Q1 2021 Li Auto Inc Earnings Call
Hello, Ladies and gentlemen, thank you for standing by for the auto <unk> first quarter of 'twenty or 'twenty, 1 earnings conference call.
This time all participants are in listen only mode. Today's conference call is being recorded.
I'll now turn the call over to your host Janet Yang Director of Investor Relations of the company. Please go ahead Janet.
Thank you Annie good evening and good morning, everyone. Welcome to Li Autos first quarter 2021 earnings conference call the company's financial and operating results were published in the press release earlier today.
State on the accomplish IR website on today's call we have our president Mr. Kevin Yeah, No you shouldn't our CFO, Mr. Johnny Kelly and average CTO, Mr. Taiwan to begin with prepared remarks, our founder and CEO, Mr. Shan Li well joined for the Q&A discussion.
Before I continue please be reminded that today's discussion will contain forward looking statements made under the safe Harbor provisions update you add private Securities Litigation Reform Act of 1995 forward looking statements involve inherent risks and uncertainties as such the company.
Actual results may be materially different from the way you've expressed to date.
Survey information regarding risks and uncertainties is included in certain families of the complaint with the U S Securities and Exchange Commission.
The company does not assume any obligation to update any forward looking statements, except as required under applicable law.
Please also note that the auto its earnings press grid price.
Press release and this conference call include discussions of audited GAAP financial information as well as audited non-GAAP financial measures.
Refrigerate Aldose price release, which contains a reconciliation of the audited non-GAAP measures to comparable GAAP measures.
With that and we'll now turn the call over to our President. Please go ahead Kevin.
Thank you Janet.
Hello, everyone and thank you for joining me our call today I will review the key highlights of the first quarter as well as our newly released <unk> 'twenty 'twenty..1 do you want which offers best in class safety efficiency comfort and intelligence.
In the first quarter, we delivered 12579 do you want.
Up 334, 4% year over year, which brought about total revenue of RMB 358 billion $319, 8% higher than the first quarter of 2020 and.
And exceeding the top end of our revenue guidance by 11, 2%.
In the first quarter, our Li 1 was the second best selling new energy SUV in China.
As our compelling product offering and the superior user experience continues to delight customers and enhance brand awareness.
Well the wavering support of our direct sales and servicing network underpinning our growth.
We were also the only domestic brand ranked in the top 10 best seller among all premium Suvs in the first quarter.
Paul do you want remained the first.
Among all new energy Suvs in China.
In the rankings, including IC cars B V E. R. E N ph D V D Y on rent through the second in the large SUV segment ended the force in the premium SUV segment.
On the profitability side, our gross margin stayed robust at 17, 3%, Amit our ongoing efforts to enhance investment in R&D as well as to extend our direct sales and servicing network.
Our expanding.
Operating expenses increased by 238, 6% year over year, and 27, 5% quarter over quarter.
Despite the deliberate increase on the expense side, we continued with a disciplined cash flow management stretch our free cash free cash flow remained positive at 5.
$170.2 million RMB.
We also raised over U S dollar.
840 million in net proceeds through our successful convertible senior notes offering in April.
<unk>, our capital base for future growth.
We increased our R&D investment in leading technologies prepared for new model launches and the gear up for further increase in demand.
We view, our direct sales and servicing network, an integral component of our close loop system that allows us to.
Yeah.
E theoretically improve product features and add new functions for our users by accelerating the expansion of our direct sales and servicing network we remain.
Committed to proactively serving our users and anticipating future demand for our pipeline vehicles.
As of April 32021, we had 73 retail stores covering 53 cities and the 143 servicing centers and the Li auto authorized the body and the paint shops operating in 100 and the <unk>.
We are on track to reach our year end target of 200 retail stores. We have also started reconfiguring our.
State of the art.
Changzhou factory for our new model pipeline, especially the full sized premium SUV based on the next generation <unk> platform to be launched in 2022.
As a user driven automotive and technology and price, we deeply value the tremendous trust and support to our users.
B still on us during the 19 international automotive industry exhibition in April a large team of Li want owners came to our exhibition to volunteer as brand ambassadors sharing their experience with the vehicle, they're passionate void and debt.
Acknowledgment of value.
