Hey, everyone. Thanks for joining us here at the 26th Annual Needham Growth Conference. I'm Chris Pierce, working in the Needham Research Department, covering everything electrification as far as vehicles and EV charging. It's my pleasure to welcome Desmond Wheatley from Beam Global. Desmond, thanks for joining us this morning. How are you doing today?
It's great to be here. Thanks very much. Thanks, everybody.
Okay, we're gonna get into some Q&A, and we'll welcome questions from the audience as well. If anyone has a question, let us know. We'll work that in as we go along. So let's start top down. Beam sits, you know, on the electrification side of the things, but not from a traditional EV charging perspective, sort of. But just broadly, investor attitudes towards EV adoption have been very, you know, volatile. Euphoria in 2021, desolation, you know, however you want to think about 2023. How do you think about EV adoption, and how does it drive your business?
Well, I think the negativity about EV adoption has been very overplayed by the press. We've somehow managed to conflate a slowing of the acceleration of growth with you know negativity around EVs. So EVs are still growing in sales both in the U.S. and internationally. But then I think when you look at where we are in this space, infrastructure is still behind EVs, and I think it will be for the next couple of decades. Honestly, it's much easier to put a consumer into an electric vehicle than it is to put an electric vehicle charger on the street somewhere.
We're probably gonna be behind for quite some time, which means that as EV sales inevitably go through, you know, waxing and waning, I think we're still gonna see significant growth in the infrastructure side of the business. We have seen absolutely no negative sentiment on the part of our customers or our prospects where charging infrastructure is concerned. Nobody is saying to us: "Hey, we think EVs are slowing down. We think we need less charging infrastructure. We're taking a foot off the accelerator right now." On the contrary, everybody's still saying the same thing to us that they were saying the year before, which is we're behind and, you know, we need ways to get deployed quickly. And of course, that we like that.
Urgency is very important for us because we're faster to deploy than anybody else, we're more scalable than anybody else. The more in a hurry somebody is, the better we like them as a customer.
Okay. Is it right to think of Beam as lever to... I know you're, you know, you've got government contracts in the military and things, so is consumer EV adoption even the right metric to look at, or that's sorta just the best of what's out there, and that's how the company kinda gets lumped in with, you know, other peers?
Yeah. So I mean, there's a couple of interesting things about us. First of all, we're not an EV charging company.
Yeah.
I think that's really important to point out. We don't make a charger. We don't provide EV charging services. We provide a suite of products which remove the construction and electrical work required to make EV charging work. So, you can in New York City, where we are today, for example, this is our largest municipal customer. It takes the city an average of 24 months to go through planning, environmental impact studies, zoning, permitting, construction, electrical work to get a charger working anywhere in the five boroughs. We do the same thing in under one hour. So a two-year process to go through traditional construction, electrical work, or less than one hour to deploy our product. They get the same ChargePoint charger that they've been deploying over the rest of the city.
It's just that charger comes to our factory, we put it onto our products, and we deliver the products intact and ready to operate, and it's less than an hour's deployment. So I mean, bundling us with the EV charging companies, it's convenient, and, you know, obviously there's, if they're doing well, that ought to tell you that we would be doing well, too, because it means more chargers going in the ground. But I think looking at consumer EV sentiment is another stage removed from that again. And as I say, I don't think there's any real slowing down in consumer sentiment. A lot of news comes out. Hertz, for example, talks about the fact that they're gonna reduce their EV, the number of EVs they have.
But is that because consumers don't want EVs, or is it just because it's expensive to fix Teslas when people crash them? In other words, I think the media's getting a, you know, taking a lot of metrics and conflating them with stuff which is not really very good indicative of how the industry is moving forward.
Okay. Okay, that's fair. Very fair. And then, you know, just broadly, you're kind of the only company I cover where I can think of where you, you don't really have a true competitor. There's no EV ARC from, you know.
Yeah.
What does that mean when you're going to a customer, when you're trying to kinda convince them to go in this different direction? What are the advantages and sort of the disadvantages of going the traditional charger route? You can kinda take it from time or just however you want to think about it.
Yeah.
You're definitely offering a product that is not sort of a non-standard versus how they think about their charging solutions.
