Executive Summary

Net revenues were $1.16M, down 23% year over year, with EV sales up nearly 80% YoY but more than offset by a sharp decline in forklift revenue; gross loss was $0.06M and net loss was $3.18M ($0.15 EPS) .
Management highlighted that over half of vehicle deliveries were structured as leases; if recognized as sales, revenue would have been about $2.2M, implying a materially different headline revenue outcome and narrative for the quarter .
Execution milestones: Gen 4 SOP still targeted “during 2023” with a production ramp to 20–25 units/month now expected in 1H 2024 (shifted later vs prior quarter); CATL supply agreement in place to secure battery supply and asset‑light production model reiterated .
No SPGI/Wall Street consensus estimates were available for EPS or revenue this quarter; comparisons to estimates cannot be made (note: SPGI consensus unavailable for PEV in Q2 2023).

What Went Well and What Went Wrong

What Went Well

EV sales increased nearly 80% YoY, demonstrating improving demand and delivery cadence in the core medium-duty EV business .
Strategic progress: CATL long‑term battery supply agreement and asset‑light model (reduced parts count from ~450 in Gen 3 to ~70 in Gen 4) underpin cost, quality, and scaling advantages; “we are reconfiguring our Anaheim facility as a showcase/training center” .
Order backlog and multiple partnerships cited by CEO Denton Peng: “We have built a tremendous order backlog and have executed multiple partnerships to further support the sales pipeline of our Gen 4 vehicles over the next several years” .

What Went Wrong

Forklift revenue declined sharply, outweighing EV gains; gross profit turned to a slight loss ($0.06M) vs profit in the prior year due to weaker forklift margins despite better EV margin .
SG&A increased to $3.10M from $2.29M YoY, driven mainly by payroll, contributing to operating loss of $3.16M and net loss of $3.18M .
Timing shift: production ramp to 20–25 units/month is now guided for 1H 2024, later than prior quarter’s expectation of reaching that cadence by year‑end 2023, which can push revenue scaling into next year .

Financial Results

Metric	Q2 2022	Q1 2023	Q2 2023
Revenue ($USD Millions)	$1.50	$1.78	$1.16
Gross Profit ($USD Millions)	$0.33	$0.17	$(0.06)
SG&A ($USD Millions)	$2.29	$3.85	$3.10
Operating Loss ($USD Millions)	$(1.97)	$(3.67)	$(3.16)
Net Loss ($USD Millions)	$(1.93)	$(2.78)	$(3.18)
EPS (Basic & Diluted, $)	$(0.11)	$(0.13)	$(0.15)

Segment/KPI details (disclosure limited):

KPI/Item	Q2 2022	Q1 2023	Q2 2023
EV Sales YoY Growth	n/a	n/a	Nearly +80% YoY (directional)
Forklift Revenue Trend	n/a	n/a	Declined materially (directional)
Adjusted Revenue if Leases recognized as sales ($USD Millions)	n/a	n/a	~$2.20
Weighted Avg Shares (Millions)	18.0 (approx)	20.82	21.26

Note: Company did not disclose quantitative segment breakdown (EV vs forklift) in the release or transcript beyond directional commentary .

Guidance Changes

Metric	Period	Previous Guidance (Q1 2023)	Current Guidance (Q2 2023)	Change
Gen 4 SOP timing	2023	“Start of production in summer 2023”	“Start of production during 2023”	Maintained timing window (less specific)
Production ramp cadence	2023–2024	Ramp to 20–25 units/month “before year‑end 2023”	Ramp to 20–25 units/month in 1H 2024	Lowered/Delayed
Gen 5 chassis independence	2024	Produce ground‑up chassis in 2024	Produce ground‑up chassis in 2024	Maintained
EdisonFuture launch	2025	Target market entry in 2025	Target market entry in 2025	Maintained
Battery supply	Ongoing	CATL strategic supply in place	CATL long‑term supply reaffirmed	Maintained

No revenue, margin, OpEx, OI&E, or tax rate quantitative guidance was provided this quarter .

