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What changed in Xos, Inc.'s 10-K — 2024 vs 2025

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Paragraph-level year-over-year comparison of Xos, Inc.'s 2024 and 2025 10-K annual filings, covering the Business, Risk Factors, Legal Proceedings, Cybersecurity, MD&A and Market Risk sections. Every new, removed and edited paragraph is highlighted side-by-side so you can see exactly what management changed in the 2025 report.

+428 added−380 removedSource: 10-K (2026-03-30) vs 10-K (2025-03-31)

Top changes in Xos, Inc.'s 2025 10-K

428 paragraphs added · 380 removed · 314 edited across 8 sections

Item 1. Business

Business — how the company describes what it does

81 edited+44 added−17 removed15 unchanged
Biggest changeToday the most popular customer configurations utilizing our chassis include the following: • Commercial Stepvans: Stepvan configurations are an attractive choice for our wide-range of parcel delivery, linen, and food & beverage customers. • Armored Trucks: Armored truck configurations using our X-Platform are popular with Xos customers specializing in armored cash transport and logistics.
Biggest changeToday, the most popular customer configurations utilizing the Xos chassis include the following: • Commercial Stepvans : Stepvan configurations are an attractive choice for a wide range of parcel delivery customers, providing efficient and reliable zero-emission last-mile delivery capabilities. • Armored Trucks : Armored truck configurations using the Xos chassis are popular with customers specializing in armored cash-in-transit and logistics applications. 10 • Uniform Rental & Linen Delivery : The Xos chassis supports configurations for uniform rental, linen delivery, and similar commercial laundry logistics operations. • Food & Beverage: The Xos chassis addresses the needs of food and beverage distribution customers operating last-mile and regional delivery routes.
The governing regulations, which are issued by the 15 Pipeline and Hazardous Materials Safety Administration, are based on the United Nations Recommendations on the Safe Transport of Dangerous Goods Model Regulations and related U.N. Manual Tests and Criteria. The regulations vary by mode of shipping transportation, such as by ocean vessel, rail, truck or air.
The governing regulations, which are issued by the Pipeline and Hazardous Materials Safety Administration, are based on the United Nations Recommendations on the Safe Transport of Dangerous Goods Model Regulations and related U.N. Manual Tests and Criteria. The regulations vary by mode of shipping transportation, such as by ocean vessel, rail, truck, or air.
Our streamlined architecture now contains nearly all high-voltage cables, wiring harnesses, and sensitive electronic components within protective structures or fully enclosed frame rails, aimed at increasing the resilience of our vehicles in real-world fleet operations. All Xos vehicles utilize lithium iron phosphate (LFP) battery packs, which are the most widely adopted chemistry in commercial electric vehicles globally.
The streamlined architecture now contains nearly all high-voltage cables, wiring harnesses, and sensitive electronic components within protective structures or fully enclosed frame rails, aimed at increasing the resilience of the Company’s vehicles in real-world fleet operations. All Xos vehicles utilize lithium iron phosphate (LFP) battery packs, which are the most widely adopted chemistry in commercial electric vehicles globally.
The information provided on, or accessible through, our Investor Relations website is not a part of this Annual Report on Form 10-K, nor is such information incorporated by reference herein, and such information should not be relied upon in determining whether to make an investment in our common stock.
The information provided on, or accessible through, the Company’s Investor Relations website is not a part of this Annual Report on Form 10-K, nor is such information incorporated by reference herein, and such information should not be relied upon in determining whether to make an investment in the Company’s common stock.
Regulations in Canada Our vehicles available for sale in the Canadian market are subject to environmental and safety certifications administered by the appropriate Canadian regulatory authorities, including, but not limited to the Canada Motor Vehicle Safety Standards, which is administered by Transport Canada. Air quality standards are administered by Environment Canada, which accepts U.S. EPA certification.
Regulations in Canada The Company’s vehicles available for sale in the Canadian market are subject to environmental and safety certifications administered by the appropriate Canadian regulatory authorities, including, but not limited to the Canada Motor Vehicle Safety Standards, which is administered by Transport Canada. Air quality standards are administered by Environment Canada, which accepts U.S. EPA certification.
See “ Changes in U.S. trade policy, including the imposition of tariffs and the resulting consequences, could adversely affect our business, prospects, financial condition and operating results,” in Part I, Item 1A “Risk Factors” of this Report. Governmental Programs, Incentives & Regulations Our business is impacted by various government programs, credits, incentives and policies.
See “Changes in U.S. trade policy, including the imposition of tariffs and the resulting consequences, could adversely affect our business, prospects, financial condition and operating results,” in Part I, Item 1A “Risk Factors” of this Report. Governmental Programs, Incentives & Regulations The Company’s business is impacted by various government programs, credits, incentives and policies.
A significant portion of our customers operate in the parcel and delivery segment which has a “peak season” between the Thanksgiving and Christmas holidays, resulting in preparatory fleet expansions leading into such period followed by declined new vehicle purchases thereafter. Intellectual Property Our ability to protect our material intellectual property is important to our business.
A significant portion of the Company’s customers operate in the parcel and delivery segment which has a “peak season” between the Thanksgiving and Christmas holidays, resulting in preparatory fleet expansions leading into such period followed by declined new vehicle purchases thereafter. Intellectual Property The Company’s ability to protect its material intellectual property is important to its business.
Clean Air Act requires that we obtain a Certificate of Conformity issued by the EPA for vehicles sold in all states, and a California Executive Order issued by the California Air Resources Board (“CARB”) is required for vehicles sold in California.
Clean Air Act requires that the Company obtain a Certificate of Conformity issued by the EPA for vehicles sold in all states, and a California Executive Order issued by the California Air Resources Board (“CARB”) is required for vehicles sold in California.
Additionally, certain states, known as “CARB opt-in states” have adopted the California standards that are either already effective or take effect in the next few years.
Additionally, certain states, known as “CARB opt-in states,” have adopted the California standards that are either already effective or take effect in the next few years.
Technology Supporting Our Products & Services Xos Vehicles & Powered by Xos™ Our proprietary X-Platform chassis serves as the foundation for all Xos vehicle products. Unlike traditional Class 5 and 6 platforms, our chassis was originally designed and modeled around a more robust Class 7 vehicle architecture.
Technology Supporting Our Products & Services Xos Vehicles & Powered by Xos™ The Company’s proprietary chassis serves as the foundation for all Xos vehicle products. Unlike traditional Class 5 and 6 platforms, the Xos chassis was originally designed and modeled around a more robust Class 7 vehicle architecture.
We believe the primary competitive factors in the commercial vehicle market for medium- and heavy-duty last-mile and return-to-base segments include, but are not limited to: • total cost of ownership; • emissions profile; 12 • effectiveness within target applications and use cases; • ease of integration into existing operations; • product performance and uptime; • vehicle quality, reliability and safety; • service and support; • technological innovation relating to batteries, software and data analytics; and • fleet management.
The Company believes the primary competitive factors in the commercial vehicle market for medium- and heavy-duty last-mile and return-to-base segments include, but are not limited to: • total cost of ownership; • emissions profile; • effectiveness within target applications and use cases; • ease of integration into existing operations; • product performance and uptime; • vehicle quality, reliability and safety; • service and support; • technological innovation relating to batteries, software and data analytics; and • fleet management.
Xos customers have significantly benefited from the California HVIP program. Approximately 200 Xos vehicles delivered through December 31, 2024 have been subsidized by HVIP, and HVIP funding is being secured for many more Xos vehicle deliveries and orders. Infrastructure Incentives A number of states and municipalities also offer incentive programs to encourage the installation of charging infrastructure for electric vehicles.
Xos customers have significantly benefited from the California HVIP program. Approximately 300 Xos vehicles delivered through December 31, 2025 have been subsidized by HVIP, and HVIP funding is being secured for many more Xos vehicle deliveries and orders. Infrastructure Incentives A number of states and municipalities also offer incentive programs to encourage the installation of charging infrastructure for electric vehicles.
These competitors also compete with us in recruiting and retaining qualified research and development, engineering, sales, marketing, corporate and management personnel, as well as in acquiring technologies complementary to, or necessary for, our products and services. Additional mergers and acquisitions may result in even more resources being concentrated with our competitors.
These competitors also compete with the Company in recruiting and retaining qualified research and development, engineering, sales, marketing, corporate and management personnel, as well as in acquiring technologies complementary to, or necessary for, our products and services. Additional mergers and acquisitions may result in even more resources being concentrated with the Company’s competitors.
Our business and products are also subject to numerous governmental regulations that vary among jurisdictions. Electric vehicle and charging infrastructure demand has been spurred by government incentives and regulations at federal, state and local levels.
The Company’s business and products are also subject to numerous governmental regulations that vary among jurisdictions. Electric vehicle and charging infrastructure demand has been spurred by government incentives and regulations at federal, state and local levels.
We are also required to comply with other federal laws and regulations administered by NHTSA, as well as Federal Motor Carrier Safety Regulations, Federal Highway Administration requirements, and standards set forth by the EPA. Our vehicles sold outside of the U.S. are subject to similar foreign compliance, safety, environmental and other regulations.
The Company is also required to comply with other federal laws and regulations administered by NHTSA, as well as Federal Motor Carrier Safety Regulations, Federal Highway Administration requirements, and standards set forth by the EPA. Vehicles sold outside of the U.S. are subject to similar foreign compliance, safety, environmental, and other regulations.
Our powertrain controls include, but are not limited to, torque arbitration and power state management, thermal management for our powertrain and high-voltage battery systems, advanced driver assistance and safety and charging system communication and controls. • Body controls .
The Company’s powertrain controls include, but are not limited to, torque arbitration and power state management, thermal management for the powertrain and high-voltage battery systems, advanced driver assistance and safety and charging system communication and controls. • Body controls .
Manufacturing & Supply Chain Manufacturing Xos assembles our electric chassis platform, the X-Platform, starting the process with marrying frame rails and cross members, all the way to the final stage testing of a fully powered electric chassis which is then shipped to a body upfit partner.
Manufacturing & Supply Chain Manufacturing Xos assembles its electric chassis, starting the process with marrying frame rails and cross members, all the way to the final stage testing of a fully powered electric chassis, which is then shipped to a body upfit partner.
As a result, it was designed to feature sturdier and larger frame rails, a reinforced suspension system, and enhanced durability for demanding commercial use cases. We believe this rugged design provides superior strength and reliability, making it well-suited for a wide range of vehicle body integrations and last-mile applications.
As a result, it was designed to feature sturdier and larger frame rails, a reinforced suspension system, and enhanced durability for demanding commercial use cases. The Company believes this rugged design provides superior strength and reliability, making it well-suited for a wide range of vehicle body integrations and last-mile applications.
Support and celebrate others.” We are committed to creating and maintaining a workplace in which all employees have an opportunity to participate and contribute to the success of our business and are valued for their skills, experience, and unique perspectives.
Support and celebrate others.” The Company is committed to creating and maintaining a workplace in which all employees have an opportunity to participate and contribute to the success of the business and are valued for their skills, experience, and unique perspectives.
Powered by Xos™ Our Powered by Xos™ business provides mix-use powertrain solutions for off-highway, industrial and other commercial equipment and specialty vehicles, such as school buses, medical and dental clinics, blood donation vehicles, and mobile command vehicles.
Powered by Xos™ The Powered by Xos business provides mixed-use powertrain solutions for off-highway, industrial, and other commercial equipment and specialty vehicles, such as school buses, medical and dental clinics, blood donation vehicles, and mobile command vehicles.
Over the past several years, we have worked to improve to the high-voltage system architecture of our vehicles. These modifications have led to substantial weight savings — eliminating hundreds of pounds in cabling, mounting brackets, and redundant components — while improving both serviceability and durability.
Over the past several years, Xos has worked to improve the high-voltage system architecture of its vehicles. These modifications have led to substantial weight savings — eliminating hundreds of pounds in cabling, mounting brackets, and redundant components — while improving both serviceability and durability.
Competition We have experienced, and expect to continue to experience, competition from a number of companies, particularly as the commercial transportation sector accelerates towards low-emission, zero-tailpipe emission and carbon neutral fleet solutions. Existing commercial diesel vehicle OEMs, such as Freightliner, Ford, General Motors, Navistar, Paccar, and Volvo/Mack, continue to invest in the development of zero-tailpipe emission solutions.
Competition The Company has experienced, and expects to continue to experience, competition from a number of companies, particularly as the commercial transportation sector accelerates towards low-emission, zero-tailpipe emission and carbon neutral fleet solutions. Existing commercial diesel vehicle OEMs, such as Freightliner, Ford, General Motors, Navistar, Paccar, and Volvo/Mack, continue to invest in the development of zero-tailpipe emission solutions.
We also aim to create targeted learning experiences, democratizing learning and career development opportunities across the organization, and empowering employees to design their own career paths with skill development targeted for the roles of today and the future.
The Company also aims to create targeted learning experiences, democratizing learning and career development opportunities across the organization, and empowering employees to design their own career paths with skill development targeted for the roles of today and the future.
We have received the requisite EPA Certificate of Conformity and approval from CARB. Vehicle Safety & Testing Our vehicles are subject to regulation by the National Highway Traffic Safety Administration (“NHTSA”), including all applicable Federal Motor Vehicle Safety Standards (“FMVSS”). Numerous FMVSS apply to our vehicles specifying design, construction, and performance requirements.
The Company has received the requisite EPA Certificate of Conformity and approval from CARB. Vehicle Safety & Testing The Company’s vehicles are subject to regulation by the National Highway Traffic Safety Administration (“NHTSA”), including all applicable Federal Motor Vehicle Safety Standards (“FMVSS”). Numerous FMVSS apply to the Company’s vehicles specifying design, construction, and performance requirements.
Our body controls include cabin heater and air conditioning, hydraulic system control, electronic parking brake system and certain other software critical for vehicle controls. • Instrument cluster and infotainment . We designed a fully digital instrument cluster specifically for last-mile commercial electric vehicles.
The Company’s body controls include cabin heater and air conditioning, hydraulic system control, electronic parking brake system, and certain other software critical for vehicle controls. • Instrument cluster and infotainment . Xos designed a fully digital instrument cluster specifically for last-mile commercial electric vehicles.
Although our vehicles have zero tailpipe emissions, we are required to seek an EPA Certificate of Conformity for vehicles sold in states covered by the U.S. Clean Air Act’s standards or a CARB Executive Order for vehicles sold in California or any of the other states that have adopted the stricter California standards.
Although the Company’s vehicles have zero tailpipe emissions, the Company is required to seek an EPA Certificate of Conformity for vehicles sold in states covered by the U.S. Clean Air Act’s standards or a CARB Executive Order for vehicles sold in California or any of the other states that have adopted the stricter California standards.
As a manufacturer, we must self-certify that our vehicles meet all applicable FMVSS, or otherwise are exempt, before the vehicles may be imported or sold in the U.S.
As a manufacturer, the Company must self-certify that its vehicles meet all applicable FMVSS, or otherwise are exempt, before the vehicles may be imported or sold in the U.S.
We believe the extent to which our leaders are equipped to care for, inspire, and empower our people plays a vital role in our strategy. Our set of leadership standards outlines clear expectations for our leaders: that they regularly connect with team members, spend time teaching and coaching, and champion their team’s career development.
The Company believes the extent to which its leaders are equipped to care for, inspire, and empower its people plays a vital role in its strategy. The Company’s set of leadership standards outlines clear expectations for its leaders: that they regularly connect with team members, spend time teaching and coaching, and champion their team’s career development.
Foundational to our well-being philosophy is providing a broad array of resources and solutions to educate employees and build capability and support for meeting individual well-being needs and goals. We employ programs to understand employee sentiment on their mental and emotional well-being, health & safety, employee experience, culture, diversity, equity and inclusion, leadership and strategic alignment.
Foundational to the Company’s well-being philosophy is providing a broad array of resources and solutions to educate employees and build capability and support for meeting individual well-being needs and goals. The Company employs programs to understand employee sentiment on their mental and emotional well-being, health and safety, employee experience, culture, diversity, equity and inclusion, leadership, and strategic alignment.
Additionally, we expect volumes of commercial vehicle sales to be less in the winter months as many customers shift focus to executing high-volume holiday deliveries.
Additionally, the Company expects volumes of commercial vehicle sales to be less in the winter months as many customers shift focus to executing high-volume holiday deliveries.
As of the date of this filing, we sell all vehicles using our California dealer license. Battery Safety & Testing Our battery packs are required to conform to mandatory regulations that govern transport of “dangerous goods,” defined to include lithium-ion batteries, which may present a risk in transportation.
As of the date of this filing, the Company sells all vehicles using its California dealer license. Battery Safety & Testing The Company’s battery packs are required to conform to mandatory regulations that govern transport of “dangerous goods,” defined to include lithium-ion batteries, which may present a risk in transportation.
Xos vehicles are designed to meet all applicable FMVSS standards in effect at the date of manufacture. While our current vehicles comply and we expect that our vehicles in the future will comply with all applicable FMVSS with limited or no exemptions, FMVSS are subject to change from time to time.
Xos vehicles are designed to meet all applicable FMVSS standards in effect at the date of manufacture. While the Company’s current vehicles comply and it expects that future vehicles will comply with all applicable FMVSS with limited or no exemptions, FMVSS are subject to change from time to time.
We use lithium-ion cells in the high voltage battery packs in our vehicles. The use, storage, and disposal of our battery packs is regulated under U.S. federal law. Our battery packs conform to such “dangerous goods” shipping standards at a cell level.
The Company uses lithium-ion cells in the high voltage battery packs in its vehicles. The use, storage, and disposal of the Company’s battery packs is regulated under U.S. federal law. The Company’s battery packs conform to such “dangerous goods” shipping standards at a cell level.
Available Information (Website) The Company’s Annual Reports on Form 10-K, Quarterly Reports on Form 10-Q, Current Reports on Form 8-K and amendments to reports filed with or furnished to the Securities and Exchange Commission (“SEC”) pursuant to Sections 13(a) and 15(d) of the “Exchange Act”, are available, free of charge, on our Investor Relations website at https://www.xostrucks.com/investor-overview as soon as reasonably practicable after we electronically file such material with, or furnish it to, the SEC.
Available Information (Website) The Company’s Annual Reports on Form 10-K, Quarterly Reports on Form 10-Q, Current Reports on Form 8-K, and amendments to reports filed with or furnished to the Securities and Exchange Commission (“SEC”) pursuant to Sections 13(a) and 15(d) of the “Exchange Act,” are available, free of charge, on the Company’s Investor Relations website at https://www.xostrucks.com/investor-overview as soon as reasonably practicable after the Company electronically files such material with, or furnishes it to, the SEC.
Accordingly, investors should monitor our Investor Relations website, in addition to following our press releases, SEC filings, and public conference calls and webcasts.
Accordingly, investors should monitor the Company’s Investor Relations website, in addition to following its press releases, SEC filings, and public conference calls and webcasts.
We believe that we compete favorably with our competitors on the basis of these factors; however, our competitors may be able to deploy greater resources to the design, development, manufacturing, distribution, promotion, sales, marketing and support of their alternative fuel and electric vehicle and energy service programs.
The Company believes that it competes favorably with its competitors on the basis of these factors; however, our competitors may be able to deploy greater resources to the design, development, manufacturing, distribution, promotion, sales, marketing and support of their alternative fuel and electric vehicle and energy service programs.
We rely upon a combination of protections afforded to owners of patents, copyrights, trade secrets, and trademarks, along with employee and third-party non-disclosure agreements and other contractual restrictions to establish and protect our intellectual property rights.
The Company relies upon a combination of protections afforded to owners of patents, copyrights, trade secrets, and trademarks, along with employee and third-party non-disclosure agreements and other contractual restrictions to establish and protect its intellectual property rights.
Environmental standards applicable to us are established by the laws and regulations of the countries in which we operate, standards adopted by regulatory agencies and the permits and licenses issued to us. Each of these sources is subject to periodic modifications and what we anticipate will be increasingly stringent requirements.
Environmental standards applicable to the Company are established by the laws and regulations of the countries in which it operates, standards adopted by regulatory agencies and the permits and licenses issued to the Company. Each of these sources is subject to periodic modifications and what the Company anticipates will be increasingly stringent requirements.
