Q4 2021 Li Auto Inc Earnings Call

February 25, 2022

Hello, Ladies and gentlemen, thank you for standing by for the <unk> fourth quarter and full year 2021 earnings conference call. At this time all participants are in a listen only mode. Today's conference call is being recorded I would now.

Turn the call over to your host Janet Yang Investor Relations Director of Lee Altair. Please go ahead Janet.

Thank you and good evening and good morning, everyone welcome to lay out how its fourth quarter and full year 2020 One earnings conference call. The company's financial and operating results were published in the press release earlier today and are posted on the company's IR website on today's call we have our president.

Mr. Kevin Yeah nation, and our CFO , Mr. Johnny Chile to begin with prepared remarks, our founder and CEO . Mr. Shan Li will join for the Q&A discussion.

Before I continue please be reminded that today's discussion will contain forward looking statements made under the safe Harbor provisions of the U S. Private Securities Litigation Reform Act of 1995 forward 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 and announcements published on that side of the Hong Kong stock exchange and to the company.

The company does not assume any obligation to update any forward looking statements, except as required and the applicable law.

Please also note that <unk> earnings press release, and this conference call include discussions of an audited GAAP financial information as well as audited non-GAAP financial measures. Please refer to <unk> press release interim results announcement in the fourth quarter and full year 'twenty to 'twenty one results announcement.

Which contain a reconciliation of the unaudited non-GAAP measures to comparable GAAP measures with that ill now turn the call over to our President. Please go ahead Kevin.

Thank you Dennis Hello, everyone and thank you for joining our call today.

2021 was a pivotal year for new energy vehicle sales in China. During this year Chinas auto industry witnessed a notable substitution.

Ice's internal combustion engine vehicles, evidenced by <unk> rapid growth in contrast to the sluggish.

Sales trends.

E vehicles.

This led to growing penetration.

This overall passenger vehicle sales according to China passenger car Association in 2021, the retail sales of new energy passenger vehicles increased by 169% year over year to nearly $3 million.

Ice's vehicle retail sales decreased by five 6%.

The penetration rates for retail sales of new energy passenger vehicles rose substantially to 28.

In the fourth quarter of 2021 versus 12, 6% and five 8% for the first nine months of 2021 and the full year of 2020.

With mobility transformation trends pointing to increased smart electric vehicle use.

We are proud to forge ahead.

Pioneer.

As an industry leader, we are ready to serve more families with continuing product and technology innovations.

We achieved deliveries.

35221 units in the fourth quarter of 2021 up 143, 5% year over year driving total revenue to RMB 10, 6 billion or $1 7 billion U S dollar growing 156.

1% year over year, the robust fourth quarter performance to our full year deliveries to 90491.

177, 4% year over year, and the total revenues to RMB 27 billion or $4 1 billion U S. Dollar up 185, 6% year over year.

The one was the first domestic revenue premium modern priced above RMB 300000 in China to achieve the 10000 monthly deliveries in January 2022, we have delivered over 10000, <unk> <unk> for the third consecutive month.

Achieving a new record.

We believe this is another milestone for the one to qualify as a blockbuster model and will be a benchmark for all our future models.

We are excited to see what we can the premium passenger vehicle market in China targeting family users and emerge as one of the best prices.

Attribute our vehicle success to our outstanding product definition capabilities.

The extended range 60 to SUV has gone from being question too mainstream.

Our full screen full vehicle interactive voice system has set a new industry benchmark.

As further proof our user recognition of <unk> pioneering and energy replenishment solution adopting battery power for urban commuting and the recharge with range extender during long distance prevalent.

And highlights our users endorsement of the brand new in vehicle driving and riding experience D. One offers in this autonomous era.

Our product definition capability built on the shared vision in our organization and a solid.

The foundation of comprehensive capability, including technological strengths profound consumer insights and systematic execution.

And we are confident we can apply these to our future models and continue to provide our users with solutions beyond what the demanding we aim to grow our model lineup significantly in the coming years.

Advancing our R&D efforts as product provides with a competitively kidneys.

Note for business and the technology for the.

Full product.

Yes.

Well production and the delivery improved.

Most of our chief supply chain partners, we resumed normal efficient challenge challenges to the overall EV supply chain will likely become long lasting affecting chips batteries and potential other auto parts given the accelerating development of the smart electric vehicle index.

Going forward together with our supply chain partners. We will continue to work multiple measures such as advanced planning and diversify the supply chain to mitigate supply chain risks.

In light of the ongoing industry wide semiconductor shortage, we expect the total deliveries in the first quarter of 2022 to be between.

30000 to 32000 vehicles.

Turning to the financial side.

Maintained strong performance with a robust and the steady gross margin of 22, 4% in the fourth quarter growing four 9% over year over year. This was driven by our strong vehicle sales performance and consistently effective cost management measurements.

Even as we accelerated the pace of R&D spending to 11, 6% of revenue.

We grew our sales network by adding 53 retail stores in the fourth quarter, we achieved profitability as well as a record breaking RMB three 8 billion operating cash flow, which is a significant reflection of our approach.

Excellent.

In 2021, we significantly extended our direct sales and servicing network almost quadrupling our number of retail stores to 206 in 102 cities from 52 in 41 cities as of the end of 2020.

By the end of January we had 220 retail stores in 150 cities as well as 276 servicing center and also authorized the body in the paint shop.

Operating in 204 cities, we aim to provide our users with more convenient efficient and purchasing and user experience by strengthening our online operations as well as continually adding physical touch points close to our users we plan to further enlarge our footprint.

And the target, reaching 400 retail stores by the end of this year to meet the growing market demand for AED national wide supported by consumers rising in EV adoption and our upcoming new model launches in 'twenty.

'twenty two.

Award.

Moving to our product optimization and R&D efforts.

In December .

2021.

We released the Otas three zero update.

All our Li one users further enhancing the in car experience for both drivers and passengers. This upgrades include the navigation Adas.

And the automatic.

Emergency braking AEP features making us the third automotive Oems globally to develop its own full stack.

As of January 31, 2021.

We have provided all the way to more than 70000 assembly users and the during the Spring Festival holiday.

Cumulated over 2 million kilometers of milk.

Meltage with Adas equipped our user base at the leading scale in China. We will continue to increase R&D of Adas related technology, and we believe we are well positioned to push the boundaries of assisted driving technologies.

The upgraded AEP.

With vision perception algorithm enables <unk> to identify roadwork and highway traffic accidents sites and the prompt users in advance to avoid major accidents. We won was awarded 2021 car of the year by Dr contributed a rebound.

Also information platform in China due to its outstanding AEP performance exhibited in the <unk> AEP test known as the most strict vehicle test in China by automotive professionals.

During the test the one with the only access model in the final one capable of accurately identify crossing vehicles two winners.

This further reflects our full stack self development capabilities.

The Otas three zero update also included.

Accreted version of the <unk> Smart in car voice assistant data towards year, which now recognize this and execute more voice instructions for <unk>.

Payment navigation and the vehicle setting.

We will continue to conduct R&D to develop safer car with smarter product features that can be helpful. For all members of the family young and old as we remain.

Steadfast in our commitment to creating comps on the move that bring happiness to the entire family.

We are also happy to share that we have been added to the handset Tech index under the index newly added category.

<unk> technology, the inclusion will take effect on March 7th this year. We have also been included in the handset companies large cap index since August .

2021, as a technology leader in smart mobility our edition.

Two the <unk> Tech index in doses.

<unk> of our full stack self developed the Adas and smart cabin technologies as well as recognizes our capability to create value for our investors. We look forward to bringing more families. Our <unk> premium issues that offer safer simpler driving.

With all the amenities and the technology people want in a premium vehicle.

In the second quarter of.

2022, we will unveil our next mass produced vehicle model.

A full size premium extended rent electric SUV deliveries of this model will start in the third quarter of this year.

In 2023, we plan to launch to be EV models that support ultra fast charging by then our ultra high voltage charging solution will be readily available to our users effectively shortening the charging time.

Dressing knowledge.

As we remain committed to developing new models.

Ton of us driving smart cockpit and others, our R&D expense for 2021 tripled year over year to RMB, three 3 billion or $516 7 million U S. Dollar accounting for 12, 2% of revenue.

We will continue to expedite our R&D.

Great.

R&D progress with the support of our expanding R&D.

Which is.

Comprised of more than 3400 personnel as of the end of 2021, representing 139, 8% year over year growth, we target to maintain our R&D investment at the level of 10% of revenue and about going forward turning to.

Our production.

We are expanding our capacity at the Changzhou factory and the constructing our Beijing manufacturing base once the expansion in construction are completed.

Designed production capacity at these two manufacturing sites will reach 500000 units.

In 2023 and around the 750000 with double shifts.

Meanwhile, we are excited to share that in December .

2021, we entered into a strategic cooperation framework with <unk>.

Municipal government for establishing our new manufacturing base, we will make relevant disclosure of the Chongqing manufacturing base when appropriate.

We enhanced the production capacity together with our enrich the product lineup.

We will position us well to capture an increasing share of the booming EV market laying a solid foundation for our strong growth in the years to come.

With the launch of our second major vehicle just around the corner and the continued strength in.

In order for our <unk>, we expect 2022 will be another pivotal year of growth for the one for the outlook, our pioneering spirit tell us to keep pushing the boundaries of what is possible and thats. What we are doing the market is right for advancement.

And we are in the right place at the right time with the right strategy. The right skill set the right business model and the right vehicle to drive us to the next destination.

In 2022, we expect that the nev market to see his greatest number of drivers yet and we are already for it.

Now I will turn the call over to our CFO , Mr. Pizzi to review our financial performance in the fourth quarter.

Thank you, Kevin and Hello, everyone.

I will now walk you through some of our financial results.

For the fourth quarter of 2021.

Due to time constraints I will address financial highlights here and encourage you to refer to our earnings press release for further details.

Total revenues in the fourth quarter of 2021 were RMB 10 point fixed to bidding.

I think $7 billion.

Representing an increase of 100.

56, 1% from RMB 4.15 bidding in the fourth quarter of <unk>.

2020.

And the increase of 36, 6% from RMB seven pardon.

Seven 8 billion in the third quarter of 2021.

This included RMB 10 point.

Three eight bidding or one point.

Six.

$3 billion from vehicle sales with.

Increased 150.

Five 7% year over year.

And 45% quarter over quarter.

The increase over the fourth quarter of.

2020 in the third quarter of 2021 was mainly due to the increase of vehicle deliveries in the fourth quarter.

Revenues from other sales and services.

RMB $244 7 million or 38 4 million in U S dollars in the fourth quarter of 2021.

Representing a increase of 174, 5%.

Year over year and the decrease of.

730.

1% quarter over quarter the year.

Over year increase.

And revenue from other sales and services was mainly attributable to increased sales of charging stars accessories and services.

With higher accumulated vehicles.

The decrease in revenue from auto sales and the services or the third quarter of.

2021 was due to the sales of automotive regulatory credits in the third quarter, which didn't reoccur in the fourth quarter.

Cost of sales in the fourth quarter of 2021 was RMB eight points.

Two for bidding or one point.

Two 9 billion U S dollars.

Representing an increase of 140.8.

<unk>, 8% year over year, and an increase of <unk>.

38, 2% quarter over quarter.

Gross profit in the fourth quarter of 2021 was RMB 238 bidding of 373, five meeting U S dollars.

Growing 228, 5%.

Comparative base for the.

Comparable with the fourth quarter of <unk>.

2020.

And 31.

3% comparable with the third quarter of 2021.

Vehicle margin in the fourth quarter.

2021 was 22, 3% comparative with 17, 1% in the fourth quarter of 2000.

<unk>.

And 21, 1% in the third quarter of 2021 the increased.