1 brings to their families everyday life 1 of the elite on there for 11 months set Li.
<unk> is not only a cadre, but also our spiritual patent on.
It is an integral part of our lives now.
We are so grateful to see our mission and vision being recognized and echoed by our users.
As of April 30, our accumulative Li 1 deliveries.
E C D. The 50.
Thousand units, we took only 17 months to reach this milestone from the first delivery of Li 1 in December 2019, creating the parties to record among all new energy vehicle companies.
Our users have driven over 500 million kilometers with more than 65 million kilo kilometres assisted by our Adas solution at the daily active rate of over 30% in term. So 50 over 800 million 31.
Things were triggered.
Preventing more than 10000 potential serious accidents.
Well he was extend did rent powertrain and Adas solutions that are a standard contribution enable more free and safe travel experience for our users.
His intelligence cockpit, featuring a comprehensive infotainment system is another highlight of the vehicle.
We pioneered the force screen interactive in car system that has been widely praised by our users for the smart space of mobility.
The house, the users and each passenger offering private usage and voice based interactive connections on <unk>.
Reach users spend more than 40 minutes in our Li 1 every day well the car itself is parked.
Our in car.
Kurt.
Oh [laughter].
Carey Carey you key function.
Which was first released before the Chinese new year holiday provide.
Provided on demand <unk> for more than 30000 times during the Chinese new year holiday and the more than 80000 times during the May day holiday affirming our long standing dream of creating.
Extension of homes, that's bring happiness to the entire family. Li 1 is a proven success catering to the needs of families in China and has effectively addressed the current challenge to be vs. In terms of energy replenishment. The success of Li 1 demonstrates.
Our extraordinary productive zone.
Defining capability, which lay a solid foundation for the development of our future models.
We will continue to develop a new EV models with best in class performance in parallel we are developing our next generation extended red platform and high power charging BV platforms, both of which will be deployed with our proprietary.
Oratory autonomous driving technologies.
We plan to introduce a next generation.
E R E D platform in our new vehicles planned for 2022 and 2023 with next generation <unk> technology, we aimed to support longer range higher energy efficiency and better.
H performance of our <unk>. We are also investing in the research and the development of next generation electric vehicle technologies, including high seaweed battery high voltage platform and the other ultra fast charging technologies leveraging.
<unk> technologies, we are developing 2 platforms whale and shock for our future H Pcbs, starting from 'twenty to 'twenty 3 we plan to launch at least 2 new <unk> B V models each year.
Our development progress in these technologies has been on track and we plan to unveil our milestone achievement in the 'twenty 'twenty 2 Beijing Auto show.
We are very excited to officially released released our 2021 Li 1 yesterday.
The new Li 1 features comprehensive upgrades in areas such as the E. R. EV powertrain Adas solution intelligent cockpit interior design for right comfort and exterior design for style offering user premium features in a standard.
Configuration at the flat retail price of RMB 338000.
Deliveries of the new Li 1 will.
Commenced on June 1st 2021.
We believe the new 2021, Li 1 is an outstanding product with advanced technologies and the very competitive feature for our target customer group. It has.
Alleviated the extended range electric technology to a brand new level. It features and all new 3 in 1 rare drive electric motor offering high energy efficiency and.
Its energy efficiency in few model is only 6.05 liter per 100 kilometers based on the ADC standard operational condition.
Best in class among large sized full will drive Suvs with software and hardware optimization and is in integrated powertrain system.
The new Li 1 achieved an ADC range after 1080 kilometers and the.
W. W. T. W. L. T C rent of 890 kilometers we are very proud of our R&D teams are successful effort to improve the rent extended technology.
In keeping with the company's core belief that safety should be standard not optional the new 'twenty 'twenty 1 Li 1 offers a full stack self developed.
In a standard configuration, all existing level, 2 adas function functionalities have been redesigned and optimize the in house by our own R&D team. We also launched the Oh a system, making the company the firm.
Oh, yes, 2 increments full stack self developed.
On the OE based on domestic application processors.
'twenty 'twenty 1 Li 1 is also the first model in the world with on the OE capability as a standard configuration.
The 1 has being well love B.
Be well loved by family users for is spacious succeed interior layout, the new Li was enhanced.
