Q3 2021 NIO Inc Earnings Call

Yeah.

Hello, Ladies and gentlemen, thank you for sitting back for Neil incorporated third quarter 2021 earnings conference call. At this time all participants are in listen only mode. Today's conference call is being recorded I would now.

I'll turn the call over to your host Mr. You pay from capital markets and Investor Relations. Please go ahead.

Okay.

Okay.

Good morning, and good evening, everyone welcome to use the third quarter 'twenty or 'twenty, One earnings conference call. The company's financial and operating results were published in the press released earlier today and are posted on the company's IR website.

On today's call we have Mr. William Li founder Chairman of the book and Chief Executive Officer, Mr. Steven phone, Chief Financial Officer, and Mr Cemetery, Senior Vice President of Finance.

Before we continue please be kindly reminded that today's discussion will contain forward looking statements made under the safe Harbor provisions of the U S. Private Securities Litigation Reform Act of 119 95.

We're looking statements involve inherent risks and uncertainties as such the company's actual results may be materially different from the views expressed today.

Further information regarding risks and uncertainties is included in certain filings of the company with the U S Securities and Exchange Commission.

Company does not assume any obligation to update any forward looking statement, except as required under applicable law.

Please also note that as news earnings press release, and this conference call include discussions of unaudited GAAP financial information as well as unaudited non-GAAP financial measures. Please refer to news our press release, which contains a reconciliation of the unaudited non-GAAP measures to.

Comparable GAAP measures with that I will now turn the call over to oversee OOO Mr. William Li William Please go ahead.

Please go.

Always have got where you like Alibaba.

Do you think it would be about deal hopefully.

Hello, everyone. Thank you for joining news of third quarter 2021 earnings call.

Our Union Defense you do what do you like Joe food, but she can go.

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B zone.

You bet.

In the third quarter of 2021 when you can lever to 24000 to 439, yes, eight yes, it's six and then you fix a new quarterly record representing solid growth of a 100 point to 2% year over year home Joanna it's about the CBS.

Wed be able to use one platinum her weight you can shoot them, sometimes in Belarus or to be well known to you about the junk by way like what they shouldn't use without G. D. G E jet engines as soon as you guys. All totally Michelle maybe had some don't put down weight something nobody else would shoot out.

Sachin what made you do wafer that didn't come from that.

Okay.

All production planning for on September 28, two October 15th to prepare for further capacity expansion and new products introduction, including 87, we implemented upgrades and the restructuring of the manufacturing lines and that's what I'll say Jayson you know advanced manufacturing.

For incentive affected by the upgrades and the restructuring we delivered three crowd than to 667 vehicles in October the plant has resumed to normal production since late October.

So Joe Yeah.

And on cheaper jumbo attainment pushout Ultimates in Italy, although patent dispute you them.

So it's a long path of getting the word strategy you didn't quite.

Yeah, Let me go to your own calculation, but putting them getting once you put.

We license and Didnt done pushes them, though.

Yeah.

And then on leases in golf.

Joe We also when you.

Gordon Lee sang.

Yeah that is jumping out.

Some thought yeah, one sanjay.

Oh, yeah, well, we can't rule that out.

According to the data published by China passenger car Association the penetration rate of our battery electric vehicles. Among passenger vehicles reached 17, 5% in September as the automotive industry is accelerating its transformation towards a smart taxation and elect.

Vacation more and more users are now choosing smart E vs over ice's.

The order momentum continues continues to be strong and all of our new orders have reached a new all time high in October currently all of our daily very volume is mining constrained by supply chain volatility we expected a total delivery in the fourth quarter of 2021 to be between <unk>.

23500 to 25000 to 500 vehicles.

Sam I'll leave you found me a fungible commodity wave patterns.

So you use swung to open their social sold some commodity really adopt us against that.

In the third quarter the vehicle gross margin stood at 18 point of zero percent, while the overall gross margin reached a 20 point of 3% benefited from the sounds of a record trade credit.

Well, then the totally without constantly beam, forming the ECL Colombian gonzo.

Next I would like to share with you. Some recent operational highlights of the company. So we are <unk> sometime soon.

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In September the first batch of E T seven tooling trials.

Wrote off the production line, representing that they would try out and commissioning of the of our manufacturing process had been completed.

The teams are making final preparations for the mass production of 87. During this appropriation protests. We have also made it varies a product optimizations on E. T. Seven for example, the drag coefficient of 87 was improved they've ground zero point to 23, two they were appointed T O.

We're very confident about the final product competitiveness and the market performance of the 87, maybe by industry type items or some of the opinion and Youtube I'm quite soon pushing the copa wounds or until her Copa Richie Dominion and southern and because of the Louis you don't forget.

Well, I mean sounds like Virginia, and a new day, you're digesting junk endorsement I mean that sounds you can sheet.

Software and hardware development and they are also pressing ahead on schedule.

<unk> offers the other two new product new technology platform 2.0, I'm also moving forward smoothly and the deliberate to users is expected to start in the second half of next year, we will share more productive details and new day 2021, Joanna wasn't unpopular Chisholm silent.

Belgium, <unk> about being able to use similar way like them for pizza that Didnt meet congregate, just so club in Centralia Hussein.

Good day, and shampoo Jewish engine that look why don't you buy engine P. But then of course IMTT will items with Hyundai hook with local Daiichi Gela means until you didn't put dealings in them.

So I'm putting that wouldn't be.

Hello, Golden them they'll need to Thunder.

I'm not sure how to use them, if you can beat us but.

In September we launched at the 75 kilowatt hour standard range battery pack squeeze L. P N cen hybrid itself.

Which has further enhance the competitiveness of our newest a battery system empowered by the industry first F. P. N C M felt layouts and advanced software and hardware systems off of thermal management and as Sophie estimation.

It was a battery system team worked closely with all of our partner in overcoming the disadvantages of the of B cells in aspect of a low temperature performance and S. O C estimation.

On top of that.

75 kilowatt hour hybrid battery pack has also achieved higher energy density and the lower dry low a longer drives.

And the lower cost compared with the 70 kilowatt hour and so yet in.

Battery pack.

Pardon me.

By way of life Finian's without Judy the tandem to someone who had some in Houston as you guys. All what were your corporation's Hudson I'm getting I'm Super tiny deals, sometimes you did agenda, so going forward the entire Hudson cut.

So the answer to how cargo.

So there was really good he jiggled wounded junk cases, there'll be unblocked minions fund you do some sort of cotai.

In terms of our production capacity besides the upgrades and the restructuring of the manufacturing lines and JC, New advanced manufacturing Center. The second manufacturing site Antonio Park, and they'll say, it's also under construction after that kicked off on April 29, we compete.

That's the main structure of construction.

<unk> 26, and it was started the equipment installation and ends up with this month.

Third quarter off of 'twenty 'twenty Chi we will begin production officially.

Like William Glenn So trends are Ya Qin <unk> chip and boardroom insulating zone will continue their thoughts from going into until its done cleanly unfunded pipeline. They hook was a whole daiichi tied Sheila you should as well.

If I'm a defense equaled itself with Judas in golf gameplay tissue with Citadel adult who you do sometimes and there shouldn't be a longtime Soho chime in about Google and book.

On the supply side due to global COVID-19, pandemic extreme weather events and other factors.

Our supply chain remains a challenging all of our supply chain team R&D team and the partners have adopted a series of measures to support the record high quarterly delivery in the third quarter and will continue to secure the supply for the delivery in the fourth quarter and upcoming new product the.

So they'll go through on local them, yet well Michelle sensor electro mission.

Those will go away like when do you guys don't go your biosensor.

Homeaway tissue chop off of your part what are your life. When we shouldn't go away like when you're Gonna put long wale edible food without couldn't do a function.

<unk> two <unk>, so the Yucatan foods.

So some John Wheeler food donation.

Buffy job, sometimes we'll commission well mcglinchey, who touch on food when we can adjourn. So we are quite certain that you won't go through them.

With regards to the South end of service and network. We now have 32, new houses and 285, new spaces in 132 cities in China will continue to expand and optimize over new house and the new space coverage to effectively penetrate Inc.

Two more tier two and tier three cities as of now we have a 43, new service centers and the 181 authorized service centers in 141 cities, well well viewed more services centers to ensure high quality services to the rapidly growing user base.

So I wanted to add one little comment or maybe even jenson globally Boswell funding's done forgot it don't worry about it was the son got homes, one somewhat towboat somebody chooses so unfunded.

Well need in that triangulate your booth, who told us about Louis totaling about.

Because I'm thinking about what.

Would you be premier gone.

I'm going to now we have deployed to 608 battery swap stations in 153 cities in China and completed over four points to 74 million swaps. In addition, we have skewed over 460 hour charters stations and.

<unk> 3155 destination Chargers across China.

Charles will go through the 201 law funding to help us validate Toyota T a courtyard.

So the P S.

Well it really weird way that you can put a sensor.

As we speed up the deployment off the battery swapping and charging infrastructure.

<unk> experience and the value brought forward by battery swapping technology and to try to reenter service has made us the go to choice for more and more users.

<unk>, telling me it Julian Sciences, Norway without tuition costs Iranian girdler, Guangdong from H, one gun too well I mean, you've done can you didn't cut yes part of D. P itself, because we're talking to you.

Yes, Bob.

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Angela Kinsey Chief Hermes, you know go to yet so there are some dealers who makes you the golden Feng.

<unk> future Tabuchi first oil demand.

I'm just curious are they going to push and Philip P. A L S.

A lot of time in.

Her function some of your more soup kitchen, So young Congress, so Tom Deitrich total top three O cheap to put out there for you.

But on the onion, what mohit tissue, partly opinion change will still kind of Gucci.

Regarding the global market.

We opened our new housing, Norway on September 30, which has attracted to wider attention from both the public and the media on the same day, we started to deliver yes, eight and to provide services to all of our users in Norway.

Besides achieving euro uncapped five star safety rating, but yes. <unk> has also received has also received rave reviews on its performance and the product experience from the local users and immediate the order intake has exceeded our expectations more importantly, among all the orders.

92% of the users have chosen Fox news of product services and innovative business model not only have been well received in China, but also presents unique value and strength in the local market in 2022, we will further step up over efforts in entering smoke glow.

A bull market.

So the way that I can see.

Go down quite quickly.

Well I can go to some of the children will add further color on thoughts on CBS.

Way light weight <unk> Cushing, Leon course, I'm going to run the entire pulpwood you didnt quite see them a lot of Standalone, cordell, who values or some kind of going into your path.

So where do you stand around codelco lunch in New York.

Yeah, Yeah, shampoo being down slightly as the positive you saw don't using Yahoo, and high renewal date toy equate to me if that's what you didn't know what they have told me that <unk> got.

Students and she got her.

Nobody like you thought that Susan to bid up near the Ali how are you.

Users have always been the foundation of Neil.

First they find the user community brings equator fatality to new and thrive to Neal to become better in October new and the new users' Trust joined hands with Samsung Ecology Protection Foundation to build a growing ecosystem in the Samsung and National Park.

With much anticipation, we have announced that the new <unk> 2021 will be held in Fuzhou in December 18th this year, new user advisors and the new they Organising Committee are working closely on the final preparation. Please stay tuned for the coming new they organize.

But together <unk> and all of our users.

[noise] Alibaba Union whaler.

And then to use them when did you do social flu, although down tusa metallic Hulu.

Well I don't sue should that ought to be able to.

Countries in the leap, where you want to tell us how the time before.

In 2021, you have to double down on investment in product development.

That's a day expansion charging into swapping network as well as the south and the service network. In 2022, we will continue to make decisive for investments to further enhance offer long term competitiveness and to provide better products and services to users.

Steven.

As always thank.

Thank you for your support with that I would now turn the call over to Stephen to provide you the financial details for the quarter. Steven. Please go ahead.

Yeah.

The long over our key financial results for the dark corner offices into one and to be mindful of the length of this call.

Encourage listeners to refer to our press release, which is posted online for additional details.

Our total revenues in the third quarter of war.

On a warm biamby, who want Bob to beating US Thomas representing an increase of 116, 6%.

The year, an increase of 16, 1% quarter over quarter.

Our total revenues are made of two parts.

Sales and other sales.

Sales and historic quarter 864 billion RMB.

Through opening new stores.

Calling for 8% of total revenues in this quarter.

Presented increase.

102, 4%.

An increase of nine 2% quarter over quarter.

The increase in vehicle sales.

A year and a quarter over quarter was meaning.

Attributed to the increase of <unk> <unk>.

Honestly all historical trends.

One 1 billion RMB.

181, $4 million, representing an increase of 358% year over year.

Increase.

179% quarter over quarter.

The increase in honesty, obviously year over year and quarter over quarter them, what's meaningful to the field of automotive regulatory credits and the batteries accurate studies as.

Other revenues, which increased in line with incremental vehicles feels massaro culture, often due to new work.

Cost of sales in historical terms.

The 10.81 been RMB.

One point to one being the strongest representing increase of 98, 3% year over year, and an increase of 13, 6% quarter over quarter.

The increase in cost of sales was in line with revenue growth, which was mainly driven by the increase of eco delivery volume.

