Leases

A summary of the balances relating to the Company’s lease assets and liabilities as of December 31, 2024 and 2023 consisted of the following (in thousands):


	Balance Sheet Location	December 31, 2024		December 31, 2023
Assets
Operating leases	Operating lease right-of-use assets, net	$	3,193	$	4,991
Equipment finance leases	Property and equipment, net	730		5,931
Total lease assets		3,923		10,922

Liabilities
Current
Operating leases	Other current liabilities	3,028		1,664
Equipment finance leases	Other current liabilities	1,054		2,005
Sub-total		4,082		3,669
Non-current
Operating leases	Other non-current liabilities	16,656		3,511
Equipment finance leases	Other non-current liabilities	418		1,472
Sub-total		17,074		4,983
Total lease liabilities		$	21,156	$	8,652

Operating Leases

The Company has a 5-year office lease on its headquarter facility in Los Angeles, California, which commenced in January 2022, as well as certain other leases (both short-term and long-term) within the United States. In connection with the acquisition of ElectraMeccanica, the Company assumed the leases for a manufacturing facility in Mesa, Arizona and a service and distribution center in Huntington Beach, California, maturing in May 2033 and January 2027, respectively.

The Company records lease expense on a straight-line basis over the lease term. Total lease expense recorded was $3.8 million and $2.2 million for the years ended December 31, 2024 and 2023, respectively.

Lease terms include renewal or termination options that the Company is reasonably certain to exercise. For leases with a term of 12 months or less, the Company has made an accounting policy election to not record a ROU asset and associated lease liability on its consolidated balance sheets. Total lease expense recorded for these short-term leases was $0 and $24,000 for the years ended December 31, 2024 and 2023, respectively.

Equipment Finance Leases

The Company leased certain equipment facilities under finance leases that expire on various dates through 2027. The finance lease cost during the years ended December 31, 2024 and 2023 consisted of the following (in thousands):


		Years Ended December 31,
	Income Statement Location	2024		2023
Amortization	Cost of goods sold	$	945	$	1,378
Interest accretion on finance lease liabilities	Other expense, net	214		418
Total		$	1,159	$	1,796

Supplemental Cash Flow Information, Weighted-Average Remaining Lease Term and Discount Rate

The weighted-average remaining lease term and discount rates, as well as supplemental cash flow information for the years ended December 31, 2024 and 2023 consisted of the following (in thousands for the supplemental cash flow information):


	Years Ended December 31,
	2024			2023
Supplemental cash flow information:
Cash paid for amounts included in the measurement of operating lease liabilities	$	3,913		$	1,860
Right-of-use assets obtained in exchange for operating lease obligations	$	—		$	—
Weighted average remaining lease term:
Operating leases	7.1 years			2.9 years
Equipment finance leases	0.9 years			1.5 years
Weighted average discount rate:
Operating lease - incremental borrowing rate	8.9		%	5.5		%
Equipment finance leases - rate implicit in the lease	5.9		%	6.5		%

Maturity Analysis

A summary of the undiscounted cash flows and a reconciliation to the Company’s lease liabilities as of December 31, 2024 consisted of the following (in thousands):


	December 31, 2024
	Operating Leases		Equipment Finance Leases		Total
2025	$	4,601	$	1,119	$	5,720
2026	4,413		317		4,730
2027	2,684		129		2,813
2028	2,647		—		2,647
2029	2,728		—		2,728
Thereafter	9,934		—		9,934
Total future minimum lease payments	$	27,007	$	1,565	$	28,572
Less: imputed interest	7,323		93		7,416
Present value of Lease Liabilities	$	19,684	$	1,472	$	21,156

About Leases Disclosures

Lease disclosures under ASC 842 provide a comprehensive view of a company's leased asset portfolio, including the split between operating and finance leases, discount rates used to present-value future payments, and the maturity schedule of lease obligations. This section reveals a significant source of off-balance-sheet commitments that were largely hidden before the current standard.

Key signals: the weighted-average discount rate affects the size of recorded lease liabilities — a higher rate reduces the reported obligation, so compare the chosen rate against the company's incremental borrowing rate. The operating versus finance lease mix affects both EBITDA and operating income presentation. Watch the maturity table for concentration risk: large payment cliffs in specific years may create cash flow pressure. Variable lease payments excluded from the liability measurement represent real obligations that do not appear on the balance sheet. Compare total lease costs against prior-year operating lease expense to assess the true economic burden.

Xos, Inc. Leases Disclosure

About Leases Disclosures

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