Q3 2024 Li Auto Inc Earnings Call
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Speaker Change: Hello, Ladies and gentlemen, thank you for standing by what Lee Autos third quarter 2024 earnings Conference call.
Speaker Change: At this time all participants are in listen only mode. Today's conference call is being recorded I will now turn the call over to your host Ms. Janet Chen Investor Relations Director. Please go ahead gentlemen.
Janet Chen: Thank you operator, good evening and good morning, everyone. Welcome to carry out her third quarter 2024 earnings conference call. The company's financial and operating results were published in our press release earlier today and are postpaid and accomplished IR web site.
Janet Chen: Today's call, we will have our chairman and CEO, Mr Stanley and our CFO, Mr. Johnny Chile begin with prepared remarks, our president Mr. Goldberg and senior Vice President Mr. Jams downturn, so will join for the Q&A discussion before we continue please be reminded that today's discussion will contain forward looking.
Janet Chen: Statements made under the Safe Harbor provision of the U S. Private Securities Litigation Reform Act of 1995, Florida looking statements involve inherent risks and uncertainties as such the company's actual results may be materially different from the views expressed today.
Janet Chen: Further information regarding risks and uncertainties is included in certain company filings with the U S Securities and Exchange Commission and the stock exchange of Hong Kong Limited. The company does not assume any obligation to update any forward looking statements, except as required and also think about law.
Please also note that <unk>, earning press release and this conference call include discussions of unaudited you ask GAAP financial information as well as an audited non-GAAP financial matters. Please refer to Leon those disclosure documents on the IR section of our website, which contains a reconciliation of the odd.
Janet Chen: non-GAAP measures to comparable U S GAAP measures.
Speaker Change: Our CEO will start his remarks in Chinese zero, the English translation. After he finishes all his remarks with that I will now turn the call over to our CEO. Mr. Shan Li. Please go ahead.
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Speaker Change: Hello, everyone. This is Michele and thank you for joining today's earnings conference call.
Speaker Change: In the third quarter, China's <unk> penetration rate has reached 53%, marking the first time any way overtook ICU vehicles in terms of new vehicle registration.
Speaker Change: The market share of leading brands continue to expand especially in the RMB 200000 and over any of the market where the top three brands combined account for over 50% market share in Q3.
Speaker Change: Auto delivered over $15 152000 vehicles in Q3 up 45, 4% year over year and driving our segment market share to 17, 3% in Q3 compared to 14, 4% in Q2.
Speaker Change: Our historically high quarterly deliveries and market shares solidified our market leadership in the segment. In addition, our sales in Chinas overall, RMB 200000, and above PV market surpassed multiple established European premium brands for the very first time, making us the top three brands among.
Speaker Change: All brands and number one across all Chinese brands in this segment.
With a multitude of players entering the <unk> market Lee L series sustained its strong sales performance, partly attributable to our ongoing innovation and high quality monthly OTA updates encompassing improvements in autonomous driving smart cockpit and electric electric drive.
Speaker Change: In Q3.
Speaker Change: The average monthly sales of Lee L series exceeded 50000 units.
Speaker Change: It is worth noting that <unk> take rate continues to grow owing to our investments in R&D that have led to rapid iterations and breakthroughs in our vehicles autonomous driving capabilities.
Speaker Change: The deployment not only reflects user recognition of our technologies, but also improves our overall product mix.
Speaker Change: In the third quarter.
I continued to upgrade our sales and servicing that works as of the end of September we had 479 retail stores located in 445 cities as well as 436 service centers and Lee auto authorized body and paint shops operating in 221.
Speaker Change: Cities in China.
Speaker Change: <unk> 165 sales centers are located in major auto parts and premium commercial properties with nine to 11 to Spice box per store driving our total despite spots to over 3000.
Speaker Change: This supports the sales growth off our existing model, while also prepare for the launch of <unk> SUV.
On the supercharger network as of now we have one supercharging stations with 4888 charging staff operating in 175 cities across 31 provinces nationwide.
Speaker Change: Notably our network includes 582 re auto Supercharging stations, along highway the largest network of its kind in China.
Speaker Change: In addition, we continue to strengthen our collaboration with premium partners in the industry on October 12, we officially formed strategic cooperation with Sinopec on charging station construction and platform Interconnectivity Hasnt.
Speaker Change: As of now our lead selection Supercharging network includes 1200 high power highly stable third party charging stations.
Speaker Change: We remain on track in terms of our BD strategy charging efficiency and reliability remain top concerns for PV customers.
Speaker Change: We continue to accelerate the deployment of our charging networks, while actively exploring new technologies aiming to establish an industry, leading charging network covering both highways and urban areas by next year the.
Speaker Change: The initiative, we are preparing for the launch of our PV electric Suvs and ensure that we continue to provide convenient and reliable charging experience for a growing number of users.
Speaker Change: Moving onto autonomous driving since its release in July.
Speaker Change: Prior to a full and full back end to end envisioned language model autonomous driving solution has been iterating at a rate of 2% to reversion per week and just three months the amount of training data per model went from 1 million video clips to $4 million, while the average mileage per intervention increased nearly two five times, our new system launches from two <unk>.
Speaker Change: <unk> is driving solution significantly enhanced user experience with its robust model and deep comprehension offset traffic environment.
Speaker Change: October 23rd we began rolling out <unk> $6 four for Lee Mega NBL series. The update includes our new autonomous driving solution, which is now fully deployed on over 320080 Max.
Speaker Change: Vehicles only three months after we rolled out our nationwide malice in OE in July the.
Speaker Change: <unk> six four update also features a more lively these samples here task faster 2.0 powered by large language models and improved charging experience.
Speaker Change: Among many other improvement.
Our industry, leading amount of real World training data is a key competitive advantage.
Speaker Change: And Power's rapid innovations in autonomous driving as of October.