Its excellence in space comfort and intelligence by equipping the front and the secondary raw seats with lumbar mess massage function.
The net room for this third rule is increased by 41 millimeter Wow is shrunk can still hold the 28 inch suitcase or.
Large size stroller.
It also features a smarter income voice assistant resounding cheer.
Providing a higher caliber and overall more spacious more comfortable and more intelligence space for family.
We believe that 2021 newly won is going to be a smart electric vehicle, bringing happiness to all families. It serves with our pop powerful extended range electric system that enables more peasants road trips aid us in our.
Standard configuration to ensure safety safe drive travel for everyone and the specious smart interior layout that enhance comfort for every occupants in the car. We believe the new Li 1 will help us getting much higher market share.
Its predecessor, we have seen a very strong order intake just in the past 24 hours taking into consideration.
Taking into the consideration of the production ramp and the ongoing global shortage of semiconductor, we expect our delivery for second quarter to be between.
14.
<unk> thousand 500, and the 15500 with that I would like to turn it over to our CTO Kai for a closer view of our technology advancement and the new Li 1 since.
Since I joined as CEO in September last year, we have made numerous breakthrough in autonomous driving as well as intelligence cockpit technologies.
Please go ahead.
Yes.
Thank you Kevin.
Hello, everyone.
Let me provide more details about our 'twenty 'twenty 1 V ones on assumptions on.
On the technical updates.
As Kevin mentioned.
<unk> level, 2 plus almost functionalities.
South do you want.
<unk> R&D team.
Besides in house consumption algorithms and level 2 on us functionalities.
Also launched an oasis.
Very proud of our team.
Effort and their dedication.
We haven't reached in such a short time.
On the 'twenty to 'twenty, 1 Li 1.
2 horizon.
Externally.
Exploration processors more automated driving.
2% centers dedicated to presenting driving data not only at a high efficiency goes.
Coastal redundancy backup.
Thank you.
The vehicle is and first production model in the world with.
Mega pixel, Frank view camera, providing full K destination.
Compared with the mainstream today.
Megapixel camera.
Visual range of 200 meters.
Rider locker room detection range and a stronger construction ability on Ram and locks will occur with the nation.
Sure.
Polymer more clarity more widely.
It is therefore safer.
Yeah. The 2021, Li 1 is fine.
Fifth generation millimeter wave readers.
Josh I'd have a wider detection range better resolution.
<unk> accuracy and improved range of recognition.
So on detection range of 110 meters and 150 degree field of view.
Following 360 degree over on coverage.
And lifestyles.
Just on simple.
The coty by reach sensors, and we tend on the capable hardware.
Along with full stack Niehaus software.
2021, Li 1 kind of recognize profit.
<unk>.
Traffic.
Yeah.
Growth curves and other complicated objects.
Suppose a more efficient and low feature.
On the off Graham on <unk>.
Arctic adaptive exploration and lane change on certain limited access to growth at all sorts of apollo's fully automated parking assist feature.
Don.
Okay.
Reaching submission based on automatic parking function.
We are confident.
2021, Li 1 believers.
Paper easier and more comfortable.
Yes.
Yes.
Assembly pie, our deeply held core value safety to be standard on.
Optional feature.
As we roll out high definition maps in cooperation with auto Nabil.
I know he will be made available to 2021, 1 users through otas update starting in the third quarter of this year.
We'll gradually.
I'll cover more roles in areas in China.
In addition to honest functions these costs.
The 2021 Li 1 we've also per watt users with more intelligence space equally including smarter in car voice interaction system.
Looking ahead, we will continue executing that.
Apparel low do you want them.
<unk> and <unk>.
Further strengthening of R&D team and the day.
Well be cocky age technologies.
Now.
I will turn this call over to our CFO, Mr. Li to review our financial performance in the <unk>.
First quarter.
Please go ahead.
Hello, everyone I will knock on or some of our financial results for the first quarter of 2021.
To be mindful of the lines of this call.
I will address our financial highlights here and encourage you to refer to our earnings press release, which is posted on <unk> for additional details.
Total revenue for the first quarter of.
2021 were RMB, 3.5 billion or U S dollar volume.
<unk> hundred 45.7 minutes.
Representing an increase of 300.
19, 8% from RMB 841, 7 million in the first quarter of <unk>.