Vehicle market over the fourth quarter of 2020.

Was primarily driven by higher.

Average selling price are attributable to the increase of vehicle deliveries.

Of our 2020, while the one still say, it's a relief in may.

Our gross margin in the fourth quarter of 2021 was 22, 4% compared with 17.

5%.

In the fourth quarter of 2020, and 23, 3% in the third quarter of 2021.

Operating expenses in the fourth quarter of 2021 were RMB 236 billion.

369.

Seven meeting U S dollar.

Representing an increase of 193, 2% year over year, and an increase of 23, 4% quarter over quarter.

Research and development expenses in the fourth quarter of 2021, RMB one point.

Two 3 billion or 193 bidding meeting U S dollar.

Representing an increase of 228.7% year over year, and an increase of 38, 4%.

Quarter over quarter, the increase the risk research and development expenses over the fourth quarter of 2022, and the third quarter of 2021.

It's primarily driven by increased employee compensation as a result of growing number of our research and development staff as.

As well as increased cost.

With new product.

Alabama.

Selling general and administrative expenses in the fourth quarter of 2021.

RMB 113 billion or 176 7 million U S dollar.

Representing a increase of 162.

0.2% year over year, the increase of 10.2.

<unk>, 2% quarter over quarter, the increase over the first quarter of 2020.

Was primarily driven by increased employee compensation as a growing as a result of growing.

A number of staff as well as increased marketing and promotional activities.

And the rental expenses associated with the expansion of the Companys distribution network.

Income from operations in the fourth quarter of 2021 was RMB 24, 1 million or three 8 million U S dollars.

Comparative with RMB.

78.

9 million loss from.

Operations in the fourth quarter of two.

2020.

In RMB 97.8.

<unk> meeting loss from operations in the third quarter of 2021.

Net income in the fourth quarter of.

Our 2021 was RMB.

$295 5 million.

$46 $4 million compared with RMB 100.

7.5 meeting net income in the fourth quarter of 2020.

And the RMB.

91, part five meeting net loss in the third quarter of 2021.

Now turning to our balance sheet and cash flow.

Our cash and cash equivalents.

Restricted cash time deposits and short term investments.

Holly.

Our total RMB.

Okay.

One 6 billion.

Seven.

Page 7 billion U S dollars as off take.

<unk> 31st 2021.

Operating cash flow in the fourth quarter of 2021 was RMB three eight.

Eight 4 billion.

All $602 1 million U S dollars.

Free cash flow was RMB one point.

Six 2 billion.

53, 5 million U S dollars in the fourth quarter of 2021.

As of December 31, 2021, we had a total of 11000.

901, and one employees.

For more of our 2021 full year financial results. Please refer to our earnings release.

For further detail.

And now for our business outlook.

For the first quarter of 2022.

The company expects deliveries to be between.

<unk> thousand and.

32000 vehicles.

Ranking of increase of.

100.

Of 38.

5% to 154, 4% from the first quarter of 2021.

The company also expects the.

The first quarter, our total revenues to be too.

Between RMB 8.84 billion and RMB 9.43 building our U S dollar 1.39 billion.

And the U S dollar when part four 8 billion, representing an increase of.

147, 2% to 163, 7%.

The first quarter of 2021.

This business outlook reflects the Companys current and the permit preliminary view points of fitness situations.

And market conditions, including the ongoing industry wide semiconductor shortage.

Asia, all subject to change I will now turn the call over to the operator.

To start our Q&A session. Thank you.

Thank you we will now begin the question and answer session.

If you wish to ask a question. Please press star one on your telephone and lights for your name to be announced.

If you wish to withdraw your request please press the pound key.

Hey.

For the benefit of all participants in today's call. Please limit yourself to two questions and if.

If you have additional questions you can re enter the queue.

You're going to ask the questions in Chinese please follow when English translation, so let's get a star one so questions.

Our first question comes from the line of Fei Fang from Goldman Sachs. Please ask your question.

Great. Thanks, Let me ask my questions in Chinese first and now translate into English.

Sure.

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Which had been a reliable channel brocade antidiuretic accident.

Come on cabinet, which gives me a hard dollar silicones.

The adults.

And what what juncture.

<unk> actually got Macondo June quarters until the Chinese panel.

George.

Simply put homeownership.

Yeah, Patrick I see it every day.

Linda <unk>.

Little icon, which allows you to go quite as Homeaway to change again.

We don't see that you.

Cannot hit harder.

Turning to the Champions League.

Let me go to Hong Kong.

Homeowners have majority short you basically on the dlcs should eaglebank tailwind actually going to take a channel, but the EMEA take a quote on the GSO. According Sunday night since you're already outstanding automobile, particularly shown by Docs you should one type of channel already arent that obviously by Dr. Ajay <unk>.

EBIT dollar tickets Institute, which a wholesale.

China, Australia in terms of all held up quite so popular.

Let me just quickly translate into English.

China's new energy vehicle industry has various product launches in the past 12 months some more successful summed it up really quite work out.

What have you learned from the from the industry and what do you think are the critical factors for products to succeed.

Second question, some manufacturing capacity and store openings to 750000 units production capacity by the end of 2023 400 stores by the end of this year. There is a condition targets large numbers from where you're at right. Now. So it doesn't mean that you are ready to scale up new products after unveiling cells.

In the rest of the year.

Okay.

Whenever that Bob Cushing.

Coaching in annual synergies.

Yes.

We do have that time.

In EMEA.

Utah.

Yes.

For the year.

Sure.

Okay.

The data show virtually the shingle at Geneva Bahar.

So that you could share.

As usual with our stakeholders as usual if you talk to the puts it out as usual open some that are.

I'll kind of across EMEA.

Our two two closer to the time here.

Is your tonnage to E comm.

At the Genco.

Additionally to reduce a wealth management shop Dynamite Hill quadrature.

Quadrature.

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If I may.

She also suggested that the helpfulness of the total so that.

Can you talk with other telco literally by Bahar well, good confidently LTE grid company outlook <unk> seen an agenda for the Doj to answer Bill.

Got it on intra Asia routes have been unchanged.

The bank has advantage regardless of timing.

Sure.

Yes.

How do you go.

And yet you're kind of in Asia.

Hi, Pavel.

Sure.

<unk>.

So we had a debate.

It should be up.

It's all good.

Now I'll payable.

Who had the English or Jack.

Jack.

Hello, Jonathan Shaw.

Sure.

The hub.

To accompany this out on you that.

Uhm.

To get to that yet.

Sure Joe.

Now to the challenge.

Sure.

Suddenly the fit out China, Hong Kong guarantees yet may also have noticed clipper into that.

First of all this is Lisa I'm traveling for leisure.

I'd like to answer this question as a product manager myself.

In fact in the industry, they're very established private logic.

We start with the users the users care about two things first of all has their own needs and there are three levels of these starting with the first level, which is there some professional fees and then going down further.

Didn't meet and eventually it means that the users don't even know themself. So first of all we need to understand these needs very well and the second point is the price point that they are willing to buy our product set and with these things we can basically draw a circle.

And as a product manager our goal is to build products that will overlap as much as possible with the circle of user needs and the product really focuses on five different things. The first one is product performance.

Liver product that perform well on many different levels and secondly, the safety and security third is quality fourth is price and fifth and supply, especially in an industry. That's been growing so rapidly suppliers, especially important as has been seen in the industry in the past few years. So overall, if we can build on.

Product that can balance these five factors and match.

Circle of user needs than the bigger the overlap of greater sales.

And on the contrary if the overlap is very small no matter what the vision is from a company standpoint sales always suffer so we believe a good product good product performance is never a coincident.

Based on various established and solid product capabilities of the company. Thank you.

Yes.

This is Kevin let me take the second question about our preparation for the coming years actually we have a very strong confidence in our.

New products that we're going to launch.

This year and next year. Therefore, we are.

Very aggressive in terms of.

Getting our capacity.

Third right now from the sales side we.

As mentioned, we have 400 store <unk> by end of this year, we'll have more.

Next year and also not only installed but also human resources of the sales force.

We're also preparing from the capacity perspective.

Actually our not only our own capacity, we are working with our supply chain partners to adding capacity in their factories also and also as we should all know that.

Supply constraints. So therefore, we have already started to secure upstream.

<unk> resources Bye bye bye.

By giving.

Advanced sending to our supply chain partners.

Thank you.

Thank you for your question.

Next question comes from <unk> <unk> from Morgan Stanley . Please ask your question.

Course equals so you can do without <unk>.

Okay.

So.

<unk> wholesale Julien.

2020 ratio.

<unk> I was just wondering.

Once again.

<unk> so.

Yes.

Since we're talking to say todays attacks.

Total liquidity it makes sense.

Hello.

Total project cost.

So chi negotiated gelatin colon doubtful.

Thanks very much.

Sorry, but you get onto the existing hedge again.

So now let's answer again tell this way to the convention of course at all times.

<unk> liquidity.

Yes.

Okay Alright.

P J.

His opinion infiltrator.

The timber.

Youll be coming into the T cell cancer.

<unk> got to let that go.

<unk> entirely ultrashape without.

So the case and when you say <unk> quite good at this yet.

And then quickly on the Chilean it sounds on the economy.

Sure.

Thank you Paul.

<unk> got.

Quite a bit.

So just two quick questions. The first question is about <unk>.

Consistent strategy.

We noticed aerostar. It appears we plan to expand the operations coke into non eco business.

For example, like smartphone manufacturing.

Because in order to broaden and enhance.

Our user ecosystem to smart TV, so from <unk> perspective, how should we think about companies like Apple ecosystem development.

And my second question is about cost the cost management.

We expect the general inflation with price hikes of catastrophes and other key materials too.

To continue this year, so how should we gauge the potential impact any quantitative information that we can take us <unk>.

Assess the potential impact.

Thank you.

Nathan will lead out.

The dividend.

No.

Liquidity and Youtube.

Turning to utility interest at 101 to do.

<unk> or Mcdonald's or digital again neutral that immunoglobulins has come down.

Tony.

Hello.

200, <unk> future housing Orlando.

I wanted to get home how champion hotels.

As usual our CFO .

Catalog contour.

Tomas Nilsson.

Ill put your domain.

If you had one yesterday I'll, let you answer that.

All right now.

Jimmy on attention to that now.

A new Union Hall by champion by Union Hall, as usual basket on channel.

And I'll see you Anthony in Angola.

Thank you Jose.

And what you see in totality chemo, John that you don't see growth.

Or would you just really can't tissue patch and again in 'twenty.

100, <unk>. The hospital you will help you grow youre going to Youre talking ideally hopefully.

Your line is hung in Azure.

We welcomed yet.

Sure Matt.

<unk> seen our vehicles leukemia, when you're open to.

Sure.

So <unk> that window conjecture, conoco acanthion people hard up how easy its usual yoyo candidly on behalf opportunity back to the call.

Now turning to locum golf.

And then go away.

The development of <unk>.

Canadian cohort cohort yet.

Hanging in there as well you had noted.

Tabular and whatnot.

Oxygen.

The founder of the company, we have been focused from day, one on the <unk>.

Mark Electric vehicle market and we believe that we've just finished our zero to one stage and there is still way too many things for us to focus on.

Then to extend into other sectors.

So there are many things that we can do on the product application technology and system level.

I believe we'll take the next five to 10 years for us to complete and we will vary.

Very focused on this market going forward for at least the next 10 years and we believe that in 10 years, we can reach a level where apple is.

And smartphones and smart devices.

So that's our overall strategy and then speaking about space in car space. There are so many things to do we're not talking about expanding into other types of space, because we believe that even for the space and car there are still many things to do.

One of the opportunities is the experience.

For activities, where the experience is still not as perfect and other space. We believe there is an opportunity to move them into cars and because of our integration capabilities and because we can fully control many of the hardware and software we can provide much better experience than they are the way it is elsewhere.

