Good afternoon, and welcome to the Carbon Revolution PLC Business Update Call. Today's call is being recorded, and we have allocated one hour for prepared remarks and Q&A. At this time, I would like to turn the conference over to Ashish Gupta, Investor Relations for Carbon Revolution. Thank you. You may begin.
Thank you, operator, and thank you everyone for joining us today. Hosting the call are Carbon Revolution CEO and Co-founder, Jake Dingle, and CFO, Gerard Buckle. We would like to remind everyone that this call contains forward-looking statements, including but not limited to, Carbon Revolution's expectations or predictions of financial and business performance and conditions, competitive and industry outlook. Forward-looking statements are inherently subject to risks, uncertainties, and assumptions, and they are not guarantees of performance. We encourage you to read in full the Form 20-F issued with the SEC on November 13th, 2023, and the accompanying presentation for a discussion of the risks that can affect Carbon Revolution's business and the outlook of the company.
Carbon Revolution is under no obligation and expressly disclaims any obligation to update, alter, or otherwise revise any forward-looking statements, whether as a result of new information, future events, or otherwise, except as required by law. With that, let me turn the call over to Jake.
Thank you, Ashish. As this is our first earnings call since we began trading on the Nasdaq, following the closing of the business combination with Twin Ridge Capital Acquisition Corp last month, I'd like to start by thanking our whole team for their contribution to Carbon Revolution's success. I'd also like to thank our shareholders for their support and patience towards the completion of the transaction, which was an important milestone for the company. Now, for today's agenda. I'll start off by giving a short overview of the company and a brief history of our expansion, with a focus on our progress over the last year. Next, I'll discuss our value proposition and how we are well positioned to capitalize on accelerating industry trends. I will then speak about the opportunity ahead of us, highlight recent program wins, and discuss why we think our technology is poised for rapid adoption.
I'll then turn it over to our CFO, Gerard Buckle, who will provide financial and operational highlights and an update on the capital structure. Moving first to the company background on what we do and the enormous and exciting global opportunity in front of us. Carbon Revolution is an established Tier 1 supplier to the global automotive industry. We are disrupting the $38 billion automotive wheel market with our highly differentiated and unique lightweight carbon fiber composite wheel technology. We've spent over a decade developing this technology and are the first, and remain the only, company to produce and sell carbon fiber wheels at scale to top global automotive OEMs in North America and Europe. Compared to conventional aluminum wheels, our carbon fiber wheels can deliver up to a 50% weight reduction. This has significant benefits for all vehicle types.
For an EV, this weight saving can result in a 5%-10% extension of range if the weight saving were to be reinvested in battery mass and, depending on the level of integration into the overall vehicle design. Additionally, reducing mass from a vehicle's wheels reduces rotational unsprung mass which substantially improves the handling, acceleration, and braking of the vehicle. We've worked to build and protect our competitive advantage in a number of important ways. First, after more than a decade of development, we believe that our technology is many years ahead of our closest aspiring competitors. We've protected this position by establishing a portfolio of 103 patents, with 82 granted and an additional 21 pending. Second, we've established relationships with major global automotive OEMs such as Ford, General Motors, Jaguar Land Rover, Ferrari, and Renault, most of whom have multiple programs awarded.
Programs that are currently in production, together with other multiyear contracted programs that are yet to enter production, result in a significant portfolio of future business or backlog. This provides substantial visibility to our expected near- and medium-term growth. Finally, as Gerard will discuss in more detail, the first phase of our Mega-line project is now commissioned, with additional capacity to be added in line with new programs coming into production over the coming years. This largely automated manufacturing process is progressively adding substantial capacity at a much lower cost per wheel and helping us to meet accelerating demand from our customers, the global OEMs. Moving now to the history of our successful expansion. We characterize our long-term strategy in terms of four key phases, with R&D, commercialization, and industrialization occurring to date in Australia, and the fourth stage, scaling up with international manufacturing, now in the detailed planning stages.
During the R&D phase, we worked closely with numerous OEMs across the globe as we evolved our technology to the level that would satisfy the requirements for introducing a safety-critical technology. Next, the commercialization phase kicked off as we secured and started to deliver the products for our first OEM programs across multiple customers. We laid the foundation for our deep customer relationships in this period and accelerated our product and process development to differentiate our offering, extending our lead in the market. To date, we have delivered 11 production programs, with another seven awarded programs working their way through the pre-production stages. We are now in the industrialization and scale-up phase. Manufacturing currently takes place in Australia at our 10,000 sq m , ISO-certified, state-of-the-art manufacturing facility that was purpose-built in 2014 and then expanded significantly in 2018.