2020.
This included RMB, 3.4 billion or U S dollar.
<unk> hundred $28.7 million of vehicle sales in the first quarter of 2021.
Representing an increase of 311, 8% from the first quarter of 2020.
The increase year on vehicle sales was mainly attributable to the increase.
Vehicle deliveries with the continuous expansion of our sales network.
On a quarter or cause our visits total revenue.
Revenue was on the vehicle sales decreased.
13, 8% and 14.
6% respectively.
Primarily due to the seasonal affect us relative to the Chinese new year holiday.
As well as the localized.
COVID-19 outbreak in northern China in February.
2021.
Our revenue from <unk>.
Other sales and services were RMB, 111, 5 million or U S. Dollar 17 meeting in the first call there are about 2021.
Comparing with RMB.
10.
6 meeting in the first quarter of 2020.
The RMB $89.2 million in the fourth quarter of 2020.
The increase in revenue from other sales on the services.
Over the first and fourth quarters of 2020 was mainly attributable to the increased sales of charging Pope charging stop accessories on the services in line with our higher accumulated vehicle sales.
Cost of sales in the first quarter.
2021 was RMB 2 pardon.
They've been in our U S. Dollar 451, 6 million, representing an increase of 277, 6% year over year on a decrease of <unk>.
13, 5%.
Auto work harder vehicle margin in the first quarter of 2021 work.
15, 9% comparison base.
8.
Corporate debt in the same quarter of 2020.
<unk> and <unk>.
$17.1 in the fourth quarter of 2020, the increase in vehicle margin over the first quarter of 2020 was primarily attributable to lower material costs on the lower unit manufacturing overhead cost derived from the increased production volume.
The slightly decrease in vehicle margin from the first quarter of 2020 from the first quarter of 2000.
Funding was primarily due to.
On the lower average.
Setting price cost by promotional activity it launched in the first quarter of 2.
2021.
Partially offset by the decreased on material costs.
Our gross margin in the first quarter 2021 was 17, 3% compared to 8 preferred in the first quarter 2020, and 17, 5%.
In the first quarter of 2020, which was mainly attributable to the change on.
Of vehicle margin.
Operating expenses in the first quarter 2021 were RMB 1 point.
Zero 2 billing all U S dollar over 100.
<unk> fixed part fault, meaning representing an increase of 200.
8.
6% year over year on an increase of 20.
27.
5%.
Quarter over quarter.
Research and development expenses in the first quarter of.
2021 were RMB.
514.5.
Our U S dollar.
<unk> 8.
8.5 million, representing an increase of 171, 2% in the first quarter.
2020 on that.
Increase off.
37, 5% in the fourth quarter of 2020.
Excluding share based compensation expenses non-GAAP research and development expenses were RMB 397 pardon.
Milling are U S dollar safety pardon me.
Meeting, representing an increase of 109.8.
8% year over year on increased off.
7.8% cultural culture.
The increase in research on.
Development expenses over the first and fourth quarter of 2020.
Was primarily attributable to increased share based compensation expenses derived from incremental share.
Cronkite with higher fair value or in January.
2021, well know share based compensation expenses were recognized.
I'll start off with.
With service conditions on the performance condition relative to our IPO in the first quarter of 2020.
Second.
The increase on.
Randy.
Okay.
The company's net vehicle models.
<unk> increased headcount.
Citing general and administrative expenses in the first quarter of 2021, while RMB 590.
On 9.9 million or U S dollar <unk> 7.8 million.
Representing the increase of 352% in the first quarter of 2020.
On the increase of 18, 8% in the fourth quarter of 2020.
Excluding share based compensation expenses non.
Non-GAAP, selling general and administrative expenses or.
RMB 449.8 million.
U S dollar 58.
Over meeting representing an increase of 200.
98, 8% year over year on the increase of 5 point.
4% cultural culture.
Increased.
Selling general and administrative expenses over the first and fourth quarter of 2020 was primarily driven by increased marketing and promotion activities.
Increased high Com on rental expenses with the expansion of the company.
And increased share based compensation expenses.
Losses from operations in the first quarter of 2020, 'twenty..1 was RMB 407, 7 million or U S. Dollar a fixed day, 2.2 million representing.
