For all the attendees that have already joined us, this is the GreenPower Motor Company Investor Webinar, and we'll be beginning the event here in just a few more minutes at 4:15 Eastern. For those that have already joined us, again, this is the GreenPower Motor Company Investor Webinar, and we'll be beginning the event in a little less than five minutes.
Hello, everyone, this is Paul Koontz with RedChip Companies. I wanna thank you for joining today's event with GreenPower Motor Company, which trades on the NASDAQ under the ticker GP. With us today, we have Fraser Atkinson, Chief Executive Officer and Chairman of GreenPower Motor, Brendan Riley, President and Director, and Michael Sieffert, Chief Financial Officer. We will begin with a brief presentation in a moment, and then we'll answer your questions. Users may submit questions at any time by using the Q&A button at the bottom of the Zoom window. Now, before we begin, please allow me to read the safe harbor statement. This call may contain forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995.
All statements pertaining to future financial and/or operating results, along with other statements about the future expectations, beliefs, goals, plans, or prospects expressed by management, constitute forward-looking statements. Any statements that are not historical facts should also be considered forward-looking, and of course, forward-looking statements involve risks and uncertainties. With that, I will now turn the webinar over to the GreenPower team. Please go ahead.
Thank you, Paul. My name is Fraser Atkinson, and as Paul mentioned, I'm the Chief Executive Officer of GreenPower Motor Company. In addition to trading on NASDAQ under the symbol GP, we also trade on the TSXV under the symbol GPV. Next slide, please. Paul's already read the forward-looking statement, so we'll dispense with the GreenPowers. GreenPower, we design, manufacture, and distribute a suite of all-electric, zero-emission, medium, and heavy-duty vehicle, which we'll cover in our presentation and take questions in terms of the various markets that we're addressing with these vehicles. We have facilities in South Charleston, West Virginia, and Porterville, California, as well as utilizing contract manufacturers in a number of other locations. To date, we've built over 900 vehicles, and we have approximately 800+ vehicles on the road today.
We're one of the few EV OEMs in our sector that consistently generates gross profit for our vehicles. We have a number of vehicles under both the New Jersey and the California ADFIT program, and in the case of the California program, we have the second-highest redemption of vouchers, which gives you a sense of our market penetration in one that particularly key market. We have a broad line of vehicles, which we'll cover shortly, and we've got a great management team with prior experience at a variety of companies that have significant experience within the EV space. Next slide, please. Why GreenPower? I think these four segments really capture some of the essence of our company. On the left there is our proprietary EV Star cab and chassis.
This is our design, our build, and it is the platform in which we are able to build out so many different Class 4 vehicles, both in the passenger space, the cargo, utility, as well as our Nano BEAST Type A school bus. The vehicle on the top there is our Type D school bus, and that is a purpose-built designed from the ground up to be a battery electric vehicle. So it's a purpose-built all-electric school bus and truly is a modern-looking school bus, and when we are at various events or shows, and other competitors have their products there, theirs are largely based on older designs and older builds. So we have a very modern-looking vehicle. It's safe and has a number of feature sets that one would expect with a modern vehicle.
On the right of this slide is an example of the broad range of vehicles that we're able to build using that EV Star cab and chassis. On the top right there, that vehicle is a box truck that was built with our Lion, or sorry, our GP Truck Body Group, which is a standalone company that does bodybuilding, which includes not only that box truck, but stake bed, utility vehicle, and a host of other vehicles for either our end customers or other customers of GP Truck Body. The one on the bottom left there is built with one of our, the contract manufacturers we utilize in terms of building the bodies for that vehicle, as well as both of our school buses.
On the bottom, the Manufacturing Light, the example that I would highlight is that we had spent a number of years looking at different marketplaces and in a number of different states. In doing that, we identified an opportunity in West Virginia where we identified an existing building that was production-ready, as well as a partnership with all levels of government in West Virginia. The end result was that West Virginia bought the building or, and, slash, facility that we currently are in building school buses. So we're able to deploy our capital on production, as opposed to spending a lot of money on CapEx or capital expenditures. Next slide.