Including content and hardware.

These are all big opportunities to tackle that we will continue to focus on.

A foreseeable future.

Tim This is Kevin let me take the second question.

About the constant challenge.

In fact, when we cancel this year's financial budget actually we already took into consideration of the potential cost.

The increase, especially as we shut down it should all know that the battery.

It's going to.

Kosovo.

Please yes on.

On the other hand about actually how with the volume substantially increased this year.

Also we will achieve more economy of scale. So therefore overall, we are although we have many challenges, but we are still target to achieve the higher end margin gross margin last year.

Thank you. Our next question comes from bin Wang from Credit Suisse. Please ask your question.

Okay.

Do you want me to do something you don't know.

Sure.

Could you just show on the municipal mutual creating with Sungard.

I'm, just hoping you can 77 digital enrollment.

Thanks.

Certainly.

Hopefully, we can do in Normandy on tissue.

We buy those bulletins are much cheaper.

Chuck.

Hello, Michael.

Could you all would each of you.

Actually.

Question number one.

As I mentioned in the March you actually got it.

Electrical for the technology.

Technology.

That means it could be electrical photo Shenzhen, Hong Kong stock connect.

That's number one and number two is about maybe you actually came in around 200 million in revenue.

On the credit.

So what's.

What's the rough amount in that 'twenty, two because you can almost more than 1% growth and it'll be one.

What's the help for margin and profit and Thats why I think you've got an announcement that the CTO HBV.

What's the reason behind us.

Thank you.

Yes.

This is John .

Thank you Amit.

First of all for the connect.

According to the latest press release by.

So index.

We have been included in <unk>.

Sure.

In.

The large cap index and also.

To be included in the.

For connect we need to meet irrelevant requirements or market cap.

Transaction volume.

We expect to be included in the <unk>.

<unk>.

In mid March after we are lifted for six months and the Plaza.

'twenty transaction days, it will be around that.

And.

For the Nev credits for 2021.

We have.

Or.

Two.

Two to three.

Times of course.

Costs are comparable.

2022.

Alright.

Because from the sales volume.

But as everyone aware.

So the protocol.

Price will.

Would be lower than last year.

We are still negotiating with.

Angel.

Of those.

These costs.

Hopefully that will come out.

Around.

The third quarter, just like last year.

And for fall.

The city also across I think we can tell.

I refer to the press release.

Okay.

Thank you.

Thank you. Thank you.

Thank you. Our next question comes from the line of Vincent Lee from Bank of America. Please ask your question.

Yes.

Go ahead Jason.

Thank you Joe.

Those who can contact and it sounds like <unk> got it.

<unk>.

Jim Teague ones, yes, I see some notice traditional seasonal change you guys use so that's the issue.

Hi, Allison.

It sounds it will be all done.

Got it.

She says under it.

Sunday Vishal.

Some tools.

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No.

I won't go through it.

So they're going into the Johnson <unk> Johnson's right.

Now Jason.

<unk> announced its accounting treatments and Mccann.

And it's good to know.

Communities.

Let me answer to that.

Now that.

Some comments about the.

Sometimes the employee plenty of who their seasonal Melbourne Johnson that sequence of the <unk>.

<unk> recently noted this is quite in terms of the improvement.

Julian.

Yes.

No.

And your assumption about what AEP.

So no change that is attempting.

Attempting.

We can tell two sides.

In India the shine through.

Zoom into the incident Georgetown.

John J quantify.

Okay.

Similarly on the issue silicone businesses on both sides.

So.

Goldman along with you Don Okay, yes. So.

So I have two questions. The first question is how do you see.

Fly churn management.

Also the chipset situation.

92, and the second question.

Okay.

After year end.

What do you think.

The most important function for mixed step for you to offer.

Customers to enhance the site experience anytime.

Hi, Lee This is Kevin let me take the first question.

Sure.

In fact, we are also impacted by the.

Hi.

<unk>.

This month and also last month.

Not only the IC shortage from my seat, but also the COVID-19 hit.

Joe.

So going forward in the coming coming.

Coming months actually we see the the <unk>.

Situation will getting improved by the steel supply will be very tight. So we will continue to do what we have been doing first quantify more supplies.

Given the vast of handing to our supply chain partners.

Basically two to increase our own production flexibility so that whenever the supplies available we can very quickly turning to into <unk>.

Final product to deliver to our customers.

Second question.

Okay.

That's at home allergy and airline client.

Got it.

Our balance sheet at June .

Tell me, who he cannot under the timing of Yahoo.

Okay.

Yes.

Southeast will initially pay.

Evolution.

Our actual book.

That shows you that you can give on that yet.

So my answer to Sudan in India.

The whole hydrogen for the AEP over here on the golf season in onshore.

Good afternoon.

In addition, due to on the EBITDA should be up.

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And we'll miss him on tissue.

That to us actually.

Atlanta.

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Now I'll touch on that alone.

Sure.

I don't know.

How could you be kind of in the future.

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Joining me on the harvest.

Baidu a good part of them will get him going onto the bill pay with Venmo leader <unk>.

Carlo.

Okay.

Sure.

Naturally wonder if you can touch on.

Those are going to be not as he had adjunct.

Excellent.

Our non financing and lease up higher at home.

Diego.

These are the mutual Omaha to another 100, and we know how they're going to be.

Johan.

So liquidity yugo.

And importantly, and I know it yet.

Yes.

Alamo group auction and try negotiate hard.

Although <unk> <unk> to <unk>.

Wondering if that Tony.

Tony.

<unk>.

Tonys out how good the GT zone.

Sure.

Thank you.

How much energy asset bubble giant Nigeria.

Since we started delivering feature on our 2021 model year Lee one we completed the full featured in the release on the model by the end of last year and our goal has always been to deliver a good experience for the.

For the customers and there is actually large amounts of work first to deliver this good experience, including adapting HD map and continue to fine tune.

So we will continue this work to continue.

To improve make improvements in safety.

And our goal is to increase safety standards across the entire driving experience not just when the current NOI mode. So which is the reason why we started to develop many of the technology in house.

And our ultimate goal is to increase safety.

And by decreasing accidents by 80% across the entire lifecycle of our vehicles, which is why we make the feature standard and continue to iterate reiterate a feature overtime. So.

Above is about.

The current solution on our <unk>, one, which which runs on two horizon three chips.

And speaking of excellent one which will be launched this year.

There will be significant improvements not only in sensors, but also in computing power and safety redundancies. It will bring the safety of entire vehicle over the lifecycle to a whole new level.

And it will make the drivers and their families safe not only when the karnes Nia mode, but also when they are drivers driving themselves.

Great. Thank you. Our next question comes from Paul Gong from UBS. Please ask your question.

Since you're pointing to.

I'm going to go Vincent I, just want to ask Juan to Cisco.

Thats from me.

<unk> does not equal to one <unk>.

<unk> City in Australia.

Paul.

Those issues on a construction Johnson <unk> Johnson.

So now your comps.

<unk>.

I mean conditions.

Goldman.

Here in Stockholm with offline so thanks John .

So I'm going to be able to Tom Johnson who's on coupon that you thought that there were some comes from each time.

We didn't own.

From a chunk of it though.

So I don't want you to conduct the <unk>.

So hotel homes.

So <unk> got some.

<unk> signed some decent.

Kingdom total functional.

So yushin.

Two questions. If you don't sign recently Goldman.

Questions will be answered your retentions.

Do you have assumptions.

Yes.

Also why won't you might sort of you.

This is Mike Jones.

Tom do you want to be.

Hi, why might short on some of the ecosystem to still come down.

<unk>, sometimes mitchell.

Okay.

So two questions. The first one is regarding the future differentiation right now the civil.

You've been startups or decrease.

How do you think going forward well everyone is working on with autonomous driving everyone is going to use my phone everyone you're speaking to.

B as well so what would be the key competitiveness.

EBIT for the innovation.

Essentially the evolution of the technology or multiple questions on the <unk>.

Efficiency.

Region on the second question is regarding the Finalization, we have outsourced that.

Some peers have already explained due to European markets.

Out of sync.

Monetization.

In the near term plans.

As in the long run.

Okay.

As England here.

Our data.

Okay.

Got it.

Our nonunion usual.

It's relevant unless the economy either union jobs.

Now to the P&L either in terms of how do we know.

John .

Keeping this yourself.

And catching up with you don't keep answers on Eagle.

Eagle High yield if you will have the usual in total to 90, and I think a way to.

Starting with EMEA.

Now with.

<unk>.

I would assume that you can on your financial.

Jackie Chan kindergarten, Amit Malhotra Daiichi agenda.

No need uhm.

You take the Chinese built muscle toward it.

How far down the gesture.

Yes sure.

Sure unusual yugo.

<unk> talking about.

Sure.

And then I wasn't sure because.

You bet, Sean hydrological yet.

Subtle giovanni's number.

Okay.

In the future.

When you looked at <unk>.

We should have.

How should even gigawatt or me if you can put on.

Danielle.

Although Matt Hardy Joanna don't actually following the user.

Yes.

Gcs law now talking you go down the <unk>.

Ill consider how can we not negotiate onshore.

On the accounting and hopefully to get completed.

Our noncontrolling Hitachi on a go.

Sure.

Yes, but going on potentially with the car shopping you, though that as we go.

I mentioned earlier.

You're absolutely correct.

We are going to.

<unk>.

Jim go.

Hello <unk>.

The Ocean <unk>.

No no not.

Obviously this will not obviously, the yoga health and non linear shelf.

Which of the headwind, but I think he has announced Linda and Azure arc home generic ISO new title.

General Jackson.

How will <unk> Union Kenny is difficult.

And with it a whole women's delivered some good data that you can receive the wholesale side.

Hydrological hefei downtown courtyard.

So you don't want your comment about women.

No.

Amanda.

Given the recent upward.

Are there any way you want me on one what was that.

Neither proposal.

Jonathan the holidays going in such as ours.

So we're going to wind up on that.

When you saw this year to resolve issues with journal articles.

100, and other tasks.

No how much of a shop visit.

So the channel so I'm going to again, just how much of a handful that sounds a little bit in Asia.

Sure.

In the short video market yet.

Yes.

I think I'm told off alcohol to deal we got overtime here.

That could be.

Yes.

Okay.

Tricia genome.

And just on that have been done and then you got to it other than of course, you didn't get the pudong.

Hello, Josephine standard.

Duncan.

Will it be eager hydro testing.

So how this is setting up the hanmi tie in Angola.

So for the target for this year.

After that Brian and Lisa good yet.

So the 301 yet.

I will now.

So hard to understand how that impact.

You talked about <unk>, you can see kind of how you are willing to meet.

Yes.

Not all of these are familiar that the Jonathan Yeah, we don't see any Google.

At this time.

Welcome to hang in there yet.

Alright.

Yes.

Sure.

<unk> policy.

That will give us a standup consortium.

Good.

I'm wondering if you can answer this with Hudson is actually that.

The hospital or the timing yet Italia.

Local machine leader, how you thought about it yet.

Asia Pac either enhance each other you can look looking at the U S home should be about <unk>.

The hydrogen vehicles.

By the end of 2021, we've pretty much validated ourself and finish the completed a zero to one stage as a company we've been focusing on we've been validating ourselves in the family buyers market at pretty much.

Tablets the industry ceiling.

Number one seller in the medium to large sized SUV market.

And our.

Our key.

Our key recipe for the success.

Focus on the family market, our efficiency R&D capabilities, and our software R&D capabilities.

This is validated through sales and having a while having a very low SG&A expense level.

And in the next.

A couple of years, we will be completing our 1% to 10 stage as many of you are well aware of 2025 goals.

Volume and margins.

