Q3 2024 XPeng Inc Earnings Call
Hello, Ladies and gentlemen, thank you for standing by for the third quarter 'twenty 'twenty four earnings conference call for <unk>, Inc.
At this time, all participants are in listen only mode.
After management's remarks, there will be a question and answer session today's.
Conference call is being recorded.
Speaker Change: I'll now turn the call over to your host Mr. Alex Yao head of Investor Relations and capital markets of the company. Please go ahead Alex.
Alex Yao: Thank you Hello, everyone and welcome to excellent third quarter to 24 earnings conference call, our financial and operating results were issued about newswire services earlier today and available online you can also view the earnings press release by visiting the IR section of our website at IR golf's shop on Dot com.
Alex Yao: Participants on today's call from our management will include our co founder Chairman and CEO, Mr. Zhao Peng Vice Chairman and President Dr. Brian <unk>, Vice President of corporate finance and VW projects with the <unk>.
Alex Yao: Chung Vice President of Finance accounting, Mr. James Hu and.
Alex Yao: And myself.
Speaker Change: <unk> will begin with prepared remarks, and the call will conclude with a Q&A session. A webcast replay of this conference call will be available on the IR section of our website before we continue. Please note that today's discussion will contain forward looking statements made under the safe Harbor provisions of the U S Private Securities Litigation reform.
Speaker Change: Max 90, 95 forward looking statements involve inherent risks.
Speaker Change: Risks and uncertainties as such the company's results may be materially different from the views expressed today further information regarding these and other risks and uncertainties is included in the relevant public filings of the company has filed with U S Securities and Exchange Commission.
Speaker Change: The company does not assume any obligation to update any forward looking statements, except as required under applicable law. Please also note that Exxon's earnings press release and this conference call includes the disclosure of unaudited GAAP financial measures as well as all to non-GAAP financial measures excellence.
Speaker Change: This press release contains a reconciliation of all non-GAAP measures to the audited gotten matters I will now turn the call over to our co founder Chairman and CEO. Mr. Zhao Peng. Please go ahead.
Speaker Change: Okay.
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Speaker Change: In the third quarter of 'twenty 'twenty four we surpassed our key performance targets. We delivered 46533 units in the third quarter, reflecting a 54% increase quarter over quarter and a 16 increased 16% increase year over year, beating the high end of our prior quarterly Guy.
Speaker Change: September's deliveries exceeded 20000 unit, marking a record high. Furthermore, thanks to the technology, driven cost reduction and growth and scale. Our gross profit margin increased to 15, 3% in the third quarter, achieving our political level and demonstrating continuous improvement for five consecutive quarters.
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Speaker Change: Over the past two years I think has undergone significant transformation amidst challenges. However, I remain calm at the center of the storm because crises often present opportunities.
Speaker Change: Overcome this adversities I think has emerged stronger than ever we're now poised to accelerate our growth and move forward Sadly I would like to express my gratitude to all of our shareholders and everyone who has consistently supported us.
Speaker Change: We have implemented comprehensive changes in our strategy product management and Organisational structure. We've also address previous areas of improvements in marketing sales channels and design. Moreover, all from investment in AI technology has begun to yield advantages in both product experience and cost efficiency, helping too.
Speaker Change: Bolster our competitive edge by prioritizing customer need maintaining a business oriented approach and giving the full picture in mind, we have established a robust capability across our entire operations from product definition and research and development to presale activities product launches and delivery as a result, we have created a series of <unk>.
Speaker Change: All products that truly surprise and delight our users.
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Speaker Change: Second decade has started and I believe the next 10 years will be the era of AI or artificial intelligence I will strive to beat I think you have become a global AI defined car company and spearhead the large scale application of AI in the mobility industry.
Speaker Change: Looking at the industry landscape I anticipate that between 2025, and 2027, which is upcoming two years, we will see a knockout phase in the Chinese automobile industry, the penetration rate of China's new energy vehicles will likely rise to over 85%, while the integration of AI will be to the next stage of all consolidation.
Speaker Change: [noise] of market yes.
Unlike a traditional car companies that have relied on corporate jets integrated supply chain models, where research and development in the past winners in the AI defined car sector will be those with index full stack self development capabilities, we feel.
Speaker Change: To harness the power of AI and use it as a data engine integrated both software and hardware in our research and development of the whole vehicle a D cabin and engines et cetera. This will allow us to integrate and upgrade and an unprecedented speech, creating a substantial advantage over companies that continue to use traditional IBD models regard.
He has experience in optimization speed, starting next year I expect significant advancement in autonomous driving and vehicle intelligence introducing AI large models will provide a transformative experience from all ethnic enabling users to embrace safer more comfortable more comprehensive and smarter ear dry.
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Speaker Change: On November seven the World first AI defined car. The P. Seven plus was officially launched that night. The number of firm orders exceeded 30000 and continues to rise. The P. Seven plus has become a phenomenal success in the mid to large B E V sedan market and marks a milestone in a widespread adopt.
Speaker Change: <unk> of AI defined cars I'm pleased to see that the core reasons users choose the piece up in plus its standards high standards intelligent driving features across the entire model range.
Speaker Change: In our past luxury was defined by configuration, but now it is defined by technology and this trend is where we are striving to be we're collaborating with suppliers and expand the production capacity of the P. Seven plus and I think the delivery volume of the pizza oven plus to exceed 10000 units in December currently both the MTA.
Speaker Change: Three and a piece of them plus have begun double shift production.
Speaker Change: As production capacity ramps up we anticipate monthly deliveries will set a record in the fourth quarter and will strive to exceed 30000 units in November.
Speaker Change: Additionally, steady and long term progress is one of our main themes for 2025, we will enter 2025 with tens of thousands of orders, which will increase our delivery volume in the first quarter of next year and lay a solid foundation for a significant increase in sales next year.
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Speaker Change: Starting from the Pizza oven plus model our newest statements at Max models will all featured the AI Hawkeye visual aid absolution that is the only Adas solution in China does not rely on HD maps or lidar and we'll take it to the rest of the world and the global automotive industry, where the.
Speaker Change: First to standardize high level intelligent driving software and hardware across our entire lineup, providing an actual leading experience for the users. We delivered experience after level three adas driving up the cost of level two achieving what we refer to as intelligence for all tech powered driving with the same cost S. P.
Speaker Change: Cool.
Speaker Change: Excitingly in the first half of next year after the lunar new year Mona empty were three Max who will start mass producing the platform base AI Hawkeye visual Adas solution. This will allow us to become the wells. The first car company to offer advanced intelligent driving vehicles suggested 150000 renminbi or about <unk>.