Yeah. That's a great question, and by the way, I think often people ask me what I view as the greatest hurdle for us to get across in terms of growth, and there's no doubt education is it. That's across the board. I think people need to be educated about EVs. They need to learn more about charging infrastructure and charging behavior in general. Then when they come to us, we're like: Hang on. They, their entire lives, they've become used to this idea that when they put an electrical appliance in somewhere, they're gonna call a contractor, they're gonna connect to the grid, they're gonna do all these other things. We're saying: Hey, you don't need to do any of that stuff. We can solve for that.
So getting people educated around that is definitely a you know big part of what we have to do. The best customer, the easiest to close customer for us is somebody who's put grid-tied chargers in the ground before. Someone who's been through that process. They've had you know they didn't understand this when they first ordered the appliance, and it arrived in a cardboard box. They didn't realize that that was actually the beginning of a process, not the end of it. You know, they were gonna have to go through permitting and construction, electrical work, and all that sort of stuff. When they find us, they don't have to do any of that stuff. It comes as a great benefit to them.
So I think from a future point of view, for us, what's interesting about that is we've had 300% year-over-year growth in 2023, up from a huge growth year over the year before that, up from a huge growth year the year before that. And yet we're doing this at the time when it's probably the most challenging period in our history, because most customers have not yet discovered how challenging it's gonna be to put grid-tied infrastructure in the ground. There's still low-hanging fruit sites out there that they can go and connect to. As those low-hanging fruit sites are eaten up, and they surely will be, and very rapidly, then customers are going to learn that it gets harder and harder. Permitting will get harder. The trenches will get longer.
The grid infrastructure will get harder to connect to. All of those things will make it easier to sell our product. So I feel quite sanguine about the fact that we're seeing this tremendous growth, even during a period which should be most challenging for us. It will only get harder to do the grid-tied stuff in the future, and it'll get easier to do what we do in the future.
Okay, so what exactly, just for those in the room that aren't familiar, what, what are you offering? Can you just break down an EV ARC and sorta-
Yes.
What it is and, like, what charging capabilities you get from that EV ARC?
Yes. So the way to think about us is if you consider all the charging companies that are out there, ChargePoint, Blink, Electrify America, Enel, any of the above, all of them have their products operating on our products. So, using New York City as an example here, New York City, the city itself uses ChargePoint chargers. They're on the ChargePoint network. If they install those ChargePoint chargers in a lump of concrete in the ground and run an electrical circuit to them, which is the normal thing that they have to do, that's a couple of year process, and it's very expensive. $2,000 a linear foot to dig a trench and return it to asphalt with cables in it. You go 100 ft, couple hundred thousand bucks in trenching.
Their option, where we're concerned, is that same ChargePoint charger comes to our factory. It's factory integrated onto our product, and then we deliver our product. We put it in a single parking space, but we don't reduce parking in any way because the vehicle parks on it, and our product generates and stores its own electricity and powers that ChargePoint charger without any construction work, without any electrical work. The charging, the rate of charging, the speed of charging is decided by the charger and by the vehicle. We're no different. The consumer can't tell the difference when they're plugged into our product. One question we often get asked is about DC fast charging. We also do DC fast charging.
Yes, we have to daisy chain a couple of our products together to do that or use one of our larger products, but we do DC fast charging. Although I'll say I think DC fast charging is being way overplayed in terms of its importance in the future. I don't. I think that will be the niche, actually, in the future. So the experience that the consumer is getting is exactly the same as if they were connecting to the grid. It's just without any of the construction work or anything else. Now, that gives us a couple of brilliant benefits. First of all, as I already pointed out, we're much faster to deploy. We're much more scalable.
If you've deployed one or two chargers and you need to deploy some more, you just call us, and we send you more, more product. Whereas if you've deployed one or two grid-tied chargers, in order to deploy more, you now need to get the construction company back out, the electrical contractor back out, and you have to hope that you've got electrical circuit and everything else. So it's a big planning project. With us, you don't have any of that. Many of our customers lease their property. They don't wanna do tenant improvements. They don't wanna dig trenches in somebody else's parking lot and spend all that money 'cause if they leave or, or something, they don't get to take any of that with them. Our product stays on their balance sheet. They can take it with them.
So there's a lot of benefits, you know, from that approach. But that's the way to think about us. We're not competing with the EV charging companies. We're not competing with the utilities. The utilities, in many cases, are our customer. They are buying our product to provide electricity to their customers, just like they buy generators or anything else. Where we fit into this, who we're displacing, and therefore, I suppose, competing with, is the general contractor, the electrical contractor, the zoning specialist, the engineer, the permitting, the interconnect guys. That ecosystem of service providers that you need to dig up the streets and pour the concrete and pull the wires, that's who we're displacing. And fortunately, for us, most of our customers don't relish the idea of engaging with any of those.
