Executive Summary

ELMS generated its first revenue as a public company in Q3 2021 ($0.136M) on initial deliveries of five Urban Delivery vans; net loss was $(17.8)M or $(0.15) per share as the company transitioned from pre-revenue to production and commercialization .
Management cut 2021 production guidance to 300–500 units (from 1,000 prior) due to shipping container shortages and elevated spot freight rates, while highlighting a 6,000-unit order commitment with Randy Marion and December homologation for on-road deliveries as near-term catalysts .
Operating expense and capex guidance were reduced for 2021 (Opex: $65–$70M press release; CFO: $60–$70M; Capex: $20–$25M), reflecting capital efficiency and timing; elevated shipping costs compressed per-vehicle margins to low single digits near term .
Strategic milestones included a long-term battery supply agreement with CATL for LFP packs, expanded service coverage via Cox Automotive, and an Asia Pacific Operations Center plus a San Francisco Urban Mobility Lab to accelerate digital/telematics—collectively supporting 2022 scale-up and cost localization efforts .

What Went Well and What Went Wrong

What Went Well

First revenue and production launch: “We began production at our Mishawaka, Indiana plant and posted revenue as we shipped our Class 1 Urban Delivery vehicles… We are now a revenue-generating company” .
Commercial traction: binding PO for 1,000 units and a 6,000-unit firm commitment with Randy Marion; pilot and demo activity broadening across delivery, rental, service, medical, and campus use cases .
Strategic de-risking: secured CATL battery supply through 2025, built charging/service ecosystem (EVgo, Cox), and opened APOC (Shanghai) and Urban Mobility Lab (SF) to strengthen supply chain and data/telematics capabilities .

What Went Wrong

Supply chain and freight inflation: spot container rates near $25,000 led ELMS to reduce 2021 production to 300–500 (from 1,000) and pushed vehicle margins from “double digits to low single digits” .
Logistics bottlenecks vs plant readiness: “no restriction in… production capabilities… The issue is getting parts to the backdoor” (plant staffed and lines running) .
Elevated opex and early-stage costs: Q3 operating expenses rose to $22.3M (R&D $5.6M, G&A $16.7M) while homologation and testing were completed ahead of December on-road certification .

Financial Results

Income Statement and Cash (comparative)

Metric	Q3 2020 (YoY)	Q2 2021	Q3 2021
Revenue ($M)	$0.000	N/A	$0.136
Gross Margin ($M)	N/A	N/A	$0.002
R&D Expense ($M)	N/A	$2.410	$5.642
G&A Expense ($M)	$1.916	$5.060	$16.699
Total Operating Expenses ($M)	$1.916	$7.470	$22.341
Net Loss ($M)	$(1.942)	$(8.586)	$(17.779)
Diluted EPS ($)	N/A	$(0.10)	$(0.15)
Cash & Restricted Cash ($M, end of period)	N/A	$217.4 (cash)	$170.9 total cash incl. restricted

Notes: ELMS reported first revenue in Q3 2021 after no revenue in Q2 2021; predecessor G&A and net loss provide partial YoY context .

KPIs and Operating Metrics

KPI	Q3 2021
Vehicles delivered in quarter	5 units (Urban Delivery)
2021 production plan	300–500 units (revised)
Order commitments	1,000-unit PO within a 6,000-unit firm commitment (Randy Marion)
Shipping/container spot rate	Up to ~$25,000 per container (cut margins to low single digits)
Anticipated near-term build rate	~40 vehicles/week (stated mid-November context)
Workforce at plant	~45–50 now; ramping to ~100 by year-end
Cash including restricted (9/30/21)	$170.9M

Guidance Changes

Metric	Period	Previous Guidance	Current Guidance	Change
Production (units)	FY 2021	1,000 units	300–500 units	Lowered
Total Operating Expenses ($M)	FY 2021	$75–$80	$65–$70 (press release) ; CFO: $60–$70	Lowered
Capital Expenditures ($M)	FY 2021	$25–$30	$20–$25	Lowered
Urban Delivery certification	2021	SOP Q3, on-road cert timing not specified	Certified on-road launch planned December 2021	Clarified timeline
2022 production guidance	FY 2022	On track vs plan	To be provided next call; long-term freight contracts expected	Deferred detail

Management also articulated that contracting freight for 2022 at ~60% of spot could enable up to ~15% gross margin (two vehicles per container assumption) by 2H22, contingent on logistics normalization and cost actions .