With larger volume programs now approaching production, we are scaling with our increasingly automated manufacturing line in Australia. We plan to then replicate and multiply this in lower-cost manufacturing regions over the coming years. We expect the first of these to be in North America. 2023 has been a transformative year for Carbon Revolution, and we have made enormous progress across new business awards, operations, and funding. In the last year, we were awarded an additional five programs, taking total awarded now to 18 programs with six global OEMs. Due mainly to these newly awarded programs, our backlog, which is the projected future revenue for awarded programs, has more than doubled and is now over $730 million. Beyond this significant expansion in order volume, our recent growth provides strategic diversification of the market segments, customer base, and geographies that we serve.
The recent launch of the Range Rover Sport SV was our first program in the large SUV market, and our additional awarded programs include our first two for electric vehicles and a program with a premium brand of a major German OEM. We've also made strong progress on our Mega-line project, successfully commissioning the first phase of the project and setting new production records as we've scaled up throughput throughout the year. The number of wheels produced from this line is increasing, while production costs are benefiting from higher automation levels. Gerard will discuss these improvements in more detail shortly. We'll continue adding capacity to the plant as required by new program introductions and growth in existing programs over the coming years.
The year has also been transformative from a funding perspective, with the completion of the company's business combination with TRCA, the establishment of a $60 million IP-backed term loan, and funding of the first $35 million tranche of an up to a $110 million preferred equity facility with OIC. Turning now to how our wheel technology uniquely addresses the enormous challenges faced by OEMs, arising from the rapid transition to EVs and other related industry trends. Regulations such as the Corporate Average Fuel Economy, or CAFE targets, are tightening dramatically. This is accelerating the demand for innovative technologies that can significantly improve the overall efficiency across all vehicles that are being produced by each OEM. EVs are the primary solution that the major global OEMs are turning to in order to meet these CAFE requirements.
But as the automotive sector transitions from Internal Combustion Engines or ICE vehicles to EVs, vehicle mass is dramatically increasing due to the enormous size and weight of batteries required to achieve adequate range. This comes on the back of much longer-term consumer trends towards SUVs and trucks and increasingly larger diameter wheels. The combination of these factors has resulted in significant structural challenges for OEM vehicle engineers to design suspension systems and axles that are strong enough to support massively heavy, conventional metal wheels. The up to 50% weight saving that can be delivered from our carbon fiber wheels, and the knock-on benefits to the overall vehicle, makes our technology an extremely compelling solution. To speak now specifically to our technology's benefits for electric vehicles, range is the new currency for OEMs as the market transitions to EVs.
Even in the best cases, EV range is far less than what a conventional ICE vehicle achieves on a tank of fuel. The weight reduction of up to 50% provided by our lightweight wheel technology can enable extension of EV range by a significant 5%-10%. The bottom end of this range represents the possible gains if the weight saving were to be reinvested directly back into battery mass. The top end of the range represents the potential further benefits that can be derived from aerodynamic, NVH, and vehicle integration enhancements. Because our carbon fiber wheels are a bolt-on technology solution, their application does not require significant investment in the overall vehicle design or in the vehicle manufacturing plant. Concurrent with the EV transition, OEM design studios are trending to larger and larger vehicle designs, which require increasing wheel size for aesthetic and proportional purposes.
Large aluminum wheels that are strong enough to support this new generation of massive vehicles are so heavy that they challenge the overall vehicle structure. In particular, they increase the stresses on the suspension structures and pose other weight challenges to such an extent that our customers are increasingly telling us that using aluminum wheels is becoming impractical at these increased sizes. The convergence of these factors is driving demand for Carbon Revolution's technology as a critical enabler for the next generation of vehicles. By providing a solution that allows studios to deliver their desired aesthetics without sacrificing the ability to meet OEM structural requirements and performance targets, we are creating a clear pathway to widespread adoption of our carbon fiber wheel technology. An additional challenge faced by OEMs in the EV segment is road noise, which is particularly noticeable because of the contrast with the nearly silent EV powertrains.
While other sound reduction measures often increase vehicle weight, Carbon Revolution's wheel technology reduces road noise while providing very significant weight savings. The low density, highly damped nature of carbon fiber composite structures allows our wheels to reduce road noise transmission. We now have two EV programs awarded and in the advanced stages of development, and further programs in the pipeline, including large SUV and pickup truck segments. Carbon Revolution's penetration is now expanding beyond the performance and luxury segments to the large-scale SUV and truck platforms. These represent a very significant part of our existing and prospective customers' current and future revenues and profits. Moving now to the size of the opportunity. The total addressable market for the global automotive wheel industry is enormous.