But nothing, nothing against them, but nobody really relishes the idea of bringing three general contractors out to their site and walking them and going through a project. We solve for all of that because we displace all of that.
Okay, and you kinda framed, you know, you kinda DC fast charging, that sort of captured investor attention in 2023, but you're kind of saying that you think that'll be, you know, of less importance going forward. Can you kinda just frame why you think that's the case?
Well, the biggest reason is because I've been driving an electric vehicle myself for 14 years, and I use my product, and every EV driver that I know, after they've owned an EV for a little while, moves away from empty, full, empty, full, empty, full charging, to what we refer to as DRR, daily range replenishment. There just isn't a good reason to wait till your EV's empty and then go somewhere and wait around while it charges, no matter how fast that happens, when you can top it off every single day. Here's a little cocktail party trick for you. Ask any Tesla owner that you meet how often they use the Supercharging network.
They'll tell you how magnificent it is, but if you ask them how often they use it, they'll say, "Whenever I go on a long trip." And how often do you do that? two or three times a year. "So why don't you use it the rest of the time? Great technology, in many cases, free to you." "Well, because I wouldn't drive for half an hour somewhere to plug into a fast charger when I can just plug in at work every day and pick up 20 mi while I'm at my work." And I think you're gonna find that people that drive EVs charge them the same way they fuel their cell phones, and I think you're gonna find that EV chargers in the future are deployed just like Wi-Fi. It's gonna be ubiquitous.
It doesn't need to be rapid and used, as long as it's good enough. Nobody would pay to connect to a gigabit of Wi-Fi when they can get 25 megs for free at Starbucks. Why? Because 25 megs is enough. And EV charging, I think, will follow the same thing. You're gonna find ubiquitous Level Two charging everywhere. People will use DC Fast Charging only when they're on long corridor-type trips. I'm making generalizations here, but they're useful generalizations. While DC Fast Charging today gets all the attention, it's because people are trying to replicate the gas station experience because they don't drive EVs.
Okay.
Anybody that drives an EV would rather just have Level Two Charging wherever they normally go.
Perfect. We had a question in the back?
Yeah, can you, and this is 'cause I'm not that familiar with the company, but can you just talk about the consistency of your power source versus the, you know, stuff under the ground? I'd imagine people dig the holes 'cause they have the power 24/7, rain or shine?
Yeah
... I guess, versus your guys' product.
Yeah, so the EV ARC, which is the product that we've been talking about most today, generates and stores enough electricity to produce up to 265 mi driving per day. Let's put that in perspective. The average U.S. sedan drives 30.4 MPD . Eight out of ten commuters, so not the average, the majority, less than 24 mi requirement for their round trip commute. And fleet vehicles, which is more than 70% of our business right now, 20 mi or so per day. So if you go to DRR, daily range replenishment, which is the way everybody charges their vehicles, what that shows you is that we can charge an awful lot of those use cases from a single product every single day. Is it a finite resource? Yes, it is.
So maybe to pre-sell the negative, maybe around your question, is it possible that somebody can plug in more vehicles than we can charge with a single EV ARC in a given day? The answer to that question is yes, that is possible. However, in practice, the great majority of units that we deploy generate and store more electricity than they're ever called upon to deliver, and that's because of behavior, not because of technology. In New York City, on a day like today, well, not a day like today, but in a bad day, we might only produce 100 mi. A New York City fleet vehicle drives about 20 MPD , so we can still fully charge five New York City fleet vehicles, give them their DRR every single day.
They're not going to cycle more than five of those vehicles across a grid-tied charger on a daily basis, so there's no difference to them in the benefit. But the upside for us is no construction, no two-year process, no $2,000 a linear foot trench. And then, to further answer your question, the time when we really become important to these customers, like U.S. Army, Marine Corps, and New York City, for example, is while that grid-tied charger theoretically operates 24 hours a day, seven days a week, it doesn't, in fact.
When there's a particularly in the case of a grid outage, in New York City, in August, when everybody turns up their air conditioning, Con Ed turns the power off because they don't have enough capacity to supply just the current base load. This is true across the nation. It's true across the globe. The grid has nowhere near enough capacity to replace oil as a transportation fuel. It was never designed to do that. In those instances, our chargers continue to operate. Flood-proof to 9.5 ft, 160 mph wind-rated, but has in fact survived Category five, 185 m ph winds. We keep charging vital fleet vehicles when the grid goes down, and so that natural resource limit that we can produce, not terribly important.