Third quarter of 2021.

Gross profit.

Third quarter.

One nine am B M B.

09310, 0.31 being used on us.

Representing an increase of 200.

43% year over year, an increase of 26, 6% quarter over quarter.

Gross margin in historic quarter, 123% compared with 12, 9% as same quarter of 2020, and 18, 6% in second quarter of two to three new one.

Increased <unk>.

Gross margin year over year.

We need to win the increase of vehicle margin and sales.

Automotive luxury credits.

The increase of gross margin quarter over quarter them once many due to the sales of automotive regulatory credits.

More specifically.

Commodities start of quarter one.

81% compared with 45% in the same quarter of 2020 and 23% in second quarter of two years to a new one.

Increase of vehicle margin year over year.

That's meaningfully been bonded.

Our average selling price as we are.

Lower material costs.

Kris of eco margin quarter over quarter was mainly due to the increase of 19.

Subsidize rates for the copper Tvs, which resulted in a deduction of equal revenue an increase in tooling depreciation cost.

<unk> expenses in third quarter.

Once you want moms in your arm B O.

$185 2 million strong us, which was an increase of 101, 9% year over year an increase of.

35% quarter over quarter.

The increase of R&D expenses year over year and quarter over quarter.

Mainly attributed to increased personnel costs and research and development on cruise.

As well as incremental design and development costs for new products and technologies.

SG&A expenses in Star courtroom, we're 182 billion RMB.

0.2, 8 billion, representing an increase of.

91% year over year, an increase of 21, 8% quarter over quarter.

The increase in SG&A expenses year over year and quarter over quarter.

Primarily due to the increase.

Personal cost.

And so its functions.

Costs related to sales and service network expansion.

Loss from operations is star quarter Daryl.

Zero point line on bidding on the <unk>.

102 to $3 9 billion just on us because it.

Any increase.

Four 9% year over year, an increase of 29 nine.

9% quarter over quarter.

Share based compensation expenses.

Third quarter.

$265 6 million RMB.

$41 two meeting of stones.

Is there any increase.

439, 8% year over year increase.

Five 6% quarter over quarter.

The increase in share based compensation expenses year over year.

It was primarily attributed to additional options and restricted shares granted.

Net loss.

Third quarter was $835 3 million RMB one.

100, 296 meeting your stance.

A decrease of 22% year over year.

An increase of 42, 3% quarter over quarter.

Net loss attributable to news ordinary shareholders historical.

Was $2 86 billion RMB.

<unk>.

$143 7 million Donuts.

It's an increase of 147% year over year and increased <unk>.

333, 6% quarter over quarter.

The Star CT opportunity, one Neil repurchased one.

8% equity interest in new China.

From a minority strategic investments for total consideration of two point, Bobby the RMB and recorded amount of $2 <unk> billion RMB.

Accretion of redeemable noncontrolling interests.

Too bad.

Basic and diluted net loss per ads in the third quarter.

Both.

A two arm b.

Two <unk>.

Excluding share based compensation expenses and accretion of redeemable non controlling interests to redemption value.

Non-GAAP adjusted basic and diluted net loss per ads.

Both.

Three six <unk> or <unk>.

<unk> per <unk>.

Our back of cash and cash equivalents restricted cash and short term investment.

47 billion RMB.

<unk> been in the stores as.

As of September 32.

<unk> you want.

And now all of this outlook.

As William mentioned for the fourth quarter opt into 'twenty one.

Comp expect deliveries to be between 23000 525500 vehicles.

We're presenting a increase of approximately 34% to 46, 9% from the same quarter of 2020.

A decrease of approximately three 8% to a increase of approximately four 3% from third quarter opportunity to launch.

The company also expects the total revenues.

Fourth quarter 2021 to be between like <unk> <unk> and <unk>.

One 1 billion RMB, representing an increase of approximately 41, 2% to 52, 2% from the same quarter of 2020, and a decrease of approximately 4% to increase of approximately three 1% funds.

Third quarter of 2001.

This is all that reflect the companys current and the preliminary view on the presentation and market condition.

Which is subject to change.

Now this concludes our prepared remarks, I will now turn the call over to the operator to facilitate our Q&A session.

Yeah.

Thank you.

Ladies and gentlemen, we will now begin the question and answer session to ask a question press star one on your telephone so Ken Silver request press, the pound or hash tea for the benefit of all participants on today's call. Please limit yourself to two questions you can re enter the queue.

Your first question comes from Tim <unk> of Morgan Stanley. Please ask your question.

Hi, Steve and then Tim Thanks for taking my question.

Great to see new managed to navigate through the couple of and Crunch and production Hiccupping firsthand.

Just two quick questions from my side the first one.

We've seen restructuring and upgrades of the production life cos around sort of disruption.

Delivery and production this year.

Just wanted to confirm that if we've completed all the necessary restructuring.

For the three new models, the next year or should we expect any similar disruption some time next year.

My second question is about the harm to the details will be out yourselves.

Could you just share more information about our newest according ourselves.

Like I say it has been searching quite a lot.

Well I think a more significant revenue increase was attributable to the sales of our heavy credits and battery upgrade services.

We have deferred the brickhouse recording their contribution.

From those items.

And what could be the scale its contribution into fourth quarter. Because if you look at this current fourth quarter revenue guidance is saying is that just mainly reflected the contribution from the <unk>. So should we expect a contribution from hardware sales to rise credit.

Those sound like two questions. Thank you.

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No.

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And Ah Boy Paywall, Linda because sometimes it's a good cheer so tied to the merger will yield some bids.

With them about it they give yourself to the vehicle.

$101 million, assuming pushing utilization so it seems as though with a woman of shingles.

It was a good basin Targa untreated, Doug also sometimes it <unk>.

And hopefully with a palpable cord cutters.

Cernuous in general terms in the because sometimes the police side.

Yeah.

Tim. Thank you for your question I would answer the first one I understand he's going to answer the second one.

In the previous remarks that we have also talked about the progress of our offer our capacity expansion for the two clubs.

For the first of our plans just like you mentioned and starting from the end of September to the Middle of October we have done a restructuring and operates off the manufacturing lines and further expanded our production capacity and prepare for the new product introductions.

Following this upgrades that we probably will do some minor restructuring the antibody vacations off the production line, but we believe the following restructuring not going to happen in a very significant impact on the normal production numbers of vehicles.

Secondly, regarding the new products some of the new products will be manufactured in the second the plants and then this means that for the second plan to where well need some time to ramp up the production for the new products, but this is not going to affect the manufacturing of the existing product.

<unk>.

Hi, Tim regarding the second question.

Among the other revenue.

517 living <unk> was contributed by the <unk>.

Credit sales and after deduction of this or you'd be crazy sales.

Our total.

Gross gross margin.

Other revenue decreased from.

My minus five 6% to.

6%.

That's because the.

Driven by the expansion of our sales and service network in Q3 and as mentioned by William.

<unk> is the explanation.

The construction of our sales and service network.

Our structure.

Earlier and faster than our sales increase.

Especially in this year, so we're expecting that to the revenue of other our other service will increase.

<unk>.

Gross profit margin for this part will decrease or let's say the in Q4 yeah.

Okay.

Okay great.

Sorry, just a quick follow up some could you highlight some potential contribution from the sales of credit into fourth quarter.

Yeah, Yeah almost.

Majority of the <unk> credit sales was realized in Q3. So in Q4, we don't expect significant revenue from this part yeah.

Okay got it and then bring in Katrina.

Katrina you sound well maintained.

Do you even children in the finance within <unk> E Commerce, and the Israel, that's definitely a stunning explained.

The series a bit different from last year, we recognized that that was off of the regulatory credits much earlier compared with last year.

Thank you Willa.

Yeah.

Your next question comes from Nick <unk> of J P. Morgan. Please ask your question.

Thank you for taking my question isn't the quantity Morgan good morning, William and Steven.

Two simple questions unrelated to margin and the second question is related to E. T step into new exciting model first first of all on the margin from <unk>.

<unk> margin for the quarter was 18% slightly down from 20% to Q1.

I Wonder how should we think about the marching into <unk> or first half next year.

Into account of two factors the first fresh pricing pricing dynamic all competition.

Cheers.

Yes.

Raw material prices, especially on the battery front.

That's the first question.

You answered part of my question.

Could you tell us so second question on E T. Stefan is certainly.

19 product.

We expect the car to hit a showroom in the near term and the medium to longer term. After the production ramp up how should we think about the volume and the possibility of 87 relative to our current high end product, yes, yes.

Yes. His current monthly run rate of sales roughly about 1500, so how should we think about the profit margin and the volume for ETE standpoint.

Two simple questions. Thank you.

Okay, Hi, Nick.

Standing by your first question a question regarding the.

Gross profit margin.

And our 75 kilowatts.

Our battery.

Dr. <unk> will start to be delivered from November and gross profit margin.

Will be improved.

Improved.

A little bit compared with 70 kilowatts hour battery.

But the process of our key materials like aluminum copper and also chips.

Increase are increasing and there will be a there will be pressures for our cost control.

Of course controlling but we are confident to continuously improve our gross profit margin, which combined efforts either from the product design our supply chain optimization. So.

For Q4.

We're expecting the gross profit margin will keep stable and for next year, our target to achieve a 20% gross profit margin for wheat costs and along with our launch of <unk> 92 products.

From a long run perspective.

We are we try to achieve a higher profit margin.

About 25%, yeah, what would it cost.

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And she asks what's ambitions yet so.

It's.

Joe downtime the Yodlee can usually yield that unfortunate in that kind of opportunity without doing until either TG.

Yeah.

You mentioned.

Uh huh.

Yeah as Stanley mentioned basically for the antitumor productivity, we expect that we should the economy goes ended the volume ramp up as well as the optimization thing every aspect at least.

Shouldn't be able to a range of 25% of favorable gross margin in the long run.

At the beginning of course, we will need some time to ramp up the production.

The new products that based on the new technology platform to point, though according to other preliminary estimation internally with diseases. The vehicle gross margin of the new product is should be quite a.

Okay and before the E T. Seven delivery, we are going to start with the delivery of 87 in the first quarter of next year. So it means that we will have the cars in all of our new houses and the new spaces around the spring Festival time.

Then afterwards, we'll start at the deliveries to the users because so we haven't used in many advanced achieve set of sensors on the 87. So this has put a lot of pressure on the mass production of 87, but we believe that everything is on schedule.

Yeah.

Yeah.

If there is any.

Thank you your next bill.

Your next question comes from Mr. Lee.

Bank of America Securities. Please ask your question.

Thank you good morning, Willy Steve and understandably so.

My question is regarding.

Your supply chain. So right now we are hearing some of the auto company expect.

Chip shortage situation.

Not to be fully resolved by the middle of next year. So right now I want to hear your latest view regarding your chip supply situation and also the.

Large size battery pack supply situation and also right.

Right now for your consumers if they place the orders to you I think of the waiting time is more than two months already so how will you can Louis.

Consumers and also next year, we expect the EV purchase subsidy to be cut further.

In this case.

Consumer tastes are older before the year end.

They need to.

We need to deliver the car.

I think in the next year. So we'll continue to give than similar subsidy amount. So we absorbed the subsidy cut this is.

My question. Thank you.

So as you said I mean.

Well then.

So think of Syngenta and Monsanto.

Hello, gentlemen on the B C. It's I'll go the strategy to call you did though.

The 10 songs just on I saw that on the absolute cost out has a phase <unk> simpkins, a good time shifted to other wouldn't he goes well.

Well then 90, we choose one that your question Ken to enforceable wins.

So the deductibility of.

Louisiana.

You do that you switched out you've up I noticed that my life Seattle salaries.

Just had them. So you can use on the tenants and the bad.

Amongst them.

Kind of one time, the euro so colonialization pin ethylene into Atlanta, which we think.

<unk> hundred <unk> you women you didn't.

So you don't need to change all of them some sort of NGO soon Columbus Salt Lake City is you'll find that I know you did some did some bid in a showdown like alcohol women solution.

Canopy has a fit I'll start with it.

Good.

So what does it say that going into 17.

Women, where many European mainland.

Oh, sorry.

This is a quick one the knives out somehow.

No.

Hum.

Thank you mean for your question.

It's because it's very difficult to forecast what is going to happen and for the chip supply I think everyone knows about the SD micro's a situation in Louisiana and the situation basically is improving right now the good thing is over.

Teams have learned to adapt to the situation and the challenges head on and we have always being able to find a solution to all of those challenges.

On the other hand over volume compared to two the material Oems is still relatively small so the challenges that phosphate is smaller compared to the major Oems.

There were some time ago, you started to see you in a woman.

Daughter took a domain controller or does it <unk> well at domain controller.

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So since I've been here it seems on.

Your balance sheet, you're going to see some people claim that you.

Barrick also Saddam EMEA, so even when you were kind of getting the Leon Qi Hello, how are you.

Are you sort of tell me book.

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Yeah. It depends on top of the Cogs element Goodyear says she said, we don't give the Panama hub for tablets that many in the easier to go and go somewhat dependent.

Jim Solutions Hyattsville woman.