It is expected to grow from $38 billion in 2020 to almost $60 billion by 2028, reflecting a greater than 5% compound annual growth rate off an already impressive base. Based on the number of EV programs we have in development, we expect Carbon Revolution's lightweight wheel technology to be an important part of the range solution for EVs, as well as supporting the efficiency, performance, and handling of conventional ICE vehicles, whose weight has steadily grown over the past four decades. Notably, with EV market share expected to increase from less than 5% of the global market in 2020 to greater than 20% by 2030, we are seeing the demand for our technology dramatically accelerate as vehicle weight reduction becomes a top priority for OEMs.
As customer demand for Carbon Revolution's technology accelerates, our team is successfully converting demand into program awards by providing solutions to the primary challenges facing OEMs. These include unlocking range improvements for electric vehicles, enhancing structural durability, and offering unique and compelling styling options favored by the design studios. Our solutions-orientated approach is driving an acceleration in the rate at which we are converting customer interest into program awards. Our first program was awarded in 2013, and between then and October 2022, a further 12 programs were awarded, with a total backlog at October 2022 of $335 million. Between October 2022 and September 2023, a further five programs have been awarded, with a backlog as at September 2023 of $730 million.
So we have had 18 programs awarded to date, and we are only just getting started. Of these, six programs are currently in production, five are in aftersales, that is, they have completed the serial production stage and are now supplying aftersales or spare parts for vehicles in the market. We have seven awarded programs that are in development, meaning they have been formally awarded, but are not yet in serial production. Activities during this pre-production phase include virtual engineering, physical prototyping, and testing, and then multiplying out production capacity ahead of serial production. Typically, the customer will reveal or launch the vehicle to consumers during this phase, at which point it typically becomes known that the vehicle will be fitted with our carbon fiber wheels. Carbon Revolution has captured a clear first-mover advantage with our unique next-generation automotive technology. It's a well-established adoption curve for comparable automotive technologies.
When introduced, new automotive technologies typically penetrate the luxury or performance end of the market first, before transitioning to full adoption as a mass-market product. You can see some great examples on slide 12. Carbon Revolution's unique technology and rapid growing backlog of awarded business make it incredibly exciting to be engaging with our OEM customers as our carbon fiber wheel technology progresses rapidly through this adoption curve. After more than a decade of intensive technology development and significant investment to date, we've successfully delivered almost 80,000 wheels to our global customer base. Our first program was the Ford Mustang GT350R, and we've subsequently delivered three additional programs to Ford, the GT, GT500 and Dark Horse Mustang programs.
We have had multiple programs to date with Ferrari, the Corvette Z06 with General Motors, the Renault Megane hot hatch, and most recently, our first SUV program, the Range Rover Sport SV with Jaguar Land Rover. Our list of programs and customers has grown with the seven awarded programs in development. The six programs in production and the seven awarded programs in development provide a backlog of over $730 million. As is typical in the automotive industry, these contracts don't contain take-or-pay or other minimum purchase obligations. Accordingly, our forecasts typically represent the capacities that our customers have asked us to install, and also the durations we know or expect in relation to these programs.
Nearly 50% of backlog is from the EV programs, which are yet to enter production, and the majority of the backlog is derived from OEMs based in North America, with the remainder in Europe and the U.K. We expect to grow our awarded programs with new and existing customers in these geographies and potentially expand to Asian-based OEMs. Before I turn it over to Gerard, I'd like to note that we've a track record of beating OEM award forecasts. As mentioned, we have a significant and growing backlog. If you look at the four main programs completed to date with OEMs, we have either exceeded or significantly exceeded the original awarded volume. This historical outperformance versus the original OEM forecasts for our awarded programs gives us the basis for confidence in our revenue forecasts.
With that, I'll now hand it over to Gerard, who will review our financial results.
Thank you, Jake. I'll begin with an overview of our fiscal first quarter results, cover our capital structure and balance sheet, discuss our outlook for the fiscal second quarter, provide some building blocks for the calendar year 2024, discuss our margin opportunity and long-term plans for capacity. Revenue grew 56% to $11.3 million in Q3 CY 2023, as compared to $7.3 million for the prior year period, driven by increased demand from the Corvette Z06 program and the launch of the Range Rover Sport SV. We are successfully ramping sales throughout calendar year 2023, increasing from $5 million in calendar Q1 to $11.3 million in calendar Q3. Our first fiscal quarter.
Commissioning of the first phase of the Mega-line has been completed, which combined with additional tooling, has delivered increased productive capacity in the plant, allowing us to service growing customer demand. Turning to the capitalization summary. This slide provides a pro forma valuation as of the Nasdaq listing. There are 2.4 million shares outstanding, including 500,000 shares underlying penny warrants held by OIC. With an indicative share price of $41 per share as of October 11, 2023, this implies an equity value of $97.2 million. There was a cash balance on closing of $79 million, which included $35 million of restricted cash, but is subject to release per terms, further terms of the OIC preferred equity financing and $9.9 million of restricted cash under the PIUS term loan.