Speaker Change: Our total reward training myeloid has reached $2 6 billion kilometers with NOI myeloid hitting $1 39 billion kilometers.
Speaker Change: The automated parking has been out of activated 60 million tons. Additionally, our active safety futures have prevented 345 million potential accident, including 516 severe accidents.
Speaker Change: In Q3 2024, our total revenues reached a record high of RMB $42 9 billion up 23, 6% year over year, our gross margin expanded to 21, 5% and non-GAAP income from operations hit an all time high RMB, four 4 billion and operating <unk>.
Speaker Change: Cash flow reached RMB 11 billion.
Speaker Change: Paul.
Speaker Change: Her financials.
Speaker Change: Due to time constraints I will address financial highlights here in <unk>.
Speaker Change: With you to refer to our earnings press release.
For further detail.
Speaker Change: Total revenues in the third quarter were RMB.
Speaker Change: <unk> two 9 billion all fixed point 1 billion U S dollars.
Speaker Change: 23, 6% year over year, and 35, 3% quarter over quarter. This included RMB.
Speaker Change: $41 3 billion, all five $9 billion from vehicle sales up 22, 9% year over year, and 30 basis points, 3% quarter over quarter.
Year over year.
Speaker Change: Sequential increase was primarily attributable to the increase in vehicle deliveries.
Speaker Change: Partially offset by the lower average selling prices, mainly due to the different product mix.
Speaker Change: Cost of sales in the third quarter was RMB 33 6 billion.
Speaker Change: Paul <unk>.
Speaker Change: 8 billion U S dollar.
Speaker Change: Up 24, 5% year over year.
Speaker Change: And the 32% quarter over quarter.
Speaker Change: Gross profit in the third quarter was RMB.
Speaker Change: $9 2 billion or $1 3 billion U S dollar.
Speaker Change: Up 27.
Speaker Change: 7% year over year.
Speaker Change: 49, 3% quarter over quarter.
Speaker Change: Vehicle margin in the third quarter was 29.
9%.
Speaker Change: The sequential increase was primarily due to the increased employee compensation associated with the recognition of share based compensation expenses.
Speaker Change: Guarding the yield performance based awards in the third quarter of two.
Speaker Change: All of this year.
Speaker Change: At the acumen of the related performance condition was deemed probable.
Speaker Change: Income from operations in the third quarter.
Speaker Change: RMB three.
Speaker Change: For bidding all.
Speaker Change: 489, 2 million U S dollar.
Speaker Change: 46, 7% year over year.
Speaker Change: 633.
Speaker Change: 4% quarter over quarter.
Speaker Change: Operating margin in the third quarter was eight briquette.
Speaker Change: <unk> grew from $6 seven in the same period last year and one 2% in the prior quarter.
Speaker Change: Net income in the third quarter.
Speaker Change: Was RMB two eight.
Speaker Change: Eight, beating our $401 9 million U S dollar.
Speaker Change: <unk>.
Speaker Change: <unk>, 3% year over year and 156 two.
Speaker Change: And 2% quarter over quarter.
Speaker Change: Diluted net earnings per ads attributable to ordinary shareholders was RMB two six.
Speaker Change: Six six all.
Speaker Change: 0.3 U S dollar in the third quarter.
Speaker Change: RMB two.
Speaker Change: Six seven in the same period last year.
Speaker Change: And RMB 1505 in the prior quarter.
Speaker Change: Now turning to our balance sheet and cash flow.
Speaker Change: Yes.
I will now turn the call over to the operator to start our Q&A session. Thank you.
Speaker Change: Thank you if you wish to ask a question. Please press star one on your telephone and Mike for your name to be announced if you wish to cancel your request. Please press star two.
Speaker Change: If you're on a speakerphone please pick up the handset to ask your question for.
Speaker Change: For the benefit of all participants on today's call. Please limit yourself to two questions and if you have additional questions you can reenter the queue.
Speaker Change: Mandarin Speaker. Please ask your questions in Chinese first then followed with English translation.
Speaker Change: Our first question comes from Tim <unk> with Morgan Stanley.
Speaker Change: Thank you Tony Hawk, we're seeing Tim Paul.
Speaker Change: Julia you of course, you see the consolidation, okay challenging <unk> central.
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Speaker Change: Hi, Jason I'll quote you answered ICD seen attrition with usual.
Speaker Change: So, especially in the pipeline.
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Speaker Change: Thanks for taking my question. So my first question is about the potential growth potential for <unk>.
Speaker Change: Production Uhm, each will have bundled woman, sometimes that you'll probably see.
Speaker Change: In the past 10 months, we have went through several major innovation in our.
Speaker Change: Autonomous driving features we went from reducing reliance on Nab to malice and to end to end, which you've seen today and in the meantime peoples recognition and expectations for our NOI has kept increasing and in terms of parking space to parking space at one click.
Speaker Change: Our plan is to launch it to all of US 80, Max users by the end of December this year and along with this launch we will also be releasing the feature to path.
Speaker Change: The EPC pulse patients automatically.
Speaker Change: Revise on a BLM model to recognize EPC total stations. So that our users can drive from highway to urban roads urban roads highway through EPC pulse patients without exiting any way, which provides a more fluid user experience.
And in terms of whether our city on OE will be released on.
Speaker Change: Models, and because of the Illinois relies on stronger perception.
Speaker Change: Large larger amount of computing power.
Speaker Change: Current city NOI features unfortunately wont be provided on a pro models.
Speaker Change: As for specifics of FERC future models and information please stay tuned to our product launch events in the future. Thank you.
Speaker Change: Your next question comes from Gena, Wang with Deutsche Bank.
Speaker Change: Good morning.
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Speaker Change: So my first question is regarding are our sales policy strategy into the fourth quarter of the year and then also our.
Speaker Change: Comes from James Jang with C. I C C.