Speaker Change: <unk> thousand U S dollars lowering the thresholds.
Speaker Change: With our leading AI technology and strong cost control, we have the competitive moats that will serve as our ultimate weapons for navigating from a fiercely competitive red Ocean Judy opportunities of a blue Ocean market.
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Speaker Change: I believe that over the next one to five years the penetration rate of smart features will significantly increase not immediately.
Speaker Change: E I defined vehicles, which incorporate powerful AI capabilities and autonomous driving features will accelerate the replacement of cars like these technologies or cars that only claims. So have these technologies in 2025, we plan to launch at least four new models, including Super Electric vehicles, and we will also update several <unk>.
Speaker Change: Shifting models each of this view and save lives models will be very distinctive in their respective market segments and I look forward to launching more top selling models that users love next year.
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Speaker Change: And our recent AI technique, we unveiled the Quin pumps Super Electric system. Our next generation extended range products, along with all next generation pure electric products will be our second largest growth engine.
Speaker Change: Together with our AI capabilities, it will drive strong momentum for accelerated development.
Powertrain technology and industry, leading energy efficiency are key components of ex thanks, Brian.
Speaker Change: We have received widespread user claim before our exceptional energy consumption management with all electric vehicles regularly exceeding advertised range estimate.
Speaker Change: In our brand new extended range products will employ high voltage electric technology. One generation ahead of the market to address common user pinpoint facing cowen extended range products in that market and provide a user experience far superior to many existing extended range products.
Speaker Change: Quinn pumps Super Electric drive system is built on our third generation industry, leading 800 volt platform supporting various features including a pure electric range of 430 kilometers a combined range of 1400 kilometers and the five feet ultra charging battery, while also controlling costs all of which will.
Speaker Change: Lead the way for the next generation extended reach technology in the coming future X Bank will adopt a dual energy approach offering a batch of new vehicle models with pure electric and Super electric powertrain options to cater to the diverse needs of global customers I believe that this will significantly expand our total addressable market.
Speaker Change: Bringing multiple opportunities for sales growth and accelerating the mass adoption of AI to find vehicles worldwide.
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Speaker Change: In terms of operation. The P 70, plus will also mark a brand new starting point, but the overall improvement in vehicle gross margins for Xbox next generation models, New platform based technologies, we have implemented and the piece of it plus we will also be applied to new models of major facelift over the next two years of 2025.
Speaker Change: In 2026, we anticipate that the gross margin of all next generation models will reach double digits significantly increasing our sales volume to a new level during a strong product cycles, and helping us move sadly toward achieving scale profitability.
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Speaker Change: Smart driving system demonstrate a robust full sex held development capabilities and integrate cloud base and in vehicle software and hardware, including chip is such a new gold standard for next generation full stack development and highlights our exceptionally efficient R&D iteration process.
Speaker Change: Many of our peers are still using our previous generation of architecture and technological routes I believe that enhancing the capabilities of smart driving relies heavily on cloud technologies.
Speaker Change: Well base Lodge model has 80 times more parameters than in vehicle model, making it the most advanced technology currently available in China's a das market in the coming years, the synergy between our in vehicle data cloud based computing computing power and both cloud and in vehicle large models and all globalization and car.
Speaker Change: <unk> will grow exponentially, marking and making significant leap forward in our large models for Cummins powered the scaling law.
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Speaker Change: We plan to realize door to door full scenario a desk on Chinchy, a I X O S 5.5 by the end of this year this uninterrupted and ultra smooth driving experience will elevate us from being on par with the first here to truly leading the pack, we actually were able to deliver.
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Speaker Change: Next we plan to achieve a elsewhere like intelligent driving experience by the fourth quarter of 2025 targeting less than one takeover.
Speaker Change: Her 100 kilometers the more advanced ultra version of the vehicle. We are developing now will significantly enhance the computing power on board and incorporate a fully redundant design for our core components. This would enable us to mass produce robo taxi at a low cost while ensuring sufficient safety.
Speaker Change: I firmly believe that the substantial improvement in autonomous driving capabilities will make a a core differentiator among beating awesome automaking companies and a key factor in capturing user mindshare.
Speaker Change: Liz will discover that AI, not only apply to autonomous driving but will also expand and integrate into various aspects, including in car AI assistance and cabin air hub Smart chassis smart audio systems and AI battery doctors.
Speaker Change: In the medium to long term the gap between AI leaders and laggards on product technology brand image and profit models will continue to widen.
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Speaker Change: Now, let's talk about globalization, we're accelerating our global presence, leading the way for Chinese Smart E D brands in their overseas ventures.
Speaker Change: Organizational management product planning autonomous driving technology, smart cockpit design supply chain management of manufacturing and production Oh strategically aligned with global deployment.
By collaborating with high quality overseas Dallas, we have extended our reach to more than 30 countries with over 110 sell stores as of the third quarter.
Speaker Change: And we have experienced strong initial cells in multiple regions. Currently expect ranked first in export sales of Chinese premium be leave an algae night ranked first in the mid to large sized battery electric SUV in northern Europe.
Speaker Change: In the third quarter, our overall overseas sales increased by 70% sequentially accounting for 15% of all total sales volume.
Speaker Change: Looking ahead to 2025, we plan to further expand our international sales network to more than 300 stores expanding to over 90% of all the N V market outside of North America.
Speaker Change: Our goal is to maintain robust growth in overseas felt over the next two years aiming to secure a leading position in mid to high end N V export sales among Chinese automakers, the rapid expansion of our international business will further boost our profitability.
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Speaker Change: After two years of headwinds we're about to enter a brand new positive cycle in the fourth quarter of 2025, we expect to experience Halloween driven by AI transformation and the Super Electric system.
Speaker Change: Which will accelerate our growth and lead us towards profitability, we anticipate our total delivery volume for the fourth quarter of 'twenty 'twenty four will range from 87000 to 91000 units. This represents a quarter over quarter increase of 87% to 95.6% and a year over year increase of <unk>.
Speaker Change: 44, 6% to 51, 3%.
Speaker Change: Ali We project our total revenue for the fourth quarter to fall between 15.3 billion renminbi and $16 2 billion renminbi, reflecting a quarter over quarter rise of 51, 5% to 64% on a year over year increase of 17, 2% to 24, 1%.
Speaker Change: Moreover, we expect our cash flow in the fourth quarter to improve significantly resulting in positive free cash flow for the second half of the year by.