To reach this goal, we will continue to play to our strength.

Is two things one we will we understand the family market very well and we will expand our product line across the 200000 500000 price range.

Providing our product to more families.

In more secondary markets. The second one is our efficiency in R&D capabilities as you can see our R&D and new store openings.

Pace has been on par with many of our competitors, but in meantime, we're still delivering very healthy and profitable financial results.

In the meantime, which we admit we have many weaknesses, which is what we will be working on over the next few years.

First of all in R&D, we will.

We actually have already made many improvements we brought in are.

Driving.

Voice recognition in house by building, a very strong talented team in the meantime, we establish our R&D capabilities and zonal controllers.

E architecture all of these are in house today. So we believe that we will continue to build.

R&D capabilities in the technical area in the meantime, the other weakness has been the supplier area, we want to work on our supply given.

Given the growth in the market, we'll be working on supply as well as the manufacturing capabilities.

And finally on the topic of intelligent technologies, we believe that there is no shortcut in the market.

One thing we have.

We observed with intelligent technology and have three characteristics first of all users.

No particular feeling of the technology.

By the product and secondly experienced bad after they buy the product that will easily give up the product in all their confidence and certainly the product is actually good they will very quickly find out that they cannot live without the product.

<unk> to deliver to make sure that we can deliver competitive products and the intelligent technology area. We will focus on three capabilities, which we have we believe the company is well.

As <unk> first of all is product.

Product capability.

It's very important to understand the user needs and continue to.

That will exceed their needs and second one is software and AI capabilities.

Which ultimately is the competition on talent.

The bench of talent.

We believe the most successful companies are the ones that can attract the best talents are the ones, where the best talents will like.

Most preferred of working.

And the third one interface systems capability and more specifically.

Operating systems, and we believe would be capabilities.

Be able to maintain our core competencies in both autonomous driving and intelligent content. Thank you.

Paul Let me take the second question about the globalization.

So basically for the for our long term strategy. We believe will ultimately compete in the global market that's for sure and for the very near future very near term, we want to focus on the.

In the China market.

And as I mentioned.

Several times, we already have a dedicated team.

Global globalized.

Globalization strategy.

We're doing three things first is to identify the.

The potential market for <unk>.

Our product second to analyze the what will be the right product mix.

This product in the third.

How to develop.

It is a model so that we had a cheaper.

Meaningful market share.

When we entered this market.

Right now this team dedicated EMEA is still developing.

Overall strategy.

Okay. Thank you.

Thank you. Our next question comes from <unk> <unk> from Citi. Please ask your question.

Thank you Glenn.

Can you squeeze.

Sure.

Okay.

And you just heard us in total you're talking about Josh Sean.

Thank you gentlemen.

Thank you.

Goodbye.

Sure.

Well that one kilo in conjuncture with Xiaomi Washingtonian shrunken.

Quick weight gain.

How much of a challenge.

Sure.

Yes.

Gotcha.

Thanks Neil.

Okay.

<unk> got one more question.

Chicago and shipping.

Shipping.

Got it.

Okay cool.

Thank you Bob.

Sure. She can counsel you arguably it will be there.

Yes.

From Thompson, Brian Sisko Chautauqua, Glenn Schorr.

Yeah.

I have two questions about the product.

One is about it.

We see the penetration rate of VEB.

Similar.

Okay.

Correct.

Thanks, Mark consumers understand more about that.

Zircon sales.

What kind of change would that take for that.

And also we know that could you please give us more color about exiting.

There were one.

And then just a quick second question is about the.

The.

The EV product will be launched next year.

<unk> is a huge change could you please give us a.

Some discretion.

Sure.

Please.

Thank you.

Okay.

Now whenever the Eagle.

Legal adhesion of Hu <unk>.

<unk>.

So we need to do on the judiciary.

So you just don't have enough hydro.

If I can be a lot.

Also the standards don't yet know the English teacher.

That's what I love each anesthesia.

If I'm here now.

But there is no book, which I know you hit you in the future.

Is that one attribute traditionally on the shelf that Gilead has only just.

So it hasn't she Aldo.

Oh, absolutely leukemia, which is under our contract with <unk> and how long do you hold back.

Now as usual with <unk>.

Total tons of them yet.

And here I'll, let him kind of assume the calculus, Amanda quite often issue.

Paul fuel Mcdonald's, we are targeting who showed a done deal.

At least <unk> 10 months.

Now Michael Hartshorn.

Eagle on a public knowledge.

John This is vishal.

How do you think about.

A lot will change industry jobs with human cancers.

We're also putting in Ghana.

What was that in Yahoo.

So how do you have that right and how long they focus a lot.

The other issue of.

A woman that our time in the Eagle cautionary yet that now when you take a blue Ocean.

I'm trying to go in the future that they will look like into the future.

So can you tell me who show the champion.

Sure.

Yes, two conditions.

Sure.

So it doesn't come up.

Do you want have been exiting the hull.

If you are going to sound like you're going to meet.

Yes, Amit mentioned utilization buyout from Gander.

In the top closing that tissue suddenly hospitals will Trump will get the egos out of the total large users.

Yes.

That's really good tissue amongst should look on this chart.

<unk>.

Yes.

<unk> you.

John .

Hogan women that are going to ship them in the Colombia, probably double digit contract user.

The reason, we're not so we're not.

That's your target model wasn't data so it's really about when the auction without getting any.

The vessels are predominantly.

The Eagle Bupa Nadal bupa.

Okay.

The CIT hall that will move through the year here you won't see Uber.

<unk>.

Sounds good.

Somebody in deep UV.

So unless youre going to come due now pushy theirs.

So perhaps you could have gone a bureau teaser bound to distinguish arguably at <unk> central in June .

<unk> done that.

Production ramp up at an angle that you should agenda.

Yes.

We should put up chemotherapy.

The improvement.

Thanks, Steve.

<unk> here.

The department.

If you're going to.

It is somewhat hard for me, it's usually not.

The Hall G Siddhartha <unk> block two gene Hall.

Yes.

Good to hear.

Thanks.

Yes, Lucas launching that.

Based on the <unk>.

Yes.

Good now at home.

We'll touch on that regarding either Tony or John you can pick one.

Not one of US is data, so think department, which without impact you don't know shipping on wholesale I believe Jonathan <unk>.

I'm going to trigger the housekeeping.

I was hoping to do that.

No additional.

Wow.

Hi, Matt.

And then how do you go back on the champion hopefully with it yet and also Youll go into ultra agenda.

First of all on the first question.

As we reach higher penetration and new energy vehicle market is actually good news for the company.

Same product methodology will continue to apply.

And as I said earlier as we observed that our users there.

There are three levels of <unk>.

The first level of explicit demand the second level or the implicit demand many of which are their pinpoint and the third level of our demands I don't even know what I can say.

The way we observe these demand as we are.

Now, we analyze and reserve the users on a rational and emotional level and understand what they want.

And build products that will exceed their needs.

And talking about the external one.

Our core theme has been to two things one thing is to upgrade thing that users really wanted on the Wan and wanting to add to their lead one product and secondly.

Delivering our new demands that are not yet not yet met in the market. Today. These are things that users do not even realize that they want but a moment epic cedar products.

There really isn't what I actually wanted to.

So the methodology will continue to remain the way it is although the user needs are changing and we will continue to follow that very closely.

So these are some comments on our <unk>.

New vehicle on our range extended vehicle.

Then a depot platform.

I'll make a few comments on the electric vehicle market electric vehicle product.

So the electric vehicle will we will focus on three different things.

First of all is our foresee charging capability.

And.

Most importantly.

Important component will be the battery, we've actually spent a lot of efforts.

Co develop the battery with our key supplier because the entire architecture and fell and charging capability heat management system will all be different so we've done it.

Extensive work in this area.

To ensure that.

The mass production of the battery will be successful.

The second component of.

Our high voltage platform for 850 volt.

EV platform, which includes many different things ranging from electric motors.

Integrated integrating PCB sea of rising voltage lowering voltage heat management battery management system. All of these things are never been provided before.

Company.

And the third thing is a 400 kilowatt charging station and charging pulse.

We've done a lot of.

Work to develop these charging poles.

To ensure that we can provide seamless experience for our users which connects the battery.

Vehicle platform and the charging station.

With these products, we will be able to charge the cars.

10 minutes and delivered 400 kilometers of range.

Thank you our next call.

I think comes from Joan shelf from Barclays. Please ask your question.

Tissue Glenn is in Q2 in.

<unk>.

When <unk> content.

So there's plenty to go.

Cook with issue to Danya Henry Ford as you saw when you all will incur will come this year some of them.

Some of it goes to entice showing quite them.

When looking at Canada constantly attempting and trying to wanted to ask according to the cuckoo Chinook an additional $20 when the seasons two and three was a good chatting.

No.

We've seen that Q why you took the tabulating weekly data, which we hope EEV should we issued going through to the chat in the urine protein we will.

I should say on that.

When would you Hitachi to move since the fund group, which is our highest with Fuji.

Apple as humans.

No.

Finisher.

So.

Thank you management for taking my questions. My question is really about.

Strategic positioning and product positioning.

Management talked about the focus.

Having the best product for their family use.

It is a family sort of use case stood a focus remains a focus for the new products, including the <unk> product.

It is.

Would that be enough for the sort of longer term sustainable.

Sustainable growth.

And strategic positioning for the company.

Jason.

Yes.

Two.

How would you deal with the tissue or trying to renegotiate.

I'm sure that there is just something I saw that you guys have a GDS.

And the Union.

Two.

Our year on year.

Search engine into the <unk> hub.

We will have the charts, usually trigger some time yet.

Your argument yourself studying with yourself and the integration of the amount of time.

Okay.

And yet I think what youre trying to get into balance sheet issue behind us.

Yes.

Maybe like what how each analyst.

Please proceed with UEC and conduct RJ.

And the good.

The number of available yet.

Yes.

I hope you all can cause pneumonia Jonathan.

So luca.

Gigawatt total development.

Equally for the consumer economy, let me just use the fleet on order.

Sure.

So could you just introduce yourself.

And with what you said or would you. Let me just ask you is how do you think drove a retail shop.

A J.

Danny which is having a material hadar deduction of carriage.

Sure.

It didn't drop and you either you can move up.

And we also have the consort health book Qimonda.

One other issue, but I'm sure that we're looking at hiring sort of hard to gauge up digital coaching that we've got our ready to move it at all.

Yet I noticed when you Dr. Sheila you are going to the dealer.

So the answer is yes, we will continue to focus on this market.

Because we progressed only validate ourselves at one particular price point in this market, but if you look at the entire market when we define to be one product in 2016.

The market was only about 2 million units annually and last year. The market has grown to $6 million and we expect that by 2025. The market size will reach 10 million units per year. So this is a very healthy market.

Bike for three reasons one it has very big growth as we've talked about earlier and second one is that there is.

Bob.

Bill of materials in the market for us to deliver a good experience for the users and thirdly. It can still deliver very healthy gross margin for us as a company. So we believe this is a very attractive market and we will continue to focus on.

So so far we've really taken a very small scoop from the market accounting for about 2% market share in the market here, we're talking about all passenger vehicle market not just in EV because.

Because we believe the one not only compete with.

New energy vehicles, where we have the potential to replace existing all all existing passenger vehicles above 200000, RMB price point. So there is still much work to do and our goal is to eventually reach at.

At least 20% of the market, which is the time by which we will have finished our 1% to 10.

Yeah.

Alright, thank you.

As we reached the end of our conference call I would like to turn the call back to the company for closing remarks. This is Janet Yang. Please go ahead.

Thank you once again for joining with US today. If you have any further questions. Please feel free to contact us in Investor Relations team again, that's all for today hope you'll have a great weekend.