When we are capable of operating is when it's vital, when the grid goes down. So it's a balance there, and I think we're coming out in the benefit. So do our customers think that. Otherwise, they wouldn't keep ordering it.
Can you kinda talk about why, you know, the military, municipal government, federal government, New York municipality, like you spoke to, why they are ideal customers, or why they've been the kind of the early adopters of the EV ARC products?
Yeah. So what we find is that anywhere it's difficult, expensive, or just impossible to extend the grid, that's a good customer for us, right? And people often say, "Oh, you must be in remote locations." And yes, we are. We're in national parks, and we're in other types of environments like that. But actually, it's often more expensive and complicated to take power across the street than it is to take it for several miles in the desert or something like that. And that's part of the reason that we're so successful in New York City, is because we deploy much faster, we're much more scalable, we're much more dynamic. They can move us around if they need to.
Again, the fact that we keep operating during blackouts and brownouts, this is an under-discussed issue within the industry yet, because with EV adoption where it is, it's not yet that important. But Army, Marine Corps, and all these other customers, they have vital fleet vehicles. They need to keep operating. We're charging police cars in New York City. You can't dial 911 and hear, "Oh, we'll send a car out when Con Ed gets the power back up." That, you know, Hurricane Sandy, six weeks without power, these types of environments, we solve for all of that. So we're lower total cost of ownership.
Costs them less over the life of the product to own and operate our product, we're much faster deployed, and we give them that hedge against energy interruptions, be those lack of capacity, which is a nationwide problem, or be those weather event related, or be it because the Russians or the Chinese or whoever have hacked the grid, which is another serious risk for us.
So how do you take that momentum and apply it to, like, the private sector? And kinda how do you kinda take what, you know, what your customers are telling you and kinda build momentum on the private sector, where I would assume... I don't know if this is the right assumption, but that's sort of a larger market than kind of the federal government.
I totally agree with you, and I think it's. I'm not surprised at all that government revenues have been so important to us, but I also agree with you that the commercial sector will end up being much larger, and I think it'll be the same reasons. We already have commercial customers today who deployed some number of grid-connected chargers, have gone back to their contractor, only to discover that they've eaten up all the available circuit on their property, and that it's going to be a very expensive proposition to upgrade all of that. And so, what ends up happening with our customers, then they find out about us. They don't need to go through a major grid upgrade to get more circuit on their property. We're an easy choice for them.
Resilience is important to them as well. They're operating their own fleets, but also everybody thinks their vehicle is important, right? Nobody thinks it's okay not to be able to fuel their vehicle ever during a blackout or any other time, so resilience is important. But the big thing is where commercial customer is concerned, we're gonna be a lot cheaper for them. The cost to install will be cheaper, and then they don't get 20 years of utility bills, demand charges, and all the other things that are increased by that. So lower cost, more scalable, and more resilient will be the drivers.
Okay. And then where do you, you know, where do you make these units? Kinda what's the factory capacity like? What's, you know, what happens to the gross margins as you make more of them? Kinda what's the right way to think about that and input costs?
Yes. So, at the moment, we have two facilities—well, we have three facilities now because of an acquisition we just did in Europe, but we've been traditionally producing our EV charging infrastructure products in our San Diego facility. I bought a battery company last year. That's in Chicago, so we're producing our batteries. We're unique in the industry that we make our own batteries. Lots of good reasons for that, too. And now we have our European facility. Our European facility is very much larger than our San Diego facility. So we've got a great deal of growth ahead of us in San Diego without capital expenditures. Europe's probably capable of 5x what we can do in San Diego, and again, without significant capital expenditures.
Okay. So can you talk, you sort of hit on it there. You've, you've been sort of acquisitive the past, I'll call it two years. What, you know, the strategic rationale for the AllCell transaction, and then after that, the strategic rationale for the Amiga transaction in Europe?
Yeah. So, on the battery company, we had been a consumer of batteries for about a decade. All of our products have batteries. So we generate electricity, we store that electricity, and then we provide it for EV charging, day or night, or during periods of inclement weather, and batteries allow us to do that. And I think it was, I may get the years wrong here, but I think it was about midway through 2021, I started to get very concerned about supply chain, where batteries were concerned. It looked like we might run out of them, and if we didn't have batteries, we couldn't make our products. So I acquired the company from whom I had been buying the batteries.