We have two core markets that we're going after, in terms of both the market opportunities and in terms of our product set or product suite. First, I'll describe the U.S. school bus market, which has almost 500,000 school buses in operation every day. One of the things in deploying electric school buses in this particular space is that there's clear health benefits, and in particular, from the K to six, or kindergarten to grade six, categories or classification, where research shows that for that particular group, the health benefits or the health issues, there's almost 15 times the incidence of lung cancer, respiratory illnesses for those children that are riding diesel emission school buses.
So with the replacement, with our all-electric school buses, we're providing a clear benefit to those students that are having to endure that type of transportation. State mandates are, have been, so far, there are six states that have set out requirements for the electrification of their school bus fleets. One of the first to institute a mandate was the state of New York, and that state has 50,000 school buses, and they all have to be battery electric, starting with new purchases in 2027, but they have to be battery electric by the mid-2030s, which is a tall order, given the number of school buses that would be required to be replaced with battery electric school buses over that period of time.
It's one thing to set mandates, it's another thing to actually have some funding or funding sources that can properly support those kind of initiatives. Federally, the EPA has been administering a program called the School Bus Program, and to date, they've awarded $1.5 billion out of a $5 billion program. That, and we have been successful in obtaining a number of those awards in terms of deploying our school buses, and we expect that that program will continue over the next few years. But our focus is to take advantage of the programs as they're available, but not assume that they're gonna be available in subsequent years. So we're equally focused on the state money, where we know that programs are funded for not just the 2024 calendar year, but future years as well.
California is one of the more notable in that they have money for initially, they had a set-aside program for school buses in the magnitude of $130 million. They've recently brought in another $500 million for the electrification of school buses, as well as the ongoing or regular HVIP program, which we are very, very familiar with, that presently has about $160 million still left before the next funding cycle starts this spring. And then there's other states that we've listed as well, that have funding to support the mandates that those states have set. Next slide. I think we missed slide six. There we go. So, I mentioned that we have two products. We have a Type A on the left, that is our award-winning Nano BEAST.
It's a Class 4 that is built on our EV Star cab and chassis, and is a modern version of the smaller school bus that you probably are familiar with that you see on the road every day. Then the larger 40-foot Type D on the right is really fills out our portfolio of vehicles that are available in the market. At this point, I'll turn it over to Brendan, who can describe some of the aspects of our build in terms of the products that we brought to market here.
Thank you, Fraser. Good afternoon, everyone. My name is Brendan Riley. I'm the president and the director of GreenPower Motor Company. The next slide, if you would, please. So when Fraser talks about the platform that we build our vehicles off of, and this is the medium duty, the smaller vehicles, this is our EV Star platform. All of the EV Star products built on the platform share about 90% of the parts, so it allows us to have parts commonality across all the models, easier parts distribution, inventory, procurement, you name it. The thing that really sets this vehicle apart and this platform apart from most of the competitors, is that our vehicle started its life as an EV. It's designed as an EV. It never is converted. A competitor may take a-...
Ford, Isuzu, what have you, vehicle, and actually remove all of the internal combustion components and insert their own components. We don't think that's an elegant or compelling product. And really, what, besides the elegancy and the durability and longevity of it, our vehicle has a very, very compelling spec rating. It provides 150 miles on one charge and has a 7,000-pound payload on this, which both are really best of class. And the way I look at it is this is also a highly deployable platform, and that the batteries are essentially a little bit larger than most EVs, but there are some EV car, commercial EV, consumer EV cars you buy that have this size battery, where this battery doesn't require a power station right next door.
I charge these at my home, when I'm running demonstrations with this product. It's easy to scale up, relatively inexpensive, and this vehicle is a very, very good value. Next slide, please. Here are some of the vehicles, again, closer up of what we do. So the center vehicle is our EV Star cab chassis platform. It's the same platform that's in all of these vehicles. So think of it as the substrate or the base that all these other vehicles are built upon. And again, we talked about the parts commonality.
But if you look at the Nano BEAST, which is our Type A school bus, they sometimes call it a SPED, special ed bus, but it's for every student, just in regular, you know, any jurisdiction where they need a smaller bus to transfer the kids from home and to school and back. This bus is lightweight. It's made predominantly of aluminum, non-corrosive, fully recyclable. It's incredibly user friendly, and we've demonstrated this bus in West Virginia and all kinds of school districts where this vehicle was actually brought there. We taught them how to use it, set up the charging, and they were off, you know, delivering kids to and from school in this bus, you know, within a day or two.