Speaker Change: By year end, we anticipate our cash on hand will exceed 40 billion renminbi withheld.
Speaker Change: With healthy gross profit and cash flow will have the capacity to invest deeply in research and development and for the future, allowing us to consistently and constantly provide our customers in China and abroad with market, leading AI defined vehicles.
Speaker Change: Sure Oh somebody element is how we view, Jim So I thought the GSO shovel money as soon as he said.
Speaker Change: That's helpful.
Speaker Change: Thank you everyone with that I'll turn the call over to Al VP of finance James to discuss our financial performance for the third quarter of 'twenty 'twenty four.
James Hu: Thank you yourself home now let me provide a brief overview of our financial results for the third quarter of 2024 I'll.
James Hu: I will reference RMB only in my discussion today, unless otherwise stated.
James Hu: Our total revenues were $10 1 billion for the third quarter of 2024.
James Hu: An increase of 18, 4% year over year, and an increase of 24, 5% quarter over quarter.
James Hu: Revenues from vehicle sales were $8 8 billion for the third quarter of 2024, representing an increase of 12, 1% year over year, and an increase of 29% quarter over quarter.
James Hu: The year over year and quarter over quarter increases were mainly attributable to higher deliveries.
James Hu: Revenues from services and others were $1 31 billion for the third quarter of 2024, representing an increase of 97% year over year, and an increase of one 1% quarter over quarter.
James Hu: The year over year increase was mainly attributable to the increased revenue from the technical R&D services related to the platform and software strategic technical collaboration.
James Hu: Well as electrical electric architecture also known as E technical collaboration with the Volkswagen Group.
James Hu: Quarter over quarter increase was mainly attributable to the revenue from technical R&D services related to the E technical collaboration with the Volkswagen group, partially offset by the reduction in parts and accessory sales.
James Hu: Gross margin was 15, 3% for the third quarter of 2024 compared with negative two 7% for the same period of 2023 and 14% for the second quarter of 2024.
James Hu: Vehicle margin was eight 6% for the third quarter of 2024 compared with negative six 1% for the same period of 2023.
James Hu: Six 4% for the second quarter of 2024.
James Hu: The year over year increase was primarily attributable to cost reduction and the improvement in product mix.
James Hu: The quarter over quarter increase was mainly attributable to the cost reduction.
James Hu: R&D expenses were 1.63 billion for the third quarter of 2024, representing an increase of 25, 1% year over year, and an increase of 11, 3% quarter over quarter.
James Hu: The year over year and quarter over quarter increases were mainly due to higher expenses related to the development of new vehicle models as the company expanded its product portfolio to support future growth.
James Hu: SG&A expenses were 1.63 billion for the third quarter of 2024, representing a decrease of three 5% year over year, and an increase of three 8% quarter over quarter, but year over year decrease was primarily due to lower employee compensation in the third quarter of 2020 full while the quarter over quarter increase.
Was mainly due to higher commissions paid to the franchise stores.
James Hu: As a result of the foregoing loss from operations was 1.85 billion for the third quarter of 2024, compared with 3.16 billion for the same period of 2023 and $1 six 1 billion for the second quarter of 2024.
James Hu: Net loss was 1.81 billion for the third quarter of 2024, compared with $3 89 billion for the same period of 2023, and 1.28 billion for the second quarter of 2024.
James Hu: As of September 30th 2024, our company had cash and cash equivalents restricted cash and short term investments and time deposits in total 35.75 billion.
James Hu: To be mindful of the length of our earnings call I would encourage listeners to refer to our earnings press release for more details on our third quarter 2024 financial results.
James Hu: This concludes our prepared remarks, we'll now open the call to questions. Operator. Please go ahead.
Speaker Change: Think he.
Speaker Change: If you wish to ask a question. Please press star one on your telephone and wait for your name to be announced.
Speaker Change: 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 a question for.
Speaker Change: For the benefit of all participants on today's call. If you wish to ask a question to management in Chinese. Please immediately repeat your question in English for the sake of clarity and order. Please ask one question at a time management will respond and then feel free to follow up with your next question.
Speaker Change: Your first question comes from Tim Hsiao with Morgan Stanley. Please go ahead.
Speaker Change: Oh, Okay, J J, so with achievement of course people, who says Oh.
Speaker Change: Yeah.
That's helpful. Because these things up where that.
Speaker Change: One P diesel in T. G E G Joe Dziedzic.
Speaker Change: Hey, Yeah, Hey, Sheila.
Speaker Change: Once again, we do such a large chunk of it that way so I'm sure Jonathan.
Speaker Change: So whole chicken panini traditionally called out actually switched out.
Speaker Change: You cannot go need to go against their logo cheat sheet.
Speaker Change: She has the choice to use a delta Chi Chow, that's starting to which he or she said she found that he stopped with engine Guy. He then Jonathan I, probably couldn't shouldn't do that similar is it puts you on that Jim fish, if you're able to quickly though she could P. P. G. They should get.
Speaker Change: I'm glad you shouldn't change with regard to yoga.
Speaker Change: You shouldn't have musical churches Tuesday's Lynch Hi, So my first question is probably a tall and tried it.
Speaker Change: Because in the next three to five years are you expecting that technology gap with supply driving a b why didn't even know a.
Speaker Change: Several leading local brands in China are considering making smart driving a standard configuration for old National I came items we've.
Speaker Change: We've got tons back into call it needs to function and future and how it could extend to ensure consumers can feel and appreciate the difference cheesecakes. Its course because of that that's my first question. Thank you.
Okay.
Speaker Change: Well it should fit them harder windshield, so slow in that vision.
Speaker Change: So all of the demolition Douglas and thoughtfully.
Speaker Change: So it ought to go away.
Speaker Change: So here, where no one thought on that.
Speaker Change: So with us as a suite.
Speaker Change: Rather than college, she called young children do the churn due to sunny.
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Speaker Change: Well tayo quota.
Speaker Change: So those are the pieces onboard torrential doses shingles.
Speaker Change #100: Of Tulsa.
Otherwise Oh, yeah, you bet to them on a job to publish.
Speaker Change #101: Okay. Thanks, a lot Jim just yet.
Speaker Change #101: Changing trends I'll see you at all.
Speaker Change #102: Well he does this little girl Sydney, They told me.
Speaker Change #102: Adulthood.
Speaker Change #102: She'd been done so since she's on those.
Speaker Change #103: Oh sure Tracy can you call she saw that she loves it.
Speaker Change #103: Do you go a little way changed at the end of.
Speaker Change #103: Well do that Hugo so part of it.