I'd had 10 years of due diligence from a technology point of view on the product, so I knew it worked well. The rationale behind the acquisition was margin recapture. Batteries are the single largest cost contributor to our product, so if I could retain that margin rather than giving it to somebody else, that was a good thing. Supply chain defense, and then also, we ended up getting a lot of other customers with that acquisition as well. And then finally, very important to point out that the AllCell company that we bought, which is now our Beam Energy Storage business in Chicago, was capable of making batteries which weren't squares or rectangles.
Because I had a streetlight product that we were bringing to market, I needed a cylindrical battery solution. They had already been putting those in submersibles, so that was a no-brainer for me. It's worked out very well for us. We've saved a lot of money. I will buy that company. In fact, everything I paid for that company, I will get a margin recapture. They've also now have the engineers and scientists on team, fantastic in terms of reducing our costs and improving the quality of our product. And you will very much see that in evidence in 2024 from reduction in COGS. The product's actually getting better, but we're reducing our COGS very significantly, and almost all of those savings are coming because of the battery company that I bought. So I'm very happy with that.
Um, Europe-
Yeah.
Why Europe? Well, because Europe's the largest automotive market in the world by far, 405 million vehicles in Greater Europe. Contrast that with 290 million in the United States, and 319 million in China, the other two big markets. Europe's by far the biggest. Europe has a mandate that nothing but zero-emission vehicles will be allowed to be sold in Europe after 2035, which is eleven years from now. They're going to need a shitload of infrastructure deployed very, very quickly over the next decade, and it's even more complicated and expensive and time-consuming to deploy infrastructure in Europe than it is here. So having a rapidly deployed zero environmental impact product that can provide scalable charging in Europe is gonna be very good.
Energy insecurity is another big contributor in Europe. Since the war in Ukraine, the Europeans have discovered how very shaky their entire electrical infrastructure is, relying on, you know, Russia for natural gas, for example. The fact that our products don't rely on the grid for energy, all of these things speak very well for us. So I acquired a company which had all the skill sets and all the capability, machinery, and everything else like that, to make our products, but didn't have our IP. This is a profitable company. I bought them very well. They've been in business for 30 years, and they sell to exactly the same customer profile with whom we've had great success in the United States: municipalities, states, militaries, and large corporations. They've already been selling to them for 30+ years.
Street furniture, so steel structures with electronics integrated into them. What do we make? Steel structures with electronics integrated into them. They just don't have our IP. Well, they do now. And so we're gonna go back out to all the existing customers. They've sold into 17 nations, including the United States. We will go back out to their existing customers and say, "Hey, you've had great luck with us over the last 30 years buying products from us. We now have some new products for you to look at. Are you interested in EV charging? Are you interested in renewable energy?" One other thing about Europe, commitment to net zero energy, in by 2050. So all of these things combined make our product much more attractive in Europe than it is in North, North America.
I think what you're gonna see happening is, we will get to a revenue run rate and a lower cost profile. The economics are very good for us, what we're producing. So we'll get to a revenue run rate and a lower cost profile in Europe in a far faster time than it took us in the United States. Well, the ramp-up will be much faster there, and then you'll see us exceeding what we're doing in the U.S. And remember, we're growing very rapidly in the U.S. right now. We will match that and better that in Europe in a short period of time, and I think you'll see the center of gravity moving over there, not at the expense of the North American market, but in addition to.
Okay. Two questions in the back.
Can you just talk about your, like, gross profit margin profile at maybe different revenue levels or things like that, and what you kind of... You know, you mentioned the battery being a tailwind, but, you know, when do you kind of get, like, meaningfully more gross profit?
Yes. The first thing to point out is that unit economics have, for a long time, been good for us. So I do not want to be confused with a company that produces a product, and every time you sell one, you're worse off than the, than had you not sold it. That's not us. So the unit economics were already good for us. However, we were, until the beginning of last year, not producing sufficient quantities of units to overcome our fixed overhead allocations and other costs, and that's because we sized the factory for growth. We, you know, we're on about 200-unit per quarter run rate right now. We can do four or five times that much from the same factory.