And then, you know, a month later, we picked up the lot and went to the next school district to operate. A very, very easy to deploy, doesn't require to change the way they were doing business. On the far right, you'll see our EV Star passenger van. This vehicle seats up to 19 passengers, has gone through Altoona certification. We've sold it to transit properties who use it for heavy-duty transit operations, and then we sold it to hotels, airport parking. I mean, it, it's, it's kind of the, the be-all van for passenger transportation. We even have VIP and accessible versions of this van with wheelchair lifts. Really a great platform and has been incredibly popular for us. At the bottom there, as Fraser alluded to earlier, that's our Mobility Plus.
That's our, our cutaway bus that's, again, built with all-aluminum body and, again, a very compelling product in that there are very few products of this type that aren't converted from, you know, somebody else's manufactured vehicle, pull out all the, the wares, and, put in your electric drivetrain and battery, which isn't compelling on many levels, for durability, price, longevity, you name it. Next slide, please. This is, the goods movement slide. So the previous slide is what we move people with. This is for moving cargo and goods. So the same platform, again, it's the same vehicle, completely the same vehicle, in the middle here. We create all these different, products with it, including a stake bed. We also white label this product, sell it to Workhorse, and they build, their Workhorse W750 step van.
It's also known as a package car, kinda like their UPS van variant. They've actually done a 250,000-mile life cycle testing on this vehicle. The only thing they had to change were brakes and tires. It was an incredibly successful test. We knew it was gonna be good because our vehicle had already gone through the Altoona government-sponsored testing in Altoona, Pennsylvania, which was a life cycle durability and structural testing. But this customer of ours, this partner of ours, independently verified it and had really spectacular results. In the bottom, we have our cargo, which is basically just a plain van, all metal inside. You put whatever interior you want, even add a refrigeration unit to it. Great for goods delivery and movement.
On the bottom left, we have a special reefer unit that we build ourselves. GP Truck Body, our wholly-owned subsidiary, our partner, builds the box, and that refrigerator unit on there is the only high-voltage refrigerator that's used on medium-duty vehicles that we know of here in the U.S. It allows that vehicle to actually have very efficient refrigeration, where that refrigeration is running right off of the high-voltage battery. Typically, the way those reefers work is they run off a low voltage, so you have to step down voltage, send the voltage up through very big, heavy cables up to the reefer unit, then step it back up to high voltage. Incredibly, I would say circuitous and not very efficient. Our system is lower cost, longer life, more efficient.
Then we have on the top left, the Cargo Plus, which is our box truck that we have typically has a lift in the back. It can be any various configurations. Again, our partner, wholly-owned subsidiary, GP Truck Body, built this one here in this picture, but we do bodies with Morgan, Utilimaster, which is Shyft Group company, and others, Marathon and other body companies. Next slide, please. So when you look at the commercial market, the EV market, these are places where you really see, I would say, not necessarily mass deployment yet, but they're moving in that direction. And Fraser's rule of markets to go after are ones where you have money or mandates. And, you know, the Advanced Clean Trucks rule is a mandate.
In some cases, it's a suggestion, but it's intended to be a mandate, and the rule states that a certain percentage of new procurements have to be zero emission. They set a target date, and there are different rubrics that apply to them, but for the most part, if you look at the 11 states that have already adopted this, we see them as very compelling places to really focus our efforts. Then 18 states have joined the Zero Emission Vehicle Task Force, which targets 2050 for all new medium-duty and heavy-duty vehicles that are purchased, commercial vehicles that are purchased to be zero emissions. The next slide, please. And when Fraser talks about, you know, what's Manufacturing Light?
I came from BYD previously, and one thing we did a lot of BYD is we were an ODM, an original design manufacturer and a contract manufacturer for a lot of the big companies, Apple, Dell, Motorola, Ericsson. Just a whole bunch of companies. It was a very compelling model, and to understand how it worked, I think was really the key and helped us really make this transition. For us, what you'd need to do to have a manufacturing light model is you need to understand what you're building, have the supply chain set up, and then have your contract manufacturing partners working hand in hand with you. It requires people on the ground at the location, verifying build quality, spec, timeliness, you know, even segregating inventory, and so on and so forth.