They don't bother you could just dig a vessel Joe put out on the vessel.

You can see as a nimble so that without clean that tell me as a pilot in Buda figure towards the choose element that does happen and somebody is already on the shelf so against that are coming in.

So on the Gulf, whether you could somehow about Massachusetts.

Yes.

Yeah.

I would like it she specifically you mentioned that because.

The many domain controllers ingleborough vehicles are actually about to buy over south seeing house. So if there is a shortage of certain chips in the domain controllers, though average seems to have that capability to quickly find the alternatives and do the rapids validation and faster.

Production of the vehicles and the chips and so because of what they say capabilities. So we have already resolved to.

Some chip shortages equation to happened to other vehicles.

For the 75 kilowatt hour battery pack, we announced as they say in September.

Gradually started that there'll be very off of that 75 per kilowatt hour battery pack in late November.

So I need some time to ramp up of the protection offered the new battery pack and we believe that the production is going to reach a reasonable level to the first quarter of next year and the battery is actually a very big constrained for US fatality. It's all very partner on the battery side they have invested a lot.

And help us than to support all of our vehicle production gradually threep to <unk>.

Battery is still the main constraint on the alcohol production and the supply of capacity.

Women chest.

Plus you add them together on the Sandoz had gone on far below illegal So Paulo young quoting Danny goods and so you should see from that balance sheet, Charlie and that's tough.

I'm in when they use it doesn't yield Simeon the only compete upon you in case, the Bogo junior on Windows.

I Wonder if you got them back.

And I kind of hot mill.

You had to pick up and by the way. It's also when you go to the lowest.

Sure that's a good enough or is it some time.

Yeah.

Yes, as I mentioned to you for you place the order right now you won't need to wait for some time to get the cars delivered.

But recently, we have also announced there are some policies regarding the subsidy reduction for the next year to keep all of our customers and also keep all of our customers. During this very long waiting time. For example, we will provide to the new credits or neo pointed to the users.

During this waiting time and do these kind of incentives to have how cats in the past for example, starting from 2018, we have already got those policies in place and we believe that this is not going to affect their users.

Regarding the waiting times now you pinpointed Jaime ill take I'm able to tie to give us a good sense for us.

They'll come and go to Chile, or Eagle Ford to the table.

Okay.

So you wanted the venture.

They were a national it's usually you'll K pool, what puts you at a high or some other subsidy and Michelle.

So that chunk of home elements I'm glad the Congress the kitchen initial job.

So I'm thrilled that put opinion, so that would be the goal.

Well put it on wafer or million Michel Bilerman, Xiaodong, who you could tell for the Chancellor yours muscles loosening itself.

Yeah.

Regarding the EV subsidy.

We believe this is not going to have been significantly impacted.

Because the average selling price is actually quite high regarding off of paradoxes. So even considering the subsidy is not going to be a very big amount comparing to the selling price of our vehicles.

I would say it anyway.

Got it.

Your next question comes from being way of Credit Suisse. Please ask a question.

Thank you for taking my question.

I've got two one on the first one is about.

A potential IPO because one of our key constraints that you're still sticking to only once they are nothing in the U S.

Also stock immediately calling out just because of the new user Trust Inc.

It's been a little bit why Neil user choice.

It could be one reason.

We then come back to Hong Kong IPO metrics and our first question a second thinking about the gross margin.

Actually you mentioned Walker reasons, because auto finance due to the margin decline. However, you can see that they may have been very good in short of supply.

I'm just curious why are we in a very tight supply will still increase the auto finance due to the falling margin theoretically should reduce the cutoff.

Auto finance VI.

And also <unk>.

South Park promenade actually remove all reduce the auto number.

A full quarter can I confirm this is the case.

This is the case.

Given the gross margin that we have.

Chris can the number of full quarter compared for example to me because you don't provide auto finance anymore and the average ASP also increased because although france seem to be Walter a reasonable ASP decline, but remember three quarter compared with second quarter. Thank you.

Ben This is Steven some detailed questions.

With regard to your first question I have two comments first the open minded.

We closely monitor the market and we'll make the right choice in the best interest of our shareholders.

And we actually.

Actually explored possibilities.

To get listed in Hong Kong market and we are in they are.

Doing what's necessary to evaluate and communicate.

Although as I know I'm being down one.

For the total fluid.

Solutions.

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They couldnt convention because part of it.

So you take a.

You got it sound other <expletive> moly to the other finance and CMO leader, particularly in Asia.

John I'll hand, it back out.

So in that kind of.

What company year Wilson without gets about four minutes I think.

Jim could take.

Well Linda Thompson.

Gordon Let me show you guys fashion and has adulthood.

B does handle political density at a time and I'll pass on that because they showed us they didn't get them.

Now women figured some months here I just don't think it wouldn't kill me she always just sort of a blend.

That said between Genova.

Auto finance.

We saw a <unk> <unk> impact would again.

<unk> no.

When would you chalk Louis sequel.

<unk> you too much I mean, Doug I know constant so that would put you at efficacy, but consider equal you could sort of draw schedule immediate time cheetah going into pure solutions.

So you should assume that you're seeing somewhat hunkered down at home in the Haynesville play.

So going in with daily hotel or many challenging them all lead to go.

With Hudson Valley, the EBIT either shipping.

Thanks, and thank keeping quick question.

So we are well make the decisions to best serve the interest of our offer.

Investors and well be open minded to different choices regarding the impact of the auto financing on the margin.

If they get to know about of our business operations are you in that.

Well need to take some measures such as balance of supply and product concentration. That's why I said the user demands.

For example, we said that 75 kilowatt hour battery pack, we announced that they sent battery pack in September and many users are more likely to wait four days to 7500 kilowatt hour battery pack, but just like I mentioned well it started the delivery of a battery pack in late.

November and even at that time, we'll look do need some time to ramp up the production of the battery pack to a reasonable level that is why we won't need to take some measures to balance or they said demand among the users and the product configuration and that's why I went to the battery supply and we are.

I encourage you to other users to choose at the 100 kilowatt hour battery pack in that case.

We believe that.

Is the right approach phosphates and not to to reduce the price of a product to offer discounted to offer users the vehicle price and so that is why we would like it to take care of those measures to balance with the demand on the supply, but this is not going to be the long term measures, we take and they say it's owning.

Actual 10 measure such as balances.

The demand situation.

One said the supply get to a reasonable level in the long run than we believe are the best of our gross margin out of the vehicle gross margin is going to improve.

Yeah.

Thank you Amit.

Thank you.

Yeah.

Your next question comes from Edison.

Bank. Please ask your question.

Hi, everyone and thank you for taking our questions first question is on the ETE seven Adas capabilities.

Could you maybe discuss what kind of features that we could expect at launch and if you can't reveal that right now would you expect to do any sort of demonstrations on the road.

Many months similar to what other competitors have done.

And then second question more longer term last year at Neo day, you kind of tee. They are solid state battery or hybrid solid state battery.

Coming to the vehicles I believe at the end of next year is there any update on this.

Is that still on track.

Any details you could provide there that'd be great. Thank you.

Hey, Jonathan.

Yeah.

So that's why.

It wasn't until maybe I was too slow Thai baht, again sort of a special type of country, where they got the answer.

A lot of bands like Oh.

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If you choose.

The tissues.

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Or downside coastal multi Joe fusco.

So I'm going to call them.

You can see <unk> overcome by growth and got a great home timber those elements that's a good trend.

We are continuing to energy issue.

I don't have data to Goldman Sachs Union, So shampoos and I'd.

I'd like to do it.

No government subsidies.

Take Cleveland took a fool if I'm gonna Suzanne humming.

What is your question.

<unk> has quickly.

Bulk of Paraguay Bo caused big are unchanged, including only seen coke hosting go find me in balance. So you can see how embedded type harmful.

On the go food.

Somebody has an edge or an employee could either choose what is it that more than a bandwidth to sell them I'm sure there's going to somebody that wants the ability to put them a demo.

The Gwen.

Well, then we'll know.

Oh I'm sorry.

But <unk> to clarify the question Joan elements added convenience will surely as Dominion mignonette sharpen yet I mean, there's 32 to take a two shooting Donegal.

And that kind of homeland undertook a geological basis.

Yeah.

Actually I believe a lot of people are working on the demo. So we don't actually one of the teams to focus their attention on the demo we were delighted to have the teams to be fully dedicated to the mass production.

Technology and offer a new product like getting to seven and regarding the seven T. We won't need some time to gradually release of those advanced features is to the users and we believe for all of those features and of course it will be based on all of our in house, the full stack of technology and <unk>.

Obviously I have also explained to that that the <unk> will be released it to the users based on the subscription like the ADSL service. So they set our innovative business model has offered us some flexibilities in terms of how should we provide in the winter that we provide all those services under.

<unk> achieved a users we will need to strike a balance between different factors, including the regulations of safety and reliability.

Then after we strike that perfect balance or find a sweet spot that we can start to provide those services to the users I believe right. Now there are hundreds of companies are working on those kind of a demo. So we don't want to.

We saw her energy that's like.

Regarding the 150 kilowatt hour battery pack Oh, we are now working together with other partners and everything basically on track previously we mentioned that that will start to the delivery of I think that battery pack in the fourth quarter of next year and we can lever.

We should be able to meet today's as scheduled.

Okay.

Thank you.

Okay.

Your next question comes from Jeff Jones of Citi. Please ask your question.

Hey, Hi, William Steven.

Three questions number one what.

Kind of annualized so total volume production from the <unk> two platform should.

<unk> will lead to the 25% GP margin.

According to your guidance.

Secondly, second question you see apart from the three brand new products are launching two of 22, how likely are we going to launch the face lips version of the existing product, yes eight.

Oh, Yes, 676, so shows how likely we're going to launch six new products next year yourself.

Brand new products.

And finally, it's the nev credits so.

Could you guide us how many points.

We sold in the third quarter so.

And from which we can activate <unk>.

Compared with the previous quarters.

Thank you Steven.

Jeff.

Yes.

Got to your first question about the GP margin.

Our 25 GP margin for N P. Two platform, it's based on the annual production volume of 300000 units per year.

Okay.

Talbot also.

So I don't see any jobs, there's little needed CFO incident in China Central and <unk>.

Absolutely the Modi, which I know data has definitely changed timna.

No.

So in the sense that you took in deemed situation too good and Detour Tonight, Oh, Mcquay potato Susanne will play out.

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Don mentioned, that's all behind us.

Women say it says I'm going to see how you decide to go to.

Downtown the wounds.

Panel controllers inside seeking a quote unquote normal solicitor shortly.

Up to today.

Yeah.

I'm just like as Steven mentioned, because that's a our plan is and if we can achieve.

Annual production of 300000 units, so we should be able to reach 25%. The vehicle gross margin on the new technology platform to point do we are very confident to achieve the targets.

Mm for the existing product and of course, if we have a plan to achieve operator of her car.

Access to the new technology platform 2.0, and we believe that.

This is a very important for the company and we will need to focus on much of the sky.

Scheduled for that product upgrades in specific or detailed internally, we have already kicked off at the department to work they still regard to and we have.

Started to how can we upgrade the different products to the newer technology platforms to point out.

Yeah about the nev credits.

I touched on it around 200000 points.

<unk> were sold in Q3.

But I want to remind is the price volatility.

<unk> credit is also high along with the China is and you'd be penetrate penetration increase recently so.

I hope this can help you to build expectation, while futures Youre Crazy revenue yeah, Yeah yeah.

Maintaining and some can do so down between equities and job to some kind of stunning Thomas in the opinion that the tenants are similar and so there's a good penetration Michelle kind of Samsung.

So the question is are you sure that you're going to shoot me, an a chocolate bar disposed off Tonight.

The real quick when they use and somebody says and I don't really know if we'd be junior mezz.

So good job.

Yes.

Okay.

This year.

Basically we believe that the number off of that crowded. So we received so well increase but.

This year the penetration rate of the E. V has increased very rapidly and this property is going to change the situation for next year regarding the regulatory credits house.

According to my personal estimation I think considering all those factors.

Price offered the nev credits is going to be different do are probably going to be lower compared with this year's that price.

Two two.

Yeah.

Your next question comes from Paul Gong of UBS. Please ask your question.

Yeah, Hi, Thanks, guys I have two questions. The first one is regarding the low grade operation.

And Oh.

Obviously, it's has been kind of more than one month and so you just briefly mentioned 92% of the users towards baas and the order has been exceeding your expectation can you give us more color like how the shipments.

They are and what is the challenges or they are obviously, it's a rich country, but the labor cost might also be much higher than in China. What can you share with us and after law, where what you see on the next destination.

For the overseas operation.

Second question is regarding your expense of funding things.

Since that so this quarter the increase in SCR has been sort.

Sort of unexpected while at the R&D increase something like it gets lower than you expected what is the key rationale behind and so all key reasons behind the view you have on so many orders on PD because of the.

Supply chain disruption.

You can see it or slowed down or to be itself, the LCM and things start to put more projects into the R&D and the following one or two quarters.

