Q4 2024 NIO Inc Earnings Call
I'll turn the call over to your host Mr. Chin head of Investor Relations of the company. Please go ahead right.
Speaker Change: Good morning, and good evening, everyone well come to Neal's first fourth quarter and full year 2024 earnings conference call. The company's financial and operating results were published in the press release earlier today and are posted on the company's IR website.
William Li: Today's call we have Mr. William Li founder Chairman of the Board and Chief Executive Officer, and Mr. Danny Chu Chief Financial Officer.
William Li: Before we continue please be kindly reminded that today's discussion will contain forward looking statements made under the safe Harbor provisions of the U S. Private Securities Litigation Reform Act of 1995 forward looking statements involve inherent risks and answer.
William Li: Certain days.
William Li: Such the company's actual results may be majority different from the views expressed today further information regarding risks and uncertainties is included in certain filings of the company with the U S Securities and Exchange Commission.
William Li: <unk> exchange of Hong Kong Limited and the Singapore Exchange of Securities trading limited.
William Li: The company does not assume any obligation to update any forward looking statement, except as required under applicable law.
William Li: Please also note that.
Speaker Change: Niels earnings press release, and this conference call include discussions of unaudited.
Speaker Change: GAAP financial information as well as unaudited non-GAAP financial measures.
Speaker Change: Please refer to news press release, which contains a reconciliation of unaudited non-GAAP measures to comparable GAAP measures.
Speaker Change: With that I will now turn the call over to our CEO Mr. William Li. Please go ahead.
Speaker Change: Thank you for joining news Sunday 20 for Q4, and the full year earnings call.
Speaker Change: In Q4, the company delivered a total also accepted 2689 somebody.
Speaker Change: Setting a new quarterly red clutch indiscernible amongst the deliveries so pet.
Speaker Change: 13000.
Speaker Change: For the first time.
Speaker Change: Well it kind of trying to fool the company's total deliveries reached 221000.
Speaker Change: 970, marking a 38, 7% increase year over year.
Speaker Change: <unk> brands continue to lead the premium segment.
Speaker Change: Labor in 200, and the less so than 200, and then nine vehicles, so two and a 40% market share in China to be the second settlement price of about 300000 threat.
Speaker Change: The Umbro brand D D, but plenty yourself didn't 700, and the 616 to one vehicles in the mainstream family market.
Speaker Change: The market share of the envoy S. E T have been steadily increasing since its launch ranking among the top three in China B V. S. You'll be much the price between 200003 hundred or so than that.
Speaker Change: In general in the February.
Speaker Change: Due to seasonality and the Chinese new year.
Speaker Change: Holiday the company delivered 27055 vehicles.
Speaker Change: We expect the total deliveries until one to reach.
Speaker Change: 41 to 43000 units, reflecting a year over year it goes although 36% to 43%.
Speaker Change: On the financial side.
Speaker Change: That's what he and supply chain optimization and across the country have a delay but strong results.
Speaker Change: So vehicle margin improved to 14, 9% in Q4.
Speaker Change: Why uncle achieved a positive vehicle margin in the early stage of a production ramp up.
Speaker Change: Yeah, I'm not that's something that the company is over or be Komatsu reached certain plan to one person that can kill Paul.
Speaker Change: At the same time that profitability of after sales services continuum team pool.
Speaker Change: Long with schools and acknowledged levies 70, leading to a positive gross margin in Oslo stats in Q4.
Speaker Change: No.
Speaker Change: Like to share some updates on our product and getting the operation.
Speaker Change: That's M D. C. S. All suites brand have entered a new product cycle.
Speaker Change: But the premium brand and Aneel.
Speaker Change: On December 24.
Speaker Change: The lumps and you eat Tonight, our flagship smart you could cause that gives to that.
Speaker Change: As the result of a new 10 year Tech innovation 18, nine set a new benchmark for opinions about that T V.
Speaker Change: With the industry deep into the knowledge and just thinking about you can spin it.
Speaker Change: It has been well received by useless and the settlement.
Speaker Change: That plus the addition.
Speaker Change: You've got a limited offering of a 99 nine units sold out within hours.
Speaker Change: Let's take a neutral bush and continued to see strong at about 18 nine deliberate way up again at the end of this month, Besides New York suburban product he'd keep I E. T. Five T E. S seeks and they usually seeks way along to their 2025 models in Q2.