The gross debt and preferred equity balance as of transaction close was $142 million. There are three key elements of our capital structure of, I will provide a summary here. However, there is further detail in our Form 20-F, filed with the SEC on November 13, 2023, which we encourage you to read. We have a four-year, $60 million term loan with PIUS. This is secured by all assets. In particular, working with PIUS enabled us to secure this loan against our valuable intellectual property. There is an 18-month interest-only period with amortization from December 2024. We have partnered with OIC on a $110 million preferred equity facility.
Initial gross proceeds of $35 million were received on closing in November, with an additional $35 million under escrow, which is expected to be released in two tranches during 2024. The first tranche of $5 million will be released subject to Carbon Revolution raising an additional $10 million of third-party equity. The second tranche of $30 million will be released by December 2024, subject to the achievement of growth milestones and refinancing of the term loan. The OIC facility also includes a further $40 million, subject to our OIC approval for future in-market manufacturing or a material upgrade to our Australian facility.
OIC is a great capital partner for our business as we continue to outgrow. Issued subject to minimum return requirements and penny warrants issued to acquire a number of shares equal to up to 19.99% of the shares outstanding as of closing of the business combination, subject to reduction if certain conditions are not met. Following the closing of the business combination, there are 12.2 million public warrants outstanding to purchase 1/10 of an ordinary share at an exercise price of $11.50 per 1/10 of an ordinary share. So effectively, $115 per whole ordinary share. The public warrants will expire in five years or earlier upon redemption. We also have an up to $60 million committed equity facility, commonly known as an ELOC, with Yorkville Partners, for a period of up to three years.
Each advance may be in an amount up to the greater of $10 million or the aggregate trading volume, subject to 9.9% cap on Yorkville's share ownership at any particular time. There are two purchase price options. Carbon Revolution has a strong list of capital partners. We will continue to assess the optimal capital structure for the company as we progress with our growth strategy. Turning to our outlook for the second fiscal quarter or calendar Q4. Based on current business conditions, business trends, and other factors, we are providing an outlook for the fiscal quarter ending December 31, 2023. We expect revenue to be in the range of $14 million-$14.5 million.
It's important to note that as programs have launched and/or ramped over calendar year 2023, our annualized run rate has significantly increased to over $50 million. We are successfully scaling the business. Sequential growth from fiscal 1Q is expected to be driven by increased production on the Corvette Z06/ E-Ray, the ongoing ramp of the JLR Range Rover Sport SV, and the initial stages of ramp of the Ford Mustang Dark Horse programs. While we intend to guide on a quarterly basis going forward, we wanted to provide context on the previous calendar 2024 outlook, as we provided during our going public transaction. As a Tier 1 automotive supplier, we have significant revenue visibility from the contracted programs in our backlog, but we do not control when OEMs introduce new vehicle programs.
It's a major project for an OEM to bring a new vehicle program together, and if a new vehicle introduction is delayed, even by a small number of months, our revenue can shift between quarters or halves, and therefore, quarterly forecasting is the most appropriate for our business as we introduce the seven new programs during calendar year 2024 and 2025. As we look to calendar 2024, the majority growth, of growth is expected to be driven by new programs, which are expected to contribute $24.8 million of new revenue. Growth from existing programs is expected to contribute $11.9 million.
As noted earlier, our production run rate and revenue results have progressively grown in the last four quarters, and the majority of this $11.9 million of growth is from maintaining the fiscal second quarter current run rate. In addition, it's important to note that the calendar year 2024 will be back half weighted, as four new programs awarded and currently in development are expected to be in production in the second half of calendar year 2024. Again, while a delayed launch could mean revenue would shift into 2025, we would emphasize that revenue would not be lost as a result of a vehicle launch delay, just delayed into a subsequent period. Now, turning to our margin improvement opportunity.
To meet growing customer demand in 2023, we have commissioned the first phase of the new Mega-line, developing a step change in production capacity and efficiency. This brings together the proprietary manufacturing processes that we have refined and developed over the last decade with state-of-the-art robotics and conveyors. It also improves the safety environment for our team while reducing cost per wheel. The Mega-line is now the beating heart of our plant. On the labor side, in the near term, we are producing more parts per hour through our Mega-line. Planned cycle time and lean process improvements are expected to result in further labor efficiencies. We also expect to be in a position to realize the benefits of greater purchasing scale, with significant reductions in raw material unit costs expected.