Earnings Call Themes & Trends

Topic	Previous Mentions (Q4 2022, Q1 2023)	Current Period (Q2 2023)	Trend
Asset‑light model	Emphasized as core strategy; upstream/downstream partnerships and Anaheim facility as a training hub	Reiterated; Anaheim reconfiguration; standardized processes; scaling via partners	Consistent, execution progressing
Battery supply	CATL supply agreement highlighted to secure long‑term battery supply	CATL partnership reaffirmed for Gen 4 K‑Packs; working on additional battery partners	Positive, supply security clarified
Chassis independence (Gen 5)	Plan for ground‑up chassis in 2024 to mitigate Ford E450 dependency	Gen 5 remains 2024; bridge from Gen 4 with shared components	Consistent timeline
Gen 4 SOP & ramp	SOP “summer 2023” and ramp to 20–25/month by YE 2023	SOP “during 2023”; ramp shifted to 1H 2024	Timing slippage on ramp
Retrofit Solutions	Limited mention previously	Explicit focus; gaining traction for cost‑effective fleet electrification	Increasing emphasis
Incentives/regulatory	IRA commercial clean vehicle credit qualification	HVIP‑supported orders and deliveries highlighted	Active use of incentives

Management Commentary

CEO Denton Peng: “We continue to make progress on the development and sales of our fourth‑generation vehicles… We expect to launch production and commercial sales during 2023.” He added, “We have built a tremendous order backlog and have executed multiple partnerships to further support the sales pipeline of our Gen 4 vehicles…” .
Mark Hastings (IR) on revenue mechanics: “Over ½ of our vehicle deliveries in the recent quarter were leases… had those leases been classified as vehicle sales, then our total net revenues would have been about one million dollars higher, or $2.2 million” .
On engineering simplification: “Our Gen 3 system had over 450 individual parts and components… with our new Gen 4 vehicles, we have reduced that number to 70” .
On supply chain: “We have… secured a supply agreement with CATL… for the long‑term procurement of K‑Packs and related products for our Gen 4 vehicles” .

Q&A Highlights

Lease accounting impact clarified: management quantified ~$1.0M revenue effect from lease classification, implying adjusted revenue of ~$2.2M if recognized as sales .
Margin drivers: gross loss driven by weaker forklift margins; EV margins improved YoY, providing mix and margin context .
OpEx: SG&A increase primarily payroll‑related, framing near‑term operating loss dynamics .
(Note: The published transcript reflects prepared remarks and brief Q&A framing; detailed analyst Q&A content was not provided in the furnished transcript –.)

Estimates Context

No S&P Global/Wall Street consensus estimates for PEV Q2 2023 were available via our SPGI feed; therefore, beat/miss analysis versus consensus cannot be provided (SPGI consensus unavailable for PEV).

Key Takeaways for Investors

Core EV demand is improving (nearly +80% YoY EV revenue), but forklift weakness and lease accounting masked topline progress; adjusted revenue implies a stronger quarter than reported .
The asset‑light model (partner manufacturing, standardized processes) and CATL supply agreement should support cost reduction and scaling once Gen 4 production is underway .
Production ramp timeline has slipped to 1H 2024 for 20–25 units/month; near‑term revenue inflection is more likely 2024 than late‑2023, adjusting expectations for timing of scale and margins .
Retrofit Solutions adds an incremental path to monetization with quicker customer ROI, potentially smoothing revenue amid chassis supply constraints .
Continued reliance on incentives (IRA, HVIP) remains a lever for orders and deliveries, particularly in municipal and fleet segments .
Near‑term focus: securing chassis supply and executing SOP; mid‑term thesis rests on Gen 5 chassis independence and broader product flexibility .
For trading, watch for SOP confirmation and any disclosed production/assembly partner announcements; these are likely catalysts for sentiment and valuation re‑rating given the adjusted revenue narrative and scaling roadmap .

PHOENIX MOTOR INC. (PEV)·Q2 2023 Earnings Summary