Increased 74, 1% in the first quarter of 2020 on the increase of 416, 7% in the fourth quarter of 2000.
2020.
Excluding share based compensation expenses.
Non-GAAP loss from operations was RMB 220 ballpark 8 meeting our U S dollar.
Surfing.
34.3 meeting representing a decrease of 4.
4% year over year on the increase of.
$216, 2% quarter over quarter.
Net loss was.
RMB 300.
<unk> meeting our U S. Dollar 54, 9 meaning in the first quarter of 2020, while comparing with RMB 70.
7.1 million net loss in the first quarter of 2020 on the RMB 107, 5 million net income in the fourth quarter.
2020.
Non-GAAP net loss was RMB $177 million or <unk>.
<unk> dollars $27 million in the first quarter of 2021 comparative with RMB 253.
<unk> net loss in the first quarter.
2020 on RMB 100.
<unk> 15, 4 meaning net income in the fourth quarter of 2020.
Turning to our balance sheet.
On the cash flow on.
Our cash on cash equivalents.
Restricted cash type deposits.
And short term investments total.
Total RMB.
Third day pardon.
3 stakes bidding are U S dollar.
Fault pardon.
Sorry bidding.
At March 31st 2020, what operating cash flow in the first quarter of 2021 was on.
RMB.
926, 3 million or U S dollar 100.
41 fall, meaning free.
Free cash flow.
With RMB 572 meeting our U S dollar.
87 meeting in the first quarter of 2000.
'twenty 1.
Our business outlook for the second quarter of 2021, the company is tax deliveries to be between.
<unk> thousand 500.
On <unk>.
<unk> thousand 500 vehicles.
The increase of.
119 partner.
6% to 100.
34, 7% from the second quarter of 2020. The company also expects second quarter total revenues to be between RMB 399 billing and.
2 points.
Pardon tools 7 bidding.
All between U S dollar.
190.
Zero meeting and.
641, 7 million, representing an increase of.
Sure.
104 point.
<unk> preferred to 119% from the second quarter of <unk>.
2020, I will now turn the call.
Over the operator to.
On the et cetera.
Sure.
Thank you.
To ask a question you need the best 1 on your telephone to withdraw.
Your question. Please press the pound the husky.
Standby, while we compile.
Any last day.
Once again, please press star 1 for your questions.
All participants on today's call.
Yourself to 2 questions and if you have.
Additional questions.
Enter the queue.
So you're going to ask the question in Chinese please follow the English channel.
Once again it is Taiwan for your question.
My first question.
It comes from the line.
Yeah.
Stanley. Your line is open. Please go ahead.
Okay.
Hi management team. Thanks for taking my question so.
2 questions.
The first question could you please update your effective capacity at the moment.
Without pick up new Li 1 model, so first of all on greater impact.
On the component bottleneck for example, like chip and chip short answer on the battery tightness or any other key components.
That's the case when do we expect the output of nearly 1.
Back to a more normal level.
My second question is.
How is the gross margin of 91 compared to the previous.
Previous version.
With a 10000 price hike the Morgan cannot offset the cost increase on the feature upgrade and raw material inflation and if it had been second quarter gross margin.
Quite a single haul so shanti <unk> charges.
No change on charter I think the 10 day okay. Thanks.
Thanks J P.
<unk> seen the switching.
So it's difficult at all.
The other piece of it.
The whole thing.
C&I Li 1 that tends to go away because Samsung is shaping.
The win T cell lines that are so low emissions quite mature machine.
Ammonia zone.
Sure. So the 2 questions hi, guys.
It would be gel.
It seemed license.
Youll take you.
<unk> chocolate he said <unk> was certainly the Netherlands at Mccann DRG.
A multi day dose.
Thank you Tim This is Kevin I'll answer the first question on.
Of course as we all know we are the <unk>.
Low industry is suffering from the shortage of.
Semiconductor.
Right now in terms of our capacity, our our Changzhou factory with 2 shifts already.
On a ready we can do on more than 500 per day, but of course due to the ramp of the newly won and also the.
Some of the timing issue of the chips.
Well the volume cannot achieve that high we.
Ex that.
Starting from September we expect our.
Monthly production will be more than 10000.
And I will ask.