The SEC maintains a website at https://www.sec.gov that contains reports, proxy, information statements and other information 17 regarding registrants that file electronically with the SEC. We use our Investor Relations website as a means of disclosing material information.
The SEC maintains a website at https://www.sec.gov that contains reports, proxy, information statements, and other information regarding registrants that file electronically with the SEC. The Company uses its Investor Relations website as a means of disclosing material information.
In addition to competition from traditional diesel OEMs, we face competition from disruptive vehicle manufacturers that are developing alternative fuel and electric commercial vehicles, such as Rivian and Harbinger.
In addition to competition from traditional diesel OEMs, the Company faces competition from disruptive vehicle manufacturers that are developing alternative fuel and electric commercial vehicles, such as Rivian, Harbinger, and Workhorse.
However, certain states permit us, as a manufacturer of motor vehicles, to apply for and receive a dealer license to conduct vehicle sales, provided we meet certain requirements. Once licensed in one of these states, we may sell our vehicles to any consumer in the United States as a matter of interstate commerce.
However, certain states permit the Company, as a manufacturer of motor vehicles, to apply for and receive a dealer license to conduct vehicle sales, provided certain requirements are met. Once licensed in one of 16 these states, the Company may sell its vehicles to any consumer in the United States as a matter of interstate commerce.
Talent Attraction, Growth, and Capability Assessment We seek to leverage best practices in assessments and talent management to strengthen and expand our current capabilities and future pipeline while reinforcing a culture of belonging, empowerment, and innovation.
Talent Attraction, Growth, and Capability Assessment The Company seeks to leverage best practices in assessments and talent management to strengthen and expand its current capabilities and future pipeline while reinforcing a culture of belonging, empowerment, and innovation.
Our People Operations team is and will be 16 responsible for our human capital policies and strategies and their collective recommendations to our Chief Executive Officer and key leadership members allow us to proactively manage our human capital and care for our employees in a manner that is consistent with our values.
The People Operations team is responsible for the Company’s human capital policies and strategies and their collective recommendations to the Chief Executive Officer and key leadership members allow the Company to proactively manage its human capital and care for its employees in a manner that is consistent with its values.
Human Capital People Strategy and Governance We firmly believe an integral part of our growth story is through elevating the most important asset we have: our people. By focusing on the fundamentals of our people strategy, leadership, culture and talent, we remain strong, adaptive, innovative, and well-equipped to respond to the ever-changing commercial vehicle landscape.
Human Capital People Strategy and Governance The Company firmly believes an integral part of its growth story is through elevating the most important asset it has: its people. By focusing on the fundamentals of people strategy, leadership, culture, and talent, the Company remains strong, adaptive, innovative, and well-equipped to respond to the ever-changing commercial vehicle landscape.
We are committed to helping our leaders strengthen these capabilities with dedicated learning paths and non-traditional learning opportunities. Employee Well-Being Initiatives We strive for an holistic approach to well-being that encompasses the financial, social, mental/emotional, physical, and professional needs of our employees.
The Company is committed to helping its leaders strengthen these capabilities with dedicated learning paths and non-traditional learning opportunities. Employee Well-Being Initiatives The Company strives for a holistic approach to well-being that encompasses the financial, social, mental/emotional, physical, and professional needs of its employees.
Xos Product Development : We are designing our next-generation chassis to reduce per-unit production costs, increase technological capabilities and improve total cost of ownership (“TCO”) for fleet operators. The next-generation chassis will continue to be designed for a wide range of use cases, including parcel delivery, uniform rental, and cash-in-transit industries.
Xos is designing its next-generation chassis to reduce per-unit production costs, increase technological capabilities, and improve TCO for fleet operators. The next-generation chassis will continue to be designed for a wide range of use cases, including parcel delivery, uniform rental, and cash-in-transit industries.
The Xosphere™ aims to minimize electric fleet TCO through fleet management integration and predictive servicing data. Our comprehensive suite of tools allows fleet operators to (i) monitor vehicle and charging performance in real-time with in-depth telematics; (ii) reduce charging cost; (iii) optimize energy usage; and (iv) manage maintenance and service support with a single software tool.
The Xosphere suite of tools allows fleet operators to (i) monitor vehicle and charging performance in real-time with in-depth telematics; (ii) reduce charging cost; (iii) optimize energy usage; and (iv) manage maintenance and service support with a single software tool.
Suggestion boxes and focus groups collect additional information on employee sentiment and needs, and we communicate the resulting actions taken with our employee population.
Suggestion boxes and focus groups collect additional information on employee sentiment and needs, and the Company communicates the resulting actions taken with its employee population.
Our custom user interface integrates into all Xos vehicles and is designed to enhance safe vehicle operation and provide critical safety information and driver efficiency guidance.
The custom user interface integrates into all Xos vehicles and is designed to enhance safe vehicle operation and provide critical safety information and driver efficiency guidance. • Xosphere™, the Company’s proprietary fleet management platform.
Other U.S. states have adopted similar standards including Colorado, Connecticut, Delaware, Maine, Maryland, Massachusetts, Minnesota, Nevada, New Jersey, New Mexico, New York, Oregon, Rhode Island, Vermont, Washington, and the District of Columbia. We may take advantage of these regimes by registering and selling ZEVs in these other U.S. states.
Other U.S. states have adopted similar standards including Colorado, Connecticut, Delaware, Maine, Maryland, Massachusetts, Minnesota, Nevada, New Jersey, New Mexico, New York, Oregon, Rhode Island, Vermont, Washington, and the District of Columbia.
To sell vehicles to customers in states where we are not licensed as a dealer, we generally conduct the sale out of the state or via our authorized dealer partner in that state.
To sell vehicles to customers in states where the Company is not licensed as a dealer, it generally conducts the sale out of the state or via an authorized dealer partner in that state.
Customers In addition to large-scale national accounts with globally recognized commercial fleet operators, we deliver vehicles directly to small- and medium-sized fleets via our in-house sales representatives and established distribution and channel partners. Such accounts include independent service providers, which fulfill last-mile routes for enterprise partners.
In addition to large-scale national accounts, the Company delivers vehicles directly to small- and medium-sized fleets via its in-house sales representatives and established distribution and channel partners. Such accounts include independent service providers, which fulfill last-mile routes for enterprise partners.
Facilities Our headquarters are located in an 85,142 square foot facility in Los Angeles, California, where we perform executive and administrative functions and service our vehicles and systems, among other things.
Facilities The Company’s headquarters are located in an 85,142 square foot facility in Los Angeles, California, where the Company performs executive and administrative functions and services its vehicles and systems, among other things.
Unlike the United States, there are no impediments to a manufacturer applying for and receiving a dealer license to perform sales and services, however, we must obtain the necessary provincial licenses to enable sales and services in each location. Seasonality Historically, the automotive industry has experienced higher revenue in the spring and summer months.
Unlike the United States, there are no impediments to a manufacturer applying for and receiving a dealer license to perform sales and services; however, the Company must obtain the necessary provincial licenses to enable sales and services in each location.
Commitment to Diversity, Equity, and Inclusion At Xos, we believe that creating an inclusive environment for all our employees is foundational to our success and, more importantly, morally the right thing to do. One of our organizational values is “One team: Be actively inclusive. Embrace diversity.
Commitment to Diversity, Equity, and Inclusion At Xos, the Company believes that creating an inclusive environment for all employees is foundational to its success. One of the Company’s organizational values is “One team: Be actively inclusive. Embrace diversity.
None of our employees are subject to a collective bargaining agreement or represented by a labor union. Corporate Information Xos, Inc. was initially incorporated on July 29, 2020 as a Cayman Islands exempted company under the name “NextGen Acquisition Corporation” (“NextGen”).
The Company has not experienced any work stoppages and considers its relationships with its employees to be good. None of the Company’s employees is subject to a collective bargaining agreement or represented by a labor union. Corporate Information Xos, Inc. was initially incorporated on July 29, 2020 as a Cayman Islands exempted company under the name “NextGen Acquisition Corporation” (“NextGen”).
However, any 13 reduction or elimination of government programs, incentives or credits because of policy changes, the reduced need for such programs due to the perceived success of the electric vehicle, fiscal tightening or other reasons may result in the diminished competitiveness of the electric vehicle industry, which would adversely affect our business.
However, any reduction or elimination of government programs, incentives or credits because of policy changes, the reduced need for such programs due to the perceived success of the electric vehicle, fiscal tightening or other reasons may result in the diminished competitiveness of the electric vehicle industry, which would adversely affect the Company’s business. 14 Governmental regulations regarding the manufacture, sale and implementation of products and systems similar to the Company’s are subject to future change.
Programs & Incentives Electric Vehicle Tax Credits On August 16, 2022, the Inflation Reduction Act of 2022 (“Inflation Reduction Act”) was enacted into law and is effective for taxable years beginning after December 31, 2022, and remains subject to future guidance releases.
The Company cannot predict what impact, if any, such changes may have on its business. Programs & Incentives Energy Storage Tax Credits On August 16, 2022, the Inflation Reduction Act of 2022 (“Inflation Reduction Act”) was enacted into law and is effective for taxable years beginning after December 31, 2022, and remains subject to future guidance releases.
We entered a new lease agreement for the facility with the landlord in August 2021, the term of which commenced on January 1, 2022, and will terminate on January 31, 2027, unless amended and/or extended. On June 20, 2024, we entered into an agreement to sublease a portion of our Los Angeles facility, effective as of July 1, 2024.
The Company entered a new lease agreement for the facility with the landlord in August 2021, the term of which commenced on January 1, 2022, and will terminate on January 31, 2027, unless amended and/or extended.
We became the lessee of certain properties in our acquisition of Electrameccanica, including a 235,094 square foot manufacturing facility in Mesa, Arizona and a 17,980 square foot service and distribution center in Huntington Beach, California, under leases expiring in 2033 and 2027, respectively.
The Company leases two properties in Byrdstown subject to leases that expire in 2026 and 2027. In connection with the acquisition of ElectraMeccanica, the Company became the lessee of certain properties, including a 235,094 square foot manufacturing facility in Mesa, Arizona and a 17,980 square foot service and distribution center in Huntington Beach, California.
ZEV credits in California are calculated under the ZEV regulation and are paid in relation to ZEVs sold and registered in California including battery electric vehicles and fuel cell electric vehicles. The ZEV program assigns ZEV credits to each vehicle manufacturer.
The Company may take advantage of these regimes by registering and selling ZEVs in these other U.S. states. 15 ZEV credits in California are calculated under the ZEV regulation and are paid in relation to ZEVs sold and registered in California including battery electric vehicles and fuel cell electric vehicles. The ZEV program assigns ZEV credits to each vehicle manufacturer.
Our powertrain offerings encompass a broad range of solutions, including high-voltage batteries, power distribution and management componentry, battery management systems, system controls, inverters, electric traction motors and auxiliary drive systems. We support some of the industry’s leading chassis manufacturers through Powered by Xos™, including Winnebago and Blue Bird.
The Company’s powertrain offerings encompass a broad range of solutions, including high-voltage batteries, power distribution and management componentry, battery management systems, system controls, inverters, electric traction motors, and auxiliary drive systems. Blue Bird Corporation (“Blue Bird”), the leading alternative fuel school bus manufacturer in the United States, is a key Powered by Xos customer.
Vehicle manufacturers are required to maintain ZEV credits equal to a set percentage of non-electric vehicles sold and registered in California.
Vehicle manufacturers are required to maintain ZEV credits equal to a set percentage of non-electric vehicles sold and registered in California. Each vehicle sold and registered in California earns a number of credits based on the drivetrain type and the all-electric range of the vehicle under the Urban Dynamometer Driving Schedule Test Cycle.
The laws and regulations to which we are subject govern, among others, vehicle emissions and the storage, handling, treatment, transportation and disposal of hazardous materials and the remediation of environmental contamination. Compliance with such laws and regulations at an international, regional, national, state and local level is an important aspect of our ability to continue our operations.
Compliance with such laws and regulations at an international, regional, national, state and local level is an important aspect of the Company’s ability to continue our operations.
Our well-being programs are an integral part of our total rewards strategy as we work to address business and employee challenges through a multi-channel approach that provides our diverse populations with choices to meet their specific needs.
The Company’s well-being programs are an integral part of its total rewards strategy as it works to address business and employee challenges through a multi-channel approach that provides its diverse populations with choices to meet their specific needs. 18 Employment Data As of December 31, 2025, we had 101 employees (including 99 full-time employees) and 34 contractors, up from 114 employees (including 109 full-time employees) and 16 contractors at the prior year-end.
Pricing for these raw materials is governed by market conditions and may fluctuate due to various factors outside of our control, such as supply and demand and market speculation. We are currently securing all raw materials and components that are either available or becoming available in the global supply chain to support our operations.
The Company’s products use various raw materials, such as aluminum, steel, phosphate, lithium, iron, and copper. Pricing for these raw materials is governed by market conditions and may fluctuate due to various factors outside of the Company’s control, such as supply and demand and market speculation.
In particular, unpatented trade secrets in the fields of research, development and engineering are an important aspect of our business by ensuring that our technology remains confidential. We also pursue patent protection when we believe we have developed a patentable invention and the benefits of obtaining a patent outweigh the risks of making the invention public through patent filings.
In particular, unpatented trade secrets in the fields of research, development, and engineering are an important aspect of the Company’s business by ensuring that its technology remains confidential.
The modularity of our X-Platform chassis allows for numerous use 9 cases and body configurations to satisfy customer demands.
The Company manufactures a medium-duty rolling chassis with multiple body options to address a range of customer applications. The modularity of the Xos chassis allows for numerous use cases and body configurations to satisfy customer demands.
However, recent developments suggest that certain provisions, including the commercial clean vehicle tax credit, may be subject to early phase-out or revision depending on forthcoming budgetary or legislative changes.
The 48E credit may enable customers to receive investment tax credits for qualifying Xos Hub deployments, reducing the effective cost of mobile charging infrastructure and improving the economic case for fleet electrification. However, recent developments suggest that certain energy-related investment tax credit provisions may be subject to early phase-out or revision depending on forthcoming budgetary or legislative changes.
We regularly review our development efforts to assess the existence and patentability of new inventions, and we are prepared to file additional patent applications when we determine it would benefit our business to do so.
In an effort to protect its brand, as of December 31, 2025, the Company had 23 pending or approved U.S. trademark applications. The Company regularly reviews its development efforts to assess the existence and patentability of new inv entions, and is prepared to file additional patent applications when it determines it would benefit our business to do so.
We believe this supports Xos’s commitment to deliver durable, high-quality electric vehicles while continually driving down total cost of ownership for our customers. Vehicle Control Software We designed and developed on-board vehicle control software to leverage third-party software and integrate our proprietary powertrain controls, body controls, instrument cluster, infotainment and Xosphere™ software. 11 • Powertrain controls .
Vehicle Control Software Xos designed and developed on-board vehicle control software to leverage third-party software and integrate its proprietary powertrain controls, body controls, instrument cluster, infotainment, and Xosphere™ software. • Powertrain controls .
These batteries are sourced through industry-leading partners in order to deliver consistent performance and long cycle-life for our customers. Compared to alternatives like nickel manganese cobalt (NMC) batteries, LFP batteries contain significantly fewer rare earth and conflict minerals, which we believe results in a more resilient supply chain and better long-term cost performance.
Compared to NMC batteries, LFP batteries also contain significantly fewer rare earth and conflict minerals, which the Company believes results in a more resilient supply chain and better long-term cost performance. The Company believes these characteristics support its commitment to deliver durable, high-quality electric vehicles while continually driving down total cost of ownership for customers.
We work to qualify multiple suppliers for key components where feasible in order to minimize potential production risks. We also mitigate risk by maintaining safety inventory for certain key components. Our products use various raw materials, such as aluminum, steel, phosphate, lithium, iron and copper.
As is the case for some automotive companies, certain of the Company’s procured components and systems are sourced from single suppliers. The Company works to qualify multiple suppliers for key components where feasible in order to minimize potential production risks. The Company also mitigates risk by maintaining safety inventory for certain key components.
Sales & Marketing Direct Sales Our sales efforts consist of sales representatives and field-based personnel who educate fleets on the wide-ranging benefits of our zero-tailpipe emission commercial vehicles as well as rapid and cost-efficient Xos products and services used to electrify commercial fleets.
These sales teams support both key national customer accounts and small and regional fleet customers. Sales representatives and field-based personnel educate fleets on the wide-ranging benefits of the Company’s zero-tailpipe emission commercial vehicles, mobile charging and energy storage products, and powertrain solutions used to electrify commercial fleets and specialty vehicles.
The Inflation Reduction Act includes multiple incentives to promote clean energy, electric vehicles, battery and energy storage manufacture or purchase, including through providing tax credits to consumers. For example, qualifying Xos customers may be eligible to receive up to $40,000 per vehicle in federal tax credits for the purchase of qualified electric vehicles in the U.S. through 2032.
The Inflation Reduction Act includes multiple incentives to promote clean energy, electric vehicles, battery and energy storage manufacture or purchase. The Section 48E Investment Tax Credit, effective for qualifying energy property placed in service after December 31, 2024, provides investment tax credits for qualifying energy storage technology, including standalone energy storage systems such as the Xos Hub.
We recognize a monthly income of $43,000 (including common area maintenance) o ver the lease term. We also have a manufacturing facility located in Byrdstown, Tennessee that utilizes the facilities of Fitzgerald Manufacturing Partners, LLC, the largest manufacturer of glider kits in the United States. We lease two properties in Byrdstown subject to leases that expire in 2026 and 2027.
On March 14, 2025, the Company entered into a month to month sublease of another portion of its Los Angeles facility, effective as of April 1, 2025, and recognized income of $44,000 in 2025. 17 The Company also has a manufacturing facility located in Byrdstown, Tennessee that utilizes the facilities of Fitzgerald Manufacturing Partners, LLC, the largest manufacturer of glider kits in the United States.
We are increasingly subject to varying and sometimes conflicting rules, tariffs, and import restrictions that can change with little notice. These regulatory changes may impact our ability to continue sourcing components from certain regions or accessing key suppliers.
Recent court decisions challenging certain IEEPA-based tariffs may provide some relief for the Company; however, the regulatory environment remains subject to change, and the challenged tariffs may be replaced with other tariffs or similar costs that are equally or more burdensome. Regulatory changes may impact the Company’s ability to continue sourcing components from certain regions or accessing key suppliers.
Xosphere™ also includes connection modules that feature over-the-air update capabilities through Xos’s cloud intelligence platform and feature remote diagnostics and maintenance services. Xosphere™ is compatible with Xos vehicles, powertrains, and charging solutions, regardless of the customer’s specific mix of products and services. As a result, Xos customers are empowered to cross-manage and optimize multiple Xos products with a single tool.
Xosphere also includes connection modules that feature over-the-air update capabilities through the Company’s cloud intelligence platform and features remote diagnostics and maintenance services. Sales & Marketing Direct Sales The Company’s sales efforts are organized around dedicated direct sales teams supporting each of its three primary product lines: Xos Hub, the Xos Vehicles, and the Powered by Xos powertrain products.
Each vehicle sold and registered in California earns a number of credits based on the drivetrain type and the all-electric range of the vehicle under the Urban Dynamometer Driving Schedule Test Cycle. 14 Regulations in the United States We operate in an industry that is subject to extensive environmental regulation, which has become more stringent over time.
Regulations in the United States The Company operates in an industry that is subject to extensive environmental regulation, which has become more stringent over time. The laws and regulations to which the Company is subject govern, among others, vehicle emissions and the storage, handling, treatment, transportation and disposal of hazardous materials and the remediation of environmental contamination.
The Byrdstown, Tennessee plant is capable of producing our chassis, battery systems and Hub, and conducting certain prototyping and powertrain installation services. In addition to our manufacturing facility in Tennessee, we maintain vehicle-servicing capabilities and conduct ongoing research and development activities in our Los Angeles, California facility.
The Byrdstown, Tennessee plant is capable of producing chassis, battery systems and Xos Hub units, and powertrain kits, as well as conducting certain prototyping and powertrain installation services. The Company has established a new production line for the Xos Hub designed to scale production into hundreds of units.