Thank you that does conclude our conference for today. Thank you for participating you may all disconnect.

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Hello, Ladies and gentlemen, thank you for standing by for the fourth.

<unk> fourth quarter and full year 2021 earnings conference call. At this time, all participants are in a listen only mode today's.

Today's conference call is being recorded.

I'll now turn the call over to your host Janet Yang Investor Relations director of Li Please.

Please go ahead Janet.

Thank you and good evening.

Anthony and good morning, everyone welcome to <unk> fourth quarter and full year.

Earnings Conference call, the company's financial and operating results were published in the press release earlier today.

On the Companys IR website.

Today's call, we have our president Mr. Kevin <unk>.

And our CFO , Mr. Johnny Chile to begin with prepared remarks, our founder and CEO , Mr. Kelly will join for the Q&A discussion.

Before I continue please be reminded that today's discussion will contain forward looking statements made under the safe Harbor operations. After the U S. Private Securities Litigation Reform Act of 1995 forward looking statements involve inherent risks and uncertainties.

As such the company's actual results may be materially different from the views expressed to date.

Information regarding risks and uncertainties is included in certain salary and setup of the company with the U S Securities and Exchange Commission and announcements published on the website of the Hong Kong stock exchange and the company.

The company does not assume any obligation to update any forward looking statements, except as required and applicable law.

Please also note that <unk>.

Earnings Press release, and this conference call include discussions of and they take GAAP financial information as well as non.

non-GAAP financial measures. Please refer to <unk> press release interim results announcement in the fourth quarter and full year tend to turn to our results announcement, which contains a reconciliation of the non.

non-GAAP measures to comparable GAAP measures with that ill now turn the call I'd like to our President. Please go ahead Kevin.

Thank you Dennis Hello, everyone and thank you for joining our call today 2021 was a pivotal year for new energy vehicle sales in China. During this year Chinas auto industry witnessed a notebook substitution.

While ice's internal combustion engine vehicles.

Evidenced by any of this rapid growth in contrast to the sluggish sales trends of Ice's vehicles.

This led to growing penetration of Ceb's overall passenger vehicle sales. According to China passenger car Association in 2021, the retail sales of new energy passenger vehicles increased by 169% year over year to nearly three.

Million, well Ice's vehicle retail sales decreased by five 6%.

The penetration rate for retail sales of new energy passenger vehicles rose substantially to 28.

<unk> percent in the fourth quarter of 2021 versus 12, 6% and five 8% for the first nine months of 2021 and the full year of 2020.

With mobility transformation trend pointing to increased smart electric vehicle use we are proud to forge ahead.

Pioneer.

As an industry leader, we are ready to serve more families with continuing product and technology innovations.

We achieved deliveries.

35221 units in the fourth quarter of 2021 up 143, 5% year over year driving total revenue to RMB 10, 6 billion or $1 7 billion U S dollar growing 156.

Two 1% year over year, the robust fourth quarter performance to our full year deliveries to 90491 up 177, 4% year over year and the total revenues to RMB 27 billion or $4 1 billion U S. Dollar.

Up 185, 6% year over year.

The one was the first domestic branded premium modern priced above RMB 300000 in China to achieve the 10000 monthly deliveries in January 2022, we have delivered over 10000, <unk> <unk> for the third consecutive months.

Achieving a new record we believe this is another milestone for the one to qualify.

Blockbuster model and there will be a benchmark for all our future models.

We are excited to see what we can the premium passenger vehicle market in China targeting family users and emerge as one of the best prices.

Attribute our vehicles success to our outstanding product definition capabilities.

Extended range six seater SUV has gone from being question to mainstream while our full screen full vehicle interactive voice system has set a new industry benchmark. This further improves our user recognition of one <unk>.

Nearly.

Energy replenishment solution.

<unk> battery power for urban commuting and the recharge with range extender during long distance traveling.

And highlights our users endorsement of the brand new in vehicle driving and riding experience D. One offers in this autonomous era.

Our product definition capability built on the shared vision in our organization and a solid.

The foundation of comprehensive capability, including technological strengths profound consumer insights and systematic execution.

We are confident we can apply these to our future models and continue to provide our users with solution beyond what the demanding we aim to grow our model lineup significantly in the coming years, well advanced in our R&D efforts as product provides the capacity.

Mrs.

Note for business and the technology for the moat for product.

Well production and the delivery improved.

Most of our chief supply chain partners with us.

Normal efficient challenge challenges to the overall HDD supply chain will likely become long lasting.

<unk>.

<unk> batteries and potential other auto parts, given the accelerating development of the smart electric vehicle industry going forward together with our supply chain partners. We will continue to work on multiple measures such as advanced planning and diversify the supply chain.

To mitigate supply chain risks.

Light of the ongoing industry wide semiconductor in shortage, we expect the total deliveries in the first quarter of 2022 to be between 30000 to 32 seven vehicles.

Turning to the financial side.

Maintained strong performance with a robust and steady gross margin of 22, 4% in the fourth quarter growing four 9% over year over year. This was driven by our strong vehicle sales performance and consistently effective cost management measurements.

Even as we accelerated the pace of R&D spending to 11, 6% of revenue.

We grew our sales network by adding 53 retail stores in the fourth quarter, we achieved a profitability as well as a record breaking RMB three 8 billion operating cash flow, which is a significant reflection of our <unk>.

Excellent.

In 2021, we significantly extended our direct sales and servicing network almost quadrupling our number of retail stores to 206 in 100 cities from 52 in 41 cities as of the end of 2020.

By the end of January we had 220 retail stores being 105 cities as well as 276 servicing center and also authorized the body in the paint shop.

Operating in 204 cities, we aim to provide our users with more convenient efficient and seven purchasing and the user experience by strengthening our online operations as well as continually adding physical touch points closer to our users we plan to further enlarge our footprint.

And target, reaching 400 retail stores by the end of this year to meet the growing market demand for AED national wide supported by consumers rising in EV adoption and our upcoming new model launches in 'twenty.

'twenty two.

Award.

Moving to our product optimization and R&D efforts.

In December .

2021.

We released the Otas III.

Update.

Our Li one users further enhancing the in car experience for both drivers and passengers. This upgrades include the navigation Adas.

And the automatic.

<unk> braking feature.

Teachers, making us the third automotive Oems globally to develop its own full stack.

The ability as of January 31, 2021.

We have provided a way to more than 70000 assembly users and the during the Spring Festival holiday, we accumulated over 2 million kilometers of <unk>.

Meltage within Adas equipped our user base at the leading scale in China. We will continue to increase the R&D of Adas related technology, and we believe we are well positioned to push the boundaries of assisted driving technologies.

The upgraded AEP.

With vision.

<unk> perception algorithm enables <unk> to identify road works and highway traffic estimate sites and the prompt users in advanced to avoid major accident D. One was awarded 2021 car of the year by <unk> <unk>, a renowned alto <unk>.

<unk> plus.

Platform in China due to its outstanding AEP performance exhibited in the <unk> AEP test known as the most strict vehicle test in China by automotive professionals during the test the one with the only access model in the final one capable of accurately.

I did by crossing vehicles than two winners.

This further reflects our full stack self development capabilities.

The Otas three zero update also includes <unk> and <unk>.

Upgraded version of the <unk> Smart in car voice assistant the capital this year.

Which now recognize this and execute more.

Instructions for <unk>.

Entertainment navigation and the vehicle setting.

We will continue to conduct R&D to develop safer car with smarter product features that can be helpful. For all members of the family young and old as we remain.

Steadfast in our commitment to creating comps on the move that bring happiness to the entire family.

We are also happy to share that we have been added to the handset Tech index under the index newly added category.

Autonomous technology, the inclusion will take effect on March 7th this year. We have also been included in the handset companies large cap index since August .

2021, as a technology leader in Smart mobility. Our addition to the <unk> Tech index in doses.

<unk> of our full stack self defense, the Adas and smart cabin technologies as well as recognizes our capability to create value for our investors, we look forward to bringing more families.

Our day, one premium excuse that offer safer simpler driving with all of the amenities and the technology people want in a premium vehicle.

In the second quarter of.

2022, we will unveil our next mass produced vehicle model.

A full sized premium extended rent electric SUV.

Deliveries of this model will start in the third quarter of this year.

In 2023, we plan to launch to be EV models that support ultra fast charging, but then our ultra high voltage charging solution will be readily available to our users effectively shortening the charging time and addressing meltage anxiety as.

As we remain committed to developing new models autonomous driving smart cockpit and others. Our R&D expense for 2021 tripled year over year to RMB three 3 billion.

All $516 7 million U S dollar accounting for 12, 2% of revenue.

We will continue to expedite our R&D.

Excuse me.

Andy.

<unk> with the support of our expanding R&D team.

Which is.

To our production.

Capacity, we are expanding our capacity at the Changzhou factory and the constructing our Beijing manufacturing base once the expansion and construction are completed the design production.

<unk> at these two manufacturing sites, we reached 500000 unit.

Annually in 2023 and around the 750000 with double shifts.

Meanwhile, we are excited to share that in December .

2021, we entered into a strategic cooperation framework with the Chongqing.

Municipal government for establishing our new manufacturing base, we will make relevant disclosure after 20 manufacturing base when appropriate.

To enhance the production capacity together with our enrich the product lineup.

We will position us well to capture an increasing share of the booming EDA market laying a solid foundation for our strong growth in the years to come.

With the launch of our second major vehicle just around the corner and the continued strength in.

In order for our <unk>, we expect 2022 will be another pivotal year of growth for the one for the outlook our pioneering spirit talents to keep pushing the boundaries of what is possible and thats. What we are doing the market is right for advancement.

And we are in the right place at the right time with the right strategy the right skill sets the right model and the right vehicle to drive us to the next destination.

In 2022, we expect that the nev market to see his greatest number of drivers yet and we are already flight.

Now I will turn the call over to our CFO , Mr. Pizzi to review our financial performance in the fourth quarter.

Thank you, Kevin and Hello, everyone.

I will now walk you through some of our financial results.

The fourth quarter of 2021.

Due to time constraints I will address financial highlights here and encourage you to refer to our earnings press release for further details.

Total revenues in.

In the fourth quarter of 2021 were RMB 10.6.

Two bidding.

One <unk> 7 billion U S dollars.

Presenting an increase of 100.

56, 1%.

From RMB <unk>, one 5 billion in the fourth quarter of two.

2020.

And the increase of 36, 6% from RMB seven seven.

Seven eight bidding in the third quarter of 2021.

This included RMB 10 point.

III eight bidding or what.

One point.

Six.

3 billion U S dollars.

From vehicle sales, which increased 150.

<unk>, 7% year over year.

And 45% cultural culture.

The increase over the fourth quarter of.

2020 in the third quarter of 2021 was mainly due to the increase of vehicle deliveries in the fourth quarter.

Revenues from other sales and services.

RMB $244 7 million or 38 $4 million in the fourth quarter of 2021.

Representing an increase of 174, 5%.

Year over year and a decrease of.

730.

1% quarter over quarter the year.

Over a year increase.

And revenue from other sales and services was mainly attributable to increased sales of charting stars accessories and services.

And with higher accumulated vehicles.

The decrease in revenue from auto sales and the services or the third quarter of.

2021 was due to the sales of automotive regulatory credits in the third quarter, which didn't reoccur in the fourth quarter.

Cost of sales in the fourth quarter of 2021 was RMB eight pardon.

Two for bidding on one point.

Two 9 billion U S dollars.

Representing an increase of 140.8.

8% year over year, and an increase of <unk>.

38, 2% quarter over quarter.

Gross profit in the fourth quarter of 2021 was RMB 238 bidding are 370, <unk> III meeting U S dollar.

Growing 228, 5%.

Comparative base for the.