Johnny to answer the call.
Margin.
The gross margin in the long run.
Sure.
The former ESI remain at the same level.
Currently.
With some additional hardware.
As you May know.
Our parts and also some savings from.
From traditional path like the Ria model.
So net net.
For the second quarter I think it will be on match of our April may.
Our promotional on the.
The current new currently.
And also with 1 month.
Neil you are with.
As oven.
RMB.
Yes.
Sales price.
So it will be on mix.
Got it. Thank you thanks for the answers.
Thank you. Our next question is from the line of Goldman.
Goldman Sachs line is open. Please go ahead.
Yes. Thanks, Thanks management for the opportunity I have 2 questions first about your store number so.
So you reported 52 stores by the end of 2020, and then you reported 73 stores by April and then you guided to 100 stores by year end. So what that means is that you.
You have added 21 stores in the first 4 months of the year, but you plan to add 130 stores.
In the next 8 months is that the right way to look at it and also a 130 stores in 8 months is not something that we've seen before so is there any execution risk with regard to that.
Second it's about pricing now you've raised prices in the face lips.
Obviously very different from some of your competitors or other EV manufacturers, who have lowered prices over time. So does that mean that Lee auto plants to move further into the premium segment and the forward product cycles.
Well my favorite shot to Chico's and cornerstone.
Particular juncture at shot show.
The in theater show Hogan several charts out these opinions.
You just said the idea the andina tico according to luxury Amsterdam bites out here that day.
EBITDA to hold back a year on child that Amy on the shutdown seizures or you don't disagree with Adobe shock net Chico.
<unk> seizures have you not seen and I know you'll note from a function. The LCR that you referred to trigger Chaco, particularly <unk> <unk> powder to go Chalco, Chicago, sugarcane, Chico Dubai, Shanghai jumped out of the soldiers are beyond that should we view it at each zone. That's 1 thing make on cultivation.
Okay. Thank.
Thank you Sanjay.
Our answer your question so as of today right now we have 75 stores and the in the.
First quarter because of the impact on the Spring Festival and.
Some areas have COVID-19 outbreaks the pace of opening new stores.
What's the best low now expect expectation. However, we have been making very good progress in our site selection.
In fact, right now we have.
We have another.
We have another.
<unk> source in our pipeline.
Actually under construction so therefore.
<unk>.
For the whole year, the 200 retail store target remains unchanged.
We are we are just a little bit behind the debt. We think we will catch up in the second half.
And for the for the pricing strategy.
The methodology we took.
Is 2.
To price our product based on volume.
Value to the customer.
And Lee why it's a very very competitive and delivered a lot of value and with more feature functions, we added into the new 1.
<unk>.
Just 10000 to RMB.
Higher price is very fair and the newly won will be even more competitive than his predecessor.
Yes, thanks for the comments.
Thank you.
Next question is from the line.
Nielsen Li.
On Securities 90 is open. Please go ahead.
Hi, Good evening management team also on 2 questions. My first question.
Regarding new supplier.
Which is the horizon so.
Non-GAAP.
1 thing you should be able to give you on patients.
Okay.
Could you give us more details.
Our strategy to choose.
Jason.
Thanks Nathan.
On the longer term we continue.
Jason for you also.
Some other program.
Great.
My first question.
Second question is.
Judy you reported.
Detailed roadmap.
I'm describing currently you are really key.
The nation.
Your new.
8 system to be launched this year.
Could you give us some.
Pipeline.
On the 22 or what kind of growth.
New sliding.
Function you provided on the next 2 years.
I don't know if it would be only on for Lindsay.
Glenn I shouldn't do but there's something going on some awesome kitchen on.
On mobile.
Or is it something else.
Sure.
Thank you.
Your line.
On a go to call me on.
Okay.
On the median the holding them up.
Jonathan.
Thank you Nick on them.
Thank you John.
Thank you Mr. Li.
Do you want to take these 2 questions.
Thank you yes.
Yes.
Okay. Thank you.
So basically.
We have 5 criteria.
The SLC selection.
So basically is asking explain why we choose.
On a journey free from horizontal growth thoughts as.
Why we're so system supplier.
So the first 1 is the performance of course, when we define the future we want to achieve.