Speaker Change #103: A little.
Speaker Change #103: Much of this EBITDA you know how long like how to touch it was all about.
Speaker Change #103: Gee, that's a little just it wasn't always it'll just sort of thing.
Speaker Change #103: And she put a shallow illinois the shot on the revamp, which wuxi shouldn't try the cool cause a change to the home.
Speaker Change #103: And I'll tell you five days I'll touch just as a widow.
Speaker Change #103: No way to equal or surpass it.
Speaker Change #104: Does that get sold yes.
Speaker Change #105: Yeah, you sound, yet on Ohio, Jonathan So if it wasn't for Donaldson told me that.
She told US he said total idiot. So you were a little late.
The old is suggest quite cheap with job all the cohorts.
Speaker Change #105: Sure.
Speaker Change #105: But on total the challenge the Civil War.
Speaker Change #106: Thank you. This is a very good question actually we've been talking about this for the past two years, while we are developing our end to end large model solution now what we need here for this next generation of capability is not only first of all the capital for R&D, but also the computing power and big data as well.
Speaker Change #106: And in the coming to each of five years I think cut any companies who've tried to compete in this line in this landscape will not will be have the full stack self develop R&D capability that combined software and hardware, but also on the close I hope vehicle chip development and also E development across different car manufacturing capabilities are all accenture.
Speaker Change #106: For having that capability. So in sum I believe that the gap between different EV makers will actually be why do I need to several years. Another point that I would like to mention is that Adas capability is just like part of your brain. You asked you have to not only have your mindset. You know what you think you can do but you actually need to be able to deliver your claims and that also will.
Speaker Change #106: That's the bar or the threshold for entering this competition another point that I would like to mention is the whole vehicle capability, how do we make sure that the whole car get smarter in order to carry all these <unk> generates a desk capability. So I think going forward users will actually have a better idea or awareness of how capable.
Speaker Change #106: Our company is how good the product is and they will have an in depth experience firsthand experience of what truly means to have a smart adas capability in the product. Thank you.
Michelle Tennessee: The more controlled Michelle.
Thanks.
Michelle Tennessee: Oh Boy, Oh boy, so each other right.
Goodnight.
Speaker Change #108: You're absolutely sure what Hudson does change and she created too much out.
Speaker Change #109: Alright got it.
Speaker Change #109: So this whole Shiloh thought Oh sure Trimble tricky, though.
Speaker Change #109: One shot show was a book on it.
Speaker Change #109: Gotcha.
Speaker Change #109: Sure.
Speaker Change #109: Other things that you guys are just.
Speaker Change #109: Please show us the way that aside though sedan.
Speaker Change #109: She showed up for you Jim.
Speaker Change #110: Oh geez.
Speaker Change #111: I also would like to add that traditionally the model for Oems to develop car is to work with tier one suppliers. However in the future when we require cars to adapt the adas capability from not only the brain, but youre up a tussle and your legs and the whole body. It will actually require a completely different.
Speaker Change #111: <unk> of development, which will also in the coming three to four years have set us apart from the rest of the competition. Thank you.
Speaker Change #111: Okay.
Speaker Change #112: Bhutto no wish on tier one PC you claim you are giving that Lee.
Speaker Change #112: You'll need to.
Speaker Change #112: She is shopping to check with you that you do a play between what you've heard them. All you do to ensure that got shut.
Speaker Change #112: Yeah Jeremy.
Speaker Change #112: He said Oh Geez I do it yourself when she starts with the team put in place at all you'd see teams without all the junk Queen T mobile.
Speaker Change #113: My second question is about the profitability.
Speaker Change #113: Over the past few quarters, we have seen excellent posting cut a check or just margin improvement at both veeco into the group level.
Speaker Change #113: Looking to next year, how can the company further narrowed the loss and to systematically turned to profit. That's my second question. Thank you.
Speaker Change #113: Hey, Tim its Brian Yeah, Let me address this question first of all I think in this quarter's financials. So I think we're very encouraged to see that our non-GAAP operating margin actually the loss has narrowed to a 15, 5%.
Speaker Change #113: <unk> two in the second quarter I think its about 19% so you'd start to see operating leverage a narrowing of operating losses and I think that trend will continue as we mentioned are we going to you know launch P. Seven plus which we think is actually a better margin profile product and also overall we actually.
Speaker Change #113: You can see the scale effect come into play as well as Additionally, we can see continued improvement on the vehicle marching front.
Speaker Change #113: And also on the expense side I think we still also start to see.
Speaker Change #113:
Speaker Change #113: A reduction opportunities for example for the fourth quarter I think we are kind of a hold of a consistent R&D spend below 2 billion RMB in total and that would make our entire year's R&D are to be probably less than $6 5 billion RMB lowered.
Speaker Change #113: Our original estimate.
Speaker Change #113: So going into next year, we start to see these factors kind of compound.
Speaker Change #113: This additional launch of more robust products as we mentioned that we have a new models as well as refreshed models to be launched we also have models that tackling new segment, including for example extended range energy module. So with all of that I think whereby optimistic about our Uh huh.
Speaker Change #113: Bus gross as well as continued margin improvement, we still I think oh hold the same view as I communicated to all of you.
Speaker Change #113: Starting two years ago that we'll be breaking even at some point next year, probably towards the end of next year and that is still our view I hope I think we hope to deliver on that and also.
Speaker Change #113:
The improvement also will bring our healthy cash flow for the company as well next year. So for example by the end of this year, we estimate we're going to have over for billing RMB on hand, and next year, Oh 40 betting on and beyond that I'm, sorry, My and Oh next year I think.
Speaker Change #114: You actually do continue to see healthy cash flow, which allows us to have a comfortable capital base to bring us to breakeven.
Speaker Change #115: Great. Thanks for sharing the details and congrats again on the strong results. Thank you.
Speaker Change #115: Yeah.
Speaker Change #115: Thank you.
Speaker Change #116: Your next question comes from Meng Shan Li with Bank of America. Please go ahead.
Speaker Change #117: Oh siblings, Ohio.
Speaker Change #118: How much do you mean, what's been the D. Go into you know a suite claim you took a highway the true high na comes out of it that way.
Speaker Change #118: Just have one joint venture minions.
Speaker Change #119: Oh TCR T G E.
Speaker Change #120: <unk> no that's it.
Speaker Change #120: You shouldn't judge usual women's about kind of interested in our opinion to the highway that's good show now.
Speaker Change #121: The <expletive>. Meanwhile, you Shanxi, Joe Shan Shan.