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Item 1A. Risk Factors

Risk Factors — what could go wrong, per management

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Biggest changePromoting and positioning our brand will likely depend significantly on our ability to provide high-quality products and engage with our existing and potential customers as intended, and we have limited experience in these areas. In addition, our ability to develop, maintain and strengthen the Xos brand will depend heavily on the success of our customer development and branding efforts.
Biggest changeIn addition, our ability to develop, maintain and strengthen the Xos brand or any other brands will depend heavily on the success of our customer development and branding efforts. Our target customers may be reluctant to acquire products from a new and unproven company such as Xos.
Our continued development and manufacture of our products are and will be subject to a number of risks, including with respect to: • our ability to acquire and install the equipment necessary to manufacture the desired quantity of our products within the specified design tolerances; • long- and short-term durability of our products to withstand day-to-day wear and tear; • compliance with environmental, workplace safety and similar regulations; • engineering, designing, testing and securing delivery of critical systems and components on acceptable terms and in a timely manner; • delays in delivery of final systems and components by our suppliers; • shifts in demand for our current products and future derivatives built off the X-Platform; • the compatibility of the X-Platform with future vehicle designs; • our ability to attract, recruit, hire and train skilled employees; • quality controls, particularly as we plan to expand our manufacturing capabilities; • delays or disruptions in our supply chain, like those we have recently experienced due to broader macroeconomic trends; • other delays and cost overruns; and • our ability to secure additional funding, if necessary.
Our continued development and manufacture of our products are and will be subject to a number of risks, including with respect to: • our ability to acquire and install the equipment necessary to manufacture the desired quantity of our products within the specified design tolerances; • long- and short-term durability of our products to withstand day-to-day wear and tear; • compliance with environmental, workplace safety and similar regulations; • engineering, designing, testing and securing delivery of critical systems and components on acceptable terms and in a timely manner; • delays in delivery of final systems and components by our suppliers; • shifts in demand for our current products and future derivatives built off the X-Platform; • the compatibility of the X-Platform with future vehicle designs; • our ability to attract, recruit, hire and train skilled employees; • quality controls, particularly as we plan to expand our manufacturing capabilities; • delays or disruptions in our supply chain, like those we have recently experienced due to broader macroeconomic trends; 24 • other delays and cost overruns; and • our ability to secure additional funding, if necessary.
The Warrant Agreement provides that (a) the terms of the Warrants may be amended without the consent of any holder for the purpose of (i) curing any ambiguity or correct any mistake, including to conform the provisions of the Warrant Agreement to the description of the terms of the Warrants and the Warrant Agreement set forth in the related prospectus, or defective provision or (ii) adding or changing any provisions with respect to matters or questions arising under the Warrant Agreement as the parties to the Warrant Agreement m ay deem necessary or desirable and that the parties deem to not adversely affect the rights of the registered holders of the Warrants under the Warrant Agreement and (b) all other modifications or amendments require the vote or written consent of at least 65% of the then outstanding Public Warrants; provided that any amendment that solely affects the 44 terms of the Private Placement Warrants or any provision of the Warrant Agreement solely with respect to the Private Placement Warrants will also require at least 65% of the then outstanding Private Placement Warrants.
The Warrant Agreement provides that (a) the terms of the Warrants may be amended without the consent of any holder for the purpose of (i) curing any ambiguity or correct any mistake, including to conform the provisions of the Warrant Agreement to the description of the terms of the Warrants and the Warrant Agreement set forth in the related prospectus, or defective provision or (ii) adding or changing any provisions with respect to matters or questions arising under the Warrant Agreement as the parties to the Warrant Agreement m ay deem necessary or desirable and that the parties deem to not adversely affect the rights of the registered holders of the Warrants under the Warrant Agreement and (b) all other modifications or amendments require the vote or written consent of at least 65% of the then outstanding Public Warrants; provided that any amendment that solely affects the terms of the Private Placement Warrants or any provision of the Warrant Agreement solely with respect to the Private Placement Warrants will also require at least 65% of the then outstanding Private Placement Warrants.
We and the third-parties upon which we rely are subject to a variety of evolving threats, including but not limited to social-engineering attacks (including through deep fakes, which may be increasingly more difficult to identify as fake, and phishing 36 attacks), malicious code (such as viruses and worms), malware (including as a result of advanced persistent threat intrusions), denial-of-service attacks, credential stuffing attacks, credential harvesting, personnel misconduct or error, ransomware attacks, supply-chain attacks, software bugs, server malfunctions, software or hardware failures, loss of data or other IT assets, adware, telecommunications failures, earthquakes, fires, floods, attacks enhanced or facilitated by AI and other similar threats.
We and the third-parties upon which we rely are subject to a variety of evolving threats, including but not limited to social-engineering attacks (including through deep fakes, which may be increasingly more difficult to identify as fake, and phishing attacks), malicious code (such as viruses and worms), malware (including as a result of advanced persistent threat intrusions), denial-of-service attacks, credential stuffing attacks, credential harvesting, personnel misconduct or error, ransomware attacks, supply-chain attacks, software bugs, server malfunctions, software or hardware failures, loss of data or other IT assets, adware, telecommunications failures, earthquakes, fires, floods, attacks enhanced or facilitated by AI and other similar threats.
Our substantial indebtedness may: • limit our ability to use our cash flow or borrow additional funds for working capital, capital expenditures, acquisitions, investments or other general business purposes; • require us to use a substantial portion of our cash flow from operations to make debt service payments; • limit our flexibility to plan for, or react to, changes in our business and industry, or our ability to take specified actions to take advantage of certain business opportunities that may be presented to us; 33 • result in dilution to our existing stockholders in the event the Convertible Note is settled in our shares of Common Stock; • place us at a competitive disadvantage compared to our less leveraged competitors; and • increase our vulnerability to the impact of adverse economic and industry conditions.
Our substantial indebtedness may: • limit our ability to use our cash flow or borrow additional funds for working capital, capital expenditures, acquisitions, investments or other general business purposes; • require us to use a substantial portion of our cash flow from operations to make debt service payments; • limit our flexibility to plan for, or react to, changes in our business and industry, or our ability to take specified actions to take advantage of certain business opportunities that may be presented to us; • result in dilution to our existing stockholders in the event the Convertible Note is settled in our shares of Common Stock; • place us at a competitive disadvantage compared to our less leveraged competitors; and • increase our vulnerability to the impact of adverse economic and industry conditions.
See “—Risks Related to the Design, Supply and Manufacturing of our Products—We have experienced product recalls and may experience future product recalls, that could materially and adversely affect our business, prospects, financial condition and operating results.” If the average performance of our products, including the usable life of a battery pack or energy system, is below expectations, or if there are product defects or any other failure of our products to perform as expected, our reputation could be harmed, which could result in adverse publicity, lost revenue, delivery delays, product recalls, product liability claims and significant warranty and other expenses and could have a material adverse impact on our business, prospects, financial condition and operating results.
See 28 “—Risks Related to the Design, Supply and Manufacturing of our Products—We have experienced product recalls and may experience future product recalls, that could materially and adversely affect our business, prospects, financial condition and operating results.” If the average performance of our products, including the usable life of a battery pack or energy system, is below expectations, or if there are product defects or any other failure of our products to perform as expected, our reputation could be harmed, which could result in adverse publicity, lost revenue, delivery delays, product recalls, product liability claims and significant warranty and other expenses and could have a material adverse impact on our business, prospects, financial condition and operating results.
Significant CFIUS reform legislation, which was fully implemented through regulations that became effective on February 13, 2020, among other things expanded the scope of CFIUS’s jurisdiction to investments that do not result in control of a U.S. business by a foreign person but afford certain foreign investors certain information or governance rights in a U.S. business that has a nexus to “critical technologies,” “critical infrastructure” and/or “sensitive personal data.” Moreover, other countries continue to strengthen their own foreign direct investment (“FDI”) regimes, and investments and transactions outside of the U.S. may be subject to review by non-U.S.
Significant CFIUS reform legislation, which was fully implemented through regulations that became effective on February 13, 2020, among other things expanded the scope of CFIUS’s jurisdiction to investments that do not result in control of a U.S. 47 business by a foreign person but afford certain foreign investors certain information or governance rights in a U.S. business that has a nexus to “critical technologies,” “critical infrastructure” and/or “sensitive personal data.” Moreover, other countries continue to strengthen their own foreign direct investment (“FDI”) regimes, and investments and transactions outside of the U.S. may be subject to review by non-U.S.
Our Certificate of Incorporation requires, to the fullest extent permitted by law, that derivative actions brought in our name, actions against current or former directors, officers or other employees for breach of fiduciary duty, other similar actions, any other action as to which the Delaware General Corporation Law confers jurisdiction to the Court of Chancery of the State of Delaware and any action or proceeding concerning the validity of our Certificate of Incorporation or our Bylaws may be brought only in the Court of Chancery in the State of Delaware (or, if and only if the Court of Chancery of the State of Delaware does not have subject matter jurisdiction thereof, any state court located in the State of Delaware or, if and only if all such state courts lack subject matter jurisdiction, the federal district court for the District of Delaware), unless we consent in writing to the selection of an alternative forum.
Our Certificate of Incorporation requires, to the fullest extent permitted by law, that derivative actions brought in our name, actions against current or former directors, officers or other employees for breach of fiduciary duty, other similar actions, any 49 other action as to which the Delaware General Corporation Law confers jurisdiction to the Court of Chancery of the State of Delaware and any action or proceeding concerning the validity of our Certificate of Incorporation or our Bylaws may be brought only in the Court of Chancery in the State of Delaware (or, if and only if the Court of Chancery of the State of Delaware does not have subject matter jurisdiction thereof, any state court located in the State of Delaware or, if and only if all such state courts lack subject matter jurisdiction, the federal district court for the District of Delaware), unless we consent in writing to the selection of an alternative forum.
Laws related to the electric and alternative fuel vehicle industry are evolving and we face risks associated with changes to these laws, including, but not limited to: • increased support for other alternative fuel systems, which could have an impact on the acceptance of our products; and • increased sensitivity by regulators to the needs of established automobile manufacturers with large employment bases, high fixed costs and business models based on the internal combustion engine, which could lead them to pass regulations that could reduce the compliance costs of such established manufacturers or mitigate the effects of government efforts to promote alternative fuel and electric vehicles.
Laws related to the electric and alternative fuel vehicle industry are evolving and we face risks associated with changes to these laws, including, but not limited to: • increased support for other alternative fuel systems, which could have an impact on the acceptance of our products; and 37 • increased sensitivity by regulators to the needs of established automobile manufacturers with large employment bases, high fixed costs and business models based on the internal combustion engine, which could lead them to pass regulations that could reduce the compliance costs of such established manufacturers or mitigate the effects of government efforts to promote alternative fuel and electric vehicles.
Any such issuances of additional shares of our Common Stock or Preferred Stock: • may significantly dilute the equity interests of our investors; • may subordinate the rights of holders of our Common Stock if Preferred Stock is issued with rights senior to those afforded our Common Stock; • could cause a change in control if a substantial number of shares of our Common Stock are issued, which may affect, among other things, our ability to use our net operating loss carry forwards, if any, and could result in the resignation or removal of our present officers and directors; and 45 • may adversely affect prevailing market prices for our Common Stock and/or Warrants.
Any such issuances of additional shares of our Common Stock or Preferred Stock: • may significantly dilute the equity interests of our investors; • may subordinate the rights of holders of our Common Stock if Preferred Stock is issued with rights senior to those afforded our Common Stock; • could cause a change in control if a substantial number of shares of our Common Stock are issued, which may affect, among other things, our ability to use our net operating loss carry forwards, if any, and could result in the resignation or removal of our present officers and directors; and • may adversely affect prevailing market prices for our Common Stock and/or Warrants.
Our ability to obtain the necessary financing to carry out our business plan is subject to a number of factors, including general market conditions and investor acceptance of our business model, as well as restrictions arising from our existing debt securities (see “—Risks Related to our Indebtedness—We have incurred substantial debt, which could impair our flexibility and access to 30 capital and adversely affect our financial position, and our business would be adversely affected if we are unable to service our debt obligations and are subject to default”).
Our ability to obtain the necessary financing to carry out our business plan is subject to a number of factors, including general market conditions and investor acceptance of our business model, as well as restrictions arising from our existing debt securities (see “—Risks Related to our Indebtedness—We have incurred substantial debt, which could impair our flexibility and access to capital and adversely affect our financial position, and our business would be adversely affected if we are unable to service our debt obligations and are subject to default”).
The price of our Common Stock, as well as the Warrants, may fluctuate due to a variety of factors, including: • changes in the industries in which we and our customers operate; • developments involving our competitors; • changes in laws and regulations affecting our business; • variations in our operating performance and the performance of our competitors in general; • actual or anticipated fluctuations in our quarterly or annual operating results; • publication of research reports by securities analysts about us or our competitors or our industry; • the public’s reaction to our press releases, our other public announcements and our filings with the SEC, particularly with respect to fluctuations in our growth expectations and outlook; • additions and departures of key personnel; • commencement of, or developments in, litigation involving us; • changes in our capital structure, such as future issuances of securities or the incurrence of additional debt; • the volume of shares of our Common Stock available for public sale; and • general economic and political conditions, such as the effects of health crises, recessions, inflation, interest rates, local and national elections, fuel prices, international currency fluctuations, corruption, political instability and acts of war or military conflict, including repercussions of the military conflict between Russia and Ukraine and in the Middle East and tensions with China, or terrorism.
The price of our Common Stock, as well as the Warrants, may fluctuate due to a variety of factors, including: • changes in the industries in which we and our customers operate; • developments involving our competitors; • changes in laws and regulations affecting our business; • variations in our operating performance and the performance of our competitors in general; • actual or anticipated fluctuations in our quarterly or annual operating results; • publication of research reports by securities analysts about us or our competitors or our industry; • the public’s reaction to our press releases, our other public announcements and our filings with the SEC, particularly with respect to fluctuations in our growth expectations and outlook; • additions and departures of key personnel; 45 • commencement of, or developments in, litigation involving us; • changes in our capital structure, such as future issuances of securities or the incurrence of additional debt; • the volume of shares of our Common Stock available for public sale; and • general economic and political conditions, such as the effects of health crises, recessions, inflation, interest rates, local and national elections, fuel prices, international currency fluctuations, corruption, political instability and acts of war or military conflict, including repercussions of the military conflict between Russia and Ukraine and in the Middle East, including Iran, and tensions with China, or terrorism.
Maintaining such confidence may be particularly challenging due to certain factors, including those that are largely outside of our control, such as our limited operating history, customer unfamiliarity with our products, any delays in scaling manufacturing, delivery and service operations to meet demand, competition, uncertainty regarding the future of electric vehicles (including our vehicles), our manufacturing and sales performance compared with market expectations and any negative publicity with respect to us, our competitors or the industry.
Maintaining such confidence may be particularly challenging due to certain factors, including those that are largely outside of our control, such as our limited operating history, customer unfamiliarity with our products, any delays in scaling manufacturing, delivery and service operations to meet demand, competition, uncertainty regarding the future of electric vehicles (including our vehicles), our 29 manufacturing and sales performance compared with market expectations and any negative publicity with respect to us, our competitors or the industry.
In response to a determination, or in settlement of allegations, that we have infringed upon or misappropriated a third-party’s intellectual property rights, we may be required to do one or more of the following: 41 • cease development, sales or use of our products that incorporate the asserted intellectual property; • pay substantial damages; • obtain a license from the owner of the asserted intellectual property right, which license may not be available on reasonable terms or available at all; and/or • re-design one or more aspects or systems of our products.
In response to a determination, or in settlement of allegations, that we have infringed upon or misappropriated a third-party’s intellectual property rights, we may be required to do one or more of the following: • cease development, sales or use of our products that incorporate the asserted intellectual property; • pay substantial damages; • obtain a license from the owner of the asserted intellectual property right, which license may not be available on reasonable terms or available at all; and/or • re-design one or more aspects or systems of our products.
Our amended and restated certificate of incorporation and amended and restated bylaws include provisions that: • authorize our board of directors to issue, without further action by the stockholders, shares of undesignated preferred stock with terms, rights, and preferences determined by our board of directors; • require that any action to be taken by our stockholders be effected at a duly called annual or special meeting and not by written consent; • specify that special meetings of our stockholders can be called only by our board of directors, the chairperson of our board of directors, or our chief executive officer; • establish an advance notice procedure for stockholder proposals to be brought before an annual meeting, including proposed nominations of persons for election to our board of directors; • establish that our board of directors is divided into three classes, with each class serving three-year staggered terms; • prohibit cumulative voting in the election of directors; • provide that our directors may be removed for cause only upon the vote of the holders of at least a majority of the voting power of the then-outstanding shares of capital stock; • provide that vacancies on our board of directors may be filled only by the affirmative vote of a majority of directors then in office, even though less than a quorum; and • require the approval of our board of directors or the holders of at least 66 2/3% of the voting power of all of the then-outstanding shares of capital stock to amend our bylaws and certain provisions of our certificate of incorporation.
