, they have always had challenges and risks, those regardless of the technology they used before. And when they started using Aeva and our FMCW approach, that's when it starts to quickly using the velocity dimension, having the advantages of no interference, the long-range sensing and the Ultra Resolution features.

It starts to actually—it, it's not about the specs and the speeds. It starts to actually help them solve actual real-world use cases, to deploy safe highway autonomy-type applications. And that's where I think is, you know, from, from what's very exciting for us is seeing that actually happen on the road with real-world testing. So, and that's the case, for example, with top 10 OEM. And in May Mobility's case, as you know, as we've briefly mentioned, they are looking to also scale their operating design domain, right? And with the existing solutions they had, that was a challenging proposition. With our approach, they see the potential with the velocity and the FMCW approach to be able to actually do that and scale their operations further.

So that's in automotive and in industrial separately, we also see the opportunity, which really highlights the flexibility of the technology, to continue to expand in industrial applications where performance, size, and cost all have to be continuously improved. And that's where, you know, we see some of that potential and the momentum we've gained, for example, Nikon, now validating it and really moving it towards the production phase. So, it's about enabling new use cases. It's about helping the customer solve what they could not before, and that's, I think, what we're all about. So if that, I hope that answers your question.

Colin Rusch (Managing Director and Head of Sustainable Growth and Resource Optimization Research)

Yeah, it's incredibly helpful. And then on the manufacturing side, as you wrap up and with Fabrinet, can you talk about where the real meaningful challenges are for you guys right now, between now and when you have to start delivering to Nikon? It would seem that you guys have to be getting awfully close, so I want to understand, you know, what sort of hurdles are remaining before you feel really confident on scaling up.

Soroush Salehian (Co-Founder and CEO)

Yeah. As we said, you know, maybe just talking briefly about the opportunity with Nikon and answer your question in that. We've been working with Nikon, of course, for, you know, a couple of years now, and even about two years ago, we set out the target to go to production by 2025. This week, we announced that we are not only on track, we have completed the validation and meeting the stringent requirements from Nikon to the Nikon level precision, which, by the way, is also a unique feature to FMCW, to our understanding versus time-of-flight.

I think from a timing standpoint, obviously, as we said, you know, that means that we need to go start our production ramping for Nikon late next year, so that Nikon's product availability can happen by 2025. We have been working on this for some time. As we said earlier in the year, you know, we set out to expand our manufacturing on the system side. We are continuing now to you know bring in additional automation on the manufacturing of our LiDAR-on-chip module, which is really the core and the heart of the product that goes that we supply to Nikon in addition with our processing. That is the focus for us.

I think, you know, in the next number of months, as we get closer, we'll be talking about updates on this, on the progress for this. But we have been working with Fabrinet and team we have on site there to really prepare, and continue, you know, expanding the outputs and throughputs, and focusing on the yields in our, you know, automated, manufacturing line over there that we're looking towards.

Colin Rusch (Managing Director and Head of Sustainable Growth and Resource Optimization Research)

Thanks so much. Appreciate it.

Operator (participant)

Thank you. The next question comes from Suji Desilva with ROTH Capital. Please go ahead.

Suji Desilva (Managing Director and Senior Research Analyst)

Hi, Soroush. Hi, Saurabh. Question on the top 10 OEM as well for me. I just want to be clear, the one you're talking about here, is that the same one with the award win you announced and the perception stack? I just want to clarify that.

Soroush Salehian (Co-Founder and CEO)

Yeah, this is the same, this is the same.

Suji Desilva (Managing Director and Senior Research Analyst)

It's all the same one. Okay.

Soroush Salehian (Co-Founder and CEO)

Yep.

Suji Desilva (Managing Director and Senior Research Analyst)

Sure.

Soroush Salehian (Co-Founder and CEO)

Same one that we've been talking about.

Suji Desilva (Managing Director and Senior Research Analyst)

Great.

Soroush Salehian (Co-Founder and CEO)

It's not, it's not the only one that is engaged, obviously.

Suji Desilva (Managing Director and Senior Research Analyst)

Understood.

Soroush Salehian (Co-Founder and CEO)

Multiple OEMs that are in there.

Suji Desilva (Managing Director and Senior Research Analyst)

Understood. Understood. And then so for this OEM, have you specified whether this engagement is for a broad platform win for the OEM that'll be multiple models and across or whether it's a target sort of vehicle? Just to understand if you've kind of clarified the breadth of your opportunity here.

Soroush Salehian (Co-Founder and CEO)

Yeah, no, we have not discussed that. I think that will be, I think, the right opportunity in the future as we, as we, you know, go towards the final decision coming up. But what I can tell you is obviously the opportunity is from a top 10 OEM with large volumes, and with production in middle of the decade, as we've talked about. So, this is not some sort of a pilot program or something like that, that we're talking about here.

Suji Desilva (Managing Director and Senior Research Analyst)

Okay. That color definitely helps. And then lastly, on the OEM, or just in general with the auto OEM waterfall of wins, is there anything that gets, quote-unquote, "easier" after you secure this first one publicly and start kind of delivering to them in terms of the second, third, and fourth win? Just want to understand how that might be or whether they're each kind of fresh starts.