And then the financial budget Diego into yourself quite good we'll wait till you get to a company that you thought about your attendance hopefully reach on building trust with our guests with OIBDA and Ashish to.

Dental.

It's how you ship out sounds like you got some much of you pointed out a whole uhm.

Our peloton bulk molecules.

But not so they thought it was a successful are you sure sure Central Asia, and so on the whole Norwegian Hotshot Yukon.

This is a somewhat different material for our new IPO.

April finished with the cool <unk> gotcha.

Gotcha.

Social corn.

So just wonder for your own agenda Eagle Ford play.

Yes.

So social wonder for Ya autographs at all either property or like a foreign film a year or.

To change what's the email together no matter acquired took effect for you with a more appropriate though Iranian harsha.

And I thought you go competing surety watching kwanza shelf, our subsea Joseph Schwartz.

Also for your answer right off the shelf and so there are a number quite that substantial or kind of drove orders again for some of them.

Well maintain Norway someone who's already done a lot in that group.

June saw.

I don't know maybe we'd see.

Oh in Midtown Mohan Naidu soon.

To a sense of how many more.

Over the near his career you hope.

<unk>.

Either you're going to sell the CBS, so that will take enough things to.

Because of some of these now that sounds zongo of intuitive.

Our progress within the year, hopefully do more but that's cool.

And I'd say no.

Based on our impressive legal suits.

But two quarters ago surely helpful.

Women's I joke with our monthly.

Two things, mostly a U M Harrison Waterloo, which hung or Michelle that about when people are in our funding side turn out and Tim Kung Fu films with Hulu Union.

It took a.

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Tayo amnesia, Soho food at Tc or Michelle Symphony Hall, the element that has.

T. J this is helpful.

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Tuesday.

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C&I loans.

They'll have what's fortunate and Tim can go what are you seeing.

Chip on how that shadow.

Your host kind of begin to narrow down and sit on the board.

No.

Like how much they don't seem to go up and I guess looking failure, so somebody that I've done remotely.

Total cost is on the agenda at Angela with nice and step by step as we continue on Libre Kobe.

Although the Midlands.

<unk> to say they continue to.

Okay.

So it's operating with our Buckland noise that naval market 2000 auto go down.

Because it's your home cooked food elements that <unk> had a good job or liquids legit Tacoma two the C.

Yes, Bob.

Norway, social political adapt underway, so definitely should see wanted to go dark either.

Just a woman so we see that.

Yeah.

Thank you.

<unk>.

Regarding offer operations in Norway.

We believe that the.

They think operations have a meet all of our expectations, saying all aspects after the new house opened to September.

At September 30, I would like to share with you some data after the test or try to one force office users have to place the orders.

All of our products. We believe that this is a very impressive and the data shows us that.

Basically the efficiency is much higher compared with the.

Here in China, and this is under deliver insight on the services side. So we're doing a lot of work to do and all.

All of our swap stations. They know they have suggested started operation because previously we need to send people over to work on the installation and the commissioning of the swap stations and then for.

For the office hours, we also encountered some challenges brought forward by the Covid situation, but the order momentum is quite strong and.

We have a down some trial delivery at the end of.

September and in October and we believe that the delivery in November is going to improve significantly.

There's a lot of our order backlog are bad weather that I got to control over the pace of delivery a little bit at the beginning because internally, we thought that the target of Barbara herself.

Especially on the user satisfaction.

As a spectrum right.

Have a.

Kind of.

The are you is the vision in action upgrades based on in the company and that basically we use at the VA you to set the target for myself my personal view is that to make sure. We can achieve a high user satisfaction rate.

Right now according to the feedback we got from the grants in Norway, We understand a word of mouth reputation has been quite good and the one off on my friend actually send the video to me and to show that there are a lot of visitors in the new house and very happy to see is this a video and you see so many people.

And offer new housing knowing.

We will continue to make a decisive investments on their surveys and on other aspects and we will do this step by step next year. Besides no way, we're going to enter additional and five countries.

And in Europe, and so they said product planning off of all those of European countries and basically they yes, eight based on the new technology platform 1.0, well owning beach sold in Norway by default the other new Norway countries, we're going to enter we're owning so the product that based on the near term.

Now onto a platform to point out.

They all go into just the hassle of Monique.

Some good EBIT punchy that included winning two or minimum wage.

Good to see.

Got it that's about you'll sit on board Ascension.

Oh minimum influenced that.

<unk> totaled <unk> 201, little comment Tim that dose eager Toyota cheap.

I think our union better come alone the total litigation hunting on Yamal hungry to gather.

And with G suite.

There's also a full on law to Honeywell Louis is assumed in that.

It seems in beta.

And then with the assembly.

Chipsets Asia totaling some delays all the time and take a tour.

Took a patent case, yeah, so you've got to come in kind of loans as seen in Malaysia to good things on that.

That won't be even farther to go to solar on the <unk> paid <unk>, sometimes <unk> <unk> <unk>.

Sure.

Yes, part of the question, Liberals, whom surgery, because they cannot ohio, but even come into to the Peru.

Come on kind of capital wisely.

Governments and good pushing so there are a few times in <unk>.

Got it.

There could be some Chinese elements scenario and Louis.

In the Cushing those that piece you can carve out a course in June.

Sure.

To do that.

That's how barbell on a pending approval.

Well sure I, just again from a technical life because of the summer so throughout the year.

So I'm with someone as you'll see on liquids. So at a time even further.

It's opened up that type of those segments right now.

On the down cycle times, and particularly impart a function.

Yeah.

I believe.

The investment question. This is more about the long term competitiveness over the long term strategy as a company.

In China. The competition is become is becoming more fierce because of that there have been many new entrances into the smart EV industry, and we believe the product to develop.

Amen to technology development, there's always the service and network infrastructure, including and swapping into charging.

Not work are part of the long term competitiveness of the company that is why we doubled down on operating last Monday, all of those freight car to in 'twenty 'twenty. One in 2022, we'll continue to make decisive investments on those aspects.

We believe the infrastructure like the swapping charging network at the postal service and I work out also part of our long term competitiveness of the company maybe in the third quarter. After this year.

The investment on those as fact that ramped up faster than expected. So that is why we can see the SG&A cost increase are higher than the previous expectation.

But on.

On the R&D side, we have also doubled to offer R&D personnel here and we have worked our.

We have been working on many new products and new technologies.

For those new products and the technologies that you won't need some time to ramp up the pace.

In the fourth quarter, we will be able to see some R&D expenses and our cost increase say in this regard you can imagine internally right now we have multiple new products and new project, so breaking in parallel than probably at the beginning when we set up at those are <unk>.

<unk>.

The cost is not going to be that high and you won't need some time to break factor all of those R&D investments on our balance sheet or P&L and at the beginning is a relatively small by the gradually a long ways to that project and this cost is going to increase but we believe had the product and technology.

She will be the cornerstone of the company for long term competitiveness and that's why we'll continue to make it besides of investment on those recon series It Paul.

Thank you very much sufficient.

Your next question comes from Chengdu, Obviously ICC. Please ask a question.

Yes, Thank you for taking my questions.

My first question is regarding the capacity expansion, so liquidity Rosa guidance on next year.

The sales volume.

Especially for the new models and also our current disappear models.

Ken our capacity to meet the need and next year.

And considering the strong EV demand under our new more new models and plenty of time, it's really do we.

Have a pen and constructing more new patents.

My second question is regarding the upgrade of our smart hardware.

Because we are expecting a really fast upgrade.

And smart hardware in the next years.

So how do we keep our competitiveness of our next models and to keep our.

Also satisfied.

Also I have a follow up question for our.

<unk> Oh, sorry longer term do you have a guidance for the proportion of overseas sales account for the or ourselves. Thank you.

Okay.

Hum.

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Suddenly because you don't want me, saying I really I'm good to go.

<unk> doesn't have been to single tenant.

Going into the system.

Schindler boomtown.

Then for the course and don't minions 72.

It seems that moving soon.

The only thing that down plans she needs.

It seems like you guys to go through.

A woman.

So the timing of like Google Twingo Quijada total lifetime Huh.

Hello Ghansham.

So you've got off the phone balance alongside a while so you got a heartland are louis alignment standing behind them.

Minimum wage.

But do you notice a number of macro industry.

Yes.

So there's plenty of time on this one.

Thank you Tom for your question.

Right now we have a basically a two pumps.

The first upfront like Oh, I mentioned that we have the upgraded to the manufacturing lines. It cheaper they expand the production capacity and so that new plant. So we are going to start with the production in the third quarter off of next year, so of all of our product and appraise.

We believe they.

They said two new plant. These are two pronged shouldn't be able to support of our mountain for the short term.

We combine this with two plants. It together the maximum production capacity. We can support is a up to 600000 to a new production capacity based on the boat ships. So we believe there's a maximum production capacity should be able to satisfy offer demand too.

In the short term.

Wouldn't you just on the <unk> in Q1.

The meeting agenda item is just <unk> a woman named answer them during the <unk> TV side is it empty tube automobile you <expletive> in Gen <unk>, let's go to which even includes families here for the.

Angela can you tell me about some empty tool now down to Cushing.

Some people don't like to be at that sort of how much yet.

<unk> home in Ohio.

They go to Houston.

No.

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Medallion, Ron Jim Humanism deal I mean, that's for sure the Xinjiang <unk> Julien tangible fabulous either some gaming on that figure as understanding that yes. The inquiry the whole team.

Hum Cheetah battling wholehearted useful aqua until such time as we continue that's how they got hold its useful so it's almost done on my house liquids issued.

And then Jim just introductions.

Yeah.

Yeah.

For the newer technology platform, one point those smart hardware upgrades.

We previously communicated the ways all of our users is that we well study some plans as she upgrades, how whereas on the new technology platform. One point out based on all of our design on the new technology platform 2.0 are we planning to properly.

<unk> provided as a services starting from next year and well provide some more details and updates on this regard to add a more simple time and of course. This is smart hardware upgrades on the new technology platform. One point, though is not going to be the same as at the same kind of experience.

So because the new technology platform to 0.1 about we believe that the digital cockpit of the dike system products today, it's going to.

Significantly improved.

We have already considered all those flexibilities in the possibility of yourself with the hardware and the software upgrade to any of our product design and.

For example are just now I mentioned about the hardware upgrades and the Tam for the software aspect that we have are being continuously upgrading offers software.

We launched and released offer Aspen three point O two already users of existing products to and have received great reviews and feedback from all of those users.

And we will continue to upgrade to offer software and iterate on for software to make sure. We can provide them much better San Jose sound experience to offer users.

Hey, its home Chenzhou potager other lifestyle Aloha.

Well done.

They know what needs to do Shlomo is a chance that there might need to figure.

Figure out sort of in sequence in the mobile.

And as you can say tongue or a change I would say that the chico's was yes.

And you'll see that go down to two citizens. So how will you in women.

Further to this at home assortment, so you're coming out of Showtime as a woman that trend to continue if I'm in Oh meal time Cheetah mobile.

Launch, it's on one of the hot our <unk>.

And our Indian Bad, though I don't want you the tongue Sheila I kind of went.

One way to go so I'm going to.

Wireless with Boeing.

Social mobile battle by Louis So, let's see the whole either equal kiosks.

Hmm.

Regarding the previous Aspen three point out. We also believe it provides a solid foundation for a global market entry Andy for Waco back to your question about the global market entry and the target for the global markets. Our new has always aspired to attribute to a global brand.

And if we look at the global market that we can see that the China is still the biggest the auto market and the biggest premium market. So China will still be the most important market setback regarding offer aspiration for the global markets.

I cannot to provide a very specific targets for the global market at this moment about I believe for food.

Markets outside of China in the long term they should account for around the 50% off of the of all as always off all of our product.

Yeah. Thank you William.

Yeah.

Uh huh.

Yeah.

Yeah.

As there are no further questions now I'd like to turn the call back over to the company for closing remarks.

Yeah.

Yeah.

Thank you once again for joining US today. If you have further questions have places you're free to contact <unk> Investor relations team through the contact information provided on our website.

That concludes our conference call you may now disconnect your lines. Thank you.

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Hello, Ladies and gentlemen, thank you for standing by for Neo incorporated third quarter 2021 earnings Conference call. At this time all participants are in listen only mode. Today's conference call is being recorded I would now turn the call over to your host Mr. <unk> <unk> from Kepler.

Our Investor Relations. Please go ahead.

Okay.

Good morning, and good evening, everyone. Welcome to news at third quarter 2021 earnings Conference call. The company's financial and operating results were published in the press release earlier today and are posted at the company's IR website.

Today's call we have Mr. William Li founder Chairman of the book and Chief Executive Officer, Mr. Steven phone, Chief Financial Officer, and Mr Cemetery, Senior Vice President of Finance.

Before we continue please kindly reminded that today's discussion will contain forward looking statements made under the safe Harbor provisions of the U S. Private Securities Litigation Reform Act of $19 95 forward looking statements involve inherent risks and uncertainties.

The company's actual results may be materially different from the views expressed today.

Further information regarding risks and uncertainties is included in certain filings of the company 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 as news earnings press release and this conference call include discussions of unaudited GAAP financial information as well as unaudited non <unk>.