It is complex, but what it allows us to do is not to have all this fixed overhead, where overhead is really the price is often built into our product, but it's not... If I'm not building or selling anything, I'm not paying for that. So it's a model that allows for, like, you know, in this EV space, the business is very lumpy. It's up and down. You're selling a bunch, and then you're delivering a bunch, and then you're back selling a bunch, and there's a lot of lumpiness in the business itself.
This model allows you to scale up very quickly, and it allows you to scale down very quickly, while still maintaining all this capacity, this quality, and is a very compelling system to really provide these disruptive products that we do in the EV space. So we, we've got our own manufacturing that does Buy America compliant manufacturing, full, complete vehicle assembly, and we've got the ability to do a lot of this stuff here in the U.S., when the customers will pay for it. But when the customers don't have to pay for it, if they don't require Buy America compliance, then they don't have to pay for it.
We get a value leveraging, you know, right next to Singapore there, or, you know, wherever we're doing our contract manufacturing, we get to leverage those economies and then pass that savings on to the customer and have a more compelling, lower price point, while still doing a lot of the work here. It gives us this flexibility. With that, I would like to pass it on to Michael Sieffert, GreenPower's CFO.
Thank you, Brendan. So the slide you're looking at here represents our growth in both vehicle deliveries as well as sales revenue over the past, well, the first nine months of the past three years. So we reported our December 31, 2023 results a couple of months ago, and I think the key points that you're gonna see here is clearly a trajectory of growth, and we do anticipate further growth over the next several years, and I'll get into the nature of that in a moment. But the other key point is, what Fraser mentioned earlier, is that we have consistently earned a gross profit on our sales over time.
And while this sounds like a fairly simple statement, I think if you look at our competitors in our industry, there's many of those that have not generated a gross profit margin. And, you know, clearly, this is a key element of a successful business over time, is that you do need to generate profit on the vehicles that you're producing. Next slide, please. So this slide here represents or shows you, you know, in a very clear diagram how we stack up against a number of companies that you may have seen in our sector.
So, you know, clearly Tesla, while we're not producing, you know, personal vehicles, you know, everybody knows about Tesla, and I think they're well-regarded in terms of their production capabilities. So the fact that we are on the left-hand side of this graph, I think is very telling, and you know, speaks to what we built, and this is really a result of what Brendan was describing in terms of our business model. The manufacturing-light approach, where we have not invested heavily in overhead, and it's, I think, due to those, you know, that manufacturing, you know, system or process that has allowed us to, you know, consistently generate these gross profits over time.
One thing I do wanna highlight is, recently, April 10th, we issued a press release, and in that press release, we talked about a shift in our production. So first off, I think the product mix that we have sold historically, if you look back over the last couple of years, has been dominated by our commercial sector. So those commercial buses would be built on the EV Star platform. We have had great success in that sector, and while we do expect to continue sales in that area, what we're now starting to see is a shift in the product mix over heavily weighted more towards the school buses. So in that press release, we commented on school bus sales for the current fiscal year, ended March 31, 2024.
The number of units had increased by over 350%, and we continue to expect those to increase over time as we head into the next year. And what that's really being driven by is a number of different contracts. So we do have contracted revenue for that growth. And, you know, a lot of that is dominated by our activities in the state of West Virginia, where we do have a large contract with the state. And once those vehicles are delivered, which we anticipate to be at the end of this fiscal year, we anticipate that we will have nearly 100 vehicles, all electric school buses operating in the state of West Virginia, which would be a real achievement for our business.
Next slide, please. Here we outline our capital structure. GreenPower is trading on the NASDAQ stock exchange under the ticker GP. We currently have just under 25 million issued and outstanding shares. We also have exercisable incentive stock options. The table here is as of December 31, 2023, and we recently issued our annual stock option grant to employees and directors. And so that number now is just over 2 million outstanding stock options as of today. In addition to this, we do have an operating demand loan for up to $8 million with the Bank of Montreal. And in addition to that, we have interest-bearing debt of approximately $4.4 million as of December 31, 2023, and these are ranging in maturities from short-term... Pardon me.