So you're carrying all that overhead, and you've got to allocate that to the small number of units you're selling. That means that from a GAAP point of view, you're reporting negative gross margins, even though your unit costs are positive. Well, we have reduced our costs, by the way, in the face of inflation. Without increasing our prices, we've reduced our costs to the point where we have managed to get to gross profitability GAAP. So that's including all the fixed overhead allocations and everything else like that during last year. Low single digits, yes, but profitable GAAP at the gross profit line. That's important because it reduces our reliance on cash that we have in the bank just to operate the business and all that sort of stuff. But it's also positive because it's showing you a trend.
Now, I announced in the third quarter that our engineers and our operations teams had identified further significant cost reductions, mostly in the battery side of the business, which was gonna lead us not to the single-digit, gross profit, but up into the double-digit gross profits here, starting in a small way in the fourth quarter, much more meaningfully in the first quarter, and by the time we get into the second quarter of 2024, we'll have all the benefits of that. At the same time, we have, for the first time in our history, announced a price increase on the product with 8% increase on, on price. Why did we do that?
I've been—everybody wanted me to increase the price on the product for a long time because it was unique and, you know, no competition, so why don't you put the prices up? But I didn't want to do that until we had sufficient adoption, enough people buying the product. And quarter after quarter, I would ask the sales team, "If we increase the prices, will it reduce your ability to sell?" And after three or four quarters of hearing from them, "No, it won't. People just want the product, and they're in a hurry to get it. They don't care what they have to pay," and all that sort of... We elected to increase the prices. So combination of all of those things together means that by the end of the—I should step back one thing, to say one thing.
Although we have introduced that price increase at the end of the third quarter of last year, we had so much contracted backlog lasted us through the first quarter of 2024. We're not gonna increase the prices on people who already have signed a contract with us. Remember what Rivian did, that didn't work out very well for them, right? We're not going to repeat that folly. By the end of the first quarter, we should be through all that, or materially, all of that backlog, and the cost savings will be in effect as well. So we will have the benefit of the 8% price increase and the double-digit improvement or reduction in costs, all of that contributing to our gross profitability.
That will put us in a situation where we're in a mid-20s, heading towards 30% gross profitability, by the way, our goal is 50% gross profitability, and you do not need to be some sort of expert to understand how we get there. It's easy to see it if you walk through the factory with us. Back to the napkin calculation. If we did exactly the same revenue that we did last year, in other words, no growth, that'd be the first time in many years, but no growth and just that gross profit contribution that we've identified, then we would end up cash flowing this year. So I don't think there's anyone else in the industry that can claim that.
I'm not aware of anybody else. This is not an indictment of my peers. It's just I don't. I'm not aware of anybody else in the industry who can claim that. So I think we're cash flow very much on the visible horizon for us. It's easy to see how we get there, back to the napkin calculation. Yes, sir?
A few questions,
Sorry, Chris, I'm just-
Go ahead.
Yeah, okay.
What's, like, the cost of one of your EV ARCs? Like, what is, like, the customer, I guess, like the retailer or restaurant, get out of it? And then are you eligible to get, like, a lot of money from the government, like, directly or indirectly through the customer, like, you know?
Yeah.
Funding.
Oh, and is it a direct sales model or do you have channel partners on that question?
It's all direct.
Okay.
It's all direct. So let's start the last question first on the money back from the government thing. Because our products are renewably energized and have energy storage in them, they're, they are eligible for the ITC investment tax credit. It's 30% credit, not a deduction, a credit. So somebody like Google, who's one of our customers, buys $1 million from us, they're gonna get $300,000 against that tax liability right off the bat. We don't get that, but it certainly helps our ability to sell. Beyond that, we're also eligible for Rule 179 depreciation, which allows them to depreciate 85% of their cost. Even though they've had a 30% credit, they can still depreciate 85% of the cost of the product in one year, 20-year lifespan product.
That's a great tax benefit as well. So in general, customers that have a tax liability, they're probably gonna get somewhere around 40% of their money back that they pay us for that product. So spend $1 million, you get $400,000 back against your tax liability. Really good news for us is that the way the new ITC has been, the new standards around ITC, even people without tax liabilities, there's gonna be ways for us to pass that on to them as well. A lot of our business is government. We haven't been able to take that benefit, but we will be able to moving forward. So those are all very beneficial for us. And around for at least the foreseeable future. In fact, I think that what we'll see is our costs drop off.
Our costs will get down to the point where, absent those benefits, we're still in the same economics, from that point moving forward. As to what people get out of it, that's a great question.
What does one thing cost?