On the performance performance of the chips that must meet the requirement.
And.
From that perspective.
Sure.
Journey III is enough for the target to target on level 2 plus functions.
Please.
<unk> features.
And then the second criteria is the openness and flexibility.
For example, our previous generation, we use mobilized at least not very flexible.
<unk> do you want them.
So from that perspective.
Both <unk> and 'twenty 3.
More open than we.
Can use our own aqua.
Our income there.
So the third area is about the support we need a very solid support from our supplier. So that we can keep on where high speed, let's say do you want them in.
And also to them.
Faisal on each region.
So journey 3 is a problem.
Origin Robotics headquarters also in Beijing.
So from that perspective, you can provide the best service or support.
Locally.
On the reaction.
This interaction between 2 comments on market much more convenient.
The force criteria is regarding peak time.
So the chipset.
On every year it will be new chips that are available from the market.
So from the timeline, we and Sanofi our 2021 Li 1.
So on.
Journey 3 bedroom.
Bedroom.
No.
But not the least.
Quite here is the price.
So the price so journey 3 can offer capable performance on <unk>.
Same time to price is affordable.
So basically.
<unk>.
These 5 criteria.
We will come out.
On data that journey 3 here.
Regarding the roadmap.
Our economy.
No.
We already mentioned in the previous.
<unk>.
<unk> description.
We will.
Right.
By the way long term work on it.
In house enquiries into some home.
And then what's going on.
On his functions with our own perception.
<unk>.
Prediction plan execution software.
And then the fourth quarter revenue per wide on the way because we do some time for that day adaptation of HD map covering more and more.
Those areas in China.
No.
And then the next year.
<unk> introduced.
And the next generation platform.
On based on small pool on that 1.
We will provide much more processing power.
On <unk>.
Greta.
I suppose more features.
So on hardware wise, we can opt to on level pool on sulfur wise on cost we need to stand on staff.
Released more functional.
That's the plan.
In general.
Thank you.
Thank you.
Thank you.
Next question is from the line of bin Wang.
Credit Suisse. Please go ahead.
Thank you for taking my question just 1 on go to low price.
Savi it's topical.
And the logistics business.
Can I just copied.
Total payments, but to actually reduce the price by on 1 on <unk>.
Can I actually tried to at that point to site is paint on the MP address the price on a sub Ral.
It's got on expansion of Alright, that's number 1 and number 2 actually on 1 company call.
Alright.
Nicole.
Switching to channel hunting, China actually the total.
Media, that's naturally I speaking bumping your on.
On a level 3 the prototyping non <unk> is the same product.
You 1 on 2021 version.
On this company swamping on supplier actually stayed on.
On his full stack in hospitality actually on.
What's the low it off to John in.
In this project.
2.1 finally as soon as shown on our consolidated.
Just wanted to on 2 point something like that Scott talked about channel transactional on Macondo.
So Jonathan I know you've been quite came on I'm going to touch on that you've been quite agile should pick up so we just want to kind of feel.
Our total net genpact when Jeff It sounds like you guys.
Pick up points on.
Uh huh.
Thank you Andrew Shlomo compound.
I'll touch on CN elements without a commensurate kind of auto Shlomo.
I'll make it up on on all of them.
So Jonathan on it.
Todd.
Homestead Nissan Honey.
Just a question on your soon on this year on food.
Josh because we Couldnt zone.
Okay.
So now just how would you put out that perhaps on what you could choose to say.
Okay. Thank you Amit.
I'll take the first question.
Actually the debt.
10000, RMB is not specifically or lay off for any.
New feature of the newly won such as.
As such as I explained that this is overall, our pricing strategy and Mr. Li dial already stated that.
The safety is standard not the optional therefore.
We make all of the new Adas solution, a standard function without any charge to our customers.
Second question, our ask <unk> to comment.
Yes, so regarding the ROE.
So would you try it on.
This is our.
Hardware tier 1.
Provider so the Royal Oak homes in client is mainly about.
Perfect validation.
And also on design condemnation together with our team and then the final production.
So.
As we already mentioned actually for our auto team, we have run about 300 people right now.
Marine both hardware and software design so.
On software wise, we would each place these planes is a full.
Bruce back in House software development, including the low level software like OIS and also the middle Ware.