Speaker Change: Future and upgrades and design cutting your cost is in the smart driving chip mobile was another major product launch in the second half of this year.
Speaker Change: Has the pole that letting up who is the first so.
Speaker Change: Solidified Nielsen did ship in the premium you pay market, while driving it overall probability.
Speaker Change: Yes.
Speaker Change: Well it means Jim mass market brand uncle, they're forced to put that out 60 came to strong.
Speaker Change: Cook our nation.
Speaker Change: Our family of yours, or it's a safety space collapsed late in energy efficiency and the convenient it's hard to you can spin.
Speaker Change: Although the second product 90 is our position as a flagship logic family SUV into it would be introduced.
Speaker Change: And into two and deliberate in Q3.
Speaker Change: The third product to be launched in Q4.
Speaker Change: A well rounded S youll be lined up to take her to a broader range of mass market yourself.
Speaker Change: Well I hadn't a small pop brand to Firefly.
Speaker Change: Its debut in December 10th of a tenant for Firefly hasn't received a boat attention, particularly from young bias in the family and looking for a second and talk.
Speaker Change: The brand is set to launch in the Beacon deliberate April leveraging neo stats network, that's the market expansion.
Speaker Change: Is this the three brands.
Speaker Change: The company used to building a comprehensive product matrix, but spending 150000 to 800000 due out.
Catering now.
Speaker Change: But if I use the group as.
Speaker Change: If we expand all access and the service networks, they're set to reach more users and drive sustainable growth.
Speaker Change: In terms of smart driving and pick a knowledge and they can spend.
Speaker Change: Technology continue to drive us towards our vision a reality.
Speaker Change: They've been stress and to reduce and exit.
Oh, probably a threat oxidize and yeah basically the same thing you're hesitant nobody he used to let you know that the automatic emergency is even future.
Speaker Change: It's led you to lead you to leave the market or you can be at lids object detection and they use case copies.
Speaker Change: Date, Nielsen's Tomorrow safety has been paid over three patents for mainland potential excellence for yourselves.
Speaker Change: And the release of a yes as opposed to improve quite a bit in safety.
Speaker Change: Meanwhile.
Speaker Change: We have a mate bookstores in switching towards next generation attached to it based on the Neal what model N. B M will provide driving Hopkins and the safety assistance across all scenarios.
Speaker Change: The other part program began in early April with mass media is gradually rolled out.
Speaker Change: Yeah.
Speaker Change: Locally.
Speaker Change: 183, new houses and the 400 and the safety to New York basis, well, although it has some 400 and the Ford pay nine stores in China.
Speaker Change: Usually in our lab balance that says copies.
Speaker Change: And the Soviet States. The company operates 388 service centers and a.
Speaker Change: Six four deliveries into us.
Speaker Change: They are putting more efforts improving operation operational efficiency, so as to better support our Neal Poe that cycle and the beauty of them is.
Speaker Change: Exceptional you'll say you pin.
Speaker Change: Oh no. The company has a deep right. So you saw then.
Speaker Change: 200, and therefore in the 45 of postal Workstations Award.
Speaker Change: Including 970 stations on highway in China.
Speaker Change: Having private the old ball six 969, mailings swaps for Neil and uncle Yosef.
Speaker Change: Addition, Neil has been awful 25, we saw it in the power charge offs and the destination touch us.
Speaker Change: That has to work remains the preferred to be charging solution for New York those are long trips.
Speaker Change: In the Chinese new year holiday it sets a new record with over 100.
Speaker Change: So it's in the 37000 Apache has to work in a single day.
Speaker Change: Pulp stations hunting Opel 100 in the eighties.
Speaker Change: Whoops.
Speaker Change: With unmatched speed and their companion battery swaps is the opt in up to more be charging solution for long distance and the holiday travel is a strategic advantage, where we reinforced our competitive edge.
Speaker Change: It market.
Speaker Change: Laying a strong foundation for Lasalle schools of all three brands given the upcoming product cycle.
Speaker Change: They are actively engaged with partners in more countries and the regions.
Speaker Change: Our global footprint.
Speaker Change: That's what they call a global set of channels and stopped Firefly deliveries.