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Speaker Change: Since we launched what we call end to end BLM Thomas driving.
Speaker Change: Functionality.
Speaker Change: We view autonomous driving.
Speaker Change: No longer as a feature.
Speaker Change: <unk> highway anyway, but more as a capability the ability to offer supervised autonomous driving and that marks the change from rule based algorithm into real AI model driven algorithms.
Speaker Change: And for users to value a pretty significant I'll give a few examples first of all in NPI or we call the miles per intervention.
Speaker Change: In Q3 and for the longest time, no matter who enters the market.
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Speaker Change: Can we offer products that are.
Speaker Change: That that provide the most value for our target users in their respective price range, that's the key to everything and our long term goal.
Speaker Change: Still too.
Speaker Change: Through our <unk> and our EV products together capture over 25% of market share.
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Speaker Change: [music].
Speaker Change: [music].
Speaker Change: Hello, Ladies and gentlemen, thank you for standing by widely autos third quarter 2024 earnings conference call.
Speaker Change: At this time all participants are in listen only mode. Today's conference call is being recorded I will now turn the call over to your host Ms. Janet Chen Investor Relations Director. Please go ahead Janet.
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Speaker Change: <unk> funding debt to EBITDAX in Q.
Speaker Change: Tito <unk> corridor.
M. A C S ESP the site changed regarding the.
Speaker Change: While modalities you tend to churn yet Steve.
Speaker Change: So EUR is I'm sure.
She is losing share.
Speaker Change: Uhm sampled it here.
Speaker Change: <unk> opened up yet.
Hello, everyone. This is Michele and thank you for joining today's earnings conference call and.
In the third quarter, China's <unk> penetration rate has reached 53%, marking the first time any way overtook ice's vehicles in terms of new vehicle registration.
The market share of leading brands continue to expand especially in the RMB 200000 over any of the market where the top three brands combined account for over 50% market share in Q3.
Auto delivered over $15 152000 vehicles in Q3 up 45, 4% year over year, driving our segment market share to 17, 3% in Q3 compared to 14, 4% in Q2.
Our historically high quarterly deliveries and market share solidified our market leadership in the segment. In addition, our sales in Chinas overall, RMB 200000 about PV market surpassed multiple established European premium brands for the very first time, making us the top three brands among.
All brands and number one across all Chinese brands in this segment.
With a multitude of players entering the <unk> market Lee L series of sustained its strong sales performance, partly attributable to our ongoing innovation and high quality monthly OTA updates encompassing improvements in autonomous driving smart cockpit and electric electric drive.
Speaker Change: In Q3.
The average monthly sales of Lee L series exceeded 50000 units.
Speaker Change: It is worth noting that <unk> take rate continues to grow.
Speaker Change: Going to our investments in R&D that have led to rapid iterations and breakthroughs in our vehicles autonomous driving capabilities.
The deployment not only reflects user recognition of our technologies, but also improves our overall product mix.
Speaker Change: In the third quarter.
We continued to upgrade our sales and servicing that works as of the end of September we had 479 retail stores located in 145 cities as well as 436 service centers and Lee auto authorized body in paint shop operating in 221.
Speaker Change: Cities in China.
These 165 sales centers are located in major auto parts and premium commercial properties with nine to 11 to Spice box per store driving our total display spots to over 3000.
Speaker Change: To support the sales growth off our existing model, while also preparing for the launch of <unk> SUV.
Speaker Change: On the Supercharging network as of now we have one supercharging stations with 4888 charging staff operating in 175 cities across 31 provinces nationwide.
Speaker Change: Notably our network includes 582 re auto Supercharging stations.
The highway the largest network of its kind in China.
In addition, we continued to strengthen our collaboration with premium partners in the industry on October 12, we officially formed strategic cooperation with Sinopec on charging station construction and platform Interconnectivity.
As of now our lead selection Supercharging network includes 1200 high power highly stable third party charging stations.
Speaker Change: We remain on track in terms of our BD strategy charging efficiency and reliability remain top concerns for PV customers.
We will continue to accelerate the deployment of our charging networks, while actively exploring new technologies aiming to establish an industry, leading charging network covering both highways and urban areas by next year.
The initiative, we are preparing for the launch of our PV electric Suvs and ensure that we continue to provide convenient and reliable charging experience for a growing number of users.
Moving onto autonomous driving since its release in July.
Speaker Change: Prior to a full and full back end to end envisioned language model autonomous driving solution has been iterating at a rate of 2% to reversion per week and just three months the amount of training data per model went from 1 million video clips to $4 million, while the average mileage per intervention increased nearly two five times, our new system launches from two <unk>.
Tom it's driving solution significantly enhanced user experience with its robust model and deep comprehension offset traffic environment.
On October 23rd we began rolling out Ot $86 four for Lee Mega NBL series. The update includes our new autonomous driving solution, which is now fully deployed on over 320080 Max vehicles.
Speaker Change: Only three months after we rolled out our nationwide map with an OE in July.
Speaker Change: Okay. Thanks for update also features a more lively visa homecare task faster to point out powered by large language models and improved charging experience.
Many other improvement.
Speaker Change: Our industry, leading amount of real World training data is a key competitive advantage.
Speaker Change: And Power's rapid innovation.
Harmless driving.
Speaker Change: As of October <unk>.
Speaker Change: Our total real or training myeloid has reached $2 6 billion kilometers with NOI myeloid hitting $1 39 billion kilometers and automated parking has been activated 60 million tons.
Speaker Change: Additionally, our active safety futures have prevented 345 million potential accident, including 516 severe accident.
In Q3 2024, our total revenues reached a record high of RMB $42 9 billion up 23, 6% year over year, our gross margin expanded to 21, 5% and non-GAAP income from operations hit an all time high RMB four 4 billion in operating cash.