Comparable with the fourth quarter.

2020.

And 31.

3% compared with the third quarter of 2021.

Vehicle margin in the fourth quarter.

2021 was 22, 3% comparative with 17, 1% in the fourth quarter of 2000.

<unk>.

And the 21, 1% in the third quarter of 2021 the increase.

Vehicle market over the fourth quarter of 2020.

Was primarily driven by higher.

Average selling price are attributable to the increase of vehicle deliveries.

Of our 2020, whether you won CSA as a relief in May.

Our gross margin in the fourth quarter of 2021 was 22, 4% compared with 17.

5%.

In the fourth quarter of 2020, and 23, 3% in the third quarter of 2021.

Operating expenses in the fourth quarter of 2021 were RMB 236 billion.

369.

Seven meeting U S dollar.

Representing a increase of 193, 2% year over year, and the increase of 23, 4% quarter over quarter.

Research and development expenses in the fourth quarter of 2021, RMB one point.

Two 3 billion or 193 bidding meeting U S dollars.

Representing an increase of 228.7% year over year and the increase of 38, 4%.

Quarter over quarter, the increase the risk research and development expenses over the first quarter of 2022, and the third quarter of 2021.

It's primarily driven by increased employee compensation as a result of growing number of research and development staff as well as increased cost.

With new product.

You're welcome.

Sure.

Selling general and administrative expenses in the fourth quarter of 2021 were RMB 113 billion.

176, 7 million U S dollar.

Representing a increase of 116 tool.

0.2% year over year, the increase of 10 point.

To protect cultural culture.

Increase over the first quarter of 2020.

Well, its primarily driven by increased employee compensation as a growing as a result of growing.

A number of staff as well as increased marketing and promotional activities.

And the rental expenses associated with the expansion of the Companys distribution network.

Income from operations in the fourth quarter of 2021 was RMB 24 1 million.

Three 8 million U S dollars.

Compared with RMB.

78.

Meaning loss from operations in the fourth quarter of 2020.

In RMB 97 point.

Meeting loss from operations in the third quarter of 2021.

Net income in the fourth quarter.

Of 2021 was RMB.

$295 5 million or 46 $4 million compared with RMB 100.

7.5 meeting net income in the fourth quarter of 2020 and.

And RMB.

91, part five meeting net loss in the third quarter of 2021.

Now turning to our balance sheet and cash flow.

Our cash cash equivalents.

Restricted cash time deposits and short term investments totaled eight.

Our total RMB.

Okay.

One 6 billion.

All seven pardon.

Page 7 billion U S dollars as of December 31st 2021.

Operating cash flow in the fourth quarter of 2021 was RMB three pardon.

Eight 4 billion.

$602 1 million U S dollars.

Free cash flow was RMB one point.

Six 2 billion.

253, 5 million U S dollars in the fourth quarter of 2021.

As of December 31, 2021, we had a total of 11000.

On 901 and one.

Yes.

More of our 2021 full year financial results. Please refer to our earnings release.

For further detail.

Now for our business outlook for the first quarter of 2022.

Company expects deliveries to be between.

<unk>.

And.

32000 vehicles.

The increase of.

100.

38.

5% to 154, 4% from the first quarter of 2021.

The company also expects the <unk>.

First quarter total revenues to be.

Between RMB 8.84 billion and RMB 9.43 billion.

<unk> dollar 1.39 billing.

In the U S. Dollar one part four 8 billion, representing an increase of.

147, 2% to 163, 7%.

The first quarter of 2021.

This business outlook reflects the company's current and the preliminary view.

Fifth ethos situation.

And market conditions, including the ongoing industry wide semiconductor shortage.

Which are all subject to change I will now turn the call over to the operator.

To start our Q&A session. Thank you.

Thank you we will now begin the question and answer session.

Do you wish to ask a question please perhaps.

Press Star one on your telephone and lights for your name to be announced.

Wish to withdraw your request please press the pound key.

The benefit of all participants in today's call. Please limit yourself to two questions and if you have additional questions you can re enter the queue.

If youre going to ask the question in Chinese please follow when English translation, so, let's get a star one.

<unk>.

Our first question comes from the line of Fei Fang from Goldman Sachs. Please ask your question.

Great. Thanks, Let me ask my questions in Chinese first and now translate into English.

Glenn it's on <unk>, so as a consequence.

What are they.

<unk> been a reliable Lindsay.

Okay antibiotics exiting China.

Cabinet, which gives me a hard dollar silicones consistency adults.

And what was unchanged.

<unk> actually dealt with conduct audits and to each other.

Panel.

Jacob.

Champion George.

Stronger.

Push homeownership.

The other times you know Patrick achieve that what are you guys in the tier two actually negotiating with icon, which allows you to go quite as Homeaway GTA has actually been.

Majority that you.

Cannot sheepherder Jacob.

Tom Thanks for the time here let.

Let me go to Hong Kong.

Homeowners have majority short you basically on the deals yet to speak of in.

<unk> going to take a China EMEA Jacob <unk>.

So I'm going to essentially already hartstein, yet it will be all particular swampland oxy for one type of channel already arent that obviously by that data.

But your EBIT dollar tickets Institute, which are holding up on the China, Australia in terms of our hollow quite so positive now.

Now, let me just quickly translate into English.

China's new energy vehicle industry has various product launches in the past 12 months. Some are successful summed it up really quite workout.

So what have you learned from the from the industry and what do you think are the critical factors for products to succeed.

The second question.

Manufacturing capacity and store openings with 750000 units production capacity by the end of 2023 400 stores by the end of this year Theres a condition targets large numbers from where you're at right now.

<unk> got ready to scale up new products after unveiling cells.

In the rest of the year. Thank you.

Okay.

Are you going to do whatever that to <unk> Cushing.

Fortunately in annual synergies.

Oh, yes.

With respect to the type of deal.

Utah's suggested households.

In other words in the half.

For the year.

<unk> gathered dodger filling them.

Okay.

The data show virtually a yogurt as usual agenda.

Almost all of that that you could share it.

And as usual with our stakeholders usual you'd have to put it out the show opens on that are kind of across EMEA.

Our Q2 closer to the time here.

What is your tonnage to combat the jackalope.

Additionally, global economic activity.

<unk> managed to ensure not only quite a lot yet.

Just your occipital hardware that you can share that with you if I'm in August .

Sure Yes.

Well most of the total so thats.

Could you talk with other telco literally by Bahar, well go talk with Emily <unk> of which is on <unk>.

For the Doj to answer Bill.

Or is it on interest.

That would have been unchanged.

The bankers in order to balance the timing of interest there.

Sure.

Yes.

So how do you go.

And yet kind of in Asia is a higher power to champion the client need.

So in a cheaper.

Sure.

It's all good.

I'll pay a bill of material.

Pat in really Ashish.

<unk> good.

John in the future.

Okay.

Yes.

Thats hanging there telling you that.

Uhm.

No.

Yes.

Sure Joe.

Now to the challenge of a cap so in that space.

The wholesale channel.

At our China Hong.

Duncan guarantees yet the ocean clipper into that.

First of all this is leisure traveling for leisure.

I would like to answer this question as a product manager and myself and.

In fact in the industry, there's various established private logic.

We start with the users the users care about two things first of all has their own needs and there are three levels of needs starting with the first level, which is their superficial knees and then going down further.

Hidden meats, and eventually or it means that the users don't even know themself. So first of all we need to understand these needs very well and the second point is the price point that they are willing to buy our products at <unk>.

And with these things we can basically draw a circle.

It has a product manager our goal is to build products that will overlap as much as possible with the circle of user needs and the product really focuses on five different things. The first one is product performance.

Deliver product that performed well on many different levels and secondly, the safety and security third is quality fourth is price and fifth and supply, especially in an industry. That's been growing so rapidly supply is especially important as has been seen in the industry in the past few years. So overall, if we can be.

A product that can balance these five factors and match with the <unk>.

Circle of user needs than the bigger the overlap of greater sales.

Based on various established and solid product capabilities of the company. Thank you.

Yes.

This is Kevin let me take the second question.

Our primary reason for the coming years actually we have a very strong confidence in our.

New products.

We're going to launch in this year and next year. Therefore, we are.

Very aggressive in terms of.

Getting our capacity prepared right now from the sales side we.

As mentioned that we have a four handle the store <unk> by end of this year, we'll have more.

Next year and also not only a store, but also human resources of the sales force. We are also preparing from the capacity perspective.

Actually our not only our own capacity, we are working with our supply chain partners to adding capacity in their factories also and also as we should all know that.

Supply is constrained. So therefore, we have already started to secure upstream.

<unk> resources Bye bye bye.

By giving.

Advanced sending to our supply chain partners.

Thank you.

Thank you for your question.

Next question comes from <unk> <unk> from Morgan Stanley . Please ask your question.

Of course equals so you can do with Australia.

Okay.

Sure.

So it's available.

Wholesale Julien.

<unk>.

<unk> thousand Central Asia.

<unk>.

Once again.

So essentially they go so.

So that's also helping <unk> since we took over say two in Asia.

Total liquidity it makes sense.

We cover product kind of a case also.

Thank you <unk>.

So everybody's furniture.

Scientists are achieved.

Gil onto the existing timeshare.

So we have that answer again tell this way to the convention of course at all times.

J D.

Yes, that's.

Alright.

<unk> two <unk>.

<unk> 10 billion.

Youll become into the T cell repertoire.

Can you talk about 2000.

<unk> without <unk>.

So the case and when you say you think Kelly Jacek AMG acquainted with yet.

I think it puts you in the channel it sounds like.

Todd.

Thank you.

Coaches, which is quite a chunk of it.

So just two quick questions. The first question is about equal.

Consistent strategy.

We noticed several store it appears we plan to expand the operations Coke into now the coal business.

Example, like smartphone manufacturing.

<unk>.

Broadband and enhance.

They use their ecosystem to smart.

So from <unk> perspective, how should we think about the comp base next Apple ecosystem development.

And my second question is about the cost the cost management.

We expect the January inflation with price hikes of catastrophes and other key materials.

We continue this year, so how should we gauge the potential impact any quantitative information that we can take us nebraskans.

We assessed the potential impact thank you.

Yes.

Hi.

Thank you Alicia.

Sure.

Hello.

Understood.

Suddenly utility anticipation on the June to July .

Junior debt or Mcdonald's or digital again industry, leading unit balances have come down I know $20.

Hello.

Now to understand what this retail housing Orlando as usual I would ask.

At home how champion Europe as.

As usual Josh.

Logan.

Neil.

So that puts you at all.

Yesterday, we entered into Utah.

Okay.

Jimmy on attention to that and how <unk>, how about champion by Union Hall unusual pass it on.

And I'll see you Anthony in Angola.

So now you hold that country, even earlier than what you said also that it can go down that you don't see growth there.

Or would you just really can't tissue, a patch and again in 'twenty.

Tony <unk>, our agenda on the shingle the hospital you will have to.

If you go to the Chinese Unicom question.

Anybody has hung in azure.

The accrued yet.

T shirt.

And how crucial.

Vehicle leukemia.

So from a paper that window conjecture conoco acanthion people hooked up how easy its usual yoyo.

On behalf of Attunity vascular cole.

Turning to look and golf Digest and go away.

The available Jackie.

Canadian local local holiday yet behind the elimination half.

Hanging in there is when you take in North Dakota.

So that type of rollout.

Asia Pacific.

The founder of the company, we have been focused from day, one on the smart electric vehicle market and we believe that we've just finished our zero to one stage and there is still way too many things for us to focus on.

Expanding into other sectors.

There are many things that we can do on the product application technology and system level that I believe will take the next five to 10 years for us to complete and we will vary.

Very focused on this market going forward for at least the next 10 years and we believe that in 10 years, we can reach a level where apple is.