Pardon me, to over 30 years. In addition to that, we do have a secured revolving credit facility. This is with the EDC, which we have recently entered into. This is to finance our production. This is up to $5 million. This was a very big achievement for our company. In securing this facility, we have access to funding to fund our expanding production over the coming year. With that, I would now like to end the presentation-
Well, before we open it to questions, I just wanted to tie it all together for everyone with a number of the slides that we've gone through. Is starting with the school buses on, I think it's slide six. We note that, you know, presently we have over 100 live orders and 164 qualified leads. This is actually as of about six weeks ago.
The that coupled with the GP, which at 16.6%, that Michael was just going through, we expect that the change that we've made in our model, where a couple of years ago we were producing per to inventory and then selling out of inventory, is that as a result of the change of the competitive landscape, and given that we're now at garnering much larger orders, we're in a position to change or to move much more to production pursuant to customer orders.
So that financing that we organized recently is very much in line with the model that we've moved to over the last two to three quarters, to where we're predominantly producing pursuant to customer orders in the school bus space. So our goal is in hitting 50-60 school buses a quarter, which with our current book is achievable within this current fiscal year, ending March 2025.
That that, combined with the modest increase in our GP into the low 20s%, along with GP Truck Body sales and some of the commercial vehicle sales, although not at the same dollar level as the school bus, that that combination gets us to positive cash flow. That's our goal within this current fiscal year that we're operating, and we believe that we have the elements in place in order to accomplish that goal.
Great. Thank you, Fraser.
So with that, let's - Paul, let's open it up to... I can see that there's a few questions that we could go through here, but I'll leave it with you.
Yes. Thank you. Thank you very much. For our audience, we are now gonna open up the Q&A portion of the event. If you do have a question, you can just press the Q&A button at the bottom of the screen and just type your question in, and we'll get those in the order they're received. With that, Fraser, we've had a couple of questions around competition. In general, what is your assessment of the competition in the markets you serve, and what share of the market do you think you can get?
Well, if you go back to slide six there, with the school buses, on these, we have very different competitors or competition for the Type A school bus on the left versus the Type D on the right. And, you know, for example, on the Type A, they're predominantly built on E-450 cab chassis purchased from Ford, and in some cases, there's some Chevy E-450s or even E-350s that are utilized that are ultimately built out to compete with the Type A. None of those are purpose-built, none of those are, as Brendan stated earlier, built from day one to be a battery electric vehicle. So there's a significant difference between the products that we brought to market.
And I think over time, we've seen people gravitating towards the purpose-built vehicle that was built to be a battery electric vehicle, because it gives you the combination of the range as well as the payload, which these other companies are a lot more challenged in terms of trying to accomplish both those objectives. The Type D on the right, they're a lot more of the legacy companies are in this space. We have Blue Bird, that is well known for producing a number of different vehicles, traditional vehicles, whether diesel, gasoline powered, and so on. We have IC. Thomas Built has a Type C. Lion Electric has a Type C and a Type D.
The point being is that none of the names that I've just mentioned have a Type A, so they're a very different mix between the two. In terms of how we stack up, a few of our competitors have gone by the wayside over the past year or two, so it's a very different competitive landscape. And it's also dictated by the states that have the different certification and requirements. So our focus has been that the biggest mandate in the nation is with New York. We are partnered with Leonard Bus Sales, who is a leading dealer in the state. And in California, they have also followed with the mandate.
They don't have as quite as many school buses as the state of New York, but they've got the most amount of money than any other state. So that's an example where we're more focused on those, because of the money and mandates, and trying to be a solution for all school districts across the nation. So we're being much more opportunistic in terms of where the best opportunities lie. And so the order book that is described here, the live orders and the qualified leads, certainly cover a lot more than those states.
In the case of New York, we've just recently received our first order for that state, whereas others, we've been, we've had orders for the past couple of years, states like Arizona, or Oregon, and you know, just to name a few. Brendan, anything to add in terms of the, you know, the competition we face and, you know, how, you know, we're sort of stacking up against that?