GAAP financial measures.

Referred to news our press release, which contains a reconciliation of the unaudited non-GAAP measures to comparable GAAP measures with that I will now turn the call over to oversee OOO Mr. William Li William Please go ahead.

Based on guidance here, it's always turned out way by adding a union defense Sidoti about honestly.

Hello, everyone. Thank you for joining the third quarter 2021 earnings call.

Union Defense, you do weigh like tofu, Cingal, so I'm going to tell for the young once the chance the biosensor Jody, Yes bought yesterday, who used to deal competes in zone, five and the ebay deal huh.

In the third quarter of 2021, when you can lever to 24000 to 439 years eight years to six and then you say fix a new quarterly record representing solid growth of a 100 point or 2% year over year tungchow, whereas the Basel III.

<unk> tightened on her way EQT at them, sometimes in power also debate well 95, big chunk by way of life for patients without DD GP.

<unk> Zika itself, so to ease up so we've got some telco down weight <unk> sedan recession or May you do wafer lots and Thompson.

Based on the overall production planning for on September 28, two October 15th to prepare for further capacity expansion and new product introductions, including 87, we implemented upgrades and the restructuring of the manufacturing lines added the Hefei Jayson.

Advanced manufacturing center affected by the upgrades and the restructuring we delivered 3667 vehicles in October the plant has resumed to normal production since late October India to navigate the Comcast.

Joe Yeah Canadian again on Q2.

Well attainment pushout autumnal Sidoti I thought patterns of switch them.

She is a.

But didn't know why you didn't go quite yeah, Let me go to your own conclusion.

<unk> putting them again.

Then on Q2.

We license and didn't Dan Swisher didn't stop.

And then promptly switching golf merchant, Joe if announce to you also.

Potently Nissan.

You said you thought that some jumping out.

Yeah, Hi.

Oh, yeah, well, we can't rule that out.

According to the data published by China passenger car Association the penetration rate of battery electric vehicles. Among passenger vehicles reached 17, 5% in September.

The automotive industry is accelerating its transformation towards a smart titration and electrification more and more users are now choosing smart E vs over ice's.

The order momentum countries continues to be strong and all of our new orders have reached a new all time high in October currently all of our daily very volume is mining constrained by supply chain volatility, we expect that the total delivery in the fourth quarter of 2021 to be between two.

<unk> 3500 to 25000 to 500 vehicles.

Sam I'll leave you found me in Pangea do some commodity wave pattern to spot.

Do you use from even the social so Luke some commodity adopt us against that.

In the third quarter the vehicle gross margin stood at 18.0% while the overall gross margin reached a 20 point of 3% benefited from the south of our record trade credit.

Sure Tony.

Totally leased out constantly beam, forming the ECR colombians going forward.

Next I would like to share with you. Some recent operational highlights of the company.

<unk> sometime soon.

So Sachin <unk> Super helpful.

Calculate taking downtime. So DTC is our downtown goes in solar usually at a time can do part B refunds will CFO, Tom Lynch Johan linear Alibaba.

You did see that so you don't come into the meat hosted hump yards you had two months.

In September the first batch of E T seven tooling trial.

Wrote off the production line, representing that that try out and commissioning of our manufacturing process had been completed.

Teams are making final preparations for the mass production of 87. During this a perforation protests. We have also made it varies a product optimizations on each seven for example, the drag coefficient of 87 was improved to from zero point to 20 320 appointed T O eight.

We're very confident about the final product competitiveness and the market performance of the 87.

By industry.

So that shouldn't be opinion.

And you tube Kinder Alain William clients in pushing the Copa <unk>.

<unk> paper, which is EMEA siobhan and because of that Louis itself will get you one pool, while maintaining the opinion of near <unk>.

The software and hardware development and they are also pressing ahead on schedule.

To answer the other two new product new technology platform to <unk>.

Also moving forward smoothly and the deliberate to users is expected to start in the second half of next year, we will share more product details and new <unk> 2021 Joanna wasn't unpopular Chisholm <unk>, it's about being able to use some of our way like in particular in the meat.

Yes, so Tom the Infantry Ali Husain, Randy could Tianjin Zhengzhou.

<unk> why don't you buy engine TT cut down on <unk>, well I tend to find a hook with local Daiichi Gela liens until it then for doing some them Egypt goes I'm, putting that wouldn't be there.

Sheila can go there and then they will need to Hudson Thunder Chew Hanmi use them, if we can beat it but.

In September we launched 75 kilowatt hour standard range battery pack with L. P N cen hybrid itself.

Each has further enhanced the competitiveness of our newest a battery system.

Powered by the industry's first of PNC and cell layout and advanced software and hardware assistance of a thermal management and as Soc the estimation.

Battery system team worked closely with all of our partner in overcoming the disadvantages of the F. B cells in aspect of low temperature performance and SLC estimation.

Top off of that.

75 kilowatt hour hybrid battery pack has also achieved.

Higher energy density and the lower dry.

Low longer drive a range and the lower cost compared with the 70 kilowatt hour and so yeah battery packs panel pardon me.

Some highway lights Indians without you did a tenant here, so I'm going to get something to you. Since you guys saw what were you what patients helping them getting them cheaper tiny Rhonda Dr. Sometimes you did again, so going forward the angioplasty and cut.

So the answer Joel Houck Hugo Boss Gucci.

<unk>. So you had the junk cases there'll be Undrawn minions fund you do some sort of cotai.

In terms of our production capacity besides the upgrades and the restructuring of the manufacturing lines in JC, New advanced manufacturing Center. The second manufacturing site Antonio Park anchor space is also under construction after that kicked off on April 29, we completed.

The main structure of construction.

August 26, and we'll start the equipment installation at end of this month.

Third quarter of 2020 Chi we will begin production officially.

William Glenn So trends are Ya Qin <unk> 10 system, but we usually do so we'll continue to work toward from going into <unk> clearly unplanned pipeline. They hold first of all I need to tie Sheila <unk>.

While somewhat defense equaled itself would you do with Cingal being quite tissue based <unk> shouldn't you downtime somehow chime in about <unk>.

On the supply side due to global COVID-19, pandemic extreme weather events and other factors that of our supply chain remains challenging all of our supply chain team R&D team and the partners have adopted a series of measures to support the record high quarterly delivery.

In the third quarter and it will continue to secure the supply for the delivery in the fourth quarter and upcoming new product production shows all go through on a low palm yet let me say a sensor go away like commission by parcel will go away like <unk> <unk> sensor.

Homeaway tissue chop off of your part what are you allowed to mission without needing to put your long wait let the person soon without sanctions.

<unk> two <unk> so the Eagles.

So Sanjay will absolutely condition. So you bypass the Utah to transport them as you well know quite tissue touch on food, we can adjourn. So we've quite often done at Yahoo.

Golf without food.

With regards to the South Center service and network. We now have 32, new houses and the 285 new spaces in 132 cities in China will continue to expand and optimize over new house and the new space coverage to effectively penetrate into more.

Tier two and tier three cities as of now we have a 43, new service centers and the 181 authorized service centers in 141 cities well more services centers to ensure high quality services to the rapidly growing user base.

One thing I want to go from here or maybe even Jenson Lisle building Boswell opinions I forgot it don't go backwards the sangha.

While somewhat tow boats about chooses so until about mid year.

Well me you didn't touch Triangulated Poohpooh toggle, a slip of Louis or total impact because I'm thinking about it would.

Would you be premier gone.

I've been to and now we have deployed to 608 battery swap stations in 153 cities in China and completed over four points to 74 million swaps. In addition, we have skewed over 460 <unk> powered charters stations and.

<unk> 3155 destination Chargers across China.

Cancel boots U 200, <unk> funding to help us.

Toyota yet could jobs.

Yeah, So Tom.

Well it really we are doing well are you in production.

As we speed up the deployment of that battery offer that's walking in the charging infrastructure the superior experience and the value brought forward by battery swapping technology and the primary as a service has made but they go to a twice for more and more users.

<unk> will come from Julia Sciences, Norway will agile machine cuts Iranian Guangdong from 80 to one one to one of your 10-K, you didn't cut yes part of <unk> being cut with Andy Stephens.

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Angela Kinsey, Chief Hermes Human car T. Yet so there are some dealers who makes you the goto lung function in town shoe to toggle you cheat.

Coyote landrum.

<unk> started on Fu Sheng Wei.

We're delighted patented HUD.

<unk> seen some of your most of the switching Comverse as Tom said trenches.

Total time charter.

So for you.

I mean on yet one more quick tissue savvy opinion changed versus how the Gucci.

Regarding the global market.

Opened over new housing, Norway on September 30, which has attracted to wider attention from both the public and the media on the same day, we started to deliver yes, eight and to provide services to all of our users in Norway.

Besides achieving Europe uncapped five-star 60 rating, but yes. <unk> has also received has also received rave reviews on its performance and the product experience from the local users and immediate the order intake has exceeded our expectations more importantly, among all the orders.

92% of the users have chosen Fox news of product services and innovative business model not only have been well received in China, but also present unique value and its strength in the global market. In 2022, we will further step up over efforts in entering smoke globe.

Paul market.

So the way that I can see going on.

Well I can go to <unk> children will add further color coming down fast.

Way light weight, <unk>, Cushing <unk> and type out would you didnt quite see them send around core Duncan I'll do so some high school and get into your box.

You send around codelco lung cancer.

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Sorry, we had some positive you saw <unk> you won't go go entirely new toy equate to vehicle. It's what you didn't know what they are <unk> forget that tinder opportunity to that.

We thought that seemed to me that Ali how are you.

<unk>.

Users have always been the foundation of Neil a diversified the user community brings a greater vitality to new and the drive to Neal to become better.

Tober, new and the new users' trust joined hands with Samsung.

Apologies Protection Foundation debuted a growing ecosystem in the Samsung and National Park.

With much anticipation, we have announced that the new <unk> 2021 will be held in Fuzhou in December 18th this year, new user advisors and the new they Organising Committee are working closely on the final preparation.

Please stay tuned for the coming new they organized the together <unk> and all of our users.

Oh, the hygiene yet whaler.

<unk> 21 did you do social flu, although down tusa methodical.

Well I mean, so should that ought to keep within that country is in the meat, we don't quote that I can call the turnkey khufu.

In 2021, you have to double down on investment in product development capacity expansion charging and swapping network as well as the south and the service network. In 2022, we will continue to make decisive for investments to further enhance our long term competitive.

And to provide better products and services to users.

Cushing Stevens.

As always thank you for your support.

I will now turn the call over to Stephen to provide you the financial details for the quarter. Steven. Please go ahead.

Thank you Vivian.

Our long over our key financial results for the third quarter of strategic move one and to be mindful of the length of this call I encourage listeners to refer to our press release, which is posted online for additional details.

Our total revenues in the Star Cultural war like a warm been RMB one.

One path to getting a stone us representing an increase of 116, 6% year over year, an increase of 16, 1% quarter over quarter.

Our total revenues are made of two parts.

Vehicle sales and other sales.

We can see all historic quarter 864 billion RMB.

One three opening your stone us accounting for 88% of total revenues in this quarter.

It represented increase of 102, 4% an increase of nine 2% quarter over quarter.

Increase in vehicle <unk>.

And quarter over quarter walk, meaning.

Attributed to the increase of <unk> 40.

Honestly all of the historical trends.

$1 1 billion RMB.

181, $4 million, representing an increase of 358% year over year increase.

179% Carnival quarter.

The increase to be honest <unk> on a.

Quarter over quarter them, what's meaningful to this field.

Automotive regulatory credits and the batteries accurate service.

Other revenues, which increased in line with incremental vehicles skills.

<unk> culture of 2021.

Cost of sales in historical terms, what the 10.81 been RMB.

One point to one company was Thomas representing increase of 98, 3% year over year, and an increase of 36% quarter over quarter.

The increase in cost of sales was in line with revenue growth, which was mainly driven by the increase of vehicle delivery volume historic quarter of 2021.

Gross profit.

Our quarter.

One nine on B B.

0931, <unk> three $1 billion, representing an increase of 200.

43% year over year, an increase of 26, 6% quarter over quarter.

Gross margin historic quarter.

23% comparatively.

9% as same quarter of 2020, and 86% is second quarter of two to two new one.

The increase.

<unk> margin year over year.

We need to win.

<unk> of <unk> and <unk>.

Sales of automotive luxury credits.

Increase of gross margin quarter over quarter.

Many due to the sales of <unk>.

Regulatory credits.

More specifically.

<unk> star of the quarter was $18 or percent compare with.

44% in the same quarter of 2020 and 23% in the second quarter of two new one.

The increase of vehicle margin year over year was meaningfully then bond.

Average selling price as well.

Lower material costs.

Decrease of eco margin quarter over quarter was mainly due to the increase in 19.

Subsidize rates.

Copper treaties, which resulted in a deduction of equal revenue an increase in tooling depreciation costs.

An extensive historic quarter.

<unk>.

$185 2 million strongest represent an increase of 101, 9% year over year an increase of.

35% quarter over quarter.

The increase of R&D expenses year over year and quarter over quarter.