These reductions will come from the reduction and reuse of carbon fiber waste, consolidation of suppliers, and volume-based discounts on material purchases as we shift from spot, spot market purchases to longer-term contracts for key materials. The combination of productivity from automation and material savings is expected to result in a significant reduction in our direct costs. Additional capacity is expected to be added through 2025 as programs come online, with the Australian plant capacity expected to expand to 70,000 wheels-90,000 wheels per annum. It is important to note that we continue to believe we can achieve EBITDA profitability at a run rate of 45,000 wheels-50,000 wheels per annum. Turning to our long-term capacity plans.
After optimizing manufacturing activities in our lead plant in Australia, we expect to establish new plants, replicating and continuing to refine the Mega-line manufacturing technology in lower-cost countries and in closer proximity to carbon fiber suppliers and our global OEM customers. We anticipate that these new plants will be much larger and allow further significant scale and cost benefits for many years to come. We are now starting to develop the plan and timing for our first in-market manufacturing plant. Calendar year 2024 will be a very important planning year for this in-market manufacturing process. We will be assessing items such as the manufacturing configuration of new plants, potential locations, and potential equipment and material supply partners. I will now hand back to Jake to provide closing remarks.
Thanks, Gerard. To wrap up, we're very excited about our recent Nasdaq listing and Carbon Revolution's future. Our highly differentiated and innovative technology solution addresses the core challenge facing global OEMs today: efficiency. The market opportunity is massive. T he highest growth segments are where we're able to offer the most compelling solutions, including the significant range extensions our wheels can deliver. Over the past decade, we have established an impressive track record that includes 18 awarded programs with six major global OEMs. We're ramping up strongly with record production figures being set. This is expected to continue through 2024 as new programs come on stream and as we add increasingly automated and efficient manufacturing capacity, resulting in increased revenue and contribution margin.
Our proven track record has allowed us to establish a position as the clear global market leader, a position backed by many patents and broader intellectual property advantages. Ultimately, we plan to locate our high-volume manufacturing facilities in more strategic and lower-cost locations, and planning for this is now well underway. This will drive significant cost reductions, and with our market-leading position, we expect this will deliver significant value to our shareholders in the coming years. We couldn't be more excited for the road ahead. Thank you again for joining us today, and we look forward to updating you on our progress as we continue our Carbon Revolution. We'll now open up the line for questions.
Thank you. Ladies and gentlemen, at this time, we will be conducting a question-and-answer session. If you'd like to ask a question, you may press star one on your telephone keypad. A confirmation tone will indicate your line is in the question queue. You may press star two if you would like to remove your question from the queue. For participants using speaker equipment, it may be necessary to pick up your handset before pressing the star key. Our first question comes from the line of Dan Ives with Wedbush. Please proceed with your question.
Congrats with the transaction. So, could you kind of talk about how the conversations with the OEMs have changed today versus a year if we go back even six months, 12 months ago? That's my first question.
Yeah, thanks, Dan. I think about 18 months ago, there was a clear shift in the discussions as we started to be seen as, rather than really being seen as a niche technology that was being applied primarily for performance applications, we started to be taken seriously as something that could transform a much broader base of their portfolios. T hat was particularly accelerated by some of the challenges they were facing as they transitioned to EV platforms. And that's really around the time that the major transition to EVs was starting. A lot of announcements were happening about a large-scale shift.
So being able to deliver such enormous weight reductions, for particularly as wheels got bigger and being in a position to talk to very senior engineering and program teams and leadership within all of these major OEMs, meant that we were able to translate the discussions we were having around smaller and you know more high-profile performance applications into those bigger platforms that still at the premium end. B ut able to talk about what that might do in applications where wheel sizes were getting up into the 22-inch, 23-inch, 24-inch realm, and vehicle mass was increasing significantly and posing major problems. For the vehicle mass itself was posing problems from a regulatory and a structural point of view. Just frankly, range has become the currency of the realm for OEMs.
The penny started to really drop with the OEMs, that this was a bolt-on technology, delivered a massive amount of weight save. Where engineers typically look for grams of weight saving, and we were able to offer tens of kilograms or, you know, over 100 pounds, in a way that wasn't gonna disrupt the manufacturing operations and was not going to disrupt the design of the vehicle platform. In fact, was going to reduce the amount of redesign they would have to do as they moved to EV platforms.
So, that 18 months ago was really around the time when that shift started to happen. A nd that was really the time when we started to look at how we would move our focus across to accessing the kind of, or establishing the kind of balance sheet that would enable us to grow at the rate that we're now seeing we need to grow.
Great.
And, Dan, the other point is, you know, they were watching our progress through the last year towards the merger. You know, now they've expressed they're very happy that, you know, we've completed that. We've listed on the Nasdaq. You know, we've shored up our balance sheet with the funding, you know, bringing OIC on board. So they've also been very happy that, you know, we've made that progress from a financial perspective.