Michelle Tennessee: Michelle is it to the change in the law.
Michelle Tennessee: Michel do consume a conduct you might come into the 20th century.
Speaker Change #122: Corner younger, but my sense is Oh, Tianjin so has it been I see.
So who does it.
Speaker Change #122: It's also the PG no quick way generally a woman does at the moment founded Vincenzo tender. The Tempe, you wait some of them that you go Oh, Toledo, social attempted or things that would or wouldn't you. So my first question is related to export Oh look so a.
Speaker Change #122: In Tony plentiful how to expect the.
Speaker Change #123: Export sales contribution to your total revenue and our current DP closer there's some oversea markets the charging infrastructure.
Speaker Change #123: Not as good as China in China, and therefore, do you see any potential bottleneck, Florida EV penetration in certain countries and are in the longer term.
Speaker Change #124: Well you see our U a E R E V product to be the major product for the oversea market.
Speaker Change #125: It means Brian again, Yeah, let me address your question on the overseas market.
Brian: First of all I think our we do see overseas market, a very robust growth market for us.
It's still very early in the electrification process compared to the Chinese market and also I think given our current coverage.
Brian: Covering most of these market by the end of next year I think we are hoping to be able to tap into that growth as you mentioned.
Brian: You know that last year I mean, obviously this year our overseas market. A person. This is has increased to around 15% of ourselves I think the next year. We expect the contribution will be similar even though oh with domestic market growth is very very significant but I will.
Brian: Think overseas growth will you know you know I think has a very similar growth profile as well and then also like two months of the electric <unk> B V versus a extended range format I think youre right I think in some markets that we do recognize the lack of infrastructure could be.
Brian: That's the bottleneck for BV penetration, however, I think.
Brian: These markets that can currently be EV penetration is still very low. So there is still ample growth opportunity for bebe models himself. So we are still hopeful the growth of E V exports as well as.
Brian: Market penetration will increase as well.
Brian: We are expanding to more market, but the same time once we actually have extended range of products, we think in some markets, particularly for markets like.
Brian: Let's say Latin America, or Central Asia, or Middle East were charged and facility infrastructure is lacking for efficient and fast charging bebe products. Some of the extended range product will actually be also attractive. So we actually very very optimistic that both BV as well as extended inch product won't be.
Brian: We are finding attractive growth opportunities invest at the global market.
Speaker Change #127: Thank you, Brian I don't know what the Tioga when he or she is guangxi.
Speaker Change #128: Oh, China in the pool for not even a woman.
Speaker Change #128: As you can because you did if you truly I'm quite a long time.
Speaker Change #128: No your condo juices are cell phones on them do it even though you said she took a green zone of Johnson.
Speaker Change #128: About 10 minutes neupogen attendance essentially no. So that she can do a bunny tend to move bonus you shouldn't shock Mcdonald our opinion.
Speaker Change #128: This was all minion Chilean that you should take the shell tenant Doug I really don't do a shop now.
Speaker Change #128: They'll be able to the Shenzhen, Guangdong, Shanghai, Suzhou Wuxi Chengdu, the Danville cones on the chunky Fujian Julian go.
Speaker Change #128: Josh.
Speaker Change #128: A couple of cleanup component pension shotts, who go to them types, not Google teaching, Ohio, some of our component you'll done to them Oh, No you should consider mitchum somebody who'd be don't Chi, which is if you're a woman.
Speaker Change #128: That's not what we're finding is done with it wouldn't be so my second question is related to capacity could you advise to you in late Easter.
Speaker Change #128: Passive heat and also your effective capacity in.
Speaker Change #128: 2025, do you have any plan to expand the new plant or you can just expense.
Speaker Change #129: Current of Tim.
Our plant to meet the demand and our recently do you also see any component shortage.
Speaker Change #130: Across your supply chain. Thank you.
Speaker Change #130: Okay.
Speaker Change #131: Hi, Charles first of all I think that as we mentioned in the earning call that the both our Guangzhou Wuhan and Chongqing plant already touched on a second shift.
Speaker Change #131: I think each of the plants can support approximately 200000 to 300000 per annum based on the two shifts.
Speaker Change #131: And also I think as we communicate before they are also ample reserve to land and also existing the plant our next.
Speaker Change #131: Next to our Guangzhou Chongqing manufacturing base, so we believe that the weekend.
Speaker Change #131: Expand our production capacity at Foster beat and also with low capital intensity.
Speaker Change #131: And also we already had our long term production capacity planning until 'twenty 'twenty six.
Speaker Change #131: And so we believe that the all these required a manufacturing capacity has been a well planned out hat and also given we have long term planning for the our own manufacturing capacity. We are also working with our suppliers also to expand the suppliers' capacity because.
Speaker Change #131: As you know that we are pushing really hard on the platform a unified platform and also the components sharing across multiple platforms in the vehicles. So it is actually more efficient for our suppliers to expand their capacity with us.
Speaker Change #131: Okay.
Charles: Thank you Charles.
Charles: Yeah.
Speaker Change #133: Thank you. Your next question comes from bin Wang with Deutsche Bank. Please go ahead.
Speaker Change #134: Uh huh.
Speaker Change #135: The Chile or even when the point of view Bollywood Qiqihar. She mentioned, there's plenty to do how do you deal with some wonderful quinton.
Speaker Change #136: Yeah, no matter how much.
Speaker Change #136: You seem to talk I shop, those onstream rates, how do you feel you have come to whether you see it.
Speaker Change #136: Can you tell me you should put you on Canada.
Speaker Change #136: And you should see the amount of your bill both ophthalmic huh.
Speaker Change #136: I'll finish up on that.
First question is about our gross margin off road vehicles.
Speaker Change #137: Actually in the third quarter, you've got two percentage points.
Speaker Change #137: Expansion you quantify each of the factors how much came from the partner.
Speaker Change #137: Coupon plus Sebastian how much come from the.
Speaker Change #137: Basically just to conclude.
Speaker Change #137: Cosco and secondary Okay, you actually tie.
Speaker Change #137: And before Q2.
Speaker Change #137: In the gross margin can go put up with it.
Speaker Change #138: Thank you.
James Hu: Hey, Ben this is James.
James Hu: So to your question on the Q3 versus Q2, our margin improvement I'd say, it's primarily driven by two aspects. One is we continued our engineering cost reduction with regard to our efforts on V. A V a.
The combination of the battery cost reduction as we see the bedroom cost is coming down for the entire industry are you you didn't mentioned that E. L. P impact we did have some impact in the second quarter, which is less than the third quarter, which is also driving an improvement of the margin.