Mainly attributed to increased personnel costs in research and development functions.

We have asked.

<unk> design and development costs for new products and technologies.

SG&A expenses in the Star courtroom, we're 182 billion RMB.

0.2, 8 billion, representing an increase.

91%.

An increase of 21, 8% quarter over quarter.

Increased SG&A expenses year over year and quarter over quarter.

Primarily due to the increase.

<unk> costs.

And service functions and costs related to sales and service network expansion.

Loss from appreciate this third quarter.

<unk> nine 9 billion RMB.

102 to $3 nine believes a stone us if there's any increase.

<unk>, 9% year over year, an increase of 29.

9% quarter over quarter.

Share based compensation expenses.

Third quarter.

$265 6 million RMB.

$41 2 million stones.

If there's any increase.

438.

8% year over year increase of five 6% quarter over quarter.

The increase in share based compensation expenses year over year.

It was primarily attributed to additional options and restricted shares granted.

Net loss.

Third quarter was $835 3 million RMB.

102, nine fixed meaning your stance.

Presenting a decrease of 22% year over year.

An increase of 42, 3% quarter over quarter.

Net loss attributable to news ordinary shareholders historical.

Was $2 86 billion RMB.

<unk> <unk>.

$143 seven meeting just donuts.

It's an increase of 147% year over year and increased <unk>.

333, 6% quarter over quarter.

The Star CT opportunity, one Neil repurchased one.

8% equity interest in China.

From a minority strategic investments for total consideration of two bonding RMB and recorded amount of $2 2 billion RMB.

Accretion on redeemable non controlling interests to redemption baddie.

Basic and diluted net loss per <unk> historic quarterly.

Rose one 8% to RMB.

<unk> per <unk>.

Excluding share based compensation expenses and accretion on the immigrant non controlling interests to redemption value loss.

Non-GAAP adjusted basic and diluted net loss per ads were both.

Yes.

0.3 fixed RMB.

<unk>.

Yes.

Our back of cash and cash equivalents restricted cash and short term investment was <unk>.

47 billion RMB.

Oh, sorry.

<unk> been in your stores.

As of September <unk>.

<unk> you want.

And now all of this.

As William mentioned for the fourth quarter opt into 'twenty one.

Comp expect deliveries to be between 23000 525500 vehicles.

Representing an increase of approximately 35, 4% to 46, 9% from the same quarter of 2020.

The decrease of approximately three 8% to a increase of approximately four 3% from third quarter opportunity to launch.

The concrete also expects the total revenues.

Fourth quarter 2021 to be between <unk> <unk> and <unk>.

One 1 billion RMB, which was an increase of approximately 41, 2% to 52, 2% from the same quarter of 2020.

And a decrease of approximately four 4% to increase of approximately three 1% from the third quarter of 2001.

Okay.

Is all that reflect the companys current and preliminary view on the situation and market condition.

Which is subject to change.

Now this concludes our prepared remarks, I will now turn it over to the operator.

The syndicate, our Q&A session.

Yeah.

Thank you.

Ladies and gentlemen, we will now begin the question and answer session to ask a question press star one on your telephone so Ken Silver request press, the pound or Hush T.

The benefit of all participants on today's call. Please limit yourself to two questions you can re enter the queue.

Your first question comes from Tim <unk> of Morgan Stanley. Please ask your question.

Hi, willing to Stephen and then Tim Thanks for taking my question.

Great to see new managed to navigate through the couple of encroach and production decoupling firsthand.

Just two quick questions from my side the first one.

We've seen restructuring and upgrades of the production life cost around two hours of a disruption.

Delivery and production this year.

Just wanted to confirm that if we've completed all the necessary restructuring.

For the three new models, the next year or should we expect any similar disruption some time next year.

My second question is about the harm to <unk>.

Details will be out yourselves.

Could you just share more information about our newest recorded audio sales.

So it has been searching quite a lot.

I think a more significant revenue increase was attributable to the sales of our heavy credits.

Battery upgrade services.

We have deferred the breakdowns recording their contribution.

From those items and what could be the scale.

Attribute into fourth quarter, because if you look at this current fourth quarter revenue guidance is saying is that just mainly reflected the contribution from the <unk>. So should we expect a contribution from hardware sales to rise credits. Those are my two questions. Thank you.

Our <unk> team.

Can you go into here when I say that there was a study okay.

A woman.

Yeah, John Boehner Goldman say, Google income from an Asia team and one of them kind of on the women.

Say, we opened <unk> Suez is through attribution elements already there'll be dealt within 18 ships two <unk> suite <unk>.

No more oh shoot.

Hopefully it was just solid younger guy itself with time, she took a deluge here how does it has a shelf IHS agenda.

The unemployed paywall.

Sometimes it's a good cheer so tied to the merger.

We have done business with them about it they give yourself to the vehicle.

$101 million, just didn't push editions machines to do with it.

<unk>.

Good they shouldn't Targa untreated Doug.

And with and hopefully with a palpable cord cutter you Cernuous in general terms in the.

Because sometimes it please.

Yes.

And Tim Thank you for your question.

I'll answer the first one I understand is going to answer the second one in the previous remarks that we have also talked about the progress of our offer our capacity expansion for the two plants.

For the first upfront just like you mentioned.

Not even from the end of September to the Middle of October we have done a restructuring and operates off the manufacturing lines. If she has further expanded our production capacity and prepare for the new product introductions.

Following this upgrades that we probably will do some minor restructuring and modifications off the production line.

We believe the following restructuring not going to happen in a very significant impact on the normal production numbers of vehicles.

Secondly, regarding the new products some of the new products will be manufactured in the second the plants.

And then this means that.

For the second plan to where well need some time to ramp up the production for the new products, but this is not going to affect the manufacturing of the existing product.

Uh huh.

Got it.

Quick question.

The other revenue.

517 living.

<unk> was contributed by the Nev.

Credit sales and after deduction of our UV Crazy sales.

Our total.

Gross gross margin for other revenue decreased from.

My minus five 6% too.

6%.

Because.

It's driven by the expansion of our sales and service network in Q3 and as mentioned by William.

Explanation.

The construction of our sales and service network.

Structure are mobile.

Earlier and faster than our sales increase.

Especially in this year, so we're expecting that to the revenue.

Other our other service will increase.

<unk>.

Gross profit margin for these parts will decrease a little bit in Q4, yeah.

Okay.

Okay great.

Sorry, just a quick follow up some could you highlight some potential contribution from the sales of credit into fourth quarter.

Yeah, Yeah almost.

Majority of the credit sales was realized in Q3. So in Q4, we don't expect significant revenue from this part yeah.

Okay got it.

It sounds from Infineon Julien.

Do you even children are financed with <unk> E Commerce and the income that's definitely a standing explained.

This year is a bit different from last year, we recognize that that sounds the offer the regulatory credits much earlier compared with last year.

Thank you Wally.

Your next question comes from Nick <unk> of J P. Morgan. Please ask a question.

Thank you for taking my question is coming from Jpmorgan, Good morning, William and Steven.

Two simple questions number one related to margin and the second question is related to EP step into new exciting model first first of all on the margin from.

The <unk> margin for the quarter was 18% slightly down from 20% to Q yeah.

How should we think about the marching into <unk> or first half next year, taking into account of two factors the first Fred.

Pricing pricing dynamic all competition.

It appears in a second.

Raw material prices, especially on the battery front.

That's the first question.

I know you answered part of my question.

That's already on a quite yourselves. So second question on ETE Stefan is essentially.

19 product.

We expect the car to hit a showroom in the near term and the medium to longer term absolute passion is to ramp up how should we think about volume and.

The possibility of 87 relative to our current high end product Esa.

Monthly run rate of sales roughly about 1500, so how should we think about the profit margin and the volume for ETE standpoint.

Two simple questions. Thank you.

Okay, Hi, Nick.

Standing by your first question a question regarding the.

Gross profit margin.

And our 75 kilowatts.

Our specialty.

Dr. <unk> will start to be delivered from November and our gross profit margin.

Will be improved.

Improved a lot.

A little bit compared with 70 kilowatts hour battery.

But the prices of our key materials like aluminum copper and also chips.

Increase are increasing and there will be there will be pressures for our cost control.

Of course controlling but we are confident to continuously improve our gross profit margin, which combined efforts either from the product design our supply chain optimization. So.

For Q4.

We're expecting the gross profit margin will keep stable and for next year, our target to achieve 20% gross profit margin for wheat costs and along with our launch of <unk> two product.

From a long run perspective.

We tried to achieve in a higher profit margin.

About 25%, yeah, what would it cost.

Oh data Susan <unk> Johnson, a woman from 92 to <unk> John.

So I would say the equivalent of <unk> <unk>.

Yeah.

Good combination <unk> multimode deal.

Ammonium will be offset by industrial.

Good evening I'm only mobile <unk>.

Can you just share your thoughts.

UGG, though.

The two of them, which I mentioned on the homeless.

Molly if I'm in the PRC.

I would say in the handset humbled Scott Canute Omnichannel, so sudden that sell Tonight.

Now you did see.

I mean, yeah, you see to the Ohio Mill junk food channel.

John on the <unk> side.

Particularly <unk> are mostly coming.

And then kind of to go on.

Who should 100 times, okay. So there's a.

Telford homes for signature.

And both of them, but I assume that down the ECS.

And then what's ambitions yet so its one piece on that John.

On the bigger.

Gulf downtime, the Yodlee, a commuter yield that unfortunate in that kind of opportunity without doing antibody TG.

Yeah.

You mentioned.

<unk>.

Yeah as a standard mentioned basically for the antitumor productivity, we expect that when the economy goes into the volume ramp up as well as the optimization thing every aspect and we shouldn't be able to average 25% of favorable gross margin in the long run at the beginning of course.

We will need some time to ramp up the production.

New products are based on the new technology platform to point, though according to other preliminary estimation internally with giving you the vehicle gross margin of the new product should be quite.

Good and before the 87 delivery, we are going to start with the delivery of 87 in the first quarter of next year. So it means that we will have the <unk>.

Cars in all of our new houses and the new spaces around the spring Festival time.

And afterwards, we'll start at the deliveries to the users because we haven't used in many advanced achieve set of sensors on the 87. So this has put a lot of pressure on the mass production of 87, but we believe that everything is on schedule.

Yeah.

Yes.

Yeah.

If there is any.

Thank you your next bill.

Your next question comes from Mr. Lee.

Bank of America Securities. Please ask your question.

Thank you good morning, Willy Steve and understandably so.

My question is regarding.

Your supply chain. So right now we truly we are hearing some of the auto company expect.

Chip shortage situation.

Not to be fully resolved by the middle of next year. So right now I want to hear your latest view regarding your chip supply situation and also the large sized battery pack supply situation and also right.

Right now for your consumers if they place the orders to you I think of the waiting time is more than two months already so how will you can.

Louis.

Consumers and also next year, we expect the EV purchase subsidy.

Cut further.

So in this case.

Consumer tastes are older before year end.

But then they need to we.

We need to deliver the car.

I think in the next year, so will we.

To give them similar subsidy amount so we absorbed the subsidy cut.

My question. Thank you.

Sure.

Well then.

So that assumption I'm sure once in a lifetime.

So, let's see I'll go the strategy to call you Danielle.

The 10 songs with ally sort of on the HIFU hesitate on BARDA Simpkins, a good time shifted to other individuals.

96 ordinary question, Ken to enforceable Lindsay.

This is <unk> <unk>.

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Okay, then a pronounced.

And then kind of quantity order silicone irritation, Penn ethylene into Atlanta, which we think.

Now, let's move on to tell you women you didn't.

<unk> all been considered lingo soon Columbus Salt Lake City is you'll find that on a Sunday some bits sugar showdown like alcohol women solution.

Canopy has a fit I'll start with it so you could see.

So what does it say that going into 17.

Women when lineal feet.

Oh, sorry.

This is a quick one the knives out somehow.

No.

Hum.

Thank you for your question.

Regarding the chip shortage situation, we believe right now is much better than the situation in Q3, but the challenge is still quite a big if because it's very difficult to forecast what is going to happen for the chip supply I think everyone knows about that that FTE.

Corrosive titration in Louisiana, and the the situation basically is improving right now the good thing is that all of our teams have learned to adapt to the situation and the challenges head on and we have always being able to find a solution to all of those challenges.

The other hand over volume compared to two the material Oems is still relatively small so the challenges that phosphate is smaller compared to the mature Oems.

It was some time ago, you said, you'll see even a woman.

<unk> took a domain controller or does it well at the main controller those storms.

So you wouldn't say so.

<unk> you said, you assume some share or Michelle <unk> quite so again soon.

So since I've seen.

Your balance sheet of almost 17.

<unk> also Saddam EMEA, so you're only authentic Leon Qi Hello, how.

How do you sort of tell me the column there you can punch headwind.

So it didn't sound like winning Formula Susan window again.

And Joanna Paavola Denzel women's in Donuts horizontal hunton tacos to shut I'll see you at a fashion type.

Yeah. It depends on what part of course, our Goodyear says she said, we do get into Thailand.

Panama hardcore tableau spending and the easier to go.