Speaker Change: Cash flow reached RMB 11 billion the <unk>.
Solid financial performance is driven by our improving product mix economies of scale and operating efficiency.
In October we reached an important milestone of 1 million cumulative vehicle deliveries and just 58 months. The first among emerging new energy vehicle automotive promoted brands in China.
The milestone marked a new beginning looking forward, we will continue to innovate through R&D and develop outstanding products and services, while maintaining our production and delivery efficiency as an industry leader.
Speaker Change: In Q4 of this year, we expect vehicle deliveries to be between 160000.
Two 170000 units with full year deliveries falling between 502005 hundred to 12000 units.
Last but not least I would like to share the highlights in our ESG performance.
In September we received Msci's highest AAA ESG rating for the second consecutive consecutive year, a testament to our outstanding performance in corporate governance protocols and safety and clean energy technology, We will continue to explore cutting edge low carbon technologies and implement green opera.
<unk> management practices proactively fulfilling our social responsibilities.
I will now turn it over to our CFO to walk you through our financial performance.
Speaker Change: Thank you Hello, everyone I will now walk you through some of our.
<unk> thousand before third quarter financials.
Due to time constraints I will look like.
Speaker Change: Financial highlights here.
I refer you to refer to our earnings press release.
Speaker Change: For further detail.
Speaker Change: Total revenue in the third quarter were RMB.
Speaker Change: $42 9 billion or $6 1 billion U S dollar.
Speaker Change: 23, 6% year over year.
35, 3% quarter over quarter if included RMB.
Speaker Change: $41 3 billion, all five $9 billion from vehicles built up 22, 9% year over year.
The 30 basis points to represent cultural work harder.
Year over year.
Speaker Change: The sequential increase.
<unk> is primarily attributable to the increase in vehicle deliveries.
Partially offset by the lower average selling prices, mainly due to the different product mix.
Speaker Change: Cost of sale in the third quarter was RMB 33 6 billion.
Speaker Change: All four.
8 billion U S dollar.
Plenty of four 5% year over year.
The 32% cultural will cover.
Gross profit in the third quarter.
Speaker Change: RMB.
$9 2 billion or $1 3 billion U S dollar.
Speaker Change: 20.
7% year over year.
Speaker Change: <unk>.
49, 3% quarter over quarter.
Sequential decrease.
Speaker Change: <unk>, primarily due to the decrease.
Speaker Change: And developed in the past.
Speaker Change: For new products.
Speaker Change: Technology and.
A decrease in employee compensation.
SG&A expenses in third quarter were RMB.
$3 4 billion, all $478 7 million U S dollar.
Up 32, 1% year over year.
Speaker Change: 19, 3% quarter over quarter.
The year over year and the sequential increase.
<unk>, primarily due to the increase.
E Commerce station associated with the recognition of share based compensation expenses regarding the field performance.
<unk> in the third quarter of two.
<unk> of this year.
The achievement of the related performance condition was deemed probable.
Income from operations in the third quarter.
Speaker Change: Was RMB three.
Speaker Change: For bidding all.
489, 2 million U S dollar.
46, 7% year over year.
Speaker Change: 633.
Speaker Change: 4% quarter over quarter.
Speaker Change: Operating margin in the third quarter was eight briquette.
Speaker Change: <unk> grew from $6 seven in the same period last year and one 2% in the prior quarter.
Net income in the third quarter.
Was RMB two eight.
Speaker Change: Eight bidding all $401 9 million U S dollar.
Speaker Change: <unk>.
<unk>, 3% year over year and 156 two.
And 2% quarter over quarter.
Diluted net earnings per ads attributable to ordinary shareholders was RMB two six.
Speaker Change: Six six all.
Speaker Change: $45 9 billion.
All six 2 billion U S dollar and.
Speaker Change: $6 5 billion.
Representing a year over year increase of three.
Three 5% to 10%.
This business outlook reflects the company's current under review.
A review point business situation and market condition, which is subject to change.
Speaker Change: That concludes our prepared remarks.
I will now turn the call over to the operator to start our Q&A session. Thank you.
Thank you if you wish to ask a question. Please press star one on your telephone.
Speaker Change: Deanna.
Thank you Mr to cancel your request please press star two.
If you're on a speakerphone please pick up the handset to ask your question for.
For the benefit of all participants on today's call. Please limit yourself to two questions and if you have additional questions you can reenter the queue.
Speaker Change: Mandarin Speaker. Please ask your questions in Chinese first then followed with English translation.
Speaker Change: Your first question comes from Tim <unk> with Morgan Stanley.
Ladies anyhow, we're seeing Tim Paul.
Yeah of course, you do the consolidation.
Speaker Change: LNG and <unk> syndrome.
<unk> E <unk> to differentiate.
Speaker Change: Instead of switching but I think it's in our culture.
He will then turn into to the chain, where should you hired I wish it <unk> change the more gallons.
Speaker Change: <unk> city to continue to allocate that all we didn't sell any.
Well me into kind of a linear adobe title XI data that got us into a corner.
Speaker Change: Sure.
Speaker Change: Hi, Jason I'll quote you Angela ICD seen attrition with diesel hedges.
Speaker Change: Just switching to <unk>.
What is traditionally the central C just with the deep links.
Thanks for taking my question. So my first question is about the.
Attention with growth potential for <unk>.
If you see opportunity for that.
Speaker Change: Well mortgage title and Ohio, and wish him the whole education, Doha zero sugar UTC now what does your gut.
Speaker Change: Now I'll go through the only hedges, which will go through without incidentally, our topical humor.
The highly acute neutral with us.
Speaker Change: Huntington without Ikea, which one where you're going with it yet.
The holiday by Deutsche Bank.
How much I know Patrick Sheffield.
<unk> UK section of ultrasound.
Our UA Nathan's functionally the Hershey are concerned.