James Hu: So that's that's for the quarter over quarter improvement as we look into Q4.
James Hu: We mentioned earlier the PS seven plus delivery will start in Q4. This is a product that will embed our latest platform was the cost reduction targets achieved and representing a double digit gross margin as we communicated earlier. This is going to help us further improve our vehicle margin from Q3.
Into Q4.
James Hu: So as a trend we do see margins continuing to improve our combined with our larger scale as Siobhan mentioned earlier, we expect our Q4 deliveries to be exceeding prior quarters in the history, therefore, helping us to sustain our manufacturing cost as well and improve overall margin.
Speaker Change #139: So can we hope that that's likely to cause margin in the fourth quarter.
Speaker Change #139: Pascal.
Speaker Change #140: The overall margin will improve as you can see we have a overall margin in Q3 as reported and you can expect that to improve.
Speaker Change #140: Our fourth quarter.
Speaker Change #141: Okay. Thank you.
Speaker Change #141: Within seven months 18 lucid Shimon.
Speaker Change #141: I Wonder if you could kind.
Speaker Change #141: We issued equity to college seen him to tell me that you can see a moment kind of took a human with two of them at any time.
Speaker Change #141: And that is what it should be quite a collection of yourself.
Speaker Change #142: A question stocks recently media reported that Taiwan Foundry company may not able to and doing the OEM or for China.
Speaker Change #142: I'm actually.
Actually for the seven nanometer, we've used any potential impact for our upcoming chips. Thank you.
How do you think that is Charles I think that the the the mass production of our touring I still see steel progress well and we haven't seen any impact on our development and all of us are tuning our associates.
Speaker Change #143: Okay. Thank you.
Speaker Change #144: Thank you.
Speaker Change #145: Our next question comes from Tina Harris with Goldman Sachs. Please go ahead.
Okay.
Speaker Change #146: Where do you go on T shirt, guangxi trickled them into town, either you're going to shoot down but now you got a new team on drupal kind of weird I thought it'd be useful when you know Shane yeah, well then she sure though you own that you found me and I'm pleased to at all she said Gee. If we found that group was home and she is a woman.
Speaker Change #146: To aid us to collect your dad that you notice was hung around how cheap yeah, I'll hop off with Mds at home all cool couldn't really sound cushion. There was <expletive> could go find me a little engagement I mean to at all what I thought would actually Ohio to wash out there you've got something that's on the content. So you have to deal with diesel and Kim.
Speaker Change #147: Thanks for taking my question. So my first question is regarding long term cost reduction of it Oh E. T. So if we look at it from the angle of the powertrain B eight us Bon, including both smart cabin that as well as autonomous driving as well as for maybe a potentially a dig.
Speaker Change #147: Car body and interior exterior so how much potential further cost reduction do you think there is in the longer term. Thank you.
Speaker Change #147: Okay.
Speaker Change #148: Uh huh.
Speaker Change #148: So its a logical one she told what jobs, what I'm trying to get that done shish hagens and stuff like that.
Speaker Change #148: Our Indian but I'm sure some of them see what does have onshore.
Speaker Change #148: It's just that to achieve that will mature in Philadelphia.
Speaker Change #148: Just your thoughts about the culture.
James Hu: As I said Huh hygienist.
Speaker Change #149: She's photo transaction.
James Hu: So with all of them.
James Hu: We're able to hold I wouldn't do that kind of without a son Nguyen since with the Sunni Antonio.
James Hu: Hi, all I see a gentleman, Illinois to a machine that's how you'll see.
James Hu: Third our people.
James Hu: Neither.
James Hu: Oh quarter.
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James Hu: G suite, Belgium, digital Colorado that going in a way more.
James Hu: Sure.
James Hu: Alright.
James Hu: Sure.
Speaker Change #150: Number one you got to a change in good fashion, that's how old you Chi Tung.
Speaker Change #150: Pneumonia told you that increase.
Speaker Change #150: Those are important.
Speaker Change #150: We're fulfilling that need.
I'm on for Cory.
Speaker Change #150: Please sushi pingo caught up over the time, So let me go she bonfield here what citizens Uh huh.
Speaker Change #150: Yeah, well you should cut our tier two tests right Tom.
Speaker Change #150: Tom in Dutch and but.
Speaker Change #150: Yeah.
Speaker Change #150: With that she did it certainly miss you.
Speaker Change #150: Yes.
Speaker Change #150: It will show up in terms of what else on mute your line.
Speaker Change #150: Yeah.
Speaker Change #150: Paul told where U haul.
Speaker Change #150: Well the Genesis Google phones, Yes, I'll tell you what my children are kind of putting.
Speaker Change #150: But of course, they're going to need to go.
Speaker Change #151: She had a positive way to do that.
Speaker Change #150: Sure.
Speaker Change #150: Needle blah blah.
Speaker Change #150: Going either to the need to go.
Speaker Change #150: What's your attitude also toy sheesh will trunk shingles.
Speaker Change #150: Send us in any manner without chi children.
Speaker Change #150: So with that gentlemen, either could you do a junk.
Speaker Change #150: Do you have an idle over this high body level. Once you do that it would kind of all women.
Speaker Change #150: India and.
Speaker Change #150: Timber concert.
Speaker Change #152: Hello, Duane I believe you're changing I see way more going down of course.
Speaker Change #153: I didn't do it I think it's useful to Chongqing.
Speaker Change #154: So she had a tissue.
Speaker Change #154: Yeah.
Speaker Change #155: Thank you. Thank you for this question I'm actually we've been we've never stop thinking about that in our understanding at all possible solution to it has been changing over the years I remember about a year and half ago. During the earnings call I actually made a promise of achieving significant cost reduction at that time I actually some of my coverage.
Speaker Change #155: Do you make that promise and I'm very happy and proud that we're able to actually deliver what we promised at that time and in the coming three to four years. Obviously, there are lots of room for improvement when it comes across.
Speaker Change #155: A lot of things are there obvious for example supply chain optimization and scale of economy of scale and also technology, a different kind of cost reduction, but specifically, we can do a lot more things as well for example on the one hand, we can do something that we call Super integration, meaning that we can actually combine different capabilities up different parts together and.
Speaker Change #155: Something that is significantly different from what would traditionally have or we can also learn and adopt the apple a model, which is to empower the tier one suppliers or help them together develop the capabilities of tier two tier three suppliers advantages leveraging their already existing our existing logistic capability in.