Oh, sorry. ASP right now, $70,000. They start at $59,400, but ASP $70,000 because we add more energy storage and all that sort of stuff. Now, that might give you a little heart flutter because you may know that you can buy a ChargePoint charger for $6,000. And so why are we 10x more? You might... Well, because as I said earlier, when you get that ChargePoint charger in a cardboard box in your office, you're at the beginning of a process. And what I can tell you is that we have 1,400 of these things deployed across the United States today, which with between one and six plugs on them. It's more than that number of plugs.
In materially every instance that our customer has bought from us, it's because we were less expensive than the avoided cost of construction and electrical work. It's just as simple as that. They don't even count the utility bills off into the future. They just say: Well, I can dig the trenches and pour the concrete. That's gonna cost me $100,000, or I can buy this thing, it's gonna cost me $70,000. I don't have to go through any of the headaches. And while it's true that there are low-hanging fruit locations where you can deploy a charger for less than that, those are becoming less available as they're being plucked, and we're, you know... The U.S. has 160,000 chargers deployed today. We're gonna need closer to 60 million in the next couple of decades.
So expect the low-hanging fruit choices to be diminishing all the time. Our product will only get less expensive, not more expensive, certainly to produce. We'll control the price line. So they're better off. They do it 'cause it's a lower total cost of ownership. And by the way, uniquely in the industry, we put charging where people want it, not where the grid dictates. And I think if you ask anybody who's doing grid-tied charging for an honest response, they will tell you that when they go to a property, they look around for the closest place they can get to the grid.
Which is why EV drivers like me have become used to, over the last decade, to charging behind the dumpsters at the back of a Safeway somewhere, because that's where electricity comes on the property, shortest trench run, that's what you do. Johnny and Jenny Lunchbucket is not gonna go for that. Early adopter, yes, but the average consumer is not gonna want to charge back there, and they're not going to be able to. So I think it gets harder and more expensive for the traditional stuff, less expensive and easier for us. As to what they get out of it. Many ways, we don't have a dog in that fight. We don't, as I said, we don't sell a charger, and we don't sell the services behind it. So we have customers that charge for charging. We have customers that give it away as an amenity.
We have customers that use it for their fleet vehicles, and so it's offsetting gasoline prices. We have customers that deny access to certain people and allow access to other people. We enable all of those scenarios, but we leave it up to the customer to decide what the business model that they want around EV charging is. And if you want my opinion, I think the idea of charging for charging in the future, that's a tough way to make money. But I also think there'll be lots of other fantastic business models around that. So, you know, member of Amazon Prime, you can charge for free in these locations. If you buy an F-150, it's part of your lease payment. I don't know.
And I think that's a very exciting part of the industry moving forward to get away from this sort of unit of energy, cash transaction, which has been fueling for the last 130 years. I think in the future, it's gonna get a lot more interesting than that. We're ideally suited for that because we have no unit cost for energy, so we can essentially go to our customer. So you can be as imaginative as you like, 'cause it doesn't matter how much energy people take, it won't cost you any more.
Can we talk about EV Standard?
About EV Standard?
Yeah.
Yeah.
Amiga. So spent some time on EV ARC, you know, driving on sunshine. You've kinda got the Amiga acquisition now, EV Standard. What kind of market does that move you into and how is it different than EV ARC, specifically around price point too, you talk about?
Yeah, so, EV Standard is the product that I've had patented since 2019. It's the product that I'm most excited about, and so then you might be justified in saying, "Well, if you're so excited about it, why haven't you produced any of them?" Well, there's a couple of answers for that. First of all, we've been very, very busy with growth on EV ARC because it's, you know, triple-digit growth year after year with EV ARC. But also because although we know a lot about renewable energy, energy storage, and EV charging, we don't know anything about streetlights. I mean, the U.S. side of the business. The company that I just bought in Europe is Europe's fourth largest streetlight manufacturer, and they don't know very much about renewable energy storage and EV charging, but they know an awful lot about streetlights.
The combination of our two engineering teams is just an unstoppable force where this is concerned. And so we have made more progress in the last four weeks in developing EV Standard than we have in the last four years. I'm committing that we will show that product in the first half of this year. Now, what is EV Standard? Why is it important? Curbside charging is the mother lode where EVs charging is concerned. It's the one thing that's the hardest to do, and yet it's going to be the most important in terms of EV adoption and EV charging deployment. Why is it hard to do? Think of any street that you know, where people park their cars, and then ask yourself, how would you deliver electricity to that curb?