Our amended and restated certificate of incorporation and amended and restated bylaws include provisions that: • authorize our board of directors to issue, without further action by the stockholders, shares of undesignated preferred stock with terms, rights, and preferences determined by our board of directors; • require that any action to be taken by our stockholders be effected at a duly called annual or special meeting and not by written consent; • specify that special meetings of our stockholders can be called only by our board of directors, the chairperson of our board of directors, or our chief executive officer; • establish an advance notice procedure for stockholder proposals to be brought before an annual meeting, including proposed nominations of persons for election to our board of directors; • establish that our board of directors is divided into three classes, with each class serving three-year staggered terms; • prohibit cumulative voting in the election of directors; • provide that our directors may be removed for cause only upon the vote of the holders of at least a majority of the voting power of the then-outstanding shares of capital stock; • provide that vacancies on our board of directors may be filled only by the affirmative vote of a majority of directors then in office, even if less than a quorum; and • require the approval of our board of directors or the holders of at least 66 2/3% of the voting power of all of the then-outstanding shares of capital stock to amend our bylaws and certain provisions of our certificate of incorporation.
We expect to continue to incur losses in future periods as we: • continue to design, develop, manufacture and market our products; • expand our manufacturing capabilities, including costs associated with contracting the assembly of our products; • build up inventories of parts and components for our products; • manufacture an inventory of our products; • expand our design, development, installation and servicing capabilities; 29 • increase our sales and marketing activities and develop our distribution infrastructure; and • increase our general and administrative functions to support our growing operations and to operate as a public company.
We expect to continue to incur losses in future periods as we: • continue to design, develop, manufacture and market our products; • expand our manufacturing capabilities, including costs associated with contracting the assembly of our products; • build up inventories of parts and components for our products; • manufacture an inventory of our products; • expand our design, development, installation and servicing capabilities; • increase our sales and marketing activities and develop our distribution infrastructure; and • increase our general and administrative functions to support our growing operations and to operate as a public company.
Any reduction, elimination or selective application of tax and other governmental programs and economic incentives because of policy changes, the reduced need for such programs due to the perceived success of the electric vehicle, fiscal tightening or other reasons may result in the diminished competitiveness of the electric vehicle industry generally or our electric vehicles in particular, which would adversely affect our business, prospects, financial condition and results of operations.
Any reduction, elimination or selective application of tax and other governmental programs and economic incentives because of policy changes, the reduced need for such programs due to the perceived success of the electric vehicle, fiscal tightening or other reasons may result in the diminished competitiveness of the 32 electric vehicle industry generally or our electric vehicles in particular, which would adversely affect our business, prospects, financial condition and results of operations.
If we fail to remediate any material weaknesses or if we otherwise fail to establish and maintain effective control over financial reporting, our ability to accurately and timely report our financial results could be adversely affected and 43 it may adversely affect investor confidence, our reputation, our ability to raise additional capital, and our business operations and financial condition.” The market prices of our Common Stock and Warrants may be volatile.
If we fail to remediate any material weaknesses or if we otherwise fail to establish and maintain effective control over financial reporting, our ability to accurately and timely report our financial results could be adversely affected and it may adversely affect investor confidence, our reputation, our ability to raise additional capital, and our business operations and financial condition.” The market prices of our Common Stock and Warrants may be volatile.
Data Privacy Framework and the UK extension thereto (which allows for transfers to relevant U.S.-based organizations who self-certify compliance and participate in the Framework), these mechanisms are subject 39 to legal challenges, and there is no assurance that we can satisfy or rely on these measures to lawfully transfer personal information to the United States.
Data Privacy Framework and the UK extension thereto (which allows for transfers to relevant U.S.-based organizations who self-certify compliance and participate in the Framework), these mechanisms are subject to legal challenges, and there is no assurance that we can satisfy or rely on these measures to lawfully transfer personal information to the United States.
Given the global nature of our supply chain and customer base, global political, economic, and other conditions, including geopolitical risks such as the current conflicts between Russia and Ukraine and in Israel, tensions with China and related sanctions, may adversely affect our business and results of operations in ways we cannot foresee at the outset or at this point.
Given the global nature of our supply chain and customer base, global political, economic, and other conditions, including geopolitical risks such as the current conflicts between Russia and Ukraine and in Israel and with Iran, tensions with China and related sanctions, may adversely affect our business and results of operations in ways we cannot foresee at the outset or at this point.
In the event of a major earthquake, hurricane or catastrophic event such as fire, power loss, telecommunications failure, cyber-attack, war or terrorist attack, we may be unable to continue our operations and may endure system interruptions, reputational harm, breaches of data security, and loss of critical data, all of which would harm our business, results of operations, and financial condition.
In the event of a major earthquake, hurricane or catastrophic event such as fire, power loss, telecommunications failure, cyber-attack, war or terrorist attack, we may be unable to continue our operations and may endure system interruptions, reputational harm, breaches of data security, and loss of critical data, all of which would harm our 48 business, results of operations, and financial condition.
Furthermore, during uncertain economic times our customers may face issues gaining timely access to sufficient funding, which could result in an impairment of their ability to make timely payments to us. If that were to occur, we may be 46 required to increase our allowance for expected credit losses and our results could be negatively impacted.
Furthermore, during uncertain economic times our customers may face issues gaining timely access to sufficient funding, which could result in an impairment of their ability to make timely payments to us. If that were to occur, we may be required to increase our allowance for expected credit losses and our results could be negatively impacted.
Our ability to utilize net operating loss carryforwards and other tax attributes to offset future taxable income or tax liabilities may be limited as a result 31 of ownership changes, including potential changes in connection with the Business Combination, the acquisition of ElectraMeccanica or other transactions. Similar rules may apply under state tax laws.
Our ability to utilize net operating loss carryforwards and other tax attributes to offset future taxable income or tax liabilities may be limited as a result of ownership changes, including potential changes in connection with the Business Combination, the acquisition of ElectraMeccanica or other transactions. Similar rules may apply under state tax laws.
Our business may be adversely affected by labor and union activities. Although none of our employees are currently represented by a labor union, it is common throughout the automobile industry generally for many employees at automobile companies to belong to a union, which can result in higher employee costs and increased risk of work stoppages.
Our business may be adversely affected by labor and union activities. 44 Although none of our employees are currently represented by a labor union, it is common throughout the automobile industry generally for many employees at automobile companies to belong to a union, which can result in higher employee costs and increased risk of work stoppages.
In addition, because we are incorporated in Delaware, we are governed by the provisions of Section 203 of the Delaware General Corporation Law, which generally, subject to certain exceptions, prohibits a Delaware corporation from engaging in any of a broad range of business combinations with any “interested” stockholder for a period of three years following the date on which the stockholder became an “interested” stockholder.
In addition, because we are incorporated in Delaware, we are governed by the provisions of Section 203 of the Delaware General Corporation Law, which generally, subject to certain exceptions, prohibits a Delaware corporation from engaging in any of a broad range of business combinations with any “interested” stockholder for a period of 50 three years following the date on which the stockholder became an “interested” stockholder.
Substantial increases in the prices for components or materials utilized in the manufacture of our products, such as those charged by suppliers of battery cells, semiconductors or other key components or materials, would increase our operating costs, and could reduce our margins if the increased costs cannot be recouped through increased vehicle, powertrain or battery pack sales.
Substantial increases in the prices for components or materials utilized in the manufacture of our products, such as those charged by suppliers of battery cells, semiconductors or other key components or materials, would increase our operating costs, and could reduce our margins if the increased costs cannot be recouped through increased vehicle, powertrain or battery pack 26 sales.
The likelihood of our success with offerings such as the Xos Hub and Xosphere ™ must be considered in light of these risks and expenses, potential complications or delays and 19 the competitive environment in which we operate. Therefore, there can be no assurances that our business plan will prove successful.
The likelihood of our success with offerings such as the Xos Hub and Xosphere ™ must be considered in light of these risks and expenses, potential complications or delays and the competitive environment in which we operate. Therefore, there can be no assurances that our business plan will prove successful.
If we fail to comply with these laws and regulations, we and certain of our employees could be subject to: substantial civil or criminal penalties, including the possible loss of export or import privileges; fines, which may be imposed on us and responsible employees or managers; and, in extreme cases, the incarceration of responsible employees or managers.
If we fail 42 to comply with these laws and regulations, we and certain of our employees could be subject to substantial civil or criminal penalties, including the possible loss of export or import privileges; fines, which may be imposed on us and responsible employees or managers; and, in extreme cases, the incarceration of responsible employees or managers.
Risks Related to our Business and Industry There is substantial doubt about our ability to continue as a going concern through the next 12 months from the date of the consolidated financial statements in this Report. As an early-stage growth company, our ability to access capital is critical.
Risks Related to our Business and Industry There is substantial doubt about our ability to continue as a going concern through the next 12 months from the date of the consolidated financial statements in this Report. As an early-stage company, our ability to access capital is critical.
Global general economic and political conditions, such as a potential recession, inflation, uncertain credit and global financial markets, including potential future bank failures, health crises, supply chain disruption, fuel prices, international currency fluctuations, changes to trade policies and tariffs, and geopolitical events such as local and national elections, corruption, political instability and tensions and acts of war or military conflict including repercussions of the wars between Russia and Ukraine and in Israel, terrorism, or tensions with China and related sanctions and export control restrictions, have and could continue to adversely impact our ability to raise additional funds, among other things.
Global general economic and political conditions, such as a potential recession, inflation, uncertain credit and global financial markets, including potential future bank failures, health crises, supply chain disruption, fuel prices, international currency fluctuations, changes to trade policies and tariffs, and geopolitical events such as local and national elections, corruption, political instability and tensions and acts of war or military conflict including repercussions of the wars between Russia and Ukraine and in Israel, terrorism, conflicts with Iran or tensions with China and related sanctions and export control restrictions, have and could continue to adversely impact our ability to raise additional funds, among other things.
In addition, we may have to liquidate our assets and may receive less than the value at which those assets are carried on our audited financial statements and/or seek protection under Chapters 7 or 11 of the United 18 States Bankruptcy Code.
In addition, we may have to liquidate our assets and may receive less than the value at which those assets are carried on our audited financial statements and/or seek protection under Chapters 7 or 11 of the United States Bankruptcy Code.
We may have limited ability to monitor or control the actions of these third-parties and, to the extent any of these strategic third-parties suffer negative publicity or harm to their reputation from events relating to our business, we may suffer negative publicity or harm to our reputation by virtue of our association with any such third-party.
We may have limited ability to monitor or control the actions of these third-parties and, to the extent that any of these strategic third-parties suffer negative publicity or harm to their reputation from events relating to our business, we may suffer negative publicity or harm to our reputation by virtue of our association with any such third-party.
The actual impact of this provision will depend on multiple factors, including the amount of research and development expenses we will incur, whether we achieve sufficient 38 income to fully utilize such deductions and whether we conduct our research and development activities inside or outside the United States.
The actual impact of this provision will depend on multiple factors, including the amount of research and development expenses we will incur, whether we achieve sufficient income to fully utilize such deductions and whether we conduct our research and development activities inside or outside the United States.
Numerous U.S. states—including California, Virginia, Colorado, Connecticut, and Utah—have enacted comprehensive privacy laws that impose certain obligations on covered businesses, including providing specific disclosures in privacy notices and affording residents with certain rights concerning their personal data.
Numerous U.S. states—including California, Virginia, Colorado, Connecticut, and Utah—have enacted comprehensive privacy laws that impose certain obligations on covered businesses, including providing specific disclosures in privacy notices and 40 affording residents with certain rights concerning their personal data.
At each reporting period, (1) the accounting treatment of the Warrants will be re-evaluated for proper accounting treatment as a liability or equity, and (2) the fair value of the liability of the Public Warrants and Private Placement Warrants will be remeasured and the change in the fair value of the liability will be recorded in our statement of operations and comprehensive loss.
At each reporting period, (1) the accounting treatment of the Warrants will be re-evaluated for proper accounting treatment as a liability or equity, and (2) the fair value of the liability of the Public Warrants and Private Placement Warrants will be remeasured and the change in the fair value of the liability will be recorded in our statement of operations and loss.
The restatements, and any perception that our published results may again need to be restated, may negatively impact the trading price of our securities and make it more difficult for us to raise capital on acceptable terms, or at all.
The restatements, and any perception that our published results may again need to be 33 restated, may negatively impact the trading price of our securities and make it more difficult for us to raise capital on acceptable terms, or at all.
In addition, if these suppliers experience financial difficulties, cease operations, or otherwise face business disruptions, we may be required to provide substantial financial support to ensure supply continuity or take other measures to ensure components and materials remain available.
In addition, if these suppliers experience financial difficulties, cease operations, or otherwise face business disruptions, we may be required to provide substantial financial support to ensure supply continuity or 25 take other measures to ensure components and materials remain available.
Economic uncertainty and associated macroeconomic conditions, including high volatility and uncertainty in the capital markets including as a result of inflation and interest rate spikes and potential future disruptions in access to bank deposits or lending commitments due to bank failures, supply chain disruption and geopolitical events, such as the war between Russia and Ukraine and in the Middle East and tensions with China, make it difficult for our customers and us to accurately forecast and plan future business activities, and could cause our customers to slow spending on our products and services.
Economic uncertainty and associated macroeconomic conditions, including high volatility and uncertainty in the capital markets including as a result of inflation and interest rate spikes and potential future disruptions in access to bank deposits or lending commitments due to bank failures, supply chain disruption and geopolitical events, such as the war between Russia and Ukraine and in the Middle East, conflicts with Iran, and tensions with China, make it difficult for our customers and us to accurately forecast and plan future business activities, and could cause our customers to slow spending on our products and services.
A material weakness is a deficiency, or a combination of deficiencies, in internal control over financial reporting, such that there is a reasonable possibility that a material misstatement of our annual or interim financial statements will not be prevented 32 or detected on a timely basis.
A material weakness is a deficiency, or a combination of deficiencies, in internal control over financial reporting, such that there is a reasonable possibility that a material misstatement of our annual or interim financial statements will not be prevented or detected on a timely basis.
The rapidly evolving market for last-mile and return-to-base electric vehicles is new and untested and is characterized by rapidly changing 20 technologies, price competition, numerous competitors, evolving government regulation and industry standards and uncertain customer demands and behaviors.
The rapidly evolving market for last-mile and return-to-base electric vehicles is new and untested and is characterized by rapidly changing technologies, price competition, numerous competitors, evolving government regulation and industry standards and uncertain customer demands and behaviors.
Risks Relating to the Design, Supply and Manufacturing of our Products We have experienced and may in the future experience significant delays in the design, manufacturing and wide-spread deployment of our products, which could harm our business, prospects, financial condition and operating results.
Risks Relating to the Design, Supply and Manufacturing of our Products 23 We have experienced and may in the future experience significant delays in the design, manufacturing and wide-spread deployment of our products, which could harm our business, prospects, financial condition and operating results.
If we fail to successfully tool our manufacturing facilities or if our manufacturing facilities become inoperable, we will be unable to produce our vehicles and our business will be harmed. 23 Tooling our manufacturing facilities for production of our vehicles and our future expansion plans are complicated and present significant challenges.
If we fail to successfully tool our manufacturing facilities or if our manufacturing facilities become inoperable, we will be unable to produce our vehicles and our business will be harmed. Tooling our manufacturing facilities for production of our vehicles and our future expansion plans are complicated and present significant challenges.
However, our rights to indemnification may be unavailable or insufficient to cover our costs and losses. Furthermore, disputes may arise with our 42 licensors regarding the intellectual property subject to, and any of our rights and obligations under, any license or other commercial agreement.
However, our rights to indemnification may be unavailable or insufficient to cover our costs and losses. Furthermore, disputes may arise with our licensors regarding the intellectual property subject to, and any of our rights and obligations under, any license or other commercial agreement.
If a large number of products are the subject of a recall, or if needed replacement 27 parts are not in adequate supply, we may not be able to deploy recalled products for a significant period of time.
If a large number of products are the subject of a recall, or if needed replacement parts are not in adequate supply, we may not be able to deploy recalled products for a significant period of time.
We expect our future expansion to include: • expanding the management team; • hiring and training new personnel; 26 • leveraging consultants to assist with company growth and development; • expanding our product offering across products, as well as services such as energy services and Xosphere™; • controlling expenses and investments in anticipation of expanded operations; • establishing or expanding design, research and development, manufacturing, sales and service facilities; • implementing and enhancing administrative infrastructure, systems and processes; and • expanding into new markets.
We expect our future expansion to include: • expanding the management team; • hiring and training new personnel; • leveraging consultants to assist with company growth and development; • expanding our product offering across products, as well as services such as energy services; • controlling expenses and investments in anticipation of expanded operations; • establishing or expanding design, research and development, manufacturing, sales and service facilities; • implementing and enhancing administrative infrastructure, systems and processes; and • expanding into new markets.
Our efforts to install, configure and implement dedicated charging solutions have been affected by numerous factors, such as; • the cost, availability, standardization and quality of commercial electric vehicle charging systems; • the availability of government incentives and our ability to navigate legal requirements, such as permits, associated with installing electric vehicle charging systems; • our ability to hire skilled employees, or train new employees, that are qualified to install and/or service electric vehicle charging systems; and • electric grid capacity and reliability.