Earnings Call Themes & Trends

Topic	Previous Mentions (Q1 2021 and Q2 2021)	Current Period (Q3 2021)	Trend
Supply chain & freight	Q1: SPAC, no operations . Q2: “Strategic supply chain in place” and 2021 target 1,000 units .	Elevated spot rates (~$25k/container) and container availability issues forced 2021 production cut; plan to lock 2022 contracts below spot .	Worsened near term; mitigation via contracts.
Product milestones	Q2: Affirmed Urban Delivery SOP by end-Q3 .	Began production; first revenue; December on-road certification; Class 3 Urban Utility approved for 2H22 .	Execution progressing; second product accelerated.
Commercial traction	Q2: Working to finalize order commitments; Cox service partnership .	1,000-unit PO; 6,000-unit commitment; strong pipeline across delivery, rental, service, medical, campus .	Strengthening demand indicators.
Battery/technology	Q2: No CATL deal disclosed.	CATL LFP supply through 2025; localization plans; ELMS AIR telematics build-out via Urban Mobility Lab .	De-risked supply; expanding software/data.
Regional expansion	Q2: Planning global offices (Shanghai, SF) .	APOC Shanghai operational; Montreal HQ added for Canada .	International footprint expanded.
Regulatory/macro	Q2: Noted EV adoption tailwinds .	Reinforced tailwinds (Infrastructure Bill, COP26, Canada mandate 100% ZEV by 2035) .	Supportive policy backdrop.

Management Commentary

“We began production… and posted revenue as we shipped our Class 1 Urban Delivery vehicles… We are now a revenue-generating company, not a pre-revenue company” — James Taylor, CEO .
“Spot rate shipping costs are running as high as $25,000 per container… These elevated shipping and logistics costs have cut our margins per vehicle from double digits to low single digits” .
“We made the decision to lower our production to 300 to 500 vehicles for the year… We’re finalizing long-term shipping and logistics contracts for 2022 to avoid paying at current spot rates” .
“We announced the deal with CATL that secures the battery supply for the Urban Delivery through 2025… We’re also… to localize production of our battery packs in the U.S.” .
“We expect fully certified Urban Delivery vehicles will be shipped in December” .

Q&A Highlights

Plant readiness vs constraints: Plant staffing, CapEx, and lines were “on track”; constraints are parts/containers, not factory capacity .
2021 mix and ASPs: 300–500 units to include both EV Campus and certified on-road vehicles; blended prices ~$27k (campus) and $34.5k (on-road) .
Pricing power: Early tests of ~$2,000 sticker increases met “no pushback,” balanced against fleet TCO goals and potential incentives .
Build cadence and staffing: ~40 vehicles/week in mid-November context; workforce ~45–50, ramping to ~100 by year-end .
Margin recovery path: 2022 freight contracts at ~60% of spot could save ~$5k/vehicle (two vehicles per container) and support up to ~15% gross margin by 2H22 .

Estimates Context

Wall Street consensus (S&P Global) for ELMSQ Q3 2021 and FY estimates was unavailable in our system due to missing CIQ mapping; as such, we cannot provide a formal consensus comparison for revenue or EPS this quarter. We attempted to retrieve S&P Global estimates but none were available for ELMSQ in our data access [SpgiEstimatesError for ELMSQ mapping].
Implication: Without consensus, we cannot label beats/misses vs Street; investors should anchor near-term expectations to management’s revised production, opex, and capex outlook and the December homologation milestone .

Key Takeaways for Investors

Commercial feasibility demonstrated: initial deliveries and first revenue mark a key de-risking step; December homologation should unlock on-road volumes and revenue recognition at the $34.5k price point .
Demand signal is strong: a 6,000-unit commitment with Randy Marion plus broad-based pilot activity across delivery, rental, service, medical, and campus verticals supports multi-segment adoption in 2022 .
Near-term margin headwinds are transitory but material: container shortages and ~$25k spot rates drove margin compression and the 2021 production cut; 2022 logistics contracts/localization are the catalyst to restore double-digit margins by 2H22 .
Capital efficiency and cash runway: reduced 2021 opex ($65–$70M press release; CFO: $60–$70M) and capex ($20–$25M) with $170.9M in cash including restricted at quarter-end provide flexibility to reach 2022 milestones .
Product roadmap on track: Urban Utility (Class 3) is board-approved for 2H22 and could be pulled forward given customer pressure; limited direct competition in targeted configurations could support pricing and mix .
Trading setup: December certification, cadence updates on weekly build rates, freight contract execution, and further order conversions are likely stock catalysts into early 2022; watch for updates on 2022 production guidance on the next call .

Appendix: Source Documents

Q3 2021 8-K earnings press release (Exhibit 99.1): headline results, guidance, financial statements .
Q3 2021 earnings call transcript: operational context, margins, logistics, pricing, ramps, quotes .
Q2 2021 8-K press release: prior guidance (1,000 units; opex $75–$80M; capex $25–$30M) and opex breakdown .
Sept. 27, 2021 8-K: Randy Marion firm order agreement details (6,000 units; 1,000-unit PO; PO timing) .

Electric Last Mile Solutions, Inc. (ELMSQ)·Q3 2021 Earnings Summary