Soroush Salehian (Co-Founder and CEO)

Yeah. Well, first of all, I think, hopefully you can see some of the trend already happening, right? So, you know, we've been talking about our progress and momentum in the space, and, you know, converting additional programs to wins. This week, we announced not one, but two in each sector. And we're really excited about that. And, you know, these are folks that, you know, for example, in May's case, have been using time-of-flight before and are familiar with LiDAR.

So I think that's where we see opportunity, and the progress to actually be able to move faster because folks have experience, they know what they're doing, they've been doing this for some time, and so they can also appreciate the advantages in terms of what they can see that helps them, you know, enable them to expand their operations, scale up their deployments, and all of that. So and we absolutely, you know, believe that with all the work that we're doing here, with, I think, really the breakthrough the past few months that we've had on the heels of two OEM wins, expanding our board with automotive experience with Dr. Sommer coming on, and his, you know, renowned experience in the space as CEO of ZF and Volkswagen, as well as bolstering a balance sheet.

All of this really helps us to position Aeva in a really strong position to win additional programs as we go towards production, and also give confidence to our customers that are looking at a select few players that can not just win something, but also be there beyond their SOPs to support them. That's really what we're doing here, you know, in a multi-step approach. That's what I can say, and I think, you know, obviously, we do believe that with us delivering on a first large kind of OEM program win, subsequent ones are gonna be that much more streamlined to get and move on from there.

Joe Moore (Managing Director and Head of US Semiconductors)

Okay. Very helpful, Soroush. Thank you.

Operator (participant)

Thank you. The next question is from Richard Shannon with Craig-Hallum. Please go ahead.

Richard Shannon (Senior Research Analyst)

Well, hi, guys. Thanks for taking my questions as well. Maybe we'll hit on the top 10 OEM here. Soroush, I think your language was, you were down selected in this past quarter here. Does that mean you're the only supplier remaining that they're looking at, or are there others?

Soroush Salehian (Co-Founder and CEO)

So, look, at the end of the day, we, we never know in terms of what the end customer does, and, and that, you know, is not something that necessarily we, we look at. I think what we, what we really look at is there's been actually multiple layers of down selection does happen. At this stage, we're in the final phase, and as I mentioned, with the decision coming up in, you know, the next quarter. But also importantly, we have been working with this OEM for some time, and they have already started deploying our sensing technology on their vehicles, and which actually replaces some time-of-flight technology as we have talked about in the past, right? So that is what I can say right now.

That gives us that additional further, you know, information and, and, you know, support that we're looking for. So, obviously, we're also working on around providing some of our perception, and collaborating with the OEM on the perception to really utilize FMCW advantages, including the velocity picture. And since the last time we spoke, of course, the OEM has also deployed with our LiDAR on additional vehicles that they have continued to build. So, you know, a number of things happening, but, I think I would stop there for the information.

Richard Shannon (Senior Research Analyst)

Okay, fair enough. Appreciate that, that color. My follow-on question here is related to May Mobility. How do we think of them in terms of the, the ultimate, scale of opportunity that exists with them through 2028? I don't know if this is something that's even in, you know, within an order of magnitude of a, of a typical, automotive OEM you're going with, but anyways, you could give us some color on how, how big that could be, relatively speaking.

Soroush Salehian (Co-Founder and CEO)

Sure, happy to. So let me give you a bit of color about May and answer your question, hopefully there. So, obviously, we're very excited about this. It's, it's, you know, one of the first deployments for us in the automotive mobility sector, starting with our two deployment already, this year. And, let me give you a little background about May and kind of give you some context about the size and the comparison you mentioned. So, first of all, May has been around for a long time, been working with a number of players, and, you know, they're partnered with some of the largest automotive companies, including Toyota. They're operating paid autonomous rides today across four states, with more coming next year.

They have done over 350,000 rides and are taking a more measured approach when it comes to scaling, as compared to some of the other players, really through paid contracts in municipalities and cities. In terms of scale, you know, May has talked about this, you know, they're scaling the operations by thousands of vehicles in the next few years here. Again, what they see in Aeva is the unique FMCW approach and enabling them really to expand their current ODDs or operating design domains, as they continue to expand. So, we're talking about here a multi-year production deal in which Aeva is the exclusive long-range LiDAR supplier for May vehicles globally.

We have minimum volume commitments starting from this quarter, every year through the end of 2028. In terms of the size of this opportunity, we actually believe this is similar to the potential size of some of the initial luxury passenger vehicle programs that are coming to the market. And that's what we can say. Again, May have probably helped out thousands of vehicles. We're talking about, you know, multiple LiDARs per vehicle. And the other thing I think that's interesting here is, as compared to the luxury passenger or an initial deployment of luxury passenger, passenger cars, is that the mobility business model does actually enable us in a mutual beneficial scenario, to have higher ASPs than a typical passenger vehicle that are considerable, right?

So that is why, in terms of the overall size, we're actually pretty excited about this. Also, this aligns with the timing of what we have always talked about, 2025 with our start of production. So, you know, we're working hard towards delivering our commitments and, we're really excited to partner with them for the years ahead.

Richard Shannon (Senior Research Analyst)

Okay, appreciate that detail as well. I will jump out of line, guys. Thank you very much.

Operator (participant)

Thank you very much. This concludes our question and answer session, and the conference is now concluded. Thank you for attending today's presentation. You may now disconnect.