One more thing I can point out is that our deliveries have actually been better than most of our competitors also. Some of them are even having two-year lead time. We're usually beating them by more than half. So besides that, Fraser, you did a wonderful job. Thank you.
Yeah, our next question, turning to the batteries: Are there any supply chain concerns regarding your batteries, and what's the reliability like? Do you have any overseas sources that you're relying on, and are these lithium or cadmium batteries?
Well, I'm gonna be turning this over to Brendan shortly, but I'll start at a high level. We use LFP, or lithium ferrous phosphate. It's a little heavier than some of the other alternatives, but it is, you know, it's rock solid. It's very dependable, has a charge-discharge cycle, you know, second to none. You know, there's just a lot of things to like about the battery chemistry. And by way of example, when Tesla went to China and started building Model 3s, they changed over to LFP batteries in order to, you know, build a reliable and cost-effective product. And in terms of the specifics on the supply chain, I'll let Brendan cover that.
Thank you, Fraser, and thank you for the question. The iron phosphate chemistry we use has been incredibly robust and dependable. We have one cell manufacturer that we leverage right now. It's EVE out of Huizhou, Guangdong, China. They are making, setting up a factory here in the southern U.S. We expect to have that online at some point in the next year or so. But again, Fraser really hit the nail on the head. The iron phosphate or ferrous phosphate chemistry, it's a lithium-ion family, so there's a few different lithium-ion chemistries that you'll see out there. But it's proven to be the most reliable, cost-effective, long-lasting, stable, really safe, and compelling battery chemistry out there.
I was lucky enough to start using this chemistry, but a lot of companies that have started out with nickel, cobalt manganese and cobalt aluminum oxide and cobalt, all the other cobalt chemistries and titanate and some of the other lithium-ion family of chemistries, they've migrated over to the iron phosphate because it is so stable, cost-effective, and it's just as energy-dense as most of the other chemistries when you look at it as a pack. So the individual cell energy density that you could maybe find in NMC or LTO, or what have you, it goes away as you start building the packs. So if you look at our vehicles, they're compelling for range and payload, and that means our battery is just right.
As far as supply chain's concerned, prices have gone up on batteries. They've stabilized again. They're in the down trajectory, as we hope. There's also new places coming online here in the U.S. to manufacture the batteries, which should... helps the market, helps drive down the price also. They're environmentally friendly. You can actually- you don't have to recycle an iron phosphate battery. It's got phosphate, which is the main ingredient in soap, iron, rust, very common ingredients. They can just be... When they're discharged, they can be thrown away in a landfill without no toxic, metals, no caustic electrolytes, nothing really nasty. It's an all-around great, great chemistry. And, we don't see a big supply chain shortage, you know. Lithium carbonate is pretty prevalent all over the world.
Price goes up and down on it, but it's not one of the minerals that, you know, people are the rarer minerals that people are fighting for. It's on the surface all over South America, it's all over in China. We have it here in large amounts in the U.S., it's in Canada. It's really findable everywhere, unlike some of the other rares that aren't findable everywhere. So we're very pleased with using it. And, you know, we've been developing higher energy density, higher power density pack designs.
We completed the Mega BEAST pack, but we've even looked at, which is our BEAST school bus with twice the size battery for long range applications and for more V2G applications, where you need more power so you can charge and discharge the battery for the grid, when it needs it, and still be able to bring kids to and from school. But the thing about this iron phosphate chemistry is that it's reliable. We've tried different cell manufacturers and even building different packs, and it takes us a year and a half, maybe two years, to validate a pack. And we've been, you know, experimenting with different pack configurations, and the one we have is still really as good as any one we're testing.
We are very, very fortunate to have a very desirable, robust, cost-effective, and compelling battery pack.
Very good. Thank you, Brendan. And our next question, is your workforce unionized? And if not, what are your views on unionization?
Well, we support the right for everybody to organize and form a union, but we are not unionized, and we try to make sure that our employees are satisfied to the level where they don't feel the compunction to organize and unionize. We are in West Virginia, which is a right-to-work state, and in California, we, you know, we have not had, we've not had a large union push. We've stayed small enough to really stay out of their, maybe out of their, out of their sights. But we'll see. You know, it's everyone's right to start a union, and we try to do our best to make sure that the employees don't feel like they need to.