Speaker Change #155: A lot of other details that can help us to improve efficiency and cut costs.
Speaker Change #155: In addition to that we also can look at for example, saving in cost control and India electronic electric materials et cetera. I mean these are just some examples tip of iceberg here really and as a company that's constantly driven by technology innovation. We also can look at the upgrade of our manufacturing.
Speaker Change #155: Oh Kaufmann ship in the coming three to four years, we're not going to stop until we achieve the optimal level of cost cutting now in the future AI Tech day and also in the future earnings call. You can expect to hear our reporting of every year's cost control outcome and I don't think it's not just going to I don't think that it will come from only.
Speaker Change #155: The scale of our supply chain control optimization, but more likely being driven by technological innovation. Thank you.
Speaker Change #156: I'm, saying I'm kind of curious how long ago, along with I know aren't young ones. He shook when you will know.
Speaker Change #155: The particularly seen them more.
Speaker Change #155: Sure. It's interesting you called a woman, but Oh geez I don't keep telling you on day, one you know he's a chartwell no truth, England journalists acquired you'll meal comes out you eat and that'd be a gun chipotle true now suddenly on the choices that you shouldn't be out exactly what was the second question is regarding our 2025 new model types.
Speaker Change #157: And also a volume outlook.
Speaker Change #158: Can we get more details in terms of the four new models, which quarter will they come out and then what kind of price range, what kind of body types and also all our overall volume outlook for 2025. Thank you.
Speaker Change #158: Hey, Gena, it's Brian I think well first of all we are not providing obviously annual guidance as we've done in the past. So I think right now all I can say is that next year, we well we actually are very confident that we can continue the momentum we're seeing in the second half of this year and also a lucky.
Speaker Change #158: At the.
The.
Speaker Change #159: The gross profile I think it won't be a more moderate growth compared to this year, but still I think it will be second half was slightly heavier than the first half.
Speaker Change #159: In terms of the model I think we gave you. The total number we're not at the moment I think we're ready to share specific models and exactly when they will be launched but we mentioned that there'll be four new models are one of those will be ER extended range model and also in addition to those four models.
Speaker Change #159: I'll have a few oh, a refresh of current models, so and that will be spread over the next four quarters. So you'll expect to see our new motto and refreshment potentially every quarter.
Speaker Change #160: Thank you Brian.
Speaker Change #161: Was that on a piece of that and I'll do it just because I've seen the model well you got to wait be Monaca pizza Giacobbe back so for the four new models or expectations should not should not be lower versus Mona as long as he said one class.
Speaker Change #161: Well I think we are.
Speaker Change #161: Very very confident that the models with launch won't be leading their respective categories, obviously different segments and different calibers will have different volume expectations, but we do feel like our bottles will be very competitive in their respective segments.
Speaker Change #162: How does that yeah. Thank you very much.
Speaker Change #161: Yeah.
Speaker Change #163: Thank you. Your next question comes from Nick <unk> with J P. Morgan. Please go ahead.
Speaker Change #164: So this is not what he wouldn't he wasn't it didn't even make a bigger one.
Speaker Change #165: N T C O Gwen to call that's why the win T and thank Tito smokies tendency to sorry to sell some things.
Speaker Change #165: And at 50000 feet with southern on Sandbox, and just shoot there's almost kind of publicly that they're going to keep talking about how it it sounds like there's some kind of a chunk all tethered to the multi pollutant and Cds to come see easily so you're going to see basically you deal with them.
Speaker Change #166: Hey, Michelle just to do it.
Speaker Change #166: <unk> concludes my cell phone feeling kind of at some point.
Jim.
Jim Covello: Tell me something like two times so I.
Speaker Change #166: I don't think so.
Speaker Change #168: Well you can coordinate you go into the F N G. Peter Labor centers Dawned on me I Wonder if you could.
Sophie: Sophie to put it.
Speaker Change #170: Good good how does it go.
Speaker Change #170: Selfish.
Speaker Change #170: Some puneet, yeah Dominion T cell b cell physical could see them when.
Speaker Change #170: And there's so much heat Shelton.
It's a timing issue.
Speaker Change #171: Yeah that she put so much educated customer.
Speaker Change #172: Let me translate my question very quickly yes.
Speaker Change #172: At the moment so quickly.
Speaker Change #172: Montana accounted for about 50% of a snowstorm you probably understand from other competitors who've done.
Speaker Change #172: For those who have overseas exposure.
Speaker Change #172: People. The people profit margin is generally about one five to two times higher than this being consumed in China.
It is fair to say the same thing applies from high school and likewise, how do we execute cosmic.
Speaker Change #172: Table, two nickel free functionality.
Speaker Change #172: Hum.
They need to have in the future.
Speaker Change #172: Yeah.
Speaker Change #172: Yeah, Hey, Nick It's Brian I think let me address your first question comes into the overseas markets profitability contribution to to US I think that there are couple of areas to two to think about one is that a yes in general I think are the price of selling a modest overseas are high.
Speaker Change #172: You then domestic prices are there's additional cost obviously in potential tariff and duties that we have to pay for the margin in general is slightly higher.
The domestic gross margin, but also to be mindful of is that the margins that we achieved a lot of these overseas markets actually our margins that our wholesale margins because we are working with in quarters or distributors in those countries where are we in a response.
Speaker Change #172: The boat for retailing and distribution of all those products. So a lot of those small march's actually it's essentially direct contribution to us rather than just the gross margin. So that's why there's a distinction, but I think going into next year I think that clearly we are in a need to dealing with.
Speaker Change #172: Changes in tariff change and a potential new market have different regimes. So we need to obviously have a more a flexible approach to our structure, but this year I think the contribution has been pretty positive.
Speaker Change #172: I think a couple of dressing and your second question.
Speaker Change #172: Sure.
Speaker Change #172: Yeah, I want to use at home could you kind of highlight some.
Speaker Change #172: And Bill will put on Laguardia.
Speaker Change #172: Oh, the organs or what do you see often does hobby it yourself a hole you won't hold.
Speaker Change #172: So what are your opinions she nemo's arena play pen 28.
Speaker Change #172: Number three instead of one.
Speaker Change #173: I'll call. The trough do you could you to cover that.
Oh, Oh dogs, you can associate with all the time.
So that's all done in Chicago.
Speaker Change #173: Oh.
Speaker Change #173: Oh boy it all to the oval, which doesn't for older dogs I tell him a little way up so far this loophole.
Speaker Change #173: Togo food all told it.
Speaker Change #173: But for.
Speaker Change #173: Oh, so cool W E T.