Speaker Change: The company is a cause salary, which in its global expansion, while delivering best in class ebay solution tool used to what to what.
Speaker Change: The company remains committed to social.
Speaker Change: It's about the ability and the sustainability, India. So back in December I didn't see it that upgraded to the New York yesterday abating from eight to tap a in general corporate at night that Neil as the number one card count today and at least 2025 global 100, most us setting up a company.
Speaker Change: The competition landscape and there's some other EBIT industry is involved in that play.
Speaker Change: Making 2025, well create to get full of market shaping.
Speaker Change: This year with a nine year model of course, we have been.
Speaker Change: The company is forming a comprehensive posed to lighten up.
Speaker Change: Wireless penetration caused to up to nation is a clause that you had to put a probability whereas global expansion P cannot eat accompany we'd be able to unlock new revenue opportunities in the meantime, the country, you see enhancing operational capabilities and the business elaborate knees.
Speaker Change: Called team.
Speaker Change: Sure I'm going to bed equation and efficiency.
Speaker Change: With this action in place we are confident in advocating peer competition and achieving our full year operating package.
Speaker Change: Thank you for your support.
Speaker Change: I would now turn the call over to Sandy for Q4 financial details over to Stan.
Speaker Change: Thank you Willa.
Stan: Let's now review our key financial results for the fourth quarter 2024.
Stan: Our total revenues reached $19 7 billion RMB increased 15, 2% year over year, and five 5% quarter over quarter vehicle sales were 17.5 M. B opposite 13, 2% year over year, and four 7% quarter over quarter.
Stan: They're primarily driven by higher deliveries, partially offset by a lower average selling price due to changes in product mix.
Stan: Our other business segments also delivered a solid performing other sales were $2 2 billion RMB grew by 33, 8% year over year, and the telcos, 7% quarter over quarter.
Stan: The annual growth was from increased sales of parts accessories after sales vehicle services and provision of PAH.
Stan: Our solutions along with a rise in sales of technical R&D services.
Stan: The increase quarter over quarter was driven by higher sales in technical R&D services used cars, and our parts and accessories and after sales vehicle services.
Stan: Looking at margins Leeco margin was 13, 1% in this quarter compared with 11 point to 9% in the Q4 last year and unchanged from last quarter.
Stan: Over your churn increase was mainly due to lower material cost per unit.
Stan: The margin turned positive this quarter, mainly due to the increase in the provision of.
Stan: Technical R&D services.
Stan: That was the sales of parts accessories, and after sales vehicle services with relatively higher margins.
Stan: Overall gross margin was 11, 7% up from seven 5% in Q4 of last year at 10, 7% last quarter.
Stan: Turning to Opex R&D expenses were $3 6 billion RMB decreased eight 5% year over year and increased nine 6% quarter over quarter. The year over year decrease was mainly driven by reduced personnel costs and the desire to development cost.
Stan: While the quarter over quarter rise reflects additional investments in design and development, partially offset by the decrease in personnel costs.
Stan: SG&A expenses were $4 9 billion RMB.
Stan: 22, 8% year over year, and 18, 7% quarter over quarter.
Stan: The year over year.
Stan: The increase was mainly driven by increased sales and marketing for new brands and products and higher personnel costs from sales and service network expansion.
Stan: The quarter over quarter increase or is it mainly due to the scene.
Stan: The sales and marketing efforts and higher.
Stan: Professional services cost for general corporate functions.
Stan: Loss from operations was six daily RMB down eight 9% year over year and up 15.2% quarter over quarter.
Stan: Interest and investment of loss was there upon 2 billion RMB compared with investment income of 1.4 billing in 'twenty to 'twenty, three Q4, and 0.3 billing in 'twenty 'twenty four Q3.
Stan: Primarily due to the fair value change of equity investment other loss net in Q4. It was 0.5 billion RMB, primarily due to the loss from the revaluation of overseas RMB related assets caused by the depreciation of RMB against the U S dollars this quarter.
Stan: That's a loss was seven points, one RMB showing an increase of 32, 5% year over year and 40.6% quarter over quarter. Lastly, we ended the quarter with total cash cash equivalents reached the restricted cash short term investments and long term time.
Stan: Chipotle amounting to $41 9 billion RMB, that's wraps up our prepared remarks for more information on the details of our unaudited fourth quarter and full year 'twenty 'twenty four financial results.