In smartphones and smart devices.

So that's our overall strategy and then speaking about our space in car space. There are so many things to do we're not talking about expanding into other types of space, because we believe that even for the space and car there are still many things to do.

One of the opportunities.

Experience.

They are the way it is elsewhere.

Including content and hardware.

These are all big opportunities to tackle that we will continue to focus on.

A foreseeable future.

This is Kevin let me take the second question.

The cost challenge in fact, when we cancel this year's financial budget actually we already took into consideration of the potential cost increase.

The increase, especially as we shut down it should all know that.

Sorry.

He is going to launch the cost too.

Please yes, okay, I'll hand about actually with the volume substantially increased this year also we will achieve more economy of scale. So therefore overall, we are although we have many challenges, but we are still target to achieve the higher end margin gross margin than last.

Yes.

Thank you. Our next question comes from bin Wang from Credit Suisse. Please ask your question.

Okay.

Kevin do you want me to do something.

Thank you Hudson.

Could you just show meaningful Mitchell, creating with Sungard.

Typically you get 70 72 enrollment.

Do you think that union.

So to a degree.

Hopefully, we can do in human tissue.

Steve Thanks, so much.

Chuck.

Hello, Michael.

People would each at AAD.

Actually.

Question number one.

As I've mentioned in the March you actually got it.

Electrical for the handset.

The cloud impact that means you can hedge portfolio Shenzhen Hong Kong stock connect.

Can a softball money that's number one and number two is about maybe you're actually booking.

200 million in revenue.

The credit in the two.

So.

What's the rough amount in the 'twenty two because you can almost more than 1% growth and it'll be one.

What's the help for margin and profit and that's why I think you've got an announcement that the CTO HBV.

And what's the reason behind us thank you.

Yes.

This is John .

Thank you Amit.

First of all for the connect.

According to the latest press release by.

So index.

We have been included in <unk>.

Sure.

In the.

Large cap index and also.

To be included in our.

The connect we need to meet a relevant requirements or market cap.

Transaction volume.

And.

To be included in the <unk>.

Connect.

In mid March after B are lifted for six months and the Plaza.

'twenty transaction days.

Around that time.

And.

For the Nev credits for 2021.

We have one.

Sure.

2223.

Times of <unk>.

<unk> costs are comparable.

2022.

Got it.

That you got from the sales volume.

As everyone aware.

The protocol.

Rice.

Will be lower than last year.

We are still negotiating with the potential buyer of those EBIT.

<unk> costs.

Hopefully that will come out.

Around.

The third quarter, just like last year.

And for <unk>.

The city also a question I think.

I refer to the press release.

Okay.

Uh huh.

Okay.

Thank you. Thank you.

Thank you. Our next question comes from the line of Vincent Lee from Bank of America. Please ask your question.

Go ahead Jason.

Was it being so difficult winter.

When he does contact then it sounds like <unk> got it.

Getting <unk>.

No.

I see some noted traditional watches.

So that's the risk.

It sounds it will be all done.

Good evening <unk>.

<unk> she has assembled.

The Sunday, which I'll now focus on some.

So we'll see.

<unk>.

No.

I won't go through it.

Going into some instances now Jason obviously, it sounds like you did in <unk>.

It's a good.

Community Count.

Now that we have.

Thanks Chip.

Syntax of employee plenty of who this is Milton Johnson that sequence of the <unk>.

<unk> recently noted this is claims handling vehicle thing Qin.

<unk>.

No.

This is a function of buckler AEP.

So no change that is linked to the centralized attempting.

Two sides.

Noninterest shine to.

Zoom into the incident Georgetown.

John J quantify each of them.

Similarly on the issue.

No.

So cindy that Goldman.

Hello.

Yeah. So I have two questions. The first question is how do you see the.

Supply chain management.

The chips that situation in 2022, and the second questions just OTT.

<unk>.

Last year and.

Do you think is the.

Most important function for next step for you to offer to your customers to enhance the user experience.

Hi, Lee This is Kevin let me take the first question.

In fact, we are also impacted by the boss.

Hi.

This month and also the last month.

Not only the IC shortage from my seat, but also the COVID-19 hit Suzhou.

So going forward in the coming.

Coming months actually we see the the situation will getting improved by the steel supply will be very tight. So we will continue to do what we have been doing first quantify more supplies second give advanced pertaining to our supply chain partners.

Basically two to increase our own production flexibility so that whenever it is available we can very quickly turning to into <unk>.

Final product to deliver to our customers.

Second question.

Yes.

That's at home and lodging airline client.

Right.

Got it.

Now I will ask Jean Andy and I'll tell you, who he cannot under the Chinese Yahoo.

Okay.

Yes.

Southeast will initially.

Yes, continuing evolution.

I should say in the book.

And what that shows you that you can give on that yet.

New management Sudan in India now.

The whole hydrogen for the AEP, Xi'an and golf season in onshore junk.

Good afternoon, Tony not unchanged.

On the Yugo.

Rhonda.

And we'll miss him on tissue, how that came to us actually.

Atlanta.

Let's see.

Now I'll touch on that too long.

Our CAGR.

I don't know how.

How could you be tons on the future.

Joining me on.

The harvest.

Part of it when we get something until the BLK, which then will lead up with NTT data.

Awesome Carlo.

Now I just want nationally.

Does that mean that as you had talked with.

Exiting our lens on financing and lease up higher at home.

Diego.

<unk>.

These are the lease up.

On the $100.

The new hot.

Taking liquidity yugo.

Unimportant, we're able to get here and I know it yet.

Our work with Google and trying to get to yet another <unk> <unk>.

Okay hold on Yahoo, wondering, Illinois to Tony Tony.

Tony.

That.

Could've gone Tony Scott Howe Gordon the GT zone.

Sure.

Finally energy <unk> in Nigeria.

Since we started delivering feature on our 2021 model year Lee one.

We completed the full feature delivered relief on the model by the end of last year and our goal has always been to deliver a good experience for the for the customers and there is actually a large amount of work first to deliver this good experience, including adapting HD map and continue to fine tune.

So we will continue this work to continue to.

To improve make improvements in safety.

And our goal is to increase safety standards across the entire driving experience not just when the current NOI mode. So which is the reason why we started to develop many of the technology in house.

And our ultimate goal is to increase safety.

And by decreasing accident by 80% across the entire lifecycle of our vehicles, which is why we make the feature standard and continue to iterate iterate a feature overtime.

The above is about.

The current solution on our <unk>, one, which is which runs on two horizon Jay three chips.

And speaking of excellent one which will be launched this year.

There will be significant improvements not only in sensors, but also in computing power and safety redundancies. It will bring the safety of entire vehicle over the lifecycle to a whole new level.

And it will make their drivers and their families safe not only when the cards Nia mode, but also when they are drivers driving themselves.

Great. Thank you. Our next question comes from Paul Gong from UBS.

Jim.

Since you're pointing to.

<unk> I just wanted to circle.

Andre.

Thank you <unk>.

In conjunction with Citi Your line.

1000 <unk>.

Central time.

In contrast, Johnson <unk> Johnson and Johnson <unk> Johnson.

E Com.

<unk>.

Lincolnshire.

Goldman.

And so all of those lines.

Some quotes you get on Sudan, Johnson, who is on the coupon that you thought that some consolidation time on kind of which ones we didn't own.

Some chunky chunky.

So I don't want you to who will conduct the ecosystem.

North America wholesale homes with Syngenta.

So we also challenge.

<unk> got some science.

Thanks Keith.

Total functional option. So the <unk> two questions. If you don't sound recently Goldman deal.

To your question Judy tensions.

Do you have assumptions.

Yes.

Also <unk> <unk> co.

Total <unk>.

Thank you so much Brian .

Do you want to be.

Why might short on some of the ecosystem to still come down.

<unk>, sometimes on the system.

So two questions.

First one is <unk>.

In the future differentiation right now the simple.

You mean startups or decrease.

How do you think going forward well everyone is working on with autonomous driving everyone is going to use my phone everyone. Your skin too.

Reduced BV as well so what would be the key competitiveness.

EBIT for the innovation.

Essentially revolution of the technology.

So question on the.

Efficiency.

What region.

Questions regarding the normalization we have observed.

Some peers has already explained due to European markets, how you sandy out of sync.

Asian placebo, Dr. Tom plans.

Number one.

Whenever that England here.

Uh huh.

Okay.

Thank you.

Our nonunion usual.

Just wondering how.

Yes.

To this we are now either in terms of how to.

John .

Keith This is John .

And catching up with you don't keep ensure Tony could you tell me you go higher than usual.

I think I'm going to turn on it.

EMEA.

No leader.

So these are the analysis so.

I would assume that you can assume an.

Just wondered on champion that normally.

The heart of the ADT, Canada.

Uhm.

That you deal with Charlie we hope muscle disorder, partly on the anti down the gesture.

Yes.

Sure sure.

<unk> done that.

Sure.

Now that.

I think as you may know Shaun hydro due this year.

So subtle giovanni's Humber.

So can you kind of rollout that if I may.

Sure.

When you look at Canada.

We should have detour.

Akshay.

Okay. So let me if you can put out.

Got it.

Although Matt How're you doing.

Extra factory with the user.

Yes.

Hi, Chuck.

And you go down the <unk>.

Thank you.

See the how can we not negotiate to answer right now.

John Mccallion hopefully Omar.

That concludes the chunky.

So I'll just hanging Duncan Hitachi on the quarter.

Sure.

Yes, well, we're going to have potentially with the car shopping with us.

A woman teenager has already incubated.

<unk> all coming on the call the usual.

And we're doing our part.

Okay.

Sure <unk>.

Sure.

So can you tell us.

So it obviously there are two largest publicly the yoga health and non linear shelf.

The headwind, but I think she is announced this agenda.

The Hong Kong Shanghai, So Luca.

J J <unk>.

Yes, <unk> you Jenny to defeat downtown.

It does and I talked about it a whole woman to diverge a good data that you can achieve the highest value died.

The whole fleet Anshan co Jonathan how does the NFL.

If I may.

So I think the cheetos.

Chicken upwards, but anyway, you want me to.

Oney nanometer proposal.

Jonathan.

Doug Oems such as Audi yourself, you're also going to now.

Well just wanted to get your thoughts you'd look at.

<unk> top 100 and other tasks.

No one wants you to chop.

So I'm going to again, just how much we can pull that sounds a little bit in Asia. The Trulia Joshi.

Sure.

The short video market.

Yes.

Okay.

That's good yeah.

I think I'll start off with our dividend.

That number.

And that will be it will go.

Okay.

That will give you a surgeon.

Generally it has been in dialogue with other than of course, you didn't get the pudong.

How do you stand on that.

Okay.

Hydro <unk>.

Yes.

This is John .

New Tenneco.

So thats, how youre going to push for the time here.

Well, we did yagur causes headwinds and leave a good year.

So the 301 yet.

I will now.

Number two hot water kind of how that impact.

We're not into the future.

You can see kind of how youre viewing the ICF hard again.

Total digital media that Jonathan.

And at Google.

The argument is unequivocal hung in there yet.

Yes.

Oxford <unk>.

<unk> policy.

Well you just stand up put solution.

Just wondering.

I'm wondering if you can answer this with Hudson is actually that the hospital or the timing.

Yet each Hollywood.

Local machine leader hospitals.

So can you just talk either enhance each other in looking at the unit holders should be another noteworthy that hydrogen vehicles.

By the end of 2021, we've pretty much validated ourself and finish the completed a zero to one stage as a company we've been focusing we've been validating ourselves in the family buyer's market and.

Pretty much.

Establishing the industry ceiling as the number one seller.

Medium to large sized SUV market.

And our.

Our key.

Our key recipe for the success.