And just as a follow-up to that, is it also, like, one of the biggest questions they'll ask is about, like, show the production ramp, the build-out in Australia, you know, when, like, when we could expect, if we order, we can get our, you know, products? Is that some of the questions you're getting?
Look, I think we've demonstrated a very, very good track record of meeting all of their milestones up to this point. So the milestones and the management against those milestones for any program is very, very tightly managed by the OEMs. Obviously, they're experts at managing their entire supply chain to ensure that things arrive on time, validation's completed on time. And so we've already demonstrated that we are capable of doing that, and we have a very strong track record. Clearly, the ability to build the capacity in time to then execute that as we grow and get larger and larger is the next thing on their radar.
As Gerard said, you know, we’ve got a very intimate, close relationship at a very senior level with all of our customers. A nd they’ve been very closely watching and working with us through this transaction. You know, clearly, we need to expand the facility in Australia further, and then we’ll be implementing offshore facilities as well. But I think the fact that we’ve got such a good track record of execution and delivery means that they have no reason to question whether we can do this. T hey’re also quite willing to be very supportive, in terms of ensuring that, you know, that they can provide whatever support they can, given how important this technology is to them.
Great. Feels like an exciting year ahead. Congrats. Thanks.
Absolutely. Thanks, Dan.
Thanks, Dan. Very exciting.
Our next question comes from the line of Eric Stine with Craig-Hallum. Please proceed with your question.
Hi, Jake and Gerard.
Hi, Eric.
Hi, Eric.
Hello. S o maybe just, you know, coming back to the OEM question. I, I'm just curious, kind of how you are seeing things develop, now that you've had some OEMs in hand for quite some time. You know, what those OEMs need to see to expand, you know, obviously, Ford, Ferrari, and others are now onto multiple programs. You know, what you're seeing in terms of how fast an OEM or what the time period is, versus that of a new OEM, and I guess, how do you expect that to trend going forward?
Yes, thanks Eric for the question. We have a good portfolio of OEMs now, and we really haven't set out to try to establish a sales relationship with every single carmaker on the planet. We've been fairly strategic about the partnerships that we've established because, you know, there's about 430 million new wheels put on vehicles every year, and about 10% of that market today is addressable to us based, you know, purely on what we've already established in terms of programs.
So that's well over 40 million wheels addressable today, which really, when you boil that down, says that even within the customers that we already have, and just recently, we've added a new major customer in Europe, one of the major German OEM groups, to our portfolio of strategic customer partners. That alone will certainly account for the capacity that we expect to be able to establish over the coming years. Now, we continue to work across the board with OEMs that have a strategic interest in this technology. But typically, the first program with any OEM takes the longest because there's a validation process to bring the technology in. But once it's in, it is then available for anybody within that organization or within the group to be able to utilize.
So it becomes part of the technology option set that they can access across all brands and across all members within the group. So the validation is a first off, and then it's just available. And that's why it's quite strategic to work with the right OEMs to be able to capitalize on that particular dynamic. Typically, OEMs will often spend five years planning for a new platform, and then it may be in production for, you know, six to eight years. So these are quite long-dated programs. There's a lot of investment that they put into each of these platforms. We tyically sign up a program about two years before it comes into production, and then it can be in production for, you know, six, seven, or eight years.
That's a typical kind of life cycle for an OEM program. That gives us great forward revenue visibility. It also gives us plenty of time to invest and have the capacity on the ground ready to go, because while we're developing the program and getting it ready for production, we can also be implementing the capacity to be ready for when we need it. But we are seeing an acceleration in the number of programs coming through, as evidenced by the rate of increase in our backlog, and we're seeing an increase in the size of the programs that we're being awarded.
So as we've moved into the SUV and full-size truck segment. P articularly the EV variants of those, the average size of programs is getting bigger, and that is using up the capacity that we expect to have available in Australia before we start to use capacity offshore, so implement and use capacity offshore. And they are looking for that capacity, you know, that time frame and the volumes that we will be able to offer offshore. T hey will be more strategically located, lower cost, and facilitate higher volume programs. And that's something we're doing in close collaboration with our customers, and that's what they're expecting as the volumes grow.
Got it. Understood. And you know, I know the backlog growth that you have talked about. The outlook is, you know, in a position where your wheels are premium price versus aluminum alternatives. And when you think about the growth going forward, I mean, clearly moving to a place like Mexico and manufacturing and bringing costs down is part of the growth outlook. But I guess you could also make the case that you know, you're tied to the growth of electrification as well, right? Because the growth you're seeing now is at that premium position in the market. So I mean, clearly this is not just an electrification name. You've also—you're tied to ICE vehicles. But when you look at the two, electrification versus price coming down, I mean, how do you kind of view as the primary driver? Maybe the answer is both.
