ElectraMeccanica Announces Filing and Mailing of the Joint Proxy Statement/Management Information Circular in Connection with its Special Meeting of Shareholders to Approve the Proposed Combination with Xos - Seite 2

Strategic Rationale for the Arrangement

The following are the key strategic factors underlying the Board of Directors’ unanimous recommendation that ElectraMeccanica shareholders vote IN FAVOR of the ElectraMeccanica Arrangement Proposal:

• Equity Position in Xos. The Arrangement provides ElectraMeccanica shareholders with an equity position in Xos, which the Board of Directors believes to be well-positioned in the mid-size electric commercial vehicle market segment that is poised for high growth.
• Xos Experience with Electric Vehicle (“EV”) Step Vans. Xos has been selling electric vehicle step vans to commercial fleet customers since 2018 and is in its third order cycle with certain customers for hundreds of vans.
• Xos Positive Gross Margins. Xos currently manufactures and sells its electric vans at positive gross margins, which distinguishes it from many other EV companies.
• Established Customer Base. Xos has an established customer base comprised of large fleet operators, including FedEx Ground, UPS, Penske, Cintas and Loomis, and deep relationships with industry leading step van body builders.
• Commercial Backlog. Xos has experienced recent high-growth while maintaining a substantial commercial backlog.
• Government Financial Incentives. Government financial incentives relating to purchasing and operating EV vans.
• Industry Leading Mid-Size Step Van. Xos’ product and service offering includes an industry leading mid-size step van, several battery size choices, an electric powertrain for other OEMs, mobile charging hubs, fleet management software solutions, single point charging infrastructure support, highly responsive aftermarket support and support in obtaining government incentives.
• Access to Capital. The Arrangement will significantly improve Xos’ capital position, enabling Xos to fund the next phase in its growth as an electric vehicle truck OEM and continue to develop adjacencies, including Xos Energy Solutions and Xos Powertrain Sales.
• Strengthened Xos Board of Directors. ElectraMeccanica will add three automotive/commercial vehicle-experienced members to the Xos Board of Directors, strengthening the Combined Company overall.
• Comparatively Superior Transaction Terms. The terms of the proposed Arrangement were considered to be superior when compared to other strategic alternatives available to ElectraMeccanica, based on the comprehensive strategic process the Board of Directors completed in which it broadly reviewed and evaluated a range of potential transaction partners and evaluated the prospects for liquidating and dissolving ElectraMeccanica and distributing its remaining cash.

Additional factors supporting the Board of Directors’ decision to approve the transaction and recommend it to ElectraMeccanica shareholders are described in the Joint Proxy Statement/Circular.