Speaker Change: You can call the Xiaomi no woman Shandong entrepreneurial Asia, Patricia simpler approach.
He reduction to assume you can have longer woman, sometimes that you'll probably see.
Speaker Change: In the past 10 months, we have went through several major innovations in our autonomous driving features we went from reducing reliance on maps to malice and.
Speaker Change: <unk> end to end.
<unk> seen today and in the meantime peoples recognition and expectations for anyway.
Kept increasing and in terms of parking space to parking space at one click.
Our plan is to launch it to all of US 80, Max users by the end of December this year and along with this launch we will also be releasing the feature to path of EDC pulse station automatically.
Speaker Change: Which revise on a BLM model to recognize DTC pulse patients. So that our users can drive from highway to urban roads urban roads highway through EPC 12 patients without exiting any way, which provides a more fluid user experience.
And in terms of whether our city annoy will be released on.
Savannah took a deep look at that children at Orsa you did actually.
Speaker Change: I believe it goes I forgot to unveil the Doj.
Speaker Change: Got you.
<unk> opened during the summer.
Speaker Change: My question is about share based compensation policy.
<unk> previously announced makes that more than half convenient units in a part of the Java Monster King the.
Speaker Change: Phil.
Our options and I know how much expense booked in the third quarter and how much we're going to be in that number for this year. Thank you.
Speaker Change: Hi.
Speaker Change: Okay.
Speaker Change: Todd.
Regarding your share based compensation.
Speaker Change: Yes.
Speaker Change: As of September.
Speaker Change: The company.
Q4, the fourth quarter at the new rate plans.
The delivery in the first three quarters, we will probably meet the yield performance required for that.
Speaker Change: Firstly.
Batch of share based compensation awards.
You mean, the total delivery in the trailing 12 months.
First rich.
I'll pass on to solve it.
So as a result, we accrue recognized.
Speaker Change: The.
Share based compensation expenses.
Speaker Change: The third quarter.
Speaker Change: Of RMB $593 million.
Speaker Change: There will be.
Speaker Change: Additional RMB.
Meaning in the fourth quarter.
And I agree I agree.
Speaker Change: Of.
The reward.
Speaker Change: The net five.
Speaker Change: 500000.
Speaker Change: <unk>.
Speaker Change: The.
Speaker Change: The path will be to say each patch.
Speaker Change: Thank you.
Planes will be responsible for overall operations not just the sales as in the past.
Operating autonomy.
Each probing can run region specific sales and marketing activities ACOG.
According to the local market conditions.
Speaker Change: Further increasing brand.
Speaker Change: Awareness and market share.
If we look at this region by region to competition landscape barriers for different provinces.
Speaker Change: We view formulate region specific sales policies. According to the local conditions. Thank.
Thank you.
Hello, This is <unk> Joshi, and chicken demand social along with some color on that.
Speaker Change: Hi, Jacob.
Speaker Change: <unk>.
I'm sure they'll Meldon Watson, John <unk> NAND on the NDA.
Speaker Change: Call Me now.
I won't mention go ahead Jake.
Speaker Change: Boy you call quote on the Tijuana.
My second question is regarding our sales net network expansion plan. So what will be our target store number by end of 2024 and also by end 2025. Thank you.
Speaker Change: Okay. So we.
Speaker Change: We expect our retail stores to reach above 500 at the end of this year.
Our key channel adjustments, we have been implementing this year is to gradually replace lower performing shopping more stores in our network.
<unk> sales center in leading.
Speaker Change: In ortho parks as a result.
Proportion of sales centers in water parks.
Increased to over 40% at the end of this year from 24%.
Speaker Change: End of 2023.
Our total display port in China.
<unk> is expected to reach over 3600 at the end of 2020 full from over 20.
Over 2600 at the end of 2023. Meanwhile, we are expanding our coverage in the third tier cities and some key fourth and fifth tier cities in pace of sales and service networks.
As to their store target next year, we are sure we.
Sure that after the first quarter earnings release, Thank you.
Your next question comes from Cheng Cheng with CIC.
Speaker Change: Okay.
What do you mean without Glenn. Please go ahead Stephen.
Speaker Change: Okay.
Speaker Change: Yeah John.
John Lowe: Got you.
And then kind of on the L E. Google.
Speaker Change: Google capital might not niche.
No it hasn't come yet.
This will now share with you that you'll.
Speaker Change: You'll see here that you will call me.
Speaker Change: Just wanted to follow Castle Creek input from them.
So my first question.
Mr. <unk> has just mentioned we have more and more new players to compete with us in the <unk>.
Speaker Change: Our EV sector. So.
Speaker Change: Looking in 12 hour curious how are they being released to Paul.
Speaker Change #107: Two years.
Speaker Change: So.
Speaker Change: Awesome.
Speaker Change: Samsung some.
Factors that we can.
Great all the products of what aspects that we think can be greatly improved.
Thank you all the detail.
Speaker Change: Sure the two industrial bolt on as usual countries go ahead Joe.
That Nader <unk> intermediate gimbal systems through strategic grow beyond.
Dave: Thank you Dave.
Speaker Change: Australia.
Speaker Change: Yes.
Our turnaround in the EBIT.
Speaker Change: Rgs Davita co manager jewelry Hall, Overhyped sure Judah <unk> Golar push on ETF tricky that you don't have it exactly right.
Speaker Change: Yes.
And the Chinese economy will then you've got the higher dose that they held up well lay that on a longer lateral.
Speaker Change: Glad to hear the water though.
Speaker Change: So generally the marginal.
Last year could you the most of the merchant.
How does this all data that I didn't hear that Jeff will deliver yet if a general electric at the cashier less.
Speaker Change: Hello <unk>.
You guys, obviously soon yet JDM Asia Chandos your top decision on top of it doesn't cut up scenario.