Goldman was still somewhat dependent.

<unk> solutions are hyattsville woman.

Yes, so Jeff let me give you a suite.

When's the dependency is a windows that without clean that timing is the pilot in Buda towards virtues Parliament and that's happened and some of it's already on the shelf so against the Queen.

So on the Gulf, whether you could somehow about Massachusetts.

Yes.

Yeah.

I would like it she specifically you mentioned that because.

The many domain controllers ingleborough vehicles are actually about to buy over yourself, saying house. So if there is a shortage of certain chips in the domain controllers, though it seems to have that could be related to quickly find the automaton and do their rapid validation and faster.

Production of the vehicles and the chips and so because of that they took capabilities. So we have already resolved.

Some chip shortages equation to happen to chew off road vehicles.

For the 75 kilowatt hour battery pack, we announced as they say in September, but we will gradually started that there'll be very off of that 75 per kilowatt hour battery pack in late November.

So I need some time to ramp up with the protection offered the new battery pack and we believe that the production is going to reach a reasonable level.

The first quarter of next year, but the battery is actually a very big constrained for US fatality. It's all very partner on the battery side. They haven't invested a lot of different help us than to support all of our vehicle production, possibly three.

Battery is still the main constraint on the alcohol production and the supply of capacity.

Well I mean, just generally.

Closely at them you guys again on the Sandoz had gone on far below Amigo. So Paulo, you don't quote and Danny goods into our Mccook. It you should see from that balance sheet shortly.

I'm in when they use it the zim yen compete upon you in case, the Bogo junior on Windows Contango as you get them back.

And that kind of stuff.

Got to get them.

When you go to the lowest.

Sure that's a good enough or is it some time.

Yeah.

Yes, as I mentioned to you for you placed the order right now you won't need to wait for some time to get the cars delivered.

But recently, we have also announced there are some policies regarding the subsidy reduction for the next year to keep all of our customers and also keep all of our customers. During this very long waiting time. For example, we will provide to the new credit O'neil pointed to the users.

During this waiting time and do these kind of incentives to have helped us in the past for example, starting from 2018, we have already got those policies in place and we believe that this is not going to affect their users.

Regarding the waiting time now you've reported since Hanmi ill take I'm able to tie to give us a good sense for us.

Come on you would shoot for your Eagle Ford shale.

Okay.

So you wanted the venture.

They were nice short Juicy Youll K pool, what puts you at the most visited and Michelle.

So Amit Chandra from elements I'm glad the Congress the kitchen muscle.

So I'm thrilled that put opinion, so that would be the goal.

We'll put it in wafer 1 billion, so bill them and show them well.

A good chunk of the chancel youll some muscles loosening itself.

Yeah.

Regarding the EV subsidy.

We believe that this is not going to have been significantly impacted.

Because the average selling price is actually quite high regarding all of our product is so even considering the subsidy is not going to be a very big amount comparing to their selling price of those vehicles.

I would say it anyway.

Got it.

Yeah.

Your next question comes from being way of Credit Suisse. Please ask a question.

Thank you for taking my question.

I've got two one on the first one is about.

Okay. So IPO because some of our key constraints that you're still sticking to only once they are nothing in the U S. But also stock immediately pulling out just because of the new user choice.

It's been a little bit why not.

Chaucer.

It could be one reason.

We then come back to Hong Kong IPO metrics and our first question. The second thing about the gross margin.

Actually you mentioned Walker reasons, because auto finance due to the margin decline. However, if you have seen that they may have been very good in short of supply.

I'm just curious why are we in a very.

They priced apart, we still increased the auto finance due to the falling margin theoretically should reduce the.

Auto finance.

And also <unk>.

South Park promenade actually remove or reduce the number.

A full quarter can I confirm this is the case.

This is the case.

The gross margin that we have.

Louis can the number of full quarter compared for example to me because you don't provide auto plant anymore.

<unk> also increased because although France seems to be one for retail ASP decline with number three quarter compared to second quarter. Thank you.

Ben This is Steven some detailed questions.

With regard to your first question I have two comments first the open minded.

We closely monitor the market and we'll make the right choice in the best interest of our shareholders.

Second we actually.

Actually explored possibilities.

To get listed in Hong Kong market and we are in day.

Doing what's necessary to evaluate and communicate.

Although.

Mcquaid for a total fluid solution.

<unk>.

They Couldnt convention it goes from there.

So you take a.

You got it sounds, though the <expletive> moly to the other finance and BMO leaders, particularly in Asia.

Alright, John.

So in that kind of a company year Wilson without gets about four minutes I think.

Right.

It could take.

Well Linda Thompson.

The pace of the gentleman.

This is a short pulse ending adult for home Shield places solution. So you've got these laptop.

Linda.

In 2000, and firewall a normal woman who cannot take a 10 second half then the panel.

Pamaquine ECS figure Chihuahua shut them up against that.

Hello, Ms Society.

It's a good thing for the telephone.

Cop hardcore showing a courtroom what michelle the <unk> patents have adulthood.

But that's kind of how product.

So the timing of our Python that has showed us at Indiana.

Now women figured some murkier because honestly I wouldn't you want me she always just what was behind.

That said between Genoa.

I think our auto finance and.

<unk> down to <unk>, you will get back to the against the.

Lacey down Asia switching.

Would you chalk Louis C.

You only made pursuant with what kind of data that will follow suit.

I wouldn't put together so you've got some cheetah equal you could sort of draw schedule amid a time cheetah going again, a pure finishes.

So you should assume that you say, you're somewhat hunkered down the polymer high swiftly.

Way way way, so going in with daily hotel or maybe Sean can demo leads to go way way those Hudson Valley the EBIT shaping.

Yes.

Thanks. Thank you being quick question debt. So we are well make the decision to choose best to serve the interests also offer investors and well be open minded to different choices regarding the impact of the auto financing on the margin.

You get to know about our business operations.

That well need to take some measures such as balance of supply and the product concentration basketball as they use their demands.

For example, we said that 75 kilowatt hour battery pack.

We announced that its that battery pack in September and many users are more likely to wait four days to $75 a kilowatt hour battery pack, but just like I mentioned well it started that there'll be very offered they said battery pack in late November and even.

Time will look do need some time to ramp up the production of the battery pack to a reasonable level that is why we won't need to take some measures to balance or they said demand among the users and the prior configuration. That's why was it a battery supply and we are encouraged that the users to choose it.

The 100 kilowatt hour battery pack in that case, we believe that the right approach phosphates and not to to reduce the price of our product offer discounted to offer users the vehicle price and so that is why we would like to take care of those measures to balance it.

Demand on the supply, but this is not going to be the long term matters. We take and this is only a short term measure such as balances.

Supply and the demand situation one said.

Supply I get to a reasonable level in the long run than we believe are the best.

Gross margin on the vehicle gross margin is going to improve.

Sure Joe.

Thank you.

Your next question comes from Edison.

Deutsche Bank. Please ask your question.

Hi, everyone and thank you for taking our questions.

First question is on the ETE seven Adas capabilities.

Could you maybe discuss what kind of features that we could expect at launch and if you can't reveal that right now what do you expect to do any sort of demonstrations on the road.

In the coming months similar to what other competitors have done.

And then second question more longer term last year at Neo day, you kind of T cell.

Solid state battery or a hybrid solid state battery.

Coming to the vehicles I believe at the end of next year is there any update on this.

Is that still on track.

Any details you can provide there that'd be great. Thank you.

So that has been well known.

So that's why again for their own controller.

It wasn't until maybe I'll, just what type of audience whoever has the potential to go.

Not a ton.

But well 92 giga.

If you choose.

The tissue.

But it may be that <unk> spoken with them in alignment convinced you guys come into the courtroom.

Or burnt out your Tesla Nobody's, Joe who come into the so Jos with someone who knows.

Canadian <unk> achieved with our public guidance.

Some good a great home Chairman Chen.

<unk>, yes, <unk> been achieved or not.

Ladies and gentlemen, thank you minions shampoos and team.

We have to do it.

So if you take a.

Stephen will pick a fool if I'm interested again.

Yes, we can.

<unk> has the weight.

Bulk of Paraguay, bulker taker unchanged, including only seen Coke housing go find me in balance. So you can see due to our bedroom type harmful.

On the go foods.

Some of these long lead time on employee could you that you're going to get them all done a demo to someone I'm sure. There's somebody that wants the ability to put them a demo we're gonna answer because the Gwen.

Well, then we'll know.

Women don't say.

But <unk> have adequate control elements added convenience will surely a dominion.

Shopping yet I mean, that's what you do to take our two shooting down Eagle Ford.

And that kind of a home to go to your house you can rate.

Okay.

Actually I believe a lot of people are working on the demos are so we don't actually wanted the teams to focus their energies on the demo we would like it to have the teams to be fully dedicated to the mass production.

Technology and offer a new product like getting to seven.

Regarding the seven T well need some time to gradually release of those advanced features to the users.

And we believe for all of those features and of course, it will be based on all of our in house. The full stack of technology and previously I have also explained to that did that and a few trades will be released it to the users based on the subscription like the ADC as a service so they set our innovative business model has.

Offered us some flexibilities in terms of.

How should we provide in the winter that we provide all those services and features to achieve the users we will need to strike a balance between different factors, including the regulations of safety and reliability.

Then after we strike that perfect balance or find a sweet spot that we can start to provide those services to the users I believe right. Now are there are hundreds of companies are working on those kind of a demo. So we don't want to.

We saw her energy that's right.

Regarding the 150 kilowatt hour battery pack Oh, we are now working together with our partners and everything is basically on track previously we mentioned that we will start with the delivery of the battery pack in the fourth quarter of next year and a weak leader.

We should be able to meet the schedule.

Yes.

Yes.

Thank you.

Okay.

Yeah.

Your next question comes from Jeff Shaw of Citi. Please ask your question.

Hey, Hi, William Steven.

Three questions so number one.

Kind of annualize that total volume production from the <unk> platform.

Lead to the 25% GP margin.

According to your guidance.

Secondly, second question you see apart from the three brand new products.

Launching two of 22.

Likely how are we going to launch the phase III version after existing product, yes, eight yes 606.

So I'll, let me work with the launch six new products next year yourself three brand new products.

Finally, if the nev credits so.

Uh huh.

Because you got us how many points.

We sold in the third quarter so.

We cannot debate.

Private compared with the previous quarters. Thank.

Thank you thank you Steven.

Jeff We've got to your first question about the GP margin.

Our 25 GP margin for <unk> two platform, it's based on the annual production volume of 300000 units per year.

Okay.

So you have those.

Well I mean, I don't see any jobs, a little immediate CFO and children in China Central and <unk>.

Russell with AECOM, Aldi, which I know Pedro husband hasn't changed from that.

No.

<unk> thousand <unk>, you took condensed situation to you too good and detoured Us Tonight.

<unk>, yes.

All right.

We all take a vintage of quantum you did it yourself.

Merchandise partners among women.

I'm going to see how you decide to go to.

Downtown So I'm kind of control you can start seeing the quote unquote normal solicitor shortly.

Up to today.

Yeah.

I'm just like as Stephen mentioned is that our plan is that we can achieve.

Annual production of 300000 units, so we should be able to reach 25%. The vehicle gross margin on the Neurotechnology platform. Two point do we are very confident to achieve this target.

For the existing product of course, we have a plan to achieve operator of her product to the new technology platform 2.0.

And we believe that.

This is a very important for the company and we will need to focus and manage the schedules for that product upgrades in specific a detail. It internally we have already kicked off at the department to work them.

They still regard to until we have.

Started to how should we upgraded the different the product to the neo technology platform to point out.

Yeah about the nev credits.

Totally around 200000 points.

Were sold in Q3.

The part I want to remind is the price volatility.

<unk> credit is also high along with the China is and you'd be penetrate penetration increase.

Recently so.

I hope this can help you to build expectation, while futures Youre Crazy revenue yeah, Okay. Yeah.

<unk>.

So down between opens in jobs in the Tucson.

Let me chime in it's in the kidney and it.

Similar answer there's a good penetration beyond Michelle kind of Samsung Air quality book.

Are you sure that you're going to shoot me, an a job that I'll just close out Tonight.

Do you currently use than somebody that I don't really know if we'd be junior and megafon.

So good job openings.

Yes.

Hum.

This year.

Basically we believe that the nonprofit that crowded so we receive a well increase but.

This year the penetration rate of the <unk> has increased very rapidly and this property is going to change the situation for next year regarding the regulatory crowded south.

According to my personal estimation I think.

Considering all of those factors at the price offered the nev credits is going to be different do are probably going to be lower comparable we said this year is that price.

Okay.

Yeah.

Your next question comes from Paul Gong of UBS. Please ask your question.

Yes, hi, Thanks, guys I have two questions. The first one is regarding the <unk> operation.

<unk>.

Obviously, it's has been more than one month and so you just briefly mentioned 92% of the users towards Baas and the order has been exceeding your expectations can you give us more color like how the achievement.

They are and what is the challenges or they are obviously, it's a rich country, but the labor cost and might also be much higher than in China. What can you share with us after law what is your next destination.