Our efforts to install, configure and implement dedicated charging solutions have been affected by numerous factors, such as; • the cost, availability, standardization and quality of commercial electric vehicle charging systems; • the availability of government incentives and our ability to navigate legal requirements, such as permits, associated with installing electric vehicle charging systems; • our ability to hire skilled employees, or train new employees or engage contractors, that are qualified to install and/or service electric vehicle charging systems; and • electric grid capacity and reliability.
Geopolitical events, hostilities and social unrest, war, military conflict, including repercussions of the military conflict between Russia and Ukraine and in the Middle East and tensions with China, terrorism, political instability, acts of public violence, boycotts, health crises and pandemics or other occurrences that lead to avoidance of public places or cause people to stay at home could harm our business.
Geopolitical events, hostilities and social unrest, war, military conflict, including repercussions of the military conflict between Russia and Ukraine and in the Middle East, conflicts with Iran, and tensions with China, terrorism, political instability, acts of public violence, boycotts, health crises and pandemics or other occurrences that lead to avoidance of public places or cause people to stay at home could harm our business.
The ultimate impact of a public health crisis on our business, operations or the global economy has a whole may depend on factors that are highly uncertain and that are difficult to predict, including, but not limited to, the duration and spread of the health crisis, its severity, the actions to contain the crisis or treat its impact and how quickly and to what extent normal economic and operating activities can resume.
The ultimate impact of a public health crisis on our business, operations or the global economy as a whole may depend on factors that are highly uncertain and that are difficult to predict, including, but not limited to, the duration and spread of the health crisis, its severity, the actions to contain the crisis or treat its impact and how quickly and to what extent normal economic and operating activities can resume.
We have been and may continue to be impacted by macroeconomic conditions, rising inflation rates, uncertain credit and global financial market, including potential bank failures, supply chain disruption and geopolitical events, such as the wars between Russia and Ukraine and in the Middle East and tensions with China.
We have been and may continue to be impacted by macroeconomic conditions, rising inflation rates, uncertain credit and global financial market, including potential bank failures, supply chain disruption and geopolitical events, such as the wars between Russia and Ukraine and in the Middle East, conflicts with Iran, and tensions with China.
Based on the results of our evaluation and the material weaknesses described above, management concluded that our internal control over financial reporting was not effective to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external reporting purposes in accordance with GAAP as of December 31, 2024.
Based on the results of our evaluation and the material weaknesses described above, management concluded that our internal control over financial reporting was not effective to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external reporting purposes in accordance with GAAP as of December 31, 2025.
Servicing our debt requires a significant amount of cash, and we may not have sufficient cash flow from our business to pay our substantial debt. Our ability to make payments of principal or interest on our indebtedness depends on our future performance, which is subject to economic, financial, competitive and other factors beyond our control.
Servicing our debt requires a significant amount of cash, and we may not have sufficient cash flow from our business to pay our substantial debt. Our ability to make payments of principal on our indebtedness depends on our future performance, which is subject to economic, financial, competitive and other factors beyond our control.
We may also directly and indirectly depend upon other companies with unionized work forces, such as our manufacturing partners, parts suppliers and trucking and freight companies, and work stoppages or strikes organized by such unions could have a material adverse impact on our business, financial condition or operating results.
We may also directly and indirectly depend upon other companies with unionized workforces, such as our manufacturing partners, parts suppliers and trucking and freight companies, and work stoppages or strikes organized by such unions could have a material adverse impact on our business, financial condition or operating results.
Furthermore, there is the risk of potential adverse publicity related to our manufacturing or other partners whether or not such publicity is related to their collaboration with us. Our ability to successfully position our brand could also be adversely affected by perceptions about the quality of our competitors’ products.
Furthermore, there is the risk of potential adverse publicity related to our manufacturing or other partners whether or not such publicity is related to their collaboration with us. Our ability to successfully position our brands could also be adversely affected by perceptions about the quality of our competitors’ products.
If we elect to settle our conversion obligation with respect to the Convertible Note in shares of our Common Stock or a combination of cash and shares of our Common Stock, any sales in the public market of our Common Stock issuable upon such conversion could adversely affect prevailing market prices of our Common Stock.
If we elect to settle our conversion obligation with respect to the Convertible Note in shares of our Common Stock or a combination of cash and shares of our Common Stock, any sales in the public market of our Common Stock issuable upon such conversion could adversely affect prevailing market prices of our Commo n Stock.
Management has determined that these deficiencies are related to insufficient internal resources in technical accounting and financial reporting impacting our internal control over financial reporting for the year ended December 31, 2024.
Management has determined that these deficiencies are related to insufficient internal resources in technical accounting and financial reporting impacting our internal control over financial reporting for the year ended December 31, 2025.
In addition, if negative incidents relating to our products occur or are perceived to have occurred, whether or not such incidents are our fault, we could be subject to adverse publicity. In particular, given the popularity of social media, any negative publicity, whether true or not, could quickly proliferate and harm consumer perceptions and confidence in the Xos brand.
In addition, if negative incidents relating to our products occur or are perceived to have occurred, whether or not such incidents are our fault, we could be subject to adverse publicity. In particular, given the popularity of social media, any negative publicity, whether true or not, could quickly proliferate and harm consumer perceptions and confidence in our brands.
Any failure of public charging stations or third-party charging networks to meet customer expectations or needs, including quality of experience, could impact the demand for electric vehicles, including ours. Our business and prospects depend significantly on our ability to build the Xos brand.
Any failure of public charging stations or third-party charging networks to meet customer expectations or needs, including quality of experience, could impact the demand for electric vehicles, including ours. Our business and prospects depend significantly on our ability to build our brands.
Since inception, we financed our operations primarily from the sales of shares of Common Stock, the Business Combination, the SEPA, the ElectraMeccanica acquisition and the issuance of debt.
Since inception, we financed our operations primarily from the sales of shares of Common Stock, the Business Combination, the SEPA, the ElectraMeccanica acquisition, the ATM Offering and the issuance of debt.
As a result, we cannot assure that we will be able to enter into a definitive agreement or that our customers will not exercise their cancellation rights.
As a result, we cannot ensure that we will be able to enter into a definitive agreement or that our customers will not exercise their cancellation rights.
We may not successfully establish, maintain and strengthen the Xos brand, and our brand and reputation could be harmed by negative publicity regarding Xos or our products. Our business and prospects are heavily dependent on our ability to develop, maintain and strengthen the Xos brand.
We may not successfully establish, maintain and strengthen the Xos brand or any other brands, and our brand and reputation could be harmed by negative publicity regarding Xos or our products. Our business and prospects are heavily dependent on our ability to develop, maintain and strengthen our brands.
There is no guarantee that the Warrants will be in the money at the time they become exercisable, and they may expire worthless. The exercise price for our Warrants is $345.00 per share of our Common Stock.
There is no guarantee that the Warrants will be in the money at the time they become exercisable, and they may expire worthless. The exercise price for our Warrants is $345.00 per share of our Common Stock, and they expire August 20, 2026.
The useful life of any equipment that would be retired early as a result would be shortened, causing the depreciation on such equipment to be accelerated, and our results of operations could be negatively impacted. 25 Our delay in providing sufficient charging solutions for our vehicles has resulted in the delay of the delivery of vehicles to customers.
The useful life of any equipment that would be retired early as a result would be shortened, causing the depreciation on such equipment to be accelerated, and our results of operations could be negatively impacted. Delays in deployment of sufficient charging solutions for our vehicles has resulted in the delay of the delivery of vehicles to customers.
As of December 31, 2024 , our principal sources of liquidity were cash and cash equivalents aggregating to $11.0 million (including cash acquired pursuant to the Arrangement with ElectraMeccanica, which closed on March 26, 2024).
As of December 31, 2025 , our principal sources of liquidity were cash and cash equivalents aggregating to $14.0 million (including cash acquired pursuant to the Arrangement with ElectraMeccanica, which closed on March 26, 2024).
Our delay in providing sufficient charging solutions for our vehicles has resulted in the delay of the delivery of vehicles to customers. Demand for our vehicles and the customer’s willingness to take delivery depends in large part on the availability of charging infrastructure.
Delays in deployment of sufficient charging solutions for our vehicles has resulted in the delay of the delivery of vehicles to customers. Demand for our vehicles and the customer’s willingness to take delivery depends in large part on the availability of charging infrastructure.
Our mix of offerings, such as the Xos Hub and Xosphere™, is novel in the industry and has yet to be tested in the long term. Any failure to commercialize our strategic plans could have a material adverse effect on our operating results and business, harm our reputation and could result in substantial liabilities that exceed our resources.
Our mix of offerings is novel in the industry and has yet to be tested in the long term. Any failure to commercialize our strategic plans could have a material adverse effect on our operating results and business, harm our reputation and could result in substantial liabilities that exceed our resources.
If we (or a third-party upon which we rely) experience a security incident or are perceived to have experienced a security incident, we may experience adverse consequences, such as government enforcement actions (for example, investigations, fines, penalties, audits, and inspections); additional reporting requirements and/or oversight; restrictions on processing sensitive information (including personal data); litigation (including class claims); indemnification obligations; negative publicity; reputational harm; monetary fund diversions; diversion of management attention; interruptions in our operations (including availability of data); financial loss; and other similar harms.
Such disclosures are costly, and the disclosure or the failure (actual or perceived) to comply with such requirements could lead to adverse consequences. 39 If we (or a third-party upon which we rely) experience a security incident or are perceived to have experienced a security incident, we may experience adverse consequences, such as government enforcement actions (for example, investigations, fines, penalties, audits, and inspections); additional reporting requirements and/or oversight; restrictions on processing sensitive information (including personal data); litigation (including class claims); indemnification obligations; negative publicity; reputational harm; monetary fund diversions; diversion of management attention; interruptions in our operations (including availability of data); financial loss; and other similar harms.
These factors may make the timing, amount, terms and conditions of such financing unattractive or unavailable to us. If we are unable to raise sufficient capital, we may have to significantly reduce our spending, delay or cancel our planned activities or substantially change our corporate structure.
These factors, as well as the market for our Common Stock, may make the timing, amount, terms and conditions of such financing unattractive or unavailable to us. If we are unable to raise sufficient capital, we may have to significantly reduce our spending, delay or cancel our planned activities or substantially change our corporate structure.
Concentration of ownership among our existing executive officers and directors and their respective affiliates may prevent other investors from influencing significant corporate decisions. As of March 24, 2025, our executive officers and directors and their respective affiliates as a group beneficially owned approximately 19.7% of the ou tstanding shares of Common Stock.
Concentration of ownership among our existing executive officers and directors and their respective affiliates may prevent other investors from influencing significant corporate decisions. As of March 26, 2026, our executive officers and directors and their respective affiliates as a group beneficially owned approximately 17.7% of the ou tstanding shares of Common Stock.
To the extent that we continue to generate taxable losses, unused losses will carry forward to offset future taxable income, if any, until such unused losses expire. As of December 31, 2024, we had federal and state income tax net operating loss carryforwards of $505.4 million.
To the extent that we continue to generate taxable losses, unused losses will carry forward to offset future taxable income, if any, until such unused losses expire. As of December 31, 2025, we had federal and state income tax net operating loss carryforwards of $598.0 million.
CFIUS or another FDI regulator may seek to impose limitations or restrictions on, or prohibit, investments by such investors (including, but not limited to, limits on purchasing our Common Stock, limits on information sharing with such investors, requiring a voting trust, governance modifications, or forced divestiture, among other things). General Risk Factors Catastrophic events may disrupt our business.
CFIUS or another FDI regulator may seek to impose limitations or restrictions on, or prohibit, investments by such investors (including, but not limited to, limits on purchasing our Common Stock, limits on information sharing with such investors, requiring a voting trust, governance modifications, or forced divestiture, among other things).
Failure to adequately obtain, maintain, enforce and protect our intellectual property could result in our competitors offering identical or similar products, potentially resulting in the loss of our competitive advantage and a decrease in our revenue which would adversely affect our business, prospects, financial condition and results of operations.
Failure to adequately obtain, maintain, enforce and protect our intellectual property could result in our competitors offering identical or similar products, potentially resulting in the loss of our competitive advantage and a decrease in our revenue which would adversely affect our business, prospects, financial condition and results of operations. 43 The protection of our intellectual property rights will be important to our future business opportunities.
The charges and expenditures that we expect to incur in connection with these cost-cutting measures, and timing thereof, are subject to a number of assumptions, including local law requirements in various jurisdictions, and we may incur costs that are greater than we currently expect in connection with these activities.
The charges and expenditures incurred in connection with these cost-cutting measures, and timing thereof, are subject to a number of assumptions, including local law requirements in various jurisdictions, and our actual costs may be greater than we expect in connection with these activities.
As disclosed in our prior year Annual Report on our Form 10-K for the year ended December 31, 2023, we identified material weaknesses in internal controls related to the ineffective operation of controls related to inventory management and revenue recognition.
As disclosed in our Annual Report on Form 10-K for the year ended December 31, 2024, we identified material weaknesses in internal controls related to the ineffective operation of controls related to inventory management, revenue recognition, and information technology (“IT”) general controls.
As of December 31, 2024, we had 109 full-time employees and 21 contractors. We intend to strategically hire personnel across a variety of functions as business needs arise. However, we may have difficulties hiring qualified personnel at times, such as during challenging labor markets.
As of December 31, 2025, we had 101 employees (including 99 full-time employees) and 34 contractors. We intend to strategically hire personnel across a variety of functions as business needs arise. However, we may have difficulties hiring qualified personnel at times, such as during challenging labor markets.
As of December 31, 2024, we had total indebtedness of approximately $28.1 million, consisting of the Convertible Note (including accrued interest), equipment notes, finance lease liabilities and insurance financing notes.
As of December 31, 2025, we had total indebtedness of approximately $20.6 million, consisting of the Convertible Note (including accrued interest), equipment notes, finance lease liabilities and insurance financing notes.
We expect our period-to-period financial results to vary based on our operating costs and product demand, which we anticipate will fluctuate as the pace at which we continue to design, develop and manufacture new products, increase manufacturing capacity and establish or expand design, research and development, manufacturing, sales and service facilities varies.
Our financial results may vary significantly from period to period due to fluctuations in our product development cycle and operating costs, product demand and other factors. 31 We expect our period-to-period financial results to vary based on our operating costs and product demand, which we anticipate will fluctuate as the pace at which we continue to design, develop and manufacture new products, increase manufacturing capacity and establish or expand design, research and development, manufacturing, sales and service facilities varies.
Debt financing, if available, may involve restrictive covenants and dilutive financing instruments. Moreover, the terms of any financing may adversely affect the holdings or the rights of our stockholders and the issuance of additional securities, whether equity or debt, by us, or the possibility of such issuance, may cause the market price of our Common Stock to decline.
Moreover, the terms of any financing may adversely affect the holdings or the rights of our stockholders and the issuance of additional securities, whether 19 equity or debt, by us, or the possibility of such issuance, may cause the market price of our Common Stock to decline.
While we cannot predict the extent to which the United States or other countries will impose quotas, duties, tariffs, taxes or other similar restrictions upon the import or export of our products, components, raw materials or other supplies in the future, a “trade war” of this nature or other governmental action related to tariffs or international trade agreements could have an adverse impact on demand for our services, sales and clients and affect the economies of the United States and various countries, having an adverse effect on our business, financial condition and results of operations.
While we cannot predict the extent to which the United States or other countries will impose quotas, duties, tariffs, taxes or other similar restrictions upon the import or export of our products, components, raw materials or other supplies in the future, a “trade war” of this nature or other governmental action related to tariffs or international trade agreements could have an adverse impact on demand for our services, sales and clients and affect the economies of the United States and various countries, having an adverse effect on our business, financial condition and results of operations. 36 A shift in the regulatory landscape toward more lenient emissions standards, or the perception that such a shift may occur, may impair demand for zero-emission vehicles.
In addition, we have the ability to redeem the outstanding Warrants at any time after they become exercisable and prior to their expiration, at a price of $0.10 per warrant if, among other things, the last reported sale price of our Common Stock for any 20 trading days within a 30-trading day period ending on the third trading day prior to the date on which we send the notice of redemption to the warrant holders equals or exceeds $300.00 per share (as adjusted for share splits, share dividends, rights issuances, subdivisions, reorganizations, recapitalizations and the like).
None of the Private Placement Warrants will be redeemable by us (subject to limited exceptions) so long as they are held by NextGen Sponsor or its permitted transferees. 46 In addition, we have the ability to redeem the outstanding Warrants at any time after they become exercisable and prior to their expiration, at a price of $0.10 per warrant if, among other things, the last reported sale price of our Common Stock for any 20 trading days within a 30-trading day period ending on the third trading day prior to the date on which we send the notice of redemption to the warrant holders equals or exceeds $300.00 per share (as adjusted for share splits, share dividends, rights issuances, subdivisions, reorganizations, recapitalizations and the like).
Additional unanticipated costs may be incurred as we continue to integrate the two businesses. While we have assumed that certain expenses would be incurred in connection with the acquisition and 34 integration, there are many factors beyond our control that could affect the total amount or the timing of expenses related to the acquisition and integration.
While we have assumed that certain expenses would be incurred in connection with the acquisition and integration, there are many factors beyond our control that could affect the total amount or the timing of expenses related to the acquisition and integration.