Speaker Change: So these are real.
Speaker Change: Did you hear several glass attached to that.
Speaker Change: <unk>.
Speaker Change: They did Yahoo.
Speaker Change: Travel assistant.
Speaker Change: RJ time note. These shipments will play out in that as usual quarter Agi <unk> quarter.
Quarter, Tycho, you know demand to the Zalviso as usual.
The competition the automotive industry encompasses technology product supply chain sales and service, it's a holistic competition and.
Our UV technology is pretty.
A pretty important one among all technologies, but definitely not the whole picture for.
For the real serious in the next few years, it's still considered if you're making the analogy to a human being is still in its stage and after consumers buy our auto vehicles, we will continue to improve our features and experience through Otas, which <unk>.
Speaker Change: Improve the value of products that they receive.
So software hardware and user experience and product. This integrated experience. The auto is still the leader in the industry and looking at the next three to five years I think the biggest variable is going to be autonomous artificial intelligence.
Speaker Change: It includes.
Speaker Change: AI powered autonomous driving and AI powered smart assistant it will create a completely different experience for our users and that I consider at the beginning of a real step change and one thing I want to remind everyone off.
Speaker Change: Since the beginning of 2024, most popular and well received automotive products.
Speaker Change: The entire world.
Our fixed and Thats hard results that we've seen.
And our source from.
From launched today in a matter of only six months.
<unk> has delivered over.
139000 units and demand is still over supplied.
Speaker Change: It requires us to expand our production facility during spring festival in 2025.
How does the demo Glen Keeler Guang.
Speaker Change: Manuel mentioned that negotiable.
Speaker Change: Jonathan.
Speaker Change: Sure.
Speaker Change #108: Oh gosh.
Speaker Change: That's helpful. Thank you Sean.
Speaker Change: Quick.
A question for you it should.
Speaker Change: Sure.
Speaker Change: Sure.
Jeff will come on.
Speaker Change: Nice to talk with ultimately the outcome.
Speaker Change: Thanks, Jonathan.
Speaker Change #109: So my second question is about overseas market.
We have a more aggressive strategy Paul.
Paul: Go in going overseas.
Speaker Change: Yes.
Speaker Change: Great Nation.
Speaker Change: Sure.
Can you give us a brief right, including which markets.
Focus on how to develop the product.
Speaker Change: Okay.
Into to help quantify the overseas market.
Key drivers for our sales growth.
Jim: Okay. This is Jim.
Jim: So your question.
Absolutely the overseas market is very important to us.
Overseas strategy.
Is different from other automakers.
So we have established we have established a survey.
Servicing network seen several countries in the region such as is the custom in.
Jim: Need to Asia.
This servicing stores also helped us expand our market share in the overseas market regarding the choice of the overseas regionally.
Middle East and Central Asia will be our first target regions.
Building on this we will continue to explore and evaluate other market with high growth potential to expand our global footprint.
However, we are not considering entering western Europe, and North America for the time being thank you.
Your next question comes from Meng Stanley with Bofa.
Jim: Okay.
So you should go to you on that right now would it be union associated with the <unk>.
Speaker Change: Any change again.
So its institutional Eddie makes at Yahoo.
Please turn with a tender out right now.
Jim: No.
Jim: And so <unk> unit.
Jim: Don.
Jim: We're going to churn.
Nothing way Jim.
Jim: <unk>.
Speaker Change #110: Uh huh.
Jim: Uh huh.
Makes the Farnborough show now Youre mill to the MPW unlock now will finish at <unk>.
Jim: So in October 2024.
Jim: Additionally.
Jim: Okay.
And the latest.
Jim: <unk> functions.
Jim: Hum.
User experience improved and the feedback so far.
Jim: Year to date.
Jim: You see significant.
Sales mix change for you Eddie mix vision.
Jim: Sure.
Speaker Change: Sure Nathan.
Jim: Correct.
Jim: Our whole shallow hunkered down kind of dwell, let's say.
Total drill hole.
Jim: One other quick.
Hong Kong into a more heightened.
With little Hasan will surely cultural Elliott at June <unk>.
We all came to regeneron the whole Youll genco with a <unk>.
Let's see a shift from Guizhou Shanghai Shenzhen Kinder.
Speaker Change: Switching to Ohio.
Yet the hotel you don't worry I'm not sure that are attached to it.
How should we don't go through that.
Speaker Change: For digital.
Our metallic and Piet quick into Hong Kong Gulping chips.
Jim: Module channel now.
Jim: It should go down with some gap gathering.
Scheduling tool for <unk>.
Jim: Okay.
Jim: Our second global liquidity.
Speaker Change: Hey, Joshua Youll cultured up huge.
To the downside.
That item to untangle adjunct renewable hydrogen that youll ship now.
And yet our trend.
Our job NPA.
Jim: After the Eagle accretion.
Jim: Xiaomi Mi.
Let me try to figure out are not.
<unk> team for the hard tissue.
Jim: So now with Amgen.
Jim: Each of them.
Jim: <unk>.
I will go back to some growth.
So the whole element that shall take the AEP. So don't change if you don't go into the high <unk>.
And you can shop from you.
John Good hearted unusual niche application.
Jim: Harsha.
We jumped up to the chunky telco.
I'm going to start with and soft tissue hasher feature set for the potential surge about shonda.
Sure sure sure Nathan if you cannot you cannot ship developments at Chalmette.
Yes, it's actually if you don't ask yourself.
Jim: Since we launched it.
Call end to end BLM Thomas driving.
Jim: <unk>.
We view autonomous driving not no longer as a feature.
Jim: <unk> highway anyway, but more as a capability the ability to offer a supervised autonomous driving and that marks the change from a rule based algorithm into real AI model driven algorithm.
And for users the values are pretty significant I will give a few examples first of all in NPI or recall the miles per intervention.