Stan: Please refer to our earning earnings press release, now I will turn the call over to the operator to start our journey session. Thank you.
Speaker Change: If you wish to revoke a question. Please press star one on your telephone and wait for your name to be announced.
Speaker Change: At least you cancel your request. Please press star two if you're on a speaker phone. Please pick up the handset ask your question to 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. Your first question is from Tim <unk> from Morgan Stanley. Please go ahead.
Speaker Change: Yeah.
Speaker Change: Yeah.
Speaker Change: Hi, This is Ken from Morgan Stanley. Thanks for taking my question I have two questions. The first question is about our cost reduction effort.
Speaker Change: Because a lot of them like your focus is put on mute the latest round of restructuring.
Speaker Change: Just wanted to know what that how much of cost saving with match when you expect to achieve and when are we going to see the contribution you're merging in upcoming quarters. That's my first question. Thank you.
Speaker Change: Oh, yes.
Speaker Change: Oh, no I'm interested as home tune yen take a surgical case shiller trunnion and yellow median case it sort of hit close to 19 companies, you're telling them of course.
Speaker Change: A woman she doesn't change your lifestyle.
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Speaker Change: Sometimes I fail, but not enough.
Speaker Change: The tons that have been done a whole bunch in here in the heartland tissue that you achieved in December.
Speaker Change: Accordingly, and that's a good from Yale at home Digital Woman Day, you said you haven't found something in that some of them go home and the largest hydrogen he had some of them.
Speaker Change: Definitely and unbundle that union to.
Speaker Change: Particularly south on you might go.
Speaker Change: Kinion a killer okay. So no kind of how do you do that you said Houston.
Speaker Change: No not at the same time, though on the junior and the truth of the hot well take a look.
Speaker Change: Lewis out or some <expletive> single women, Chichester, who say well without a shuttle flew on both of them. Yeah look I'm a bolus I pay you know without that gets you into that switch heat. So yeah. She had to change things yet.
Speaker Change: I must agree at least without Kinion.
Speaker Change: So without it tell me he's yet.
Speaker Change: Did that play a lot books household luxuries that caused that.
Speaker Change: A woman's homogeneous each it okay.
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Speaker Change: Oh, Kleenex, Ohio thought, particularly social food lunch, Amanda soundly, you got somebody who.
Speaker Change: Once the need for that patient.
Speaker Change: You've been talking about that either.
Speaker Change: There's plenty of course, a little more.
Speaker Change: Hello, Hustled and cocoa.
Speaker Change: But one of them go way too many of them will go quicker.
Speaker Change: So.
Speaker Change: I'm far from it I just decided to go so that's on the field.
Speaker Change: Hum.
Speaker Change: And kind of bought some shares to go to your call, let's say to a take out take a totally about it that way she has taught us.
Speaker Change: Tony or polka all digital.
Speaker Change: You can find yourself.
Speaker Change: China.
Speaker Change: Thank you for the question regarding the cost reductions are actually since last year. We have already started the cost of mining initiatives and affords the 'twenty 'twenty four full year. We were also on track for the cost reduction initiatives as you can see in our vehicle margin for Q4, he has fulfilled our expectation and we.
Speaker Change: Continuous such cost reduction action this year from a multiple aspects, including supply chain R&D and in that case, we foresee that our vehicle margins will also continue to grow starting in Q2 and in terms of expenses in actually in Q4 last year as we have.
Speaker Change: Launched at the new brand envelope together Ret is product, we have started to make investments and expenses developing itself and service networks as well as in our brand related.
Speaker Change: Related activities and such activities and expenses will continue in Q1. This year in building up the new brand and also the south and service networks, but in the meantime, starting Q1. This year. We have started a all employee comprehensive cost reduction initiatives covering R&D stuff.
Speaker Change: King.
Speaker Change: And also a service teams we call. It C. B you, whereas tops business unit basically we ask it all the teams and employees to take ownership and accountability of the company's operational targets. We already have seen some good results and action taken voluntarily by the R&D teams by the sales and service teams.
Speaker Change: Reducing the cost and improving these patients.
Speaker Change: Sounds good and some Q2 has suddenly say Oh I'm in Congo. Once that's been done that's it I'm sorry.
