Mr. Sam Bruneau reports

TAIGA DOUBLES ITS PRODUCTION DURING THE THIRD QUARTER OF 2023

Taiga Motors Corp. has released its financial and operating results for the third quarter ended Sept. 30, 2023.

Management commentary

Taiga reported $4.2-million from the sale of 147 vehicles during the third quarter ending Sept. 30, 2023, showcasing revenue growth of 222 per cent compared with the third quarter of 2022. Taiga's production experienced a significant ramp-up with the introduction of the Orca Performance model, which was engineered for manufacturing efficiency, utilizing a sheet moulding composite for high-volume manufacturing and a sixth-generation tractive unit with greater part integration. As a result, Taiga has been able to double its quarterly manufacturing capabilities and produced 365 Orca personal watercrafts during the third quarter while achieving the 50-vehicle-per-week milestone.

During the quarter, Taiga continued to expand its Taiga service provider (TSP) network, and, as of Sept. 30, 2023, Taiga's TSP network included 31 locations to provide deliveries and after-sales service across Canada and the United States. Taiga initiated deliveries in California, which results in the TSP network now covering top key boating and EV (electric vehicle) markets in Canada and the United States. The company is now focusing on scaling its TSP network and driving sales. Along with expanding the TSP network, Taiga is also working on improving its production schedule to better align with seasonal consumer retail timings. As such, the Nomad snowmobile is expected to begin its production run imminently for the coming 2023/2024 winter season.

"The third quarter was another step towards establishing Taiga as a leader in power sport electrification. We launched the Orca Performance, and, with it, we were able to ramp up our production to double the prior quarterly throughput. The Orca Performance personal watercraft was designed for scalability in order for Taiga to leap forward in mass-market power sport electrification and drive mass adoption at a competitive price," said Sam Bruneau, chief executive officer of Taiga. "The next phase for us at Taiga is to continue to build on our production momentum, and I'm excited to announce that we produced our historic 1,000th off-road EV in November, 2023. We're also working hard to improve our supply chain, ramp up our TSP network and invest in marketing as we further grow our brand."

On Sept. 29, 2023, Taiga closed a $15-million secured term loan agreement with Export Development Canada (EDC). The term loan provides Taiga with additional liquidity and flexibility in managing its working capital. The term loan bears interest on the drawn funds at the annual rate of the prevailing Canadian prime rate plus 5.00 per cent, provides for multiple advances over a nine-month drawdown period and matures on Feb. 10, 2028.

Third quarter 2023 financial highlights:

• Revenue of $4.2-million recorded during the third quarter of 2023, compared with $1.3-million recorded in the third quarter of 2022; the 222-per-cent increase in revenue is associated with the delivery ramp-up with 147 vehicles delivered in the third quarter of 2023, compared with 40 vehicles delivered in the prior-year quarter;
• Cost of sales of $12.1-million recorded during the third quarter of 2023, compared with $5.7-million reported in the third quarter of 2022; the increase in cost of sales is associated with the increased production output and in part by an additional $2.1-million provision to write down inventories to net realizable value;
• Research and development (R&D) expense (net of tax credits) decreased to $4.1-million from $4.4-million compared with the third quarter of 2022;
• General and administration (G&A) expense decreased to $4.7-million from $5.5-million compared with the third quarter of 2022;
• Sales and marketing (S&M) expense increased to $1.8-million from $1.3-million, compared with the third quarter of 2022;
• Net loss for the period increased to $20.2-million, compared with $15.5-million in the third quarter of 2022;
• Additions to property and equipment increased to $5.8-million, compared with $4.5-million in the third quarter of 2022;
• Cash and cash equivalents of $5.8-million as at Sept. 30, 2023, compared with $22.8-million as at Dec. 31, 2022; on Sept. 29, 2023, Taiga closed a $15-million secured term loan agreement with Export Development Canada to provide additional liquidity and flexibility in managing its working capital;
• Inventory increased to $32-million as at Sept. 30, 2023, compared with $20.8-million as at Dec. 31, 2022; The increase in inventory is largely associated with higher levels of finished goods as well as parts purchased for the Orca Performance build.

Third quarter operational updates:

• Produced 365 Orca personal watercrafts during the third quarter of 2023; the company is expected to begin the coming Nomad snowmobile production run in November, 2023;
• Delivered 147 vehicles, including 112 personal watercrafts and 35 snowmobiles, during the third quarter of 2023;
• Preorders at 2,754 during the third quarter as the company focuses on maintaining a preorder level and sales pipeline in line with its production plan;
• Launched the Orca Performance, which was optimized for high-volume manufacturing and represents a leap forward in mass-market boating electrification;
• Made initial deliveries in California, United States; Taiga vehicles are now available in the United States' top three prominent boating and EV adoption hubs;
• Expanded the TSP network with nine new locations, with a total of 31 locations in Canada and the United States as of Sept. 30, 2023;
• Head count at 314 full-time employees at the end of the third quarter of 2023, with approximately 40 per cent of the work force employed in engineering.

2023 priorities

For 2023, Taiga is focused on three key areas of the business, which include ramping up production, establishing a world-class customer experience and furthering the company's technology advantage in off-road electrification. The future of off-road is electric, and Taiga is committed to strategically investing in and manufacturing the next generation of off-road vehicles to accelerate no-compromise access to the outdoors.

Outlook

While the company was able to reach targeted throughput with its 2023 Nomad snowmobile and 2023 Orca Performance, the company faced a slower-than-expected ramp-up on its Orca Carbon and Orca Performance models largely due to parts availability. As a result of the delayed ramp-up, the company expects to produce approximately 1,000 vehicles in 2023.

Conference call

Taiga management will hold a conference call on Nov. 13, 2023, at 9 a.m. Eastern Time (6 a.m. Pacific Time) to discuss these results.

Toll-free dial-in number:  1-855-658-2585

International dial-in number:  1-514-375-0364

The conference call will be broadcast live and available for replay through the investor relations section of Taiga's website.

A telephonic replay of the conference call will be available after 12 p.m. Eastern Time on the same day through Nov. 20, 2023.

Toll-free replay number:  1-800-319-6413

International replay number:  1-604-638-9010

Replay ID:  0544

About Taiga Motors Corp.

Taiga is a Canadian company reinventing the power sports landscape with breakthrough electric off-road vehicles. Through a clean-sheet engineering approach, Taiga has pushed the frontiers of electric technology to achieve extreme power-to-weight ratios and thermal specifications required to outperform comparable high performance combustion power sports vehicles. The first models released include a lineup of electric snowmobiles and personal watercraft to deliver on a rapidly growing demand from recreational and commercial customers who are seeking better ways to explore the great outdoors without compromise.

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