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Item 1C. Cybersecurity

Cybersecurity — threats and controls disclosure

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Biggest changeRisk Factors in this Report, including “If our IT systems, those of third-parties upon which we rely, or our data are or were compromised, we could experience adverse consequences resulting from such compromise, including but not limited to regulatory investigations or actions; litigation; fines and penalties; disruptions of our business operations; reputational harm; loss of revenue or profits; loss of customers or sales; and other adverse consequences.” Governance One of the key functions of our Board is informed oversight of our risk management process, including risks from cybersecurity threats.
Biggest changeRisk Factors in this Report, including “If our IT systems, those of third-parties upon which we rely, or our data are or were compromised, we could experience adverse consequences resulting from such compromise, including but not limited to regulatory investigations or actions; litigation; fines and penalties; disruptions of our business operations; reputational harm; loss of revenue or profits; loss of customers or sales; and other adverse consequences.” Governance One of the key functions of our Board is the informed oversight of our risk management process, including risks from cybersecurity threats.
Item 1C. Cybersecurity Risk Management and Strategy 48 We have established policies and processes designed to assess, identify and manage material risk from cybersecurity threats, and have integrated these processes into our overall risk management systems and processes.
Item 1C. Cybersecurity Risk Management and Strategy We have established policies and processes designed to assess, identify and manage material risk from cybersecurity threats, and have integrated these processes into our overall risk management systems and processes.
Our management, including the COO, maintains an active dialogue with the Board and Audit Committee on risk management matters, which includes cybersecurity.
Our management, including the COO, maintains an active dialogue with the Board and Audit Committee on risk management matters, which includes cybersecurity. 51

Item 2. Properties

Properties — owned and leased real estate

1 edited+3 added−2 removed2 unchanged
Biggest changeWe became the lessor of a 235,094 square foot manufacturing facility in Mesa, Arizona and a 17,980 square foot service and distribution center in Huntington Beach, California, under leases expiring in 2033 and 2027, respectively. 49 We believe our existing facilities are generally well maintained and adequate for our current requirements and that we will be able to obtain additional or alternative space at other locations to support our continuing expansion.
Biggest changeWe assumed two lease facilities in connection with the ElectraMeccanica acquisition, which we do not intend to use for our ongoing operations. We became the lessor of a 235,094 square foot manufacturing facility in Mesa, Arizona and a 17,980 square foot service and distribution center in Huntington Beach, California, under leases expiring in 2033 and 2027, respectively.
Removed
We assumed two lease facilities in connection with the ElectraMeccanica acquisition, which we do not intend to use for our ongoing operations.
Added
On August 21, 2025, the Company entered into an agreement with the lessor of the Company’s manufacturing facility in Mesa, Arizona, leased by the Company’s indirect wholly owned subsidiary, EMV Automotive USA Inc., to terminate the lease on the facility.
Removed
We currently do not own any real property.
Added
As a result of the termination, the Company is no longer obligated to pay rent on the Mesa Lease and the Company will make 18 monthly payments of approximately $2.8 million in the aggregate to complete the termination. See Note 2 — Summary of Significant Accounting Policies of this Report.
Added
We believe our existing facilities are generally well maintained and adequate for our current requirements and that we will be able to obtain additional or alternative space at other locations to support our continuing expansion. We currently do not own any real property.

Item 3. Legal Proceedings

Legal Proceedings — active lawsuits and investigations

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Biggest changeWe are not currently a party to any legal proceedings, the outcome of which, if determined adversely to us, would individually or in the aggregate have a material adverse effect on our business, financial condition or results of operations. Item 4. Mine Safety Disclosures Not applicable. 50 PART II
Biggest changeWe are not currently a party to any legal proceedings, the outcome of which, if determined adversely to us, would individually or in the aggregate have a material adverse effect on our business, financial condition or results of operations. Item 4. Mine Safety Disclosures Not applicable. 52 PART II

Item 4. Mine Safety Disclosures

Mine Safety Disclosures — required of mining issuers

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Biggest changeItem 4. Mine Safety Disclosures 50 Part II Item 5. Market for Registrant's Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities 51 Item 6. Reserved 51 Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations 51 Item 7A. Quantitative and Qualitative Disclosures About Market Risk 65 Item 8.
Biggest changeItem 4. Mine Safety Disclosures 52 Part II Item 5. Market for Registrant's Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities 53 Item 6. Reserved 53 Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations 53 Item 7A. Quantitative and Qualitative Disclosures About Market Risk 67 Item 8.

Item 5. Market for Registrant's Common Equity

Market for Common Equity — stock, dividends, buybacks

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Biggest changePurchases of Equity Securities by the Issuer and Affiliated Purchasers There were no unregistered sales of equity securities during the year ended December 31, 2024 other than as reported in our Quarterly Report on Form 10-Q for the quarterly period ended March 31, 2024 filed with the SEC.
Biggest changeRecent Sales of Unregistered Securities There were no unregistered sales of equity securities during the year ended December 31, 2025 other than as reported in our Quarterly Report on Form 10-Q for the quarterly period ended June 30, 2025 and our Current Report on Form 8-K dated August 21, 2025, which were filed with the SEC.
Payment of future cash dividends, if any, will be at the discretion of our Board of Directors after taking into account various factors, including our financial condition, operating results, current and anticipated cash needs, the requirements of then-existing debt instruments and other factors our Board of Directors deems relevant. Recent Sales of Unregistered Securities None.
Payment of future cash dividends, if any, will be at the discretion of our Board of Directors after taking into account various factors, including our financial condition, operating results, current and anticipated cash needs, the requirements of then-existing debt instruments and other factors our Board of Directors deems relevant.
Holders of Common Stock and Warrants As of March 26, 2025, there were 55 holders of record of our Common Stock and 18,833,298 Public Warrants outstanding held by 2 holders of record.
Holders of Common Stock and Warrants As of March 26, 2026, there were 56 holders of record of our Common Stock and 18,833,298 Public Warrants outstanding held by 2 holders of record.
Added
Purchases of Equity Securities by the Issuer and Affiliated Purchasers Except to the extent withholding shares of Common Stock upon vesting of RSUs may be deemed a purchase, the Company did not purchase any shares of its Equity Securities during the year ended December 31, 2025.

