Xos and Regulatory Tailwinds

Recent initiatives reflecting state and federal government commitments to regulating emissions are creating increasing demand for commercial electric vehicles. Xos holds a strong position in this growing market, which is one of the many reasons the ElectraMeccanica board and management team believes in the future value that our proposed combination creates for shareholders. 

Read below to understand better how Xos is positioned for success thanks to various internal and external factors, including the current and expected government incentives and regulations around emissions for commercial fleets:

Current State Regulations 

As of January 2024, the state of California Advance Clean Fleets (ACF) rules passed in 2023 by the California Air Resources Board (CARB) went into effect. In the long term, these new rules require medium-duty fleets, including stepvans, to transition to 100% zero-emission vehicles (“ZEVs”) by 2035. In the near term, however, the rules mandate that any new delivery trucks purchased by large fleet operators that deliver in the state buy only ZEVs –  or that by 2025, 10% of its total fleet must be comprised of ZEVs. This means thousands of ZEV stepvans will be needed by 2025, and Xos is a clear market leader helping companies meet these requirements. It’s anticipated that many states will follow suit. 

States Advocating for Electrification 

Just under a dozen additional state governments, including New York, New Jersey, Maryland, Massachusetts, Colorado, and Oregon support commercial ZEV mandates. Fourteen states, California, and the District of Columbia have signed a pledge for 30% zero-emission fleets by 2030 and 100% by 2050. Across America, senators and representatives are discussing legislation for zero-emission medium- and heavy-duty vehicles.

Stackable Incentives 

Mandates aside, there are several state and federal incentives that reward fleet operators for purchasing Xos electric stepvans and other commercial electric vehicles. Through the Inflation Reduction Act, fleet operators in all 50 states can be reimbursed for nearly 25% of the cost of an Xos electric stepvan. Additionally, the Diesel Emissions Reduction Act (DERA) is a national grant program that covers up to 45% of the total project cost for fleet operators meeting certain requirements. 

Xos customers in many states are also eligible for grants, vouchers and tax credits that may help offset nearly the entire cost of purchasing a Xos electric stepvan and can be stacked with federal incentives. Visit Xos website for the full list of state programs companies that purchase  Xos electric stepvans may be eligible for. 

Xos Expertise

Unlike other EV OEMs, Xos takes a proactive approach supporting customers through the complexities of navigating incentive and grant programs. Taking advantage of the increasing federal and state incentives can be time-consuming and challenging. Xos has an in-house team of experts that helps customers reap the full financial benefits of available grants, vouchers, and tax credits, further demonstrating the company’s commitment to making fleet electrification easier and more affordable. We believe Xos is strategically well-positioned to help drive customer success within the evolving regulatory landscape.

As our EMV shareholders consider their position on our potential agreement, we encourage them to acquaint themselves with the key role Xos products play in the myriad of regulatory tailwinds supporting the electrification of commercial vehicles. 

We are committed to sharing regular updates for our shareholders to better understand Xos’ promising business outlook. To stay in the know, be sure to sign up for email updates on our microsite, and email our shareholder relations team at IR@emvauto.com with any questions. 

About Xos, Inc.

Xos is a leading technology company, electric truck manufacturer, and fleet services provider for battery-electric fleets. Xos vehicles and fleet management software are purpose-built for medium- and heavy-duty commercial vehicles that travel on last-mile, back-to-base routes. The company leverages its proprietary technologies to provide commercial fleets with battery-electric vehicles that are easier to maintain and more cost-efficient on a total cost of ownership (TCO) basis than their internal combustion engine counterparts. For more information, please visit www.xostrucks.com.

About ElectraMeccanica

ElectraMeccanica (NASDAQ: SOLO) is a designer and assembler of environmentally efficient electric vehicles that will enhance the urban driving experience, including commuting, delivery and shared mobility.

Additional Information and Where to Find It

 Xos and ElectraMeccanica have mailed a joint proxy statement/management information circular (the “Joint Proxy Statement/Circular”) and a proxy card to Xos’ stockholders and ElectraMeccanica’s shareholders as of the record date established for voting on the matters related to the proposed transaction (the “Arrangement”) and any other matters to be voted on at the special meetings of Xos’ stockholders and ElectraMeccanica’s shareholders, respectively. BEFORE MAKING ANY VOTING DECISION, INVESTORS AND SECURITY HOLDERS ARE URGED TO READ THE JOINT PROXY STATEMENT/CIRCULAR (INCLUDING ANY AMENDMENTS OR SUPPLEMENTS THERETO), AS APPLICABLE, AND ANY OTHER DOCUMENTS THAT XOS AND ELECTRAMECCANICA WILL FILE WITH THE U.S. SECURITIES AND EXCHANGE COMMISSION (THE “SEC”) OR THE CANDIAN SECURITIES ADMINISTRATORS (“CSA”) IN CONNECTION WITH THE PROPOSED TRANSACTION, OR INCORPORATE BY REFERENCE IN THE JOINT PROXY STATEMENT/CIRCULAR, AS APPLICABLE, WHEN THEY BECOME AVAILABLE BECAUSE THEY WILL CONTAIN IMPORTANT INFORMATION. Security holders may obtain free copies of the Joint Proxy Statement/Circular (including any amendments or supplements thereto) and any other relevant documents filed by Xos and ElectraMeccanica with the SEC or the CSA in connection with the proposed transaction (when they become available) on the SEC’s website at www.sec.gov, on the CSA’s for Electronic Document Analysis and Retrieval+ website at https://www.sedarplus.ca/, on Xos’ website at www.xostrucks.com, by contacting Xos’ investor relations via email at investors@xostrucks.com, on ElectraMeccanica’s website at https://ir.emvauto.com, or by contacting ElectraMeccanica’s Investor Relations via email at IR@emvauto.com, as applicable.