Speaker Change #173: Cool built in the L. CCA agency criticism, who tends that general guidance.
Speaker Change #173: So safety agenda.
Speaker Change #174: That's all what it doesn't yet change today that you don't do this well it's okay. If I believe will cause would've told me what can I say.
Speaker Change #174: You can put out really it's all about that Oh, there was shy of a year since it's always India.
Speaker Change #174: So just I'll.
Speaker Change #175: Let me show you seemed to Oh, yeah. So that's a whole lot agenda really.
Speaker Change #175: I will turn the call available for a foothold it'll put a tool that's is hopefully a little shove holdup.
Speaker Change #176: Kim could you tie anyway, so that doesn't show Hollywood today, instead of La Jolla, the solutions they need.
Speaker Change #176: Well Thunder, but pay your bills and it's hurting you with Hugo Henkel and Tony That's L. P. J the haynesville it doesn't go what's efficient here shortly.
Speaker Change #176: Children sitting tight question Alethia.
Speaker Change #176: Okay.
Speaker Change #176: Thank you, yes, indeed different countries are different they have different users different provinces different recognitions I comparison for example, Europe versus China typically China, you know as the market has a younger group of consumers that are really attracted by Eddie V's, whereas in Europe. The majority of the youth.
Speaker Change #176: Those are in middle age and a bus but also we see a lot of similarities between China and other parts of the world outside of you as well, but here, but its discussion I'm going to focus on the differences between Europe and China now right now what we know when it comes to the capabilities being delivered to all U S customers I think they were.
Speaker Change #176: Really love Smart cabin fast and ultra fast efficient charging Oh high quality services opt yourself services and also the valet parking auto parking LCC ACC. These R. A D. A you know sort of most daily commonly accepted and prefer Adas features are that are being loved by European.
Speaker Change #176: Customers and when it comes to other parts of Adas features because of the limitation or because of the regulatory environment in Europe Cyclically you know the implementation of those features in Europe. It's about 12 months behind what we can see in China right now, but as the company that is being driven by technology Ah with heavy investment in there.
Speaker Change #176: Strong capabilities in a software and hardware, it's they're very very confident in you know adopting the same set of solutions, but using different combinations for different market in order to build our global presence as a premium brand going forward and right. Now you know as has been proven by market feedback that we are actually able to do that so in the future when it comes to a lot.
Speaker Change #176: We're implementing our solutions in different countries, we're going to focus more on not only product and service quality, but also the operations across the different regions to.
Speaker Change #177: <unk> customized for our local consumers. Thank you.
Speaker Change #178: How does he see well take a one team culture and thank you Suzy of Penguin computing.
Speaker Change #179: Two questions on win T now to live in People's homes through tough times I kind of want to think of Unionpay. So that's helpful.
Speaker Change #179: So if you see me because he couldn't we see little to no question.
Speaker Change #179: We're now, saying Hey, what's the Pizza places, we don't see somehow.
Speaker Change #179: Sometimes it's like <unk> 10, or so to kind of dumped on me at yoga tights on sooner.
Speaker Change #179: To conclude that people think so could we say something don't maintain them towards the door.
Speaker Change #180: I think the same thing.
Speaker Change #180: So you saw that would be good to do something but we see some fact, pete competing with.
Speaker Change #180: My second question is really about the trade policy put.
Speaker Change #180: Patent standpoint, what I'll be on.
Speaker Change #180: On the continuity of the policy into 'twenty five and likewise.
Speaker Change #180: Since the building has been very strong, especially with the monopoly MPC pause.
Speaker Change #180: We placed the order today and we only get caught sometimes in the first quarter next year, our multi strategy fund cosmos.
Speaker Change #180: In the first quarter.
Speaker Change #181: Oh, Hi, Nick because as Charles I think and we believe that our newly launched the proton AR like I'm all three and also as a piece of them plus are of a very competitive in terms of the product capabilities and I think that the customer chose a product because I think there is no alternative product.
Speaker Change #181: Or less all very limited options are available to them in the price range. So we're we believe that we will continue to see the strong momentum for the older orders for the Emerald three and also a piece of it plus I think that the more importantly, I think that the we have very significant Uh huh.
Speaker Change #181: A second order backlog for both of them or three on the Pizza oven plus I think this is also Oh. We I think this is also very different from a lot of our peers, we won't be carrying probably tens of thousands order backlog for both of them or three on the piece of impulse into Q1, So we believe.
Speaker Change #181: That that won't be a foundation of our growth in the in 2025.
Yeah.
Speaker Change #182: And then can you talk about what you could do.
Speaker Change #182: This is Patrick Christmas I think 10 million times.
Speaker Change #182: Cause the company.
Speaker Change #182: Two significant between your.
Speaker Change #182: Thanks, principally coffee.
Speaker Change #182: My pleasure.
Speaker Change #182: Thanks, Mike.
Speaker Change #183: My question is for the customers, who buy Pizza places with a piece of been plentiful and I see it.
Speaker Change #183: When you get a car infrequently 2025.
Speaker Change #183: Pumpkinseed to reimburse Dan.
Speaker Change #184: Additionally, Cynthia thanks.
Alex Yao: Hi, This is Alex so first of all we do not have any specific insight about the.
Alex Yao: The government subsidies we stopped.
Alex Yao: Auto sector will still be supported biannual potential stimulus policy is a priority of any of the economic policy and regarding the customer expectations I think they have quite reasonable expectations for their delivery time right. You can see the there'll be time for the Pisa and policy.
Alex Yao: <unk> eight.
11 weeks, so I don't think our customers they are expecting to see a sort of theory.
Alex Yao: Before the cause somewhat this year for most of our customers who put their oldest right now to have reasonable expectations. We don't think they will change the decision because of the subsidies. They chose X pump cost because of that unique value proposition. We bring to these customers in these segments piece of impasse.
There are three on the big cities.
Alex Yao: I'm happy with all our peers models, so we don't.
Alex Yao: We really expect to see a material impact from any potential continuation or discontinuation of subsidies. We just focus on our our product competitiveness as well as strengthening our channels.
Great very clear thank.
Alex Yao: Thank you.
Alex Yao: Thank you.
Speaker Change #185: There are no further questions now I'd like to turn the call back over to the company for closing remarks.
Speaker Change #186: Thank you once again for joining US today. If you have further questions. Please feel free to contact ex pumps investor relations through the contact information provided on our website or the Pearson finish communications.
Speaker Change #187: This concludes today's conference call you May now disconnect. Your line. Thank you.
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