Item 7. Management's Discussion & Analysis

Management's Discussion & Analysis (MD&A) — revenue / margin commentary

100 edited+35 added−34 removed55 unchanged
Biggest changeGeneral and Administrative General and administrative expense decreased by $2.6 million, or 7%, from $37.7 million in the year ended December 31, 2023 to $35.1 million in the year ended December 31, 2024, attributable to decreases of (i) $1.9 million in professional fees (ii) $1.1 million in headcount and personnel cost for legal, finance, accounting, IT and general and administrative functions, (iii) $1.0 million in insurance costs driven by cost efficiencies associated with a new broker and (iv) $1.0 million in other operating expenses, including travel, recruiting, and computer equipment.
Biggest changeThe increase due to recognition of return reserves is due to units at our dealer locations being delivered to end customers. 60 Table of Contents General and Administrative General and administrative expense decreased by $10.3 million, or 29%, from $35.1 million in the year ended December 31, 2024 to $24.8 million in the year ended December 31, 2025, attributable to decreases of (i) $5.7 million in headcount and personnel cost for legal, finance, accounting, IT and general and administrative functions, (ii) $1.2 million in professional fees, including a favorable settlement of an outstanding vendor payable for $0.8 million, (iii) $1.1 million in depreciation due to the allocation of less overhead costs, (iv) $1.0 million in bad debt expense, (v) $0.7 million in stock-based compensation expense, (vi) $0.6 million in other operating expenses, including travel, recruiting, and computer equipment, (vii) $0.6 million in facility costs connected to the termination of the Mesa lease, (viii) and $0.5 million in insurance costs driven by cost efficiencies associated with a new broker.
If we are unable to raise capital when needed or on attractive terms, we would be forced to delay, reduce or eliminate our commercialization, research and development programs and/or other efforts and our ability to continue our operations would be negatively impacted.
If we are unable to raise capital when needed or on attractive terms, we would be forced to delay, reduce or eliminate our commercialization, research and development programs and/or other efforts and our ability to continue our operations would be negatively impacted.
If we seek additional financing to fund our business activities in the future and there remains substantial doubt about our ability to continue as a going concern, investors or other financing sources may be unwilling to provide funding to us on commercially reasonable terms, if at all.
If we seek additional financing to fund our business activities in the future and there remains substantial doubt about our ability to continue as a going concern, investors or other financing sources may be unwilling to provide funding to us on commercially reasonable terms, if at all.
In addition, we may have to liquidate our assets and may receive less than the value at which those assets are carried on our audited financial statements and/or seek protection under Chapters 7 or 11 of the United States Bankruptcy Code.
In addition, we may have to liquidate our assets and may receive less than the value at which those assets are carried on our audited financial statements and/or seek protection under Chapters 7 or 11 of the United States Bankruptcy Code.
While our significant accounting policies are described in the notes to our financial statements (see Note 2 – Basis of Presentation, Summary of Significant Accounting Policies and Recent Accounting Pronouncements in the accompanying financial statements), we believe that the following accounting policies require a greater degree of judgment and complexity.
While our significant accounting policies are described in the notes to our financial statements (see Note 2 – Summary of Significant Accounting Policies, Basis of Presentation and Recent Accounting Pronouncements in the accompanying financial statements), we believe that the following accounting policies require a greater degree of judgment and complexity.
We believe regulation relating to commercial vehicles, sustainability initiatives from leading financial and corporate institutions and growth of last-mile logistics will be important factors in establishing the level of demand for, and adoption of, our products worldwide. Xos is an early-stage growth company, and as such incurred net losses and cash outflows since its inception.
We believe regulation relating to commercial vehicles, sustainability initiatives from leading financial and corporate institutions and growth of last-mile logistics will be important factors in establishing the level of demand for, and adoption of, our products worldwide. Xos is an early-stage company, and as such has incurred net losses and cash outflows since its inception.
Under ASC Subtopic 205-40, Presentation of Financial Statements—Going Concern (“ASC 205-40”), we have the responsibility to evaluate whether conditions and/or events raise substantial doubt about our ability to meet our future financial obligations as they become due within one year of the financial statements included elsewhere in this Report.
Under ASC Subtopic 205-40, Presentation of Financial Statements—Going Concern (“ASC 205-40”), we have the responsibility to evaluate whether conditions and/or events raise substantial doubt about our ability to meet our future financial obligations as they become due within one year of the consolidated financial statements included elsewhere in this Report.
Cost of goods sold also includes material and other direct costs related to the production and assembly of powertrains and battery packs as well as materials and other costs incurred related to charging infrastructure installation. Materials include inventory purchased from suppliers, as well as assembly components that are assembled by company personnel, including allocation of stock-based compensation expense.
Cost of goods sold also includes material and other direct costs related to the production and assembly of Hubs, powertrains and battery packs as well as materials and other costs incurred related to charging infrastructure installation. Materials include inventory purchased from suppliers, as well as assembly components that are assembled by company personnel, including allocation of stock-based compensation expense.
For other features and services such as over-the-air software updates that are included as part of the vehicle consideration received, an observable price is used to determine the stand-alone selling price or, when one is not available, a blended market approach and cost-plus margin approach is utilized.
For other features and services such as Xosphere™ software or over-the-air software updates that are included as part of the vehicle consideration received, an observable price is used to determine the stand-alone selling price or, when one is not available, a blended market approach and cost-plus margin approach is utilized.
Our most significant estimates and judgments involve inventory valuation, incremental borrowing rates for assessing operating and financing lease liabilities, product warranty liability, useful lives of property and equipment, earn-out shares liability, common stock warrant liability, valuation of stock-based compensation, including the fair value of our Common Stock, and the valuation of the convertible notes payable and derivative liabilities.
Our most significant estimates and judgments involve inventory valuation, incremental borrowing rates for assessing operating and financing lease liabilities, product warranty liability, useful lives of property and equipment, earn-out shares liability, common stock warrant liability, valuation of stock-based compensation, including the fair value of our Common Stock, and the valuation of the convertible notes payable.
As an early-stage growth company, we have incurred net losses and cash outflows since our inception. We will continue to incur net losses and cash outflows in accordance with our operating plan as we continue to scale our operations to meet anticipated demand and seek to establish our product and service offerings.
As an early-stage company, we have incurred net losses and cash outflows since our inception. We will continue to incur net losses and cash outflows in accordance with our operating plan as we continue to scale our operations to meet anticipated demand and seek to establish our product and service offerings.
Changes in the fair value relate to remeasurement of our Public and Private Placement Warrants to fair value as of any respective exercise date and as of each subsequent balance sheet date and mark-to-market adjustments for derivative liabilities each measurement period.
Changes in the fair value relate to remeasurement of our Public and Private Placement Warrants to fair value as of any respective exercise date and as of each subsequent balance sheet date and mark-to-market adjustments for these derivative liabilities each measurement period.
As an early-stage growth company, the Company's ability to access capital is critical. However, there can be no assurance such capital will be available to the Company when needed, on favorable terms or at all.
As an early-stage company, the Company's ability to access capital is critical. However, there can be no assurance such capital will be available to the Company when needed, on favorable terms or at all.
We developed the X-Platform (our proprietary, purpose-bui lt vehicle chassis platform) and high-voltage architecture with a focus on the medium-duty commercial vehicle segment and, in particular, last-mile commercial fleet operations.
We developed our proprietary, purpose-bui lt vehicle chassis platform and high-voltage architecture with a focus on the medium-duty commercial vehicle segment and, in particular, last-mile commercial fleet operations .
The result of our ASC 205-40 analysis, due to uncertainties discussed below, is that there is substantial doubt about our ability to continue as a going concern through the next 12 months from the date of the consolidated financial statements in this Report. As an early stage growth company, we have incurred net losses and cash outflows since our inception.
The result of our ASC 205-40 analysis, due to uncertainties discussed below, is that there is substantial doubt about our ability to continue as a going concern through the next 12 months from the date of the consolidated financial statements in this Report. As an early stage company, we have mainly incurred net losses and cash outflows since our inception.
As of June 30, 2024, the Company completed the crushing of the vehicles but, as of December 31, 2024 , has not yet received any tariff recovery related to the destruction of SOLO vehicles.
As of June 30, 2024, the Company completed the crushing of the vehicles but, as of December 31, 2025 , has not yet received any tariff recovery related to the destruction of SOLO vehicles.
Unless the context otherwise requires, references in this “Management’s Discussion and Analysis of Financial Condition and Results of Operations” to “we”, “us”, “our”, and “the Company” are intended to mean the business and operations of Xos and its consolidated subsidiaries. Overview We are a leading fleet electrification solutions provider committed to the decarbonization of commercial transportation.
Unless the context otherwise requires, references in this “Management’s Discussion and Analysis of Financial Condition and Results of Operations” to “we”, “us”, “our”, and “the Company” are intended to mean the business and operations of Xos and its consolidated subsidiaries. Overview We are a leading energy storage and fleet electrification solutions provider committed to the decarbonization of commercial transportation.
Through our Powered by Xos™ business, we also provide mix-use powertrain solutions for off-highway, industrial and other specialty vehicles, such as forklifts, school buses, medical and dental clinics, blood donation vehicles, and mobile command vehicles.
Through our Powered by Xos™ business, we also provide mixed-use powertrain solutions for off-highway, industrial and other specialty vehicles, such as forklifts, school buses, medical and dental clinics, blood donation vehicles, and mobile command vehicles.
The second step is to measure the tax benefit as the largest amount which is more than 50% likely of being realized upon ultimate settlement. We consider many factors when evaluating and estimating tax positions and tax benefits, which may require periodic adjustments and may not accurately forecast actual outcomes. See Note 1 7 – Income Taxes for additional information.
The second step is to measure the tax benefit as the largest amount which is more than 50% likely of being realized upon ultimate settlement. We consider many factors when evaluating and estimating tax positions and tax benefits, which may require periodic adjustments and may not accurately forecast actual outcomes. See Note 17 – Income Taxes for additional information.
In the case of manufactured inventories and work in process, cost includes an appropriate share of production overheads based on operating capacity. 62 Table of Contents At the end of each reporting period, we evaluate whether our inventories are damaged or obsolete, and if so, a loss is recognized in the period in which it occurs.
In the case of manufactured inventories and work in process, cost includes an appropriate share of production overheads based on operating capacity. At the end of each reporting period, we evaluate whether our inventories are damaged or obsolete, and if so, a loss is recognized in the period in which it occurs.
Sales and Marketing Expense Sales and marketing (“S&M”) expense consists primarily of e xpenses related to our marketing of vehicles and brand initiatives, which includes: • payroll expense for employees primarily engaged in S&M activities, including allocation of stock-based compensation expense; and • web design, marketing and promotional items, and consultants who assist in the marketing of the Company and its products and services.
Sales and Marketing Expense Sales and marketing (“S&M”) expense consists primarily of e xpenses related to our marketing of products and brand initiatives, which includes: • payroll expense for employees primarily engaged in S&M activities, including allocation of stock-based compensation expense; and • web design, marketing and promotional items, and consultants who assist in the marketing of our products, services and brand.
Supply Chain Disruptions While our ability to source certain critical inventory items has been steadily improving since prior years, we are still experiencing long-standing negative effects from global economic conditions, and management expects such effects to continue to varying degrees for the foreseeable future.
Supply Chain Disruptions While our ability to source certain critical inventory items has been steadily improving, we are still experiencing long-standing negative effects from global economic conditions, and management expects such effects to continue to varying degrees for the foreseeable future.
We will continue to incur net losses and cash outflows in accordance with our operating plan as we continue to scale our operations to meet anticipated demand and seek to establish our product and service offerings.
We may continue to incur net losses and cash outflows in accordance with our operating plan as we continue to scale our operations to meet anticipated demand and seek to establish our product and service offerings.
Moreover, it is possible that such measures will have an adverse effect on our operations (see Part I, Item 1A Risk Factors of this Report, under the caption “Our recent cost-cutting measures may not adequately reduce our operating costs or improve our operating margins, may lead to additional workforce attrition and may cause operational disruptions”).
Moreover, it is possible that such measures will have, or have had, unintended and/or unknown adverse effect on our operations (see Part I, Item 1A Risk Factors of this Report, under the caption “Our recent cost-cutting measures may not adequately reduce our operating costs or improve our operating margins, may lead to additional workforce attrition and may cause operational disruptions”).
See “Our recent cost-cutting measures may not adequately reduce our operating costs or improve our operating margins, may lead to additional workforce attrition and may cause operational disruptions” in Part I Item 1A Risk Factors of this Report. • Certain of our senior executives have accepted temporary reductions in their annual base salaries, including our Chief Executive Officer and Chief Operating Officer who have volunteered to temporarily reduce their cash salaries by between approximately 20% and approximately 50%, effective October 28, 2024.
See “Our recent cost-cutting measures may not adequately reduce our operating costs or improve our operating margins, may lead to additional workforce attrition and may cause operational disruptions” in Part I Item 1A Risk Factors of this Report. • Certain of our senior executives have accepted temporary reductions in their annual base salaries, including our Chief Executive Officer and Chief Operating Officer, reducing their cash salaries by between approximately 20% and approximately 50%, respectively effective October 28, 2024.
Accordingly, these are the policies we believe are the most critical to aid in fully understanding and evaluating our financial condition and results of operations. Revenue Recognition We generate revenue from the sale of our commercial electric vehicles, powertrains and battery packs, and goods and services related to charging infrastructure.
Accordingly, these are the policies we believe are the most critical to aid in fully understanding and evaluating our financial condition and results of operations. Revenue Recognition We generate revenue from the sale of our commercial electric vehicles, powertrains and hubs, and goods and services related to charging infrastructure.
Interest income based on the implicit rate in the lease is recorded over time as customers are invoiced on a monthly basis. See Note 2 – Basis of Presentation, Summary of Significant Accounting Policies and Recent Accounting Pronouncements and Note 3 – Revenue Recognition for additional information.
Interest income based on the implicit rate in the lease is recorded over time as customers are invoiced on a monthly basis. See Note 2 – Summary of Significant Accounting Policies and Note 3 – Revenue Recognition for additional information.
Standby Equity Purchase Agreement On March 23, 2022, we entered into a Standby Equity Purchase Agreement with YA II PN, Ltd (“Yorkville”), which was subsequently amended on June 22, 2023 (as amended, the "SEPA"), whereby we have the right, but not the obligation, to sell to Yorkville up to $125.0 million of our shares of Common Stock at our request any time until February 11, 2026, subject to certain conditions.
Standby Equity Purchase Agreement On March 23, 2022, we entered into a Standby Equity Purchase Agreement with YA II PN, Ltd (“Yorkville”), which was subsequently amended on June 22, 2023 (as amended, the "SEPA"), whereby we had the right, but not the obligation, to sell to 62 Table of Contents Yorkville up to $125.0 million of our shares of Common Stock at our request any time until February 11, 2026, subject to certain conditions.
Additionally, since the Private Placement Warrants are substantially the same as the Public Warrants, we determined the fair value of our Private Placement Warrants based on the Public Warrant trading price. The Private Warrants are classified as Level 2 financial instruments. See Note 1 2 — Derivative Instruments for additional information.
Additionally, since the Private Placement Warrants are substantially the same as the Public Warrants, we determined the fair value of our Private Placement Warrants based on the Public Warrant trading price. The Private Warrants are classified as Level 2 financial instruments. See Note 12 — Derivative s for additional information.
GAAP”) which requires management to make certain estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities as of the balance sheet date, as well as 61 Table of Contents reported amounts of revenues and expenses during the reporting periods.
GAAP”) which requires management to make certain estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities as of the balance sheet date, as well as reported amounts of revenues and expenses during the reporting periods.
We design and manufacture Classes 5 through 8 battery-electric commercial vehicles that travel on last-mile, back-to-base routes of up to 200 miles per day. We also offer, through Xos Energy Solutions™, mobile and fixed charging infrastructure products, such as the Xos Hub, and have from time to time offered services to support electric vehicle fleets.
We offer, through Xos Energy Solutions™, mobile charging and energy storage products , such as the Xos Hub™, and have from time to time offered services to support electric vehicle fleets, including fixed charging infrastructure products. We design and manufacture Classes 5 and 6 battery-electric commercial vehicles that travel on last-mile, back-to-base routes of up to 200 miles per day.
Net cash used in operating activities was $48.8 million for the year ended December 31, 2024, primarily consisting of a cash-basis net loss of $26.2 million from normal operations of the Company (after non-cash adjustments of $24.0 million), and $22.6 million in unfavorable net working capital changes, primarily driven by higher accounts receivable, increases in other liabilities relating to the ElectraMeccanica acquisition and inventory usage, partially offset by higher accounts payable.
Net cash used in operating activities was $48.8 million for the year ended December 31, 2024, primarily consisting of a cash-basis net loss of $26.2 million from normal operations of the Company (after non-cash adjustments of $24.0 million), together with $22.6 million in working capital movements, primarily relating to higher accounts receivable, increases in other liabilities relating to the ElectraMeccanica acquisition and inventory usage, partially offset by higher accounts payable.
Key Factors Affecting Operating Results 53 Table of Contents We believe that our performance and future success depend on several factors that present significant opportunities for us but also pose risks and challenges, including those discussed in this Report.
Key Factors Affecting Operating Results We believe that our performance and future success depend on several factors that present significant opportunities for us but also pose risks and challenges, including those discussed in this Report.
Recent Accounting Pronouncements See Note 2 — Basis of Presentation, Summary of Significant Accounting Policies and Recent Accounting Pronouncements and our consolidated financial statements included in this filing for more information about recent accounting pronouncements, the timing of their adoption, and our assessment, to the extent we have made one, of their potential impact on our financial condition and our results of operations. 64 Table of Contents
Recent Accounting Pronouncements See Note 2 — Summary of Significant Accounting Policies and our consolidated financial statements included in this filing for more information about recent accounting pronouncements, the timing of their adoption, and our assessment, to the extent we have made one, of their potential impact on our financial condition and our results of operations.
Upon property and equipment retirement or disposal, the cost of the 55 Table of Contents asset disposed, and the related accumulated depreciation from the accounts and any gain or loss is reflected in the consolidated statements of operations and comprehensive loss, allocated to G&A.
Upon property and equipment retirement or disposal, the cost of the asset disposed, and the related accumulated depreciation from the accounts and any gain or loss is reflected in the consolidated statements of operations, allocated to G&A.
Successful Commercialization of our Products and Services We expect to derive future revenue from sales of our vehicles, battery systems and other product and service offerings.
Successful Commercialization of our Products and Services We expect to derive future revenue from sales of our vehicles, energy-storage systems and other product and service offerings.
We have plans to secure and intend to e mploy various strategies to raise additional capital, which may include the SEPA as well as other capital raising strategies such as debt financing (which may include asset-based lending and/or receivable financing), other non-dilutive financing and/or equity financing.
We have plans to secure and intend to e mploy various strategies to raise additional capital, which may include the ATM Offering (as defined below) as well as other capital raising strategies such as debt financing (which may include asset-based lending and/or receivable financing), other non-dilutive financing and/or equity financing.
Additionally, the Private Placement Warrants will be non-redeemable so long as they are held by the initial purchasers or their 63 Table of Contents permitted transferees.
Additionally, the Private Placement Warrants will be non-redeemable so long as they are held by the initial purchasers or their permitted transferees.
ASC 606, Revenue from Contracts with Customers , requires us to recognize revenue in a way that depicts the transfer of promised goods or services to customers in an amount that reflects the consideration to which we expect to be entitled in exchange for those goods or services. We determine revenue recognition by applying the following steps: 1.
ASC 606, Revenue from Contracts with Customers , requires us to recognize revenue in a way that depicts the transfer of promised goods or services to customers in an amount that reflects the consideration to which we expect to be entitled in exchange for those goods or services.