Vacation sulfur and close loop H, 2 cloud environment completely <unk>.
The hardware part actually also design hardware park to ensure that we have to compete.
The transparency of the Dubai.
So that we can react.
Yes, something wrong as R&D side.
During the lifecycle of the product.
So we are also responsible for the complete hardware design simulation and design limitation.
Including both electronics and in Capex.
Bob Rowe.
Well on hosting clients they will participate as the operating side.
Because from an efficiency point of view, we would like to elaborate on.
The outsource.
Resources to ensure we keep that.
3 high level.
So overall David.
We'll do the.
Coordination.
Product validation and then for productive week.
On purpose, we don't want to talk because of that we have lowered the efficient overall efficiency and also desktop part actually tier 1.
Who would have looked better.
Efficiency compare was Oh, yes.
Thank you.
Thank you so much.
Thank you.
Next question is from the line of Hong Kong of UBS.
Is open please go ahead.
Yes, hi, Thanks for taking my question 2 questions.
First 1 is you have switched from the mobile IQ for 233, and you are going to switch to.
On video or in next year.
Do you see the data formats of the switch systems you are free to use the data connected in the previous system and now and for the development of <unk>.
Function or is it.
It seems to me.
Transition.
Question is regarding <unk>.
<unk> plan for 'twenty on some history you mentioned, so we'll end the shock platform how to think.
After seeing somehow auto show with dominant in deal.
On the Remodels.
This change or the rate of your timeline your roadmap with Q.
The process for the pits.
Few of the rising competition in the market. Thank you.
Political wins and I saw the answer.
Cool on mobile IQ polo took on.
Oh, okay.
In general terms from Sangamo.
Cool.
Even with auto took over in total Shuja, though you've got total shipments what Tom's opinion on that you could close some of the auto book and ship on some of your.
So for non go towards the April 1 day, you can see.
<unk> 4 <unk> co stimulatory because.
They are both on the hydro comes on.
Sometimes hold on you on it.
But beyond.
On the whole Schindler switching it up we can donate Joshua.
So on them until you get a lot from gains on tuition, but you've got quite frothy, but Q1 simple.
Conditions, though you'll be on prices on our signed in price.
So good senior house, Hungary on cooking tissue.
Okay, maybe I take.
The first question.
Regarding differ.
Different platforms.
So actually that's the reason why we would like to do the housekeeping.
Housekeeping.
When you have control that algorithm development.
On.
There are of course.
<unk> Sims.
Basically you utilize the same coming from behind.
So when you're developing something.
Then you can really based on different hardware on me.
Kind of a record software.
You can support different containers.
Yes.
At the high end.
From a competitive point of view.
The year on really lots of common area you can reuse.
Also on top of debt.
So you can you can see on the current environment, we do have each part and also the cloud part Mcclard part we utilized.
On a computing power for training.
So bose.
Oh journey II platform.
Our <unk> platform.
The same on BDO solution behind or training.
See right away you are already on.
Entre for common stock.
Sure.
Ben.
We don't have any problem of course, if you support more than you need.
More effort.
On that patient between platforms.
And we will nor that of course, yes.
Smarts and actually as we've mentioned that's the reason why we have a very strict criteria.
On SBC selection.
Thank you.
Yeah. Paul This is Kevin let me take the second question.
Of course, we are see a lot of the new car models launched in the Shanghai Auto show. However, as we are.
Reiterated many times that we think.
A charging solution is.
The key competitive advantage.
We need to gain to <unk>.
Compete in the BV.
Anna.
Therefore.
Therefore, we will we will stay on.
On our track to 2.
To develop our.
Shock in the wheel platforms with ultra fast charging capability, we think that thats the key to winning the future competition. Yeah. So therefore, we will not.
Alterra our plan, yes, we lost day.
Stay very focused on.
Of course with the more resources, we of course want to.
Salary to the R&D process for sure, but right now the outlook is steel.
In 2023.
Thank you very much.
Thank you.
As you are reaching the end of our conference call I'd like to turn the call back over to the company for closing remarks.
Please go ahead.
Thank you once again for joining with that state. If you have further questions. Please feel free to contact me out us Investor Relations team.
That's also good day, thank you and have a good 1.
Okay.
[music].