Our focus on the family market, our efficiency R&D capabilities, and our software R&D capabilities.

This is validated through sales and having a while having a very low SG&A expense level.

And in the next.

A couple of years, we will be completing our 1% to 10 stage as many of you are well aware of 2025 goals in.

In volume and margins and to reach this goal, we will continue to play to our strength.

Its two things one is we will we understand the family market very well and we will expand our product line across the 200000 500000 price range by providing our product to more families.

In more segments of the market. The second one is our efficiency in R&D capabilities as you can see our R&D and new store opening pace.

Pace has been on par with many of our competitors, but in meantime, we're still delivering very healthy and profitable financial results.

In the meantime, which we admit we have many weaknesses, which is what we will be working on over the next few years.

First of all in R&D, we will.

We actually have already made many improvements we brought in.

<unk>.

Tons, driving and voice recognition in house by building a very strong talented team in the meantime, we establish our R&D capabilities and zonal controllers.

E architecture all of these are in house today. So we believe that we will continue to build.

R&D capabilities and the technical area in the meantime, the other weakness has been supply area, we want to work on our supply given.

Given the growth in the market, we'll be working on supply as well as the manufacturing capabilities.

And finally on the topic of intelligent technologies, we believe that there is no shortcut in the market.

One thing we have observed with intelligent technology. It has three characteristics first of all users.

No particular feeling of the technology when they buy the product and secondly, if that experience bad after they buy the product that will easily give up the product on their confidence and certainly the product is actually good they will very quickly find out that they cannot live without the product.

So to deliberate to make sure that we can deliver competitive products in the intelligent technology area. We will focus on three capabilities, which we have we believe the company is apparent.

Establishing first of all is.

Product capability.

It's very important to understand the user needs and continue to.

That will exceed their needs and second one is software and AI capabilities.

Which ultimately competition on talent the.

Bench of talent.

We believe the most successful companies are the ones that can attract the best talents are the ones, where the best talents will like.

Most prefer to work in and third one Fas systems capability and more specifically the billing.

<unk> operating systems, and we believe with these three capabilities.

Be able to maintain our core competencies in both autonomous driving and intelligent content. Thank you.

Paul Let me take the second question about the globalization.

So basically for the long.

A long term strategy, we believe will ultimately compete in the global market that's for sure and for the very near future very near term, we want to focus on the.

In the China market went up.

And as I mentioned.

Several times, we already have a dedicated team for the global Strep globalization strategy. We are doing three things first is to identify the.

Potential market for <unk>.

Our product second to to two annualized so what will be the right product mix.

This product in the third.

How to develop.

It is the model so that we can achieve.

Meaningful market share.

When we entered this market so right now this team dedicated <unk> team.

<unk> strategy.

Okay. Thank you.

Thank you. Our next question comes from <unk> from Citi.

Please ask your question.

Your line is open.

Consequently.

Sure.

Okay.

And so as you heard us in total you're talking about Josh Sean.

Thank you Matt.

You made a T shirt.

Richard.

Sure sure sure.

Sure Jeremy question Colby.

Okay.

One more quick one.

I would say the transmission companies.

Yes.

Gotcha.

Neil.

Okay Charlie.

Gosh, I don't know what you call it.

Do you see passing Danielle.

Thank you.

I'm just going to need the talent wants you to acquire.

Okay cool.

Thank you Brian .

Okay.

Sure sure sure.

Cancel you're arguably it will be they will wash itself out.

Sure.

Yes remember women.

Thanks Chuck.

Brian just for Sichuan quickly Glenn Schorr.

I have two questions about the product.

One is about it.

We see the penetration rate of VEB.

Okay.

Correct.

And that means more consumers understand more about it.

Zale close off market.

So what's kind of changed would that take for that.

Users and also we know that could you please give us more color about correctly.

Number one.

And then secondly, the second question is about.

The ped.

The EV product will be launched next year.

For R&D to be eating into huge change could you please give us.

Some discussion.

Okay.

Sure Jason.

Please.

Thank you.

Okay.

Now whenever that day.

Eagle adhesion.

<unk> audience.

Hi, This is Jeff.

Patrick can you just what happened.

It can be a lot.

Also these Amazon yet now the English.

No.

That's why our ambition as usual we literally from here now that you are but because there is no group, which has been a human issue.

Is that one.

On the show that growth annually.

So it hasn't Thiago.

Now I'll talk a little Colombia, where the designs of our contract with <unk> and how long do you hold back.

As usual well, yes. There is also some of them yet.

Thank you Alejandro.

The calculus, Amanda wont have an issue.

Oh fuel Mcdonald's we are targeting <unk>.

At least for me on the <unk> 10 months.

Ill comment.

Also non Hugo now public.

John I think as you saw in Hollywood.

About a year changing industry jobs with human cancers.

We also put in Ghana.

What was that in your colon.

So how do you have that number right and how long they focus.

When you take a share of women that are time in the Eagle cautionary yet now when you take a boiler.

When we're trying to help with the future of that DIY that will look like in the future.

So if we had targeting who show the champion.

Like a.

<unk> condition that ownership.

Sure.

So it seems that at some time.

Do you want to have any acme.

With regard to it sounds like you're going to meet.

Pardon me implements utilization by F&B and up.

The one thing that you should certainly also the total.

With the Eagle after the two large users.

Yes.

We're going to be digging into it and that sort of got tissue amongst should looking to shop to Jennifer Hudson bodily Anthony.

It's all about timing.

Yeah, Hey, John .

<unk>, probably double digit contract user.

<unk> and whatnot so.

No that's.

Thats your target model wasn't data. So it's really about when we are selling without getting into any vessels are predominantly.

<unk> no doubt about that.

Yes.

The CIT hall that will move through the year here.

Got it.

But <unk> our.

Sounds good.

<unk> done that in deep <unk>.

<unk> youre going to push it.

You cannot go not bureau teaser downloaded.

Okay Albi rebounder centered in June .

<unk> done on the Shadow number three functional.

I was hanging walls, you should again.

Yes.

Alright.

Walking hand up.

Mark.

<unk> here.

If you're going to <unk>.

Somewhat hard for me as usual.

So thats kind of accounting block.

Hello.

Good it yet.

The normal <unk> launching at.

Based on the profit on the Colombia.

<unk> got the hard home.

Susan will touch on regarding had autonomy and drop now John you can pick one.

That's one of our vessels later, so thank God I wish without impact you don't know shipping on wholesale I believe John look yet nonetheless easier housekeeping.

I was hoping to do.

Now with the addition of the Hull.

Uh huh.

So that's all about.

Yes.

No Jim.

How do you go Bandunda champion hopefully with it yet and also Johan the ultra agenda.

Yes.

First of all on the first question.

As we reach higher penetration and new energy vehicle market.

Good news for the company.

The same product methodology will continue to apply.

And as I said earlier as we observe there are users.

There are three levels of <unk>.

The first level of explicit demand the second level or the implicit demand many of which are their pain points and the third level of our demands I don't even know it.

The way we observe these demands.

Now, we analyze and reserve the users on and rational and emotional level and understand what they want and build products that will exceed their needs.

And talking about the external one.

Our core theme has been to two things one thing is to operate things that users really wanted on the Wan and wanting to add to their lead one product and secondly.

Delivering our new demands that are not yet not yet met in the market. Today. These are things that users do not even realize that they want but a moment that exceed our products.

There really isn't what I actually wanted.

So the methodology will continue to remain the way it is although the user needs are changing and we will continue to follow that very closely.

So these are some comments on our end.

New vehicle on our range extended vehicle range.

And of equal platform.

I'll make a few comments on the electric vehicle market.

Our vehicle product.

So the electric vehicle will focus on three different things.

First of all is our foresee charging capability.

And this.

Most importantly.

Important component will be the battery, we've actually spent a lot of efforts.

Co develop the battery with our key supplier because the entire architecture and fell and charging capability heat management system will all be different so we've done it.

Extensive work in this area.

To ensure that.

The mass production of the battery will be successful.

The second component of our high voltage platform for 850 volt.

EV platform, which includes many different things ranging from electric motors.

Integrated integrating PCB sea of rising voltage lowering voltage a heat management battery management system. All of these things have never been provided before.

Company and.

And the third thing is a 400 kilowatt charging station and charging pulse.

We've done a lot of work.

The work to develop these charging pulse.

To ensure that we can provide seamless experience for our users which connects the battery.

Vehicle platform and the charging station.

With these products, we will be able to charge their cars.

10 minutes and delivered 400 kilometers of range.

Alright, thank you.

I think comes from Joan shelf.

Please ask your question.

Sure Glenn is in Q2 and the wounds.

1020 content the issue.

From Florida to.

Cook with issue to Danya Henry Ford as you saw when you all wound Cobra Thomas you are some of the.

Some of it goes to entice showing.

Okay.

We're looking at kind of constantly attempting and trying to do.

I wanted to ask Wayne to Cook, reaching an additional $20 when the seasonal influenza Utica chatting.

No.

When we think that Q why you took the tabulating weekly data Coke, which room, when we hope be EV <unk> going to <unk>.

Jackie and the team we will be on the plant.

When would you Hitachi to move since the fund group, which is our highest so would you hire to this apple as you mentioned.

Finisher.

So.

Thank you management for taking my questions. My question is really about.

Strategic positioning product positioning.

Management talked about the focus.

Having the best product for our family use.

It is a family sort of use case stood a focus remains a focus for the new products, including the BV product.

It is.

Would that be enough for the sort of longer term.

Sustainable growth.

And strategic positioning for the company.

Thank you Jason.

Without a doubt.

How would you know what I'm going to tissue.

The answer that is just something that you guys have a GDS Huntington.

And are you going to adjust to.

Yes.

<unk> initial hub.

Our TCE to Ta.

Arthur I understand that.

Yourself.

Okay.

Clearly and yet youre trying to do.

<unk> do you think about that.

With <unk> leadership connectivity and conduct RJ Alessandra genco to novel way.

Total cycle, yet in Cape Archer.

<unk> Jonathan.

Let us look at the Holdco.

Gigawatt total development.

Equally importantly, fundamentally when you may just usually the fleet harder how are you.

Michelle.

Sure.

Could you just introduce yourself.

Peter.

Or would you have wanted just ask you Tony you can reach a trough.

Okay.

Arguably kind of dining which is having a material hardart deduction.

Good morning.

And you either you can bouba.

Thank you for that and we also have the conduit book onto the you should see him on that issue.

I'm sure that we're looking hard at the heart of the digital coaching that we've got our range without pulling it off did not yet have analysts when you Dr. John Zuniga going into July .

So the answer is yes, we will continue to focus on this market.

We progressed only validated ourself at one particular price point in this market, but if you look at the entire market will redefine the b one product in 2016.

<unk> is only about 2 million units annually and last year. The market has grown to $6 million and we expect that by 2025. The market will reach 10 million units per year. So this is a very healthy market.

For three reasons. One is it has very big growth as we talked about earlier and second one is that there is.

Enough.

Bom Bill.

So so far we've really taken a very small scoop.

From the market accounting for about 2% market share in the market here, we're talking about all passenger vehicle market not just in EV.

Because we believe the one not only compete with.

New energy vehicles, but we have the potential to replace existing all all existing passenger vehicles above 200000, RMB price point. So there is still much work to do and our goal is to eventually reach at.

At least 20% of the market, which is the time by which we will have finished our 1% to 10 states as a company.

Alright, thank you.

We reached the end of our conference call I would like to turn the call back to the company for closing remarks. This is Janet Yang. Please go ahead.

Thank you once again for joining with US today. If you have any further questions. Please feel free to contact Investor Relations team again, that's all for today Hope you have a great weekend.

Thank you that does conclude our conference for today. Thank you for participating you may all disconnect.

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