You've got to find the nearest landowner, you've got to make an easement with them, you've got to install electrical infrastructure, new, new, new, meters and panels, and everything else like that. There's another easement with the city to dig up the street. It just, it goes on and on and on. EV Standard allows us to take out an existing streetlight, so the foundation's already there, the electrical circuit is already there, and replace it with this product. Now, what the product has, and you can see an image of it up here, this is it, it's gonna look approximately like that. It has a light wind generator, so it's generating electricity whenever there's wind. It has a tracking solar array, using our patented tracking for the solar array.
And then the pole of the thing is full of our patented and proprietary battery technology. And we combine the wind circuit with the solar circuit with the streetlight circuit, put all three of them together into our batteries, and then we provide a meaningful EV charge from the batteries. Now, no one else in the industry has this. I have patents on this in North America and Asia, and I just got a European patent on it as well. So the acquisition of Amiga, now Beam Europe, put me in a position where I went from really knowing nothing about streetlights to having a factory which is full of automated capabilities to make streetlights, and all the engineering prowess that I need to perfect the EV Standard product.
I got 210 employees with that acquisition, of whom 35 are advanced degree engineers, English speaking, fantastic work product. And by the way, I'm paying them less than I'm paying welders in San Diego. So, the economics are fantastic from that point of view as well. I believe that EV Standard will be the largest volume selling product that we have because it's such a problem solver. I'll just, just give you just a quick brief anecdote on this. A couple of months ago, I met with Governor Newsom. Regardless of your politics, that man was at that time the leader of the fourth largest economy in the world. Why is he meeting with me? Because we're solving problems that they desperately need solved.
And I was showing him EV ARC, and he was very excited about EV ARC, but then I described to him EV Standard, and we were outside the EPA building in Sacramento, and he looked around and he pointed at a streetlight and he said: "I want the very first of them deployed right here. I want the first one that comes off the line." And I said to him: "Governor Newsom, with all due respect, you may get in the line, because everybody that we talk to wants that product." So I think it'll be the highest producing product that we have. We have great automation to make it in Europe. We intend to launch it in North America and Europe, first half of this year. Sales cycle will be different than EV ARC, definitely.
I think we'll get backlog from it later in this year, and I think that we'll get the first meaningful revenues in 2025. Thereafter, I think it will accelerate past EV ARC and become our biggest revenue producer by far.
Okay. Just lastly, can you talk about, you know, the balance sheet, cash?
Yes
... the offering of Amiga, kind of how investors think about the balance sheet and how they kind of steer the conversation?
Yes, good. I think it's a very good news story. We have no debt. We are well capitalized. I do have a $100 million line of credit from Oci in London, priced at SOFR +300 basis points. Now, it has to be said, SOFR + 300 basis points when I first did that, was fantastic. It was free money. SOFR ain't what it used to be, right? So it's not as good, but it's nice to know that we have that in the background, but it's untouched. I haven't used it in any case. The other thing that's very important from an investment thesis point of view, to point out is, I have an incredibly low number of shares outstanding, 14 million shares outstanding.
If you compare that to anybody, I think you just have Blink in the room here, they've got 70+ million shares outstanding. ChargePoint has 450 million shares outstanding. No one wants to talk about this, but if you think about this, I'm an old-fashioned guy. EPS, at the end of the day, is what matters. And I have a hell of a lot less S into which I will have to divide E, than anybody else, than any of my near peers. I just don't think you'll find anybody who's had the level of discipline around equity and cash that we have had over the years. We run a very, very, very lean ship. The rule is, if it doesn't make the product, make the product better or sell the product, we don't invest in it. Simple as that.
That's why we have a clean balance sheet, that's why we have cash, that's why we don't have debt, and that's why we have such a low number of shares outstanding. That gives us a lot of firepower for future acquisitions, and we're not finished. I'm still acquisitive. But I will be very, very careful about the acquisitions that I make. They'll be priced well, they'll be structured well. I encourage you to look at the way we did both the AllCell acquisition and the Amiga acquisition. If you can find fault with it, call me. I'll give you my cell phone number. I'd be delighted to hear how you'd have done it better.
I've done a lot of M&A, and I'm really proud of these last two transactions that we've done, and that's the way we will move forward. So we're in great shape where that's concerned. I think that's a very important metric where this company is concerned.
Okay. We're about out of time. Desmond, thank you for the time today. I appreciate it, and good luck.
Great pleasure. Thanks for having me.
Yeah.
Thank you, everybody.