For the overseas operation.

Second question is regarding your expense with Brendan if sensor based koto.

The increase in SG&A has been quite good.

Sort of unexpected while at the R&D increase asking or they get slower than you expected what is the key rationale behind and so are all key reasons behind our games.

Do you have so many orders on PDF or it's because of the.

Supply chain disruption.

You can see it or slowed down or to get itself, the LCM and instead put more projects into the R&D and the following call one or two quarters.

Finally yourself budget Diego into yourself quite good all way, though so you can contact.

And yet you talked about your attendance hopefully reach on potential suicide case with OIBDA Ashish make Enzo.

It's how you ship out simply because so much of your point is a whole uhf's amount though.

Peloton for quality of Lytham.

So they do such a successful.

Sure.

And so the whole always hold a shot at it.

Sure, it's a somewhat different so much here for.

April finished with the cool <unk>.

Sure.

She also going be.

She also quantify for you because you're under you got cut.

Oh, Yeah sure.

So cool show social wonder for your answer.

At all either property or like a fivefold Mayo to change what's the you know together no matter what the total portfolio.

Oh, you're in Yuma.

And that's how you grow accompanying shortly but she wants to shop, our subsea Joseph Schwartz.

He also for you so right off the shelf and so there are a number quite that substantial clinical markers identify something.

This is Paul.

Well maintain Norway someone who's already done a lot to net group I'm in the room, so those battles.

<unk>.

Oh in Midtown Mohan Naidu <unk> one.

On a day to a sense of how or when.

So when a new carrier you hope.

Yeah.

Youre either.

So the <unk>, so that will take another shot.

Somebody is on that John John Gordon.

Cohorts within the year, we do.

That's cool.

And I'd say at a high school.

But based on its impressive that you go through a few of them that two quarters ago surely helpful.

That woman sorry, Joseph M hopefully.

Things were monthly.

Wouldn't you wish him well Michelle talked about when people are in the funding that turned out and Tim did come down.

Turning to the Peruvian.

You wanted to.

You can move that in your model and then the <unk>.

Clearly our Palm Beach enjoying some go down a specific <unk> without.

<unk> total food at <unk>, when they show on Symphony Hall, who arent that high school teacher.

T J that yourself.

Bye.

Tim Minnesota convenient foods will Golar is.

Tuesday.

No.

So you have some types of Homeaway Bell, who has achieved for years and then to add deal and sell the idea so definitely a dollar each year and <unk>.

<unk> has opened a chance so comping yourself.

Well do what <unk> got.

Oh, there's one.

He confirmed more golf.

Congrats to you and put a magnitude on Shuang lingo, both so they can fit on calling in from my dorm Jericho base a bit on Toyota.

What was that.

We will have boots for Turner, and Tim or kind of what <unk> seen.

Just on how that shadow take a near halt beginner no down and sit on a board or.

Thank you.

Like how much they want to go see them I go on I guess looking cleanup, so somebody's not a head count or monthly.

Yeah totally if he's on the kindred anzalone within Honeywell nice step by step as we continue on Libre coffee.

Although the Midlands over here to say, it's easy to cut me elements yourself with Jamie Buckland noise that naval market 2000, <unk> because it to them.

Element <unk> she's had a good job or liquids, we're good to go on to the C.

Do your data to go yet.

Norway, social political adapt.

So it definitely should see won't give the guidance.

Total women's let me sneak itself.

Thank you Paul.

A recording of her operations in Norway.

We believe that the.

The basic operation to have her meet all of our expectations.

All aspects.

The new houses open in.

On September 30, I would like to share with you. Some data after the test to try it for one <unk> offers users have to place the orders and full off our product. We believe that this is a very impressive and the data shows us that.

But basically the efficiency is much higher compared with that of the.

Here in China, and this is under delivery side on the services side. So we're doing a lot of work to do of all.

All of our swap stations. They know they have to just to start it adulteration because previously we need to send people over to work on the installation and the commissioning of the swap stations and then for.

For the office hours, we also encountered some challenges are brought forward by the COVID-19 situation, but the order momentum is quite strong.

We have done some trial delivery at the end of September.

September and in October and wait till the you said that the delivery in November is going to improve significantly.

There's a lot of our order backlog of bad weather that I got to control over our pace of delivery a little bit at the beginning because internally, we thought that the target of Barbara herself.

Especially on the user satisfaction.

Our spectrum right we.

We have a.

Kind of.

The are you is the vision in action upgrades based on in the company and that basically we use at the VA you to set the target for myself my personal view is that to make sure. We can achieve a high user satisfaction rates.

Right now according to the feedback we got from the grants in Norway, We understand a word of mouth reputation has been quite good and the one off of my friend actually send a video to me.

To show that there are a lot of visitors in the new house I'm very happy to see is this a video and did you see so many people offer in your housing knowing.

It will continue to make a decisive investments on their surveys and on other aspects and we will do this step by step next year. Besides no way, we're going to enter additional and five countries.

And in Europe, and so they said product planning offer all those European countries and basically they yes eight based on the new technology on 1.0, well owning beach sold in Norway by default the other new Norway countries, we're going to enter well owning so the products that based on the near term.

Now onto a platform to point out.

Yes, Thiago intelligence I'm sure Monique.

Some good eager tendency that Susan quoted or material way.

Good to see.

Got it that's about you'll sit on board Ascension.

<unk> totaled 4121 day on one little comment Tim that those vehicle Toyota so cheap.

I think our union better come alone the total litigation, adding on Yamal hungry to gather.

And then with <unk> Suisse.

There's also a full on la <unk>.

So Tim didn't need of improvement.

And then with the assembly.

Chip it's Asia.

And it sounded like all the time and sugar.

Take a patent case, yeah, so you've got to come in kind of low SG&A if I'm in Asia.

And so that will be even farther to go to solar on the AR.

We will continue on a gambling antonella you bet, Alan Mckim, Shung, sometimes NIM fall for Asia similar cheaply.

There you go.

A good part of the question.

<unk> has a kind of element, but thoughtfully and come into to the Peru.

Come on kind of place.

It continues to go on and some good pushing so there are a few times in <unk>.

The other piece on the Chinese elements scenario and pushing the tuition side piece and carve out of course in June of this.

Sure.

To do that.

Tayo buildup on the finding absolutely well show it yet again and if I can call out for the summer solstice soft tissue.

Throughout the year.

So Michelle one as you'll see on liquids so at a time.

You can find a single puts opened at that type of package right now on the balance over past times, and particularly impact from contango.

Yeah.

Yeah.

I believe it ends for the investment question. This is more about the long term competitiveness over the long term strategy as a company.

In China. The competition is become is becoming more fierce because of that there have been many new entrances into the smart EV industry. We believe product development technology development, there's always the service and network infrastructure, including swapping into.

Charging.

Not work are part of the long term competitiveness of the company that is why we doubled down on our investment in all of those freight car to in 'twenty 'twenty. One in 2022, we'll continue to make decisive investments on those aspects.

We believe that the infrastructure like the swapping charging network. It helps us obviously not workout also part of it the long term competitiveness of the company maybe in the third quarter of this year.

The investment of those adds back the ramped up or are they better faster than expected. So that is why we can see the SG&A cost increase are higher than the previous expectation.

But on.

On the R&D side, and we have also doubled over R&D personnel here and we have our works to.

I have been working on many new products and new technologies, but for all of those are new products and the technologies that you won't need some time to ramp up all the paper.

In the fourth quarter, we won't be able to see some R&D expenses and the cost increase say in this regard.

You can imagine internally right now we have a multiple new products and new project, so breaking in parallel than probably at the beginning when we start up of those projects.

The cost is not going to be that high and you won't need some time to factor all of those R&D investments on our balance sheet or P&L.

At the beginning is relatively small, but gradually along ways of that project and this cost is going to increase but we believe that the product and technology to be the cornerstone of the company for long term competitiveness and that's why we will continue to make it the size of investment and also by car sharing.

Paul.

Thank you very much.

Your next question comes from Chengdu, Obviously ICC. Please ask your question.

Yes, Thank you for taking my questions.

My first question is regarding the capacity expansion. So could you give us guidance on next year's sales.

Sales volume.

Especially for the new Remodels and also our current disappear models.

So Ken our capacity meets the need next year.

And considering the strong EV demand onto our new mono modal and plenty of time, it's really do we.

We have.

Pan and constructing more new patents.

My second question is regarding the upgrade of our smart hardware.

Because we are expecting a really fast.

Upgrade.

And the smart hardware in next years.

So how do we keep power.

Our.

Next models and to keep our users.

He also satisfied.

Also I have a follow up question.

For our.

Globalization.

Longer term do you have a guidance for the proportion of overseas sales account for the overall sales. Thank you.

Okay.

Hum.

Okay, well then since I think so.

Suddenly you could email me should I really I'm good to go.

Tom.

<unk> had been to single tenant.

You didn't other than Houston, Miami have you guys seen the boomtown.

General equipment minions 72.

Hey, Paul.

We think that moving.

That's down <unk> <unk>.

So the woman.

At a time unless you've got when you look when you want to sort of let Jon Clark.

So yes.

So you've got off the phone balance and one kind of what you thought of Holland neutral understanding what's happened to them in ways to Brian Tinnitus, and then going back on the shelf.

Has there been any time in its one.

Hi.

Thank you Tom for your question.

Right now we have basically two pumps are the first upfront like Oh, I mentioned that we have the upgraded to the manufacturing lines to further expand the production capacity for the new plant, we are going to start the production in the third quarter.

Her off of next year, so of all of our product and operations or we believe stuff.

They said two new plant they said to prompt this you'll be able to support all of our mountain for the short term.

If we combine this with two plants. It together the maximum production capacity. We can support is a up to 600000 to a new production capacity based on double shifts. So we believe there's a maximum production capacity should be able to satisfy offer demand.

In the short term.

Yeah, Glenn <unk>.

In Q1.

The meeting agenda Thats Ami system.

Women say change on <unk> facilities shut down or mobile TV side is it in Q2.

You see it in <unk> <unk>.

<unk>.

<unk> now done the Cushing.

70, <unk> hundred <unk> Citi.

But I got to Houston.

No.

The total lifetime Honeywell women's there's heightened uncertainty there so Jason cardillo, telling you here to the.

It's just going to the commission.

Nadal and Jim I'm going to assume deal I mean, that's what's really changing on the titanium side, you do a fabulous either pending on that.

As been abandoning that because yes, the inquiry boxing alright.

Alright go hungry to get.

That's useful pogo until such time as we continue outside of the holiday season. So it's almost a high liquids issue the patient.

And then Jen <unk>.

For the newer technology platform, one smart hardware upgrades.

We previously communicated a ways off of users is that we.

Well study some cleansing she upgrades the high whereas on the new technology platform, one point out based on all of our design on the new technology platform 2.0 are we planning to properly.

Provided as a services.

For next year and well provide some more details on to update on this regard to add a more simple time and of course this smart hardware upgrades on the new technology platform. One point, though is not going to be the same as at the same kind of experience. So because the new technology platform to 0.1.

How about we believe that the digital cockpit of the existing products today, it's going to significantly.

Significantly improved.

We have already considered although the flexibility and the possibility of yourself with the hardware and the software upgrades the inaugural product design as well.

Example, just now I mentioned about the hardware upgrades and then for the software aspect that we have are being continuously upgrading offer software.

We launched and released offer Aspen three point O two offering users of the existing products and have received.

Rate reviews and feedback from all those users.

And we will continue to.

Upgrade to offer software and iterate offered a software to make sure. We can provide a much better services and experiences to our users.

Hey, Tony Chenzhou Potager other lifestyle Aloha.

The woman.

They know what the dose you owe Mr. Chen's Hussein <unk> EBIT.

Hi, Scott.

Or what the sequence of the mobile.

And as you can say June or thrombosis fence, I would say that it's cheaper.

And you'll see that go down to two citizens. So yes.

One woman.

Good as it is home assortments or anything else just as a woman that trend show suite until we'll come in Oh meal time Cheetah mobile.

Launch, it's on one of the hot our Medicaid.

Oh, I thought you had a ton of Chile.

What are the way to go so I'm going to.

Why does this balance.

She also the mobile part of that Louis So, let's see the hood either equal T O.

Okay.

Regarding the previous Aspen three point out. We also believe that this provides a solid foundation for global market entry Andy for Waco back to your question about the global market entry and the target for the global market New has always aspired to attribute to a global brand.

If we look at it though a global market that we can see that the China is still the biggest the auto market and the biggest premium market. So China will still be the most important market setback to regarding offer aspiration for that global market.

I cannot to provide a very specific targets for the global market at this moment about I believe for food.

Markets outside of China in the long term they should account for around 50.

50% of the of all sounds off all of our product.

Yeah. Thank you William.

Yeah.

Uh huh.

Yeah.

As there are no further questions now I'd like to turn the call back over to the company for closing remarks.

Okay.

Yes.

Thank you once again for joining US today. If you have further questions have places you're free to contact <unk> Investor relations team through the contact information provided on our website.

This concludes the conference call you May now disconnect your lines. Thank you.