<unk> increased very steadily as we increase the amount of training parent model parameters and training data.
And the increase is actually very very perfect, Andrew scaling law, which means companies with high quality training data will have a significant competitive advantage in the future.
Jim: In this industry in the future.
Second example, I want to give a.
Jim: <unk>, which is miles per accident have also been increasing steadily.
Jim: My estimate is that.
Jim: With this current end to end version.
The MTA is going to be three to five times compared to human drivers.
Jim: And lastly, as we increase the big model capability or active safety features like AEP Aes.
I have also been improving very significantly.
Number of severe accidents packet dropped dramatically.
And in terms of sales take rate 80 Max.
Jim: The grass valley.
The increase not only for cards priced over 300000.
Jim: But also for our fixed we have seen a very dramatic increase in.
Jim: <unk> take rate.
Jim: Okay.
Jim I don't know whats it been at the end of the wind Zouk whenever you do go limit that strongly in China.
Jim: Okay.
<unk> you.
Speaker Change #112: Cheng Cheng.
<unk> minions, Ohio Cydonia. Indeed are so just wanted the Diana <unk> two shopko not anyway.
Most of the <unk>.
Speaker Change: Jen I'll do some designs.
Jim: <unk>.
You should note that Shan Shan, Glenn it's a quite a bit.
Jim: It's just too.
So you'll just see a chance to reach.
Speaker Change: Got it.
Tony intended to assume you guys.
Well gentlemen, so again, so it may cause it to Josh.
Sure no some sequences.
So when you then dose due to the <unk>.
<unk> that youll seasonal XOMA.
XOMA Marty you sound like she is.
Women to Tony and John.
Speaker Change: <unk> B.
To them, it's not easy.
So the formula is notwithstanding.
Speaker Change: So what's our.
Planning for the charging station by the end of next year and how do you see current breakdown.
On building.
Station and also the charging essentially around by the third party and right now how do you start utilization, especially since you have so many charging station.
Speaker Change: Yeah.
BV Banca total population is still not high does this mean that many other brand you'll see charging Brent so.
Speaker Change: Charging station did not impact gross margin.
Jim: Okay. This is Jim.
Speaker Change #111: We'll take your question. So overall, we plan to establish the industry's largest OEM charging network.
Speaker Change #111: And Heaven absolutely.
And before new EV models come to market, we expect to have more charging stations.
Tesla in key cities for sales.
By the time, our new EV model launches. So we target to have more then.
Jim: In 2000 charging stations in operation.
Which we are a scale up to 4000 by the end of 2025 next year.
Jim: Our Super charging station network now covers.
Nine national highways.
Total of over 54000 kilometers with a coverage ratio of <unk>.
Six 3% of National Highway trunk lines.
By the end of 2025, we will build more than 1200, supercharging stations, along highways covering 90% of national high risk.
Jim: 10.
Jim: In addition to highway and urban coverage will be also selectively cargo immediately.
Jim: And no anticipated self driving route to meet the needs of our users for family travel.
Jim: For instance, or.
Mount Everest supercharger station tumors.
Operation in October this year, and we expect to achieve end to end coverage to national Highway.
Jim: And the National Highway 318 in April next year and also regarding the.
Cooperative supercharger station in the safety and so far we have already built more than 500, and we are expect we are expecting by end of next year. We also have this cooperative supercharging stations CPE Morton's resold it.
Jim: Thank you.
Your next question comes from Ken Zhang with HSBC.
Speaker Change #113: Hi, Nathan.
Speaker Change: Kingdom Lasalle honestly, you sound like tableau and season pass it onto where should we go home and to sell a whole bunch of Italian total 10 telephones dental laser.
Speaker Change: But I'll go ahead and doing that uhm, let him go.
Speaker Change #114: Interesting that's coming back.
How crazy busy machine snapping back.
So the first question is about the consolidation for the pricing category above 200, K, we discussed at the beginning of the year is the industry consolidation shaping the way as management I expected, how do we take that competition coming from the mass market brands High end model and tech brands Ultra lineup.
Speaker Change: And whether it is out there.
Speaker Change: But this is <unk>, Alex let me add to it.
And with the hard drive yourself, even though you.
Speaker Change: It will do that.
Speaker Change: All of our initiatives.
But we should see the EMEA.
Speaker Change: Well tayo, you'll have to Glenn <unk>.
It was a tough whether those are doubled dominion and Cowen <unk> company.
Well then you go into my time here none of that.
Doug the GDS video with Hugo.
The agenda coming out here with.
Speaker Change: With you.
Speaker Change: Our metallic.
Now I'll turn book.
Jim: Sure.
With me on the timing yet how daiichi.
Jim: Mango loco.
Jim: Electronics in them we are in the.
The akamai.
Jim: What we found.
Today, even before we launch our pure electric Suvs.
And increasing our market share versus definitely every quarter and it has reached 17, 3% in Q3 and for the longest time no matter who enters the market.
Jim: Fundamental challenges famous everyone.
Jim: Can we offer products that are.
Jim: Got off that provide the most value for our target users in their respective price range. That's the key to everything and our long term goal.
Jim: Still too.
Through our three PV in RV products together capture over 25% of market share.
The MLP market over 200000 RMB.
Jim: Okay.
Jim: Okay.
When he is asking women.
Dancing Simpson.
Got SUV MPV and the data to Dan kind of things and so I think they're going to do that.
Jim: Yeah.
Let's have a widget and adapting the <unk> proven tool that you will not hit.
Jim: Alongside that.
Speaker Change: Got it.
The second question is on the segment and boundary we noticed that more module supplier among the mid to larger sized family utility <unk> will the company management to see the boundary limits fault current segment or will family user market saturated to such an extent, which have the other segment.
That accompany with identifying promising.
Speaker Change #116: Oh no.
Congrats on the answers on the logic around <unk>.