Research and Development Expense Research and development (“R&D”) expense consists primarily of costs incurred for the design and development of our vehicles and battery systems, which include: • payroll expense for employees primarily engaged in R&D activities, including allocation of stock-based compensation expense; • expenses related to licenses and subscriptions of software utilized in R&D activities; • fees paid to third-parties such as consultants and contractors for engineering and computer-aided design work on vehicle designs and other third-party services; and • expenses related to materials and, supplies consumed in the development and modifications to existing vehicle designs, new vehicle designs contemplated for additional customer offerings, and our battery pack design We expect our R&D costs to decrease for the foreseeable future primarily due to lower headcount driven by our RIF.
Research and Development Expense Research and development (“R&D”) expense consists primarily of costs incurred for the design and development of our vehicles and energy-storage systems, including the Hub, which include: • payroll expense for employees primarily engaged in R&D activities, including allocation of stock-based compensation expense; • expenses related to licenses and subscriptions of software utilized in R&D activities; • fees paid to third-parties such as consultants and contractors for engineering and computer-aided design work on vehicle designs and other third-party services; and • expenses related to materials and supplies consumed in the development and modifications to existing vehicle designs, new vehicle designs contemplated for additional customer offerings, and our battery pack design.
Arrangements under this program can have terms for up to 60 months for stepvans and 24 months for Hub units. The Company recognizes all revenue and costs associated with the sales-type leases upon delivery of the vehicle to the customer.
The Company has outstanding sales-type leases for stepvans and Hubs under ASC 842, Leases (“ASC 842”). Arrangements under this program can have terms for up to 60 months for stepvans and 24 months for Hub units. The Company recognizes all revenue and costs associated with the sales-type leases upon delivery of the vehicle to the customer.
Change in Fair Value of Contingent Earn-out Shares Liability The gain on the change in fair value of contingent earn-out shares liability decreased by $0.5 million, or 93% from $0.5 million in the year ended December 31, 2023 to $39,000 in the year ended December 31, 2024.
Change in Fair Value of Contingent Earn-out Shares Liability The gain on the change in fair value of contingent earn-out shares liability decreased by $39,000, or 100% from $39,000 in the year ended December 31, 2024 to $0 in the year ended December 31, 2025.
Net cash used in financing activities was $38.4 million for the year ended December 31, 2023, primarily consisting of (i) payments for convertible notes (including prepayment premium) of $34.4 million, (ii) equipment lease principal payments of $3.0 million, (iii) taxes paid relating to net-settlement of stock-based awards of $1.1 million, and (iv) outflow from net short-term insurance financing note activity of $1.1 million.
Cash Flow from Financing Activities Net cash used in financing activities was $2.4 million for the year ended December 31, 2025, primarily consisting of (i) equipment lease principal payments of $2.0 million, (ii) payments of principal on Convertible Notes of $1.5 million (iii) taxes paid relating to net-settlement of stock-based awards of $1.0 million, and (iv) payments of net short-term insurance financing note activity of $0.3 million.
We recognize revenue for shipping and handling charges at the time control is transferred for the related product. Costs for shipping and handling activities that occur after control of the product transfers to the customer are recognized at the time of sale and presented in cost of goods sold.
Costs for shipping and handling activities that occur after control of the product transfers to the customer are recognized at the time of sale and presented in cost of goods sold.
For the year ended December 31, 2023, we have generated $39.9 million in revenue (or 90% of revenue) from vehicle sales, $1.2 million (or 3% of revenue) in powertrain and hub sales, $1.5 million (or 3% of revenue) in sales-type lease revenue, $0.8 million (or 2% of revenue) from other product revenue, and $1.1 million (or 2% of revenue) from ancillary revenue. 52 Table of Contents We believe our growth in the coming years will be supported by the growth of e-commerce and last-mile delivery, and will depend in part on regulatory and consumer interest in reducing the impacts of climate change.
For the year ended December 31, 2024, we generated $42.8 million in revenue (or 76% of revenue) from vehicle sales, $8.7 million (or 16% of revenue) in powertrain and hubs sales, $0.7 million (or 1% of revenue) in sales-type lease revenue, $1.8 million (or 3% of revenue) from other product revenue, and $1.9 million (or 3% of revenue) from ancillary revenue. 54 Table of Contents We believe our growth in the coming years will be supported by the growth of e-commerce and last-mile delivery, and will depend in part on regulatory and consumer interest in reducing the impacts of climate change.
We used the net proceeds received from sales of Common Stock pursuant to the SEPA for working capital and general corporate purposes and expect similar uses of any remaining proceeds going forward. See Note 10 — Convertible Notes and Note 11 — Equity — Standby Equity Purchase Agreement in the accompanying consolidated financial statements for more information regarding the SEPA.
We used the net proceeds received from sales of Common Stock pursuant to the SEPA for working capital and general corporate purposes. See Note 11 — Equity — Standby Equity Purchase Agreement in the accompanying consolidated financial statements for more information regarding the SEPA.
The change was primarily due to decreases of (i) $1.7 million in allocation of personnel costs driven by lower headcount, (ii) $0.4 million related to reduction in public relations costs and tradeshows costs and (iii) $0.2 million in stock-based compensation expense.
The change was primarily due to decreases of (i) $1.2 million in allocation of personnel costs driven by lower headcount, (ii) $0.2 million related to reduction in public relations costs and tradeshows costs. These were offset by an increase of (i) $0.3 million in stock-based compensation expense.
Our liquidity was supplemented by net cash acquired in connection with the acquisition of ElectraMeccanica, which was approximately $50.2 million (excluding severance related costs paid at closing). Management’s plans to improve Xos’s liquidity and working capital requirements over the next twelve months include reducing operating costs in order to conserve financial resources.
Our liquidity was supplemented by net cash acquired in connection with the acquisition of ElectraMeccanica, which was approximately $50.2 million (excluding severance related costs paid at closing). Beginning in the fourth quarter of 2024, management implemented plans to improve Xos’s liquidity and working capital requirements. including reducing operating costs in order to conserve financial resources.
As of December 31, 2024, the remaining commitment available under the SEPA was $119.4 million. However, our ability to fully utilize the remaining commitment amount may be limited by various factors, including, but not limited to, the availability of an effective registration statement permitting the resale of such shares of Common Stock.
As of December 31, 2025, the remaining commitment available under the SEPA was $119.4 million. However, our ability to access the remaining commitment amount was limited by various factors, including, but not limited to, the availability of an effective registration statement permitting the resale of such shares of Common Stock. The SEPA expired on February 11, 2026.
Change in Fair Value of Derivatives The gain on the change in fair value of derivative instruments decreased by $0.4 million, or 59% from $0.7 million in the year ended December 31, 2023 to $0.3 million in the year ended December 31, 2024.
Change in Fair Value of Derivatives The gain on the change in fair value of derivative instruments decreased by $0.2 million, or 82% from $0.3 million in the year ended December 31, 2024 to $0.1 million in the year ended December 31, 2025.
Sales and Marketing Sales and marketing expense decreased by $2.3 million, or 35%, from $6.4 million in the year ended December 31, 2023 to $4.1 million in the year ended December 31, 2024.
Sales and Marketing Sales and marketing expense decreased by $1.1 million, or 27%, from $4.1 million in the year ended December 31, 2024 to $3.0 million in the year ended December 31, 2025.
Upon property and equipment retirement or disposal, the cost of the asset disposed, and the related accumulated depreciation from the accounts and any gain or loss is reflected in the consolidated statements of operations and comprehensive loss, allocated to cost of goods sold.
Upon property and equipment retirement or disposal, the cost of the asset disposed, and the related accumulated depreciation from the accounts and any gain or loss is reflected in the consolidated statements of operations, allocated to cost of goods sold. Cost of goods sold includes reserves for estimated warranty expenses as well as reserves for estimated returns of vehicles.
Accordingly, in the fourth quarter of 2024, Xos took the following measures: • We completed a reduction in force (the “RIF”) pursuant to which we terminated approximately 26% of our total workforce. We do not expect to incur material costs in connection with the RIF. The RIF may have unintended adverse effects on our operations and results.
In the fourth quarter of 2024, Xos took the following measures: • We completed a reduction in force (the “RIF”) pursuant to which we terminated approximately 26% of our total workforce. The RIF may have had, and may continue to have, unintended and/or unknown adverse effects on our operations and results.
Cash Flow Data The following table provides a summary of cash flow data for the years ended December 31, 2024 and 2023 ( in thousands ): Years Ended December 31, 2024 2023 Net cash used in operating activities $ (48,795) $ (39,286) Net cash provided by investing activities 51,176 50,630 Net cash used in financing activities (3,025) (38,379) Net decrease in cash, cash equivalents and restricted cash $ (644) $ (27,035) Cash Flow from Operating Activities Our cash flow from operating activities is significantly affected by the growth of our business.
Cash Flow Data The following table provides a summary of cash flow data for the years ended December 31, 2025 and 2024 ( in thousands ): Years Ended December 31, 2025 2024 Net cash provided by (used in) operating activities $ 5,365 $ (48,795) Net cash provided by investing activities 61 51,176 Net cash used in financing activities (2,382) (3,025) Net increase (decrease) in cash, cash equivalents and restricted cash $ 3,044 $ (644) Cash Flow from Operating Activities Our cash flow from operating activities is significantly affected by the growth of our business.
Cash Flow from Financing Activities Net cash used in financing activities was $3.0 million for the year ended December 31, 2024, primarily consisting of (i) equipment lease principal payments of $2.3 million and (ii) taxes paid relating to net-settlement of stock-based awards of $1.0 million.
These decreases were partially offset by proceeds from issuance of common stock under the ATM Offering by the Company of $2.4 million Net cash used in financing activities was $3.0 million for the year ended December 31, 2024, primarily consisting of (i) equipment lease principal payments of $2.3 million and (ii) taxes paid relating to net-settlement of stock-based awards of $1.0 million .
Revenue is provisioned upon control transfer of a vehicle and recognized over time on a straight-line basis as the Company has a stand-ready obligation to deliver such services to the customer. The Company has outstanding sales-type leases for stepvans and Hubs under ASC 842, Leases (“ASC 842”).
Revenue is provisioned upon control transfer of a vehicle and recognized over time on a straight-line basis as the Company has a stand-ready obligation to deliver such services to the customer.
Xos Energy Solutions™ is our charging infrastructure business through which we offer mobile and stationary multi-application chargers, including the Xos Hub, and mobile energy storage to accelerate transitions to electric fleets by maximizing incentive capture and reducing implementation lead times and costs. We have also developed a fleet management platform called Xosphere™ that interconnects vehicle, maintenance, charging, and service data.
Xos Energy Solutions™ is our charging infrastructure business through which we offer mobile and stationary multi-application chargers, including the Xos Hub, and mobile energy storage to accelerate transitions to electric fleets by maximizing incentive capture and reducing implementation lead times and costs.
For the year-ended December 31, 2024, we generated $42.8 million in revenue (or 76% of revenue) from vehicle sales, $8.7 million (or 16% of revenue) in powertrain and hub sales, $0.7 million (or 1% of revenue) in sales-type lease revenue, $1.8 million (or 3% of revenue) in other product revenue, and $1.9 million (or 3% of revenue) from ancillary revenue.
For the year ended December 31, 2025, we generated $35.8 million in revenue (or 78% of revenue) from vehicle sales, $7.2 million (or 15% of revenue) in powertrain and hubs sales, $0.4 million (or 1% of revenue) in sales-type lease revenue, $1.7 million (or 4% of revenue) in other product revenue, and $0.9 million (or 2% of revenue) from ancillary revenue.
Other Expense, Net Other expense, net decreased by $7.5 million, or 62%, from $12.0 million in the year ended December 31, 2023 to $4.6 million in the year ended December 31, 2024.
Other Expense, Net Other expense, net decreased by $2.5 million, or 53%, from $4.6 million in the year ended December 31, 2024 to $2.1 million in the year ended December 31, 2025.
During the year ended December 31, 2024, we delivered 244 vehicles (including leases), 19 powertrains and 34 Hubs. During the year ended December 31, 2023, we delivered 277 vehicles (including leases), 5 powertrains and 1 hub.
During the year ended December 31, 2024, we delivered 244 vehicles (including leases) and 53 powertrains and Hubs.
As of December 31, 2024 , the Company estimates aggregate tariff recovery of approximately $2.7 m illion with respect to destruction of SOLO vehicles and submission of the related claim documents.
The Company expects to recover some of the vehicle inventory value through crushing the vehicles to recover tariffs already paid. As of December 31, 2025 , the Company estimates aggregate tariff recovery of approximately $2.7 m illion with respect to destruction of SOLO vehicles and submission of the related claim documents.
Any deposits from customers represent contract liabilities. We recognize revenue by transferring the promised product to the customer, with the revenue recognized at the point in time the customer takes control of the product as agreed in the applicable contract, normally when delivered to the carrier.
We recognize revenue by transferring the promised product to the customer, with the revenue recognized at the point in time the customer takes control of the product as agreed in the applicable contract, normally when delivered to the carrier. We recognize revenue for shipping and handling charges at the time control is transferred for the related product.
Our powertrain offerings encompass a broad range of solutions, including high-voltage batteries, power distribution and management componentry, battery management systems, system controls, inverters, electric traction motors and auxiliary drive systems.
Our powertrain offerings encompass a broad range of solutions, including high-voltage batteries, power distribution and management componentry, battery management systems, system controls, inverters, electric traction motors and auxiliary drive systems. We have also developed a fleet management platform called Xosphere™ that interconnects vehicle, maintenance, charging, and service data.
Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be realized or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized as income or expense in the period that includes the enactment date.
Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary 65 Table of Contents differences are expected to be realized or settled.
We evaluate convertible debt instruments to determine whether any embedded features require bifurcation and separate periodic valuation. Convertible debt is recorded net of stated discounts as well as debt issuance costs. Debt discounts and issuance costs are amortized over the contractual term of the debt using the effective interest rate method.
Convertible Debt We account for convertible debt pursuant to ASC 815 . We evaluate convertible debt instruments to determine whether any embedded features require bifurcation and separate periodic valuation. Convertible debt is recorded net of stated discounts as well as debt issuance costs.
Our stripped chassis is our vehicle offering that consists of our X-Platform electric vehicle base and battery systems, which customers can upfit with their preferred vehicle body.
Components of Results of Operations Revenue To date, we have primarily generated revenue from the sale of electric stepvans, stripped chassis vehicles and battery systems. Our stripped chassis is our vehicle offering that consists of our X-Platform electric vehicle base and battery systems, which customers can upfit with their preferred vehicle body.
Off-Balance Sheet Arrangement s We do not have any off-balance sheet arrangements, as defined under the applicable rules and regulations of the SEC. Critical Accounting Policies and Estimates Our financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“U.S.
Critical Accounting Policies and Estimates Our financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“U.S.
Contractual Obligations and Commitments We did not have any material contractual obligations or other commitments as of December 31, 2024, other than what is disclosed in Note 1 5 - Commitments and Contingencies and Note 8 - Leases in this Report.
We did not have any material contractual obligations or other commitments as of December 31, 2025, other than what is disclosed in Note 15 — Commitments and Contingencies and Note 8 — Leases in this Report. Off-Balance Sheet Arrangement s We do not have any off-balance sheet arrangements, as defined under the applicable rules and regulations of the SEC.
Change in Fair Value of Contingent Earn-out Shares Liability The contingent earn-out shares liability was established as part of the Business Combination.
Change in Fair Value of Contingent Earn-out Shares Liability 58 Table of Contents The contingent earn-out shares liability was established as part of the Business Combination. Changes in the fair value relate to remeasurement to fair value as of each subsequent balance sheet date.
The increase in cost of goods sold is attributable to increases of (i) $2.3 million in inventory 57 Table of Contents reserves and associated write-downs of inventory to its net realizable value, (ii) $2.3 million in unfavorable physical inventory count and other adjustments, (iii) $2.0 million in direct materials, (iv) $0.6 million related to overhead, and (v) $0.3 million due to recognition of return reserves for the year ended December 31, 2024.
The decrease in cost of goods sold is attributable to decreases of (i) $5.5 million in direct materials, (ii) $4.2 million in inventory reserves and associated write-downs of inventory to its net realizable value, (iii) $2.1 million in favorable physical inventory count and other adjustments, (iv) $0.6 million in direct labor, (v) $0.6 million related to overhead, and (vi) $0.5 million in freight out.
In assessing the realizability of deferred income tax assets, ASC 740, Income Taxes , requires a more likely than not standard be met. If we determine that it is more likely than not that deferred income tax assets will not be realized, a valuation allowance must be established.
If we determine that it is more likely than not that deferred income tax assets will not be realized, a valuation allowance must be established. We record a valuation allowance, when necessary, to reduce deferred tax assets to the amount expected to be realized.
Until we can generate sufficient revenue from product sales, we expect to finance a substantial portion of our operations through commercialization and production with proceeds from the Business Combination, the SEPA, the Convertible Note, the ElectraMeccanica acquisition and any future capital raising efforts.
Until we can generate sufficient revenue from product sales, we expect to finance a substantial portion of our operations through commercialization and production and any future capital raising efforts. The amount and timing of our future funding requirements, if any, will depend on many factors, including the pace and results of our commercialization efforts.
We elected to early adopt Accounting Standards Update (“ASU”) 2020-06, Debt—Debt with Conversion and Other Options (Subtopic 470-20) and Derivatives and Hedging—Contracts in Entity’s Own Equity (Subtopic 815-40): Accounting for Convertible instruments and Contracts in an Entity’s Own Equity (“ASU 2020-06”). See Note 9 — Earn-out Shares Liability for additional information.
We elected to early adopt Accounting Standards Update (“ASU”) 2020-06, Debt—Debt with Conversion and Other Options (Subtopic 470-20) and Derivatives and Hedging—Contracts in Entity’s Own Equity (Subtopic 815-40): Accounting for Convertible instruments and Contracts in an Entity’s Own Equity (“ASU 2020-06”). 66 Table of Contents Duty Drawback Receivables Duty drawback is the recovery of tariffs paid for vehicles that we acquired as a result of the consummation of the Arrangement.
During the year ended December 31, 2024, we delivered 297 units, (244 stepvans, including leases, 19 powertrains and 34 hubs, including leases), compared to 283 units (277 stepvans, 5 powertrains, and 1 hub) in the year ended December 31, 2023.
During the year ended December 31, 2025, we delivered 259 stepvans (including leases), 69 powertrains & Hubs, compared to 244 stepvans (including leases), 53 powertrains & Hubs, including leases, in the year ended December 31, 2024.
The change was primarily due to decreases of (i) $4.3 million in allocation of personnel costs driven by lower headcount in engineering, (ii) $3.0 million in equipment and material purchases due to fewer research and development projects in development year over year, (iii) $1.3 million in net other costs, driven by reductions of consulting and design fees, in addition to equipment and vehicle purchases used solely for research and development purposes and (iv) $0.4 million in stock-based compensation expense.
The change was primarily due to decreases of (i) $2.4 million in allocation of personnel costs driven by lower headcount in engineering and (ii) $0.4 million in net other costs, driven by reductions of consulting and design fees, in addition to computer and software costs.
Cost of goods sold also includes reserves to write down the carrying value of our inventory to their net realizable value and to provide for any excess or obsolescence. We are continuing to undertake efforts to find more cost-effective vendors and sources of parts and raw materials to lower our overall cost of production.
Additionally, cost of goods sold includes adjustments for the results of physical inventory counts. Cost of goods sold also includes reserves to write down the carrying value of our inventory to their net realizable value and to provide for any excess or obsolescence.
The amount and timing of our future funding requirements, if any, will depend on many factors, including the pace and results of our commercialization efforts. Customer Demand We have sold a limited number of our vehicles to our existing customers, have agreements with future customers and have received interest from other potential customers.
Customer Demand We have sold a limited number of our vehicles to our existing customers, have agreements with future customers and have received interest from other potential customers. The sales of our vehicles and services to our existing and future customers will be an important indicator of our performance.
Claims incurred under our standard product warranty programs are recorded based on open claims. See Note 2 – Basis of Presentation, Summary of Significant Accounting Policies and Recent Accounting Pronouncements for additional information.
Claims incurred under our standard product warranty programs are recorded based on open claims. See Note 2 – Summary of Significant Accounting Policies for additional information. Public and Private Placement Warrants The Public Warrants and the Private Placement Warrants are recognized as derivative liabilities in accordance with ASC 815, Derivatives and Hedging (“ASC 815”).
Revenue contracts are identified when an enforceable agreement has been made with a customer. Performance obligations are identified in the contract for each distinct product provided within the contract. Revenue is measured as the amount of consideration we expect to receive in exchange for transferring products. All revenue is recognized when we satisfy our performance obligations under the contract.
Revenue is measured as the amount of consideration we expect to receive in exchange for transferring products. All revenue is recognized when we satisfy our performance obligations under the contract. Any deposits from customers represent contract liabilities.
This could potentially cause us to cease operations and result in a complete or partial loss of your investment in our Common Stock.
This could potentially cause us to cease operations and result in a complete or partial loss of your investment in our Common Stock. ATM Offering On August 14, 2025, we entered into a Sales Agreement (the “Sales Agreement”) with Roth Capital Partners, LLC (the “Agent”).

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