I think it's important to note that in the two primary markets, in terms of our production facility in Southern California and in South Charleston, West Virginia, we've created the labor pool. It literally, in some cases, from scratch. So it's not as if we're drawing from an existing, labor pool that may or may not be unionized. I think our dynamic is very different in that, we have built out the production teams in each of those two locations, from labor resources that, you know, you know, weren't specifically oriented towards, you know, producing all-electric vehicles in those regions.
Very good. Thank you. And our next question: you have 16% gross profit margin. How do you intend to drive improved profit margins going forward?
I'll start, and then Michael can take it over. But at a high level, over the last number of quarters, you know, when you have a large finished goods inventory, then you are subject to, you know, the ongoing evaluation as to what the realizable value of your finished goods inventory is. So we have recorded what we call some provisions, or in some cases, impairments on that inventory. So as we reduce that inventory, we're less likely going to have those impairments. And so looking out two, three, four quarters from now, with that transition to where we're producing pursuant to customer orders, will allow us to reduce those types of, you know, in many cases, one-time charges.
The second thing is, is that, you know, with the school bus production, we're looking at, hitting new records later this year in terms of production and deliveries and deployments. And with that, comes some economies of scale in terms of the, in particular, the allocation of cost to our cost of goods sold from the overhead and rent and things like that. And I'll let, Michael sort of round out the, the explanation on how we believe we can get this into the low twenties.
Yeah. No, that's great, Fraser. I think just to elaborate on what Fraser was saying in terms of some of the activity in the recent quarters. As we have built out our facility in West Virginia, you know, just so you can appreciate, it's an 80,000 sq ft facility. We do anticipate significantly higher throughput in production over time. But on those first few deliveries, the allocation of costs to, I believe it was four vehicles that have delivered from that facility over the past two quarters, you know, that allocation is quite high, and so that negatively impacts the gross profit margin. But as Fraser said, as we increase our throughput from there specifically, we do expect that to increase over time.
The other factor I think that will impact our gross profit margins is we do have a 30% GP margin on, I would say, smaller unit sales. But as we get into larger volume sales, you know, with key customers, which may be something that we attract over time, you know, that will, you know, impact that gross profit margin as well. So it... You know, currently we anticipate 16% is below target. We do expect this to increase. And then, you know, over time, it will evolve based on the nature of the contracts we have in place.
Thank you, Michael. And then we have a question here: what companies, what foreign contract manufacturers is GreenPower working with?
Our supply chain is global. You know, and an example that is, you know, our body builder that we partnered with and does work for Volvo, for MAN, you know, some globally recognized manufacturers or vehicle manufacturers, is based outside of Singapore. And they, the aluminum, extruded aluminum that we use in building out the frame for those vehicles, we get from Constellium in a factory in Czechoslovakia. So, you know, that's an example that, you know, the two school buses that are pictured on the slide here are built in that fashion, you know, really with a global supply chain.
Very good, thank you. And then we have another question. Can you talk a little bit about the state funding that's for the school buses?
I'll deal with the state of New York first. They had a contract. They went out and had companies respond to their contract provisions and specifications, and we worked with Leonard Bus Sales to get onto that contract. In the Type A category, they have four different lots that are essentially based on the number of students that would be in a particular category, if you will, for the Type A school bus, and we're in two of those four.
And then on the Type D school bus, we're in a category, which I believe there is one other company that was recently added, but, for a period of time, we were the only one in the entire category, which was a higher volume or number of passengers in a Type D school bus. So that's on the State of New York, and if you're not on that contract, you can't provide... You know, you can't sell your vehicle. And then in the State of California, we are on the HVIP program. We actually have 12 vehicles listed on that program, out of a total of 152 from about 40 OEMs. So we have strong representation on the HVIP program, which- and they fund it to the tune of, you know, several hundred million dollars a year.
Presently, that program shows about $151 million, I believe, available today. In addition to that, they have the set aside fund, which is will be about $130 million this year. They have $500 million. That is a new program called the ZESB program. And there's also air quality management districts, where we've had, to date, probably one of our greatest source of funding for the vehicles that we've delivered and deployed in the state of California, comes from various air quality management district, which is backed by the California Energy Commission, or CEC. And I'm sure I've missed two or three others.