Look, I think we're whilst electrification is certainly a huge tailwind for us, and it's accelerated the demand for the technology. We're quite agnostic in terms of powertrain. The real driver here is efficiency. The CAFE standards and equivalents in other parts of the world are forcing the industry to find dramatic improvements in efficiency. And this is a dramatic improvement in efficiency. I mean, to find 5%-10% range extension is very, very difficult, and it's extremely difficult in a bolt-on technology. Particularly one that, you know, has a home in the, to start with in the premium segment where it has consumer desire as well.
So there is a dynamic around this technology that means that it really is quite agnostic. B ut the EV, the big EV replacement cycle that's going on at the moment is a significant tailwind. I think the size of the market generally is really in our favor. So you know, we will continue to secure programs in the ICE segment. There's no question about that. But this acceleration through the EV segment at the premium end will continue. We certainly won't be racing to the bottom. You know, the backlog that we've got is still largely for premium programs that are gonna be produced in Australia, but the acceleration in that backlog is likely to be...
As we, as we open up capacity in a much lower cost location, as you said, you know, quite likely in Mexico. T hen the cost comes down dramatically, but there is still an, an enormous number of more premium applications that will, will be the target of, of the next big chunk of our capacity. And so that obviously has great potential for us from a company point of view, in terms of profitability and profitable growth, and, and maintaining the, the very strong and long leadership position that we've established.
Got it. And maybe last one for me. Just, you know, as you think about scaling up here, just are there challenges you see in the supply chain or steps that you've taken, you know, in order to be ready for that scale-up?
Yeah, so that's a great question. I mean, the Australian facility really should be thought of as a pilot facility. We have a disproportionately high number of very technical people in the business for a business this size. We've developed the product and process technologies concurrently. That means we've got a lot of very seasoned manufacturing engineering specialists here and some great partnerships, as well as a lot of PhD engineers in the composites, science, and engineering field. And that's enabled us to develop a very well-integrated manufacturing base, as we've concurrently developed the product. And that gives us the ability to then duplicate that or replicate that and duplicate it offshore.
We are establishing strong partnerships with external parties in the manufacturing engineering space from an equipment point of view, and that will de-risk the scale-up of equipment, and ensure that it is very reliable, and maintainable, which is obviously a key to the manufacturing environment. I've just come back from an offshore trip, working with suppliers of our key raw materials, particularly carbon fiber, and there are some very healthy dynamics in the industry around the supply of industrial-grade carbon fiber that we use. That's another key area to secure. S o we're, you know, making good progress in that area from a strategic point of view.
Then, obviously, site selection and ensuring that we have the basis for ramping up with a reliable and well-located and well-built facility in the location that's most strategic to servicing our customers. All of that is already in the detailed planning stages. You know, we also have a healthy dialogue with our customers about that because we want them to be across it. As I said, we have a pretty intimate relationship with all of our customers. They're strategic partners in this as well.
Okay, thanks a lot.
Thanks, Eric.
Thanks, Eric.
Our next question comes from the line of Chris Souther with B. Riley. Please proceed with your question.
Hey, guys, thanks for taking my questions here. Maybe just a little bit more on the customer discussions. You know, can you kind of walk through... I think the deck said we have two more EV customers that are in kind of that development stage. Like, what is the timing from, you know, kind of first engagement, you know, development to kind of the first launch that we should typically expect? And then, you know, as we're looking at, you know, filling up demand from, you know, with incremental wins from your current customers from this, you know, for, for your current plans, you know, how should we think about kind of the cadence that we'd, you know, expect from either current or new, you know, customers who you haven't named before?
Yeah. S o the two EV programs, we expect them to come into production in the second half of next calendar year, so 2024, so towards the back end of 2024. That would generally mean that the OEM is likely to announce them to the market probably around the middle of next year, possibly early in the second half. We don't have any control over that. Obviously, that's entirely down to their own marketing decisions. And so it does vary. The time frames around these vary from customer to customer and program to program. But typically, we are awarded them somewhere between 18 months and two years before they actually enter production. The dialogue around those programs can be fairly quick beforehand, or it can be over some period of time.
But because we have, with each of our customers, we have dialogue around multiple programs, it's often an active dialogue around which are the higher priority and which are selected as the ones that should be done first and prioritized, given what I described earlier as their planning processes. Given the number that have been awarded over the last 12 months, and we are obviously expecting that backlog to keep increasing, we won't give any specific guidance around that. B ut there is, you know, there is obviously growing demand for the technology. There will be ongoing announcements and updates in terms of that backlog.
Then, as I said, our customers will announce programs when they're ready to do so. S ometime before the program or before the vehicle is actually available to buy in the market or before their actual production starts.