Conversion I want to note data ingestion.
Speaker Change #115: Not yet.
Paul I'll take the Jacksonville, Columbia and of course, John hotels already within the Ghansham.
Speaker Change: Hi.
Speaker Change: Sure.
Speaker Change: Could you just kind of go into the shop in their patio Shannon Hall Disneyland.
Don't forget that.
Speaker Change: Sure.
Super. Thank you Ravi you sounded from yet Jamie listen Im not.
Speaker Change: Sure sure sure.
And you saw the Hudson in that time period.
Speaker Change: John <unk>, Joe Jamba, you gave some EBITDA.
We can help should help me on that.
Speaker Change: Although the hall.
Speaker Change: Automotive.
Horizontal times, you've had the tornado jumped to download data digital cartoon that unites the way.
Speaker Change: <unk>.
Speaker Change: Sure.
Putting that in with your analogy.
Speaker Change: Yeah.
My view is that we have only started to scratch the surface in terms of family users market.
Actually if you take into account the power of AI.
Changes temporal powered by AI in terms of autonomous driving.
Our cockpit experience, there's going to be so much room for imagination for family users. So in this regard we're not in a rush.
Speaker Change: There are new markets and the other off surety is pure electric our best markets.
Speaker Change: If you look at the market.
Their products over 300000 RMB.
There is no product that offers the equivalent of a comparable product Val.
Speaker Change: Value to alpha.
Now eight or nine so there is simply no good supply and we believe that's another big opportunity for us so whether it's AI or bad.
That market, we think they're big.
Opportunities in terms of large Suvs for family users. So this is something we will continue to.
Speaker Change: Yes.
To explore before we look at other potential markets are in niche markets.
In analogy would be we actually have in golden ball in our hands.
Speaker Change: Begging with Goldman <unk>.
Speaker Change: Your next question comes from Gil Yang with <unk>.
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Speaker Change: My first question is about self driving.
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Speaker Change: Sure.
Our current direction is to use.
Iterate on supervised autonomous driving.
And provide parking to parking.
Our problem is driving experience.
Really seamless user experience and.
In the meantime, we are innovating in terms of humor vehicle.
Interaction when it comes to supervise the autonomous driving.
And we are currently running through some internal tests.
And we will be releasing these to all of our users in the near term near term.
And looking at the long term with the also alright.
<unk> already launched primary research and research on al for autonomous driving.
It builds on top of our current <unk> model.
And we're looking into reinforced learning system that combines VLA models on the car side and a world model on the cloud side and in the meantime, we will continue to invest in infrastructure.
Sustain our leadership and computing power as well.
Driving mileage.
Speaker Change: And finally in terms of Thomas.
Speaker Change: Tom is driving capability and the gap between different players I don't think it will narrow but in fact I think it will widen over time and the reasons for that is because first of all the requirement for Carr fire and clarify computing computing power requirement for training data and resource investment.
Speaker Change: Tend to be very large and has trend to increase.
And there's also a higher requirement.
The algorithm capabilities for autonomous driving so overall I think the capital widened.
Speaker Change: Okay.
Speaker Change: Okay.
Okay great.
Speaker Change #117: Good morning.
Which is your point of view.
Speaker Change: Assuming.
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But certainly on the tissue.
Speaker Change: Tom you want Wheeler vertical jumping to hydrocodone.
Speaker Change: And so the loser.
Speaker Change: Sure.
So my second question is about the future cost reduction as.
Speaker Change: As we know that.
With our increasing it sounds good.
So how do we look at.
Speaker Change: Future cost reduction.
Speaker Change: <unk> procurement technology.
Speaker Change #103: Thanks, Julie and Aloha.
Speaker Change #102: That's correct.
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Joseph Giordano: Joseph Giordano.
Speaker Change: I don't see a whole Q call today's hour muscle that internally.
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Speaker Change: Pardon me.
Speaker Change: No shortage of key thought leaders.
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Thanks, John.
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Speaker Change: Thank you.
Jacob I'll start with the Ecopetrol.
Speaker Change: Got it.
Oh I see.
First overall, we will look at the full value chain end to end to find opportunities to increase efficiency and lower cost which includes technology innovation.
Speaker Change: Economy of scale in procurement and reducing quality related waste.
Speaker Change: It also includes working with our partners increased their capacity utilization more efficient logistics all of these require very detailed and very skillful operations.
And so given an example in terms of technology innovation.
Key to driving lower cost over the long term for example, with our <unk> system and our electric drive system, if we could integrate them and integrate.
Central control unit, it will not only make our products more competitive but also make our cost more competitive on the supplier.
Speaker Change: We are building a joint innovation platform with a supplier. So thats our suppliers can get involved much earlier, we can work together to find better solutions in terms of designs and processes to find.
Speaker Change: Curious for lowering cost.
Also in working with suppliers or a value has always been a win win.
Speaker Change: Our philosophy.
Because only this is beneficial to the long term development of the industry on the other hand, we will design our parts so that their share.
Sure on the same platform and we enlarge the volume of each product, which we call hip product.
And in terms of supplier strategy, Australia has been true.
Concentrate the volume on a smaller number of suppliers increased air capacity utilization and driver drive cost down over the long term.
And lastly, we will continue to leverage too.
Speaker Change: Asian Smart technologies on our factories as well as to empower our partners to reduce waste in their manufacturing process.
<unk> running rate.
Online right.
Equipment to drive down costs over the long term. Thank you.
Actually our 18, we end up our conference call now I'd like to turn the call back over to the company for closing remarks.
Zhang: Zhang Please go ahead.
Thank you once again for joining US today. If you have further questions. Please feel free to contact <unk> Investor relations team through the contact information provided.
Speaker Change: Syed.
Speaker Change #106: This concludes this conference call you May now disconnect. Your line. Thank you.