As you can imagine, there's a real tapestry of different funding sources, depending on where you're located in the state and the particular fleet that you're operating.
Great. Thank you, Fraser. And, for our attendees, if you did submit a question and we did not get to that, one of our Red Chip team members will be following up with you to help with that. And also, we just wanted to let you know, for more information about Green Power Motor, you can always call us here at Red chip at 1-407-644-4256, or you can email us at gp@redchip.com. That's the ticker symbol, gp@redchip.com. And you can also visit the investor information page that we've set up for Green Power at greenpowermotorinfo.com. That's greenpowermotorinfo.com, and there you can actually download the investor presentation that you just saw, as well as a recent fact sheet, and you can even sign up for Green Power news alerts as well.
For an archived version of today's presentation, you'll be able to find that, subsequent to this ending, at RedChip.com/events. Also, at that link, you'll be able to see upcoming schedule of additional webinars that you can attend. With that, I wanna thank everyone for your-
Oh, sorry, Paul. Paul, can I interrupt? We-
Please, go ahead.
I think Brendan and I would love to answer Ryan's question.
Okay.
Where Ryan has asked, "Can you update on the feasibility timing of moving to a solid state battery?" And Ryan, if you have one that is our form factor and provides the voltage output that we're looking for in each battery cell, please call us right away. And I say that somewhat tongue-in-cheek, in that, you know, this is the Holy Grail. You know, we can't wait until this is commercially available. Unfortunately, that's probably, you know, at least three or four years out, but we can at least dream in the meantime. But it is, it is going- it is gonna have a huge impact on the EV business, and when I say a huge impact, in a very, very positive way.
I know this is a pet project or area of, of, very strong interest for Brendan, so I'll let him, you know, provide the concluding remarks on, on your question.
Ryan, nice to speak to you again, and I hope you're well. Ryan, I remember in 2011, 2012, I went to see a solid-state battery manufacturer in Northern California that shared part of the campus at Stanford. They will remain nameless, though. And I was there with my boss at the time, and we went through the whole factory, and you know, they showed us the cell. They showed us it was solid state. You know, it had a, it was a ceramic, I think, chemistry cell. But again, you know, lithium-ion, solid electrolyte, usually they're ceramic or glass or some other material that makes them solid state.
The benefit of the solid state batteries, for those on the call, is that they're not—they don't have any temperature issues. They're not prone to freezing or getting too hot. They're very stable, and they're also very safe. They can't rapidly disassemble and cause any issues. Thermal runaway is not a problem. Also, they can be packaged in all kinds of different form factors and, you know, they... It's just a very compelling concept. This is 13 years ago that I was there, at least, and I was there with the CEO of my company, the chairman of the company that I was working for at the time.
And we were looking at this process, and the folks told me then, within three to five years, the product would be ubiquitous, manufacturability, price, half of what lithium-ion batteries cost, whatever, whatever. The three to five years is just us saying it'll happen. We don't know the timeline, and we're just really making something up. As soon as I see a product that really has manufacturability and a path to production, I can't wait to use it. But I'll keep you posted as soon as I see something like that. I have not yet.
Very good, gentlemen. Thank you for the additional color. I guess with that, is there any closing comments, Fraser or Brendan, that you would like to make before we wrap things up officially?
I think the summary we provided at the end of the deck really captures it, is that we are, on the one hand, you know, we're bringing some great products to the EV market. But the thing is, is that we have a very... You know, we, we've always had our eye on the treasury and managing our cash and cash flow. So we believe we are uniquely positioned with a business model that can generate consistently gross profit on the sales of vehicles. And we now are positioned that in terms of our production, the financing for that production, and order book in the school bus space, that we have a path to positive cash flow, you know, and, you know, targeting the third and fourth quarter of our current fiscal year.
Great. Thank you very much. And again, for our audience, if there are any further questions, please reach out to us at 1-407-644-4256, or email us at gp@redchip.com. With that, I wanna thank our attendees for joining us today. And again, thank you, Fraser, Brendan, and Michael, for sharing the GreenPower story. We look forward to having you back to share more of the updates as you continue to succeed.
Yeah. Thanks for everyone attending.
Thank you.