Chris, you know, in terms of the plant here, you know, our plans at the moment is to build the plant to about 70,000 wheels per annum capacity. And in our backlog of our awarded programs, we have that, we have that sort of already sold, in a couple of years' time. So those awarded programs, we have seven awarded programs that are in development at the moment. Four of those are gonna come in, in the back half, roughly in the back half of next calendar year, and the other three will come in, you know, during 2025. So by the end of 2025, when all those awarded programs are up and running, you know, we'll be at that 70,000 wheel capacity.
We can probably do a little bit more out of Australia, like we might be able to take that capacity up to 90,000 wheel and have another couple of programs come in after that. We're considering that at the moment. B ut the plan is right now build to 70,000 wheels because that's what's awarded. A nd that'll come in, you know, through 2024 and 2025. Those new programs will come in and we'll see our, you know, we'll see our capacity lift, and we'll see our sales lift to that level.
Got it. Then maybe my, my last one here, just on the competitive environment. You know, how do you guys think about competition from, you know, other non-aluminum, you know, wheels that might be out there and, you know, the barriers to entry, you know, from, from the competition?
I think in carbon fiber wheels, Chris, we've got a very healthy leadership position between five and 10 years, probably at the higher end of that at this point. But there are other materials, but none are as light that we're aware of as carbon fiber. There are things like magnesium, which really has been around for a long time and has never been able to be scaled, and it is not as light. Forged aluminum is something that's been in the market for some time. That's the premium end of the aluminum market. It's nowhere near as light. It's a little bit lighter than cast aluminum. But I think really, we're the competitive environment that we're dealing in is the competition for efficiency technologies.
Given that this is still relatively new for the OEMs in terms of their pick list and what they can choose from in order to improve their vehicles, there's still an education process underway. There is a rapid adoption among certain OEMs, and others are now understanding what this can do. So it's an exciting time for us because we're really you know establishing a position for the technology, working closely with them in relation to how it can benefit them. We've established ourselves as a very reliable, safe pair of hands from a Tier 1 supplier perspective by entering the market in a very typical automotive technology adoption approach.
So we've come in as a niche performance, luxury technology and are now increasing our adoption into more mainstream applications into an enormous market. And frankly, you know, we don't need to race into the more mainstream segments, and we won't be able to just because of the pure time it takes to put in capacity. But you know, I think the competitive environment for us is really less of a factor than just working to ensure we have capacity in place that we're able to execute on the supply and implementing the capacity that we need in time, which we have very strong plans for, and we have an excellent team.
We've established a very, very strong team of internationally experienced technology and manufacturing executives and practitioners from both OEM and Tier 1 supplier, global Tier 1 supplier base. So yeah, that's really how I'd describe our position at the moment.
Got it. Thanks.
Our next question comes from the line of Mike Shlisky with D.A. Davidson. Please proceed with your question.
Hi, thanks for taking my question. Wanted to ask a little bit more detail on what's in the backlog. You had mentioned it's roughly or almost half EVs, and I assume the other half is obviously ICE vehicles, and most of those are in the high-performance category. I'd be curious if the EVs, again, just kind of broadly speaking, if those vehicles are also at kind of the higher end of the price range and performance range, or if those are actually companies that are embracing your extension of range abilities on the lower or mid part of the price scale?
Yeah, thanks for the question, Mike. The EVs that are in the backlog are for full-size. S o pickup truck and SUVs, that are part of very large, very large sort of wedges of the market, versus the smaller performance vehicles that, that you've seen us on previously. They are at the premium end of those segments, as you could probably imagine, but they're being adopted by those manufa- or by the customers because of the ability to resolve issues around structure, you know, regulations and for the range benefits. So yes, they are being adopted for not to improve lap times, as we have been on Ferraris, Corvettes, Mustangs, and those sorts of things, and to improve handling, and you know, ride and handling benefits.
But these are for, primarily for, for weight saving benefits, including range, structural, and regulatory drivers. But also there is that, that improvement in NVH, because it's a damped technology. The improvement in handling and performance is still, it's still a factor for these SUVs and pickup trucks. But, yeah, that's, that's the segment that we're in. Still the premium end, but the, the premium end of those segments is much, much larger obviously, than some of the performance segments.
Great. I appreciate that discussion. I'll leave it there in the interest of time. Thank you so much.
Thanks, Mike.
Thanks, Mike.
There are no further questions in the queue. I'd like to hand the call back to management for closing remarks.
Great. Well, thanks everyone again for joining us today, and we look forward to meeting you all at upcoming conferences and events in the new year. Please don't hesitate to reach out to our Investor Relations team, if there are any questions in the meantime. Thank you.
Ladies and gentlemen, this does conclude today's teleconference. Thank you for your participation.