This communication will not constitute an offer to sell or the solicitation of an offer to sell or the solicitation of an offer to buy any securities, nor will there be any sale of securities in any jurisdiction in which such offer, solicitation or sale would be unlawful prior to registration or qualification under the securities laws of any such jurisdiction.

Safe Harbor Statement 

This communication includes “forward-looking statements” within the meaning of U.S. federal securities laws and applicable Canadian securities laws. These forward-looking statements are subject to the safe harbor provisions under the Private Securities Litigation Reform Act of 1995. Forward-looking statements may be identified by words or expressions such as “expects,” “anticipates,” “intends,” “plans,” “believes,” “estimates,” “may,” “will,” “projects,” “could,” “should,” “would,” “seek,” “forecast,” or other similar expressions. Forward-looking statements represent current judgments about possible future events, including, but not limited to statements regarding expectations or forecasts of business, operations, financial performance, prospects, and other plans, intentions, expectations, estimates, and beliefs relating to the proposed transaction between ElectraMeccanica and Xos, such as statements regarding the combined operations and prospects of ElectraMeccanica and Xos, the current and projected market, growth opportunities and synergies for the combined company,  federal and state regulatory tailwinds, expectations and intentions provided by ElectraMeccanica to Xos, the expected cash balance of ElectraMeccanica at the time of the closing of the proposed transaction, expectations regarding Xos’ ability to leverage ElectraMeccanica’s assets, the expected composition of the management and the board of directors of the combined company, gross margin and future profitability expectations, and the timing and completion of the proposed transaction, including the satisfaction or waiver of all the required conditions thereto. These forward-looking statements are based upon the current beliefs and expectations of the management of ElectraMeccanica and Xos and are subject to known and unknown risks and uncertainties. Factors that could cause actual events to differ include, but are not limited to:

  • ElectraMeccanica’s ability to maintain its net cash balance prior to the effective time of the Arrangement;
  • the ability of the combined company to further penetrate the U.S. market;
  • the total addressable market of Xos’ business;
  • general economic conditions in the markets where Xos operates;
  • the expected timing of any regulatory approvals relating to the proposed transaction, the businesses of ElectraMeccanica and Xos and of the combined company and product launches of such businesses and companies;
  • non-performance of third-party vendors and contractors;
  • risks related to the combined company’s ability to successfully sell its products and the market reception to and performance of its products;
  • ElectraMeccanica’s, Xos’, and the combined company’s compliance with, and changes to, applicable laws and regulations;
  • ElectraMeccanica’s, Xos’, and the combined company’s limited operating history;
  • the combined company’s ability to manage growth;
  • the combined company’s ability to obtain additional financing;
  • the combined company’s ability to expand product offerings;
  • the combined company’s ability to compete with others in its industry;
  • the combined company’s ability to protect its intellectual property;
  • ElectraMeccanica’s, Xos’, and the combined company’s ability to defend against legal proceedings;
  • the combined company’s success in retaining or recruiting, or changes required in, its officers, key employees or directors;
  • the combined company’s ability to achieve the expected benefits from the proposed transaction within the expected time frames or at all;
  • the incurrence of unexpected costs, liabilities or delays relating to the proposed transaction;
  • the satisfaction (or waiver) of closing conditions to the consummation of the proposed transaction, including with respect to the approval of Xos’ stockholders and ElectraMeccanica’s shareholders; 
  • the occurrence of any event, change or other circumstance or condition that could give rise to the termination of the definitive arrangement agreement;
  • the effect of the announcement or pendency of the transaction on the combined company’s business relationships, operating results and business generally; and
  • other economic, business, competitive, and regulatory factors affecting the businesses of the companies generally, including but not limited to those set forth in ElectraMeccanica’s filings with the SEC, including in the “Risk Factors” section of ElectraMeccanica’s Annual Report on Form 10-K filed with the SEC on April 17, 2023, ElectraMeccanica’s Quarterly Report on Form 10-Q filed with the SEC on November 3, 2023 and any subsequent SEC filings, and those set forth in Xos’ filings with the SEC, including in the “Risk Factors” section of Xos’ Quarterly Report on Form 10-Q for the quarter ended September 30, 2023 and any subsequent SEC filings. These documents with respect to ElectraMeccanica can be accessed on ElectraMeccanica’s website at https://ir.emvauto.com/filings/sec-filings/default.aspx and these documents with respect to Xos can be accessed on Xos’ web page at https://www.xostrucks.com/investor-overview/ by clicking on the link “SEC Filings.”

Readers are cautioned not to place undue reliance on forward-looking statements. It is uncertain whether any of the events anticipated by the forward-looking statements will transpire or occur, or if any of them do, what impact they will have on the results of operations and financial condition of ElectraMeccanica, Xos or the combined company. Forward-looking statements speak only as of the date they are made, and ElectraMeccanica, Xos and the combined company undertake no obligation to update publicly or otherwise revise any forward-looking statements, whether as a result of new information, future events, or other factors that affect the subject of these statements, except where they are expressly required to do so by law.