Speaker Change: Not that too suddenly knowing which was somewhat by attending hopefully you know me something Super show down the thing that.
Speaker Change: The molded Houston, you just seem to Cooper.
Speaker Change: Well then shouldn't you Ashish.
Speaker Change: I shouldn't say when it comes to the neighborhood teach with opinion until suitcases yen to the U can beat us on the go mobile.
Speaker Change: And the result of such actions will be reflected in our Oh, that's shipped in the coming quarters, starting in Q2, as we continued to strengthen our cost control and also expenses management.
Speaker Change: In the second half of this year together with improvements in the south volume in the vehicle margin. That's why I think the expense control. We are confident that we are going to achieve our breakeven target in Q4.
Speaker Change: Okay. Please.
Speaker Change: Thank you.
Speaker Change: My second question is bell uncle.
Speaker Change: Just wanted to know that what actions could.
Speaker Change: On voting to be candid growth momentum.
Speaker Change: When you stick to the tea brand strategy, where it could potentially change although to a suffering onto neo to save costs and enhance efficiency. So that's my second question. Thank you.
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Speaker Change: Oh, yeah, not hard to do just a foot Neil it sounds good.
Speaker Change: You can switch on the Neal the Sevens now.
So you shouldn't have a degree of science diet women's hadn't been there this year.
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Speaker Change: Ali I'm going to go through this this this oh.
Speaker Change: I'm a Sunday no woman. She has her life well then she the Sydney yet you didn't catch that no women say, a junior and shouldn't yet you tell them, yet and gallery shaped by the time. He had total mutual and say Oh I'm going to go to your son and say you should take a pause or do you mean, the two good getting teach out you mean that apart.
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Speaker Change: So he is Hong Kim has the window to capitalize on the current dollar teaching, though on the taught us the shoe that's a good Houston. So you just had I'd say, if I'm going to talk about how much you could achieve.
Speaker Change: Thank you for the question regarding although it's Oskar formats are starting this year you didn't meet our expectations and we have also reviewed the comprehensive Christmas and cautious for it's Fulfillness. The first reason is because our brand awareness and direct with our brand awareness and the east.
Speaker Change: Moshe asked almost still annual grant in terms of its brand awareness and get right.
Speaker Change: Awareness it is actually a farfetch now its competitors. We have also done some studied M research on the influence of the brand awareness of envelope and in terms of the brand awareness is only one third I'll start off Neil.
The case as we consumed all of the existing and existing order backlogs, we are facing larger pressures regarding the fresh orders starting this year, especially during and after the spring Festival holidays. We have also taken as the rest of actions to help strengthen and improve the brand awareness and exposure we have.
Speaker Change: Wrote out some offline advertisements in the train stations and also in the elevators. All apartment buildings. We have also double down on their social media campaigns to help improve like brochures and we are seeing some good effects in helping all of them being more famous and runoff.
Speaker Change: Hi, Sue them into social agenda for Guy.
Sue: Yes, you know the ramp up of the court.
Sue: Oh tune yen, but some sooner so that shouldn't you and.
Sue: Oh you bet.
Sue: Yeah, Beltran Union Dino Hunter women shouldn't Didnt like you back towards that number Tom Woodshed Knowhow not you Didnt publicize it.
Sue: That's all of them as they have been doing on the.
Sue: Those listening to.
Sue: But again, the Ohio, Yeah Farquhar.
Sue: With William Lyon.
Sue: There are pockets that you chose to pass on the coach.
Sue: Well Miss Ito, Suzhou K, yet Togo Sunday, we had them in again, because I cannot tell you that yeah, you could even get a shout. It has some people so.
Sue: It's just that I don't want no I'm looking at kind of just had but again that's really cool.
Sue: So the whole Titusville Union salvage that Oh I'm, yeah, yeah. It's a it's a good chance you haven't been getting it showed you that Houston. So it's something that I saw a woman say took a social work both I'm gonna to go towards the sounds that union to kill switch Union until you haven't done that you should take a toll road it sound easier to Yodlee Hello English.
Sue: You mentioned the a J.
Sue: So I don't find them and go two five weeks ago, Joseph along with employees.
Sue: Yeah.
Sue: And does that kind of person asked regarding the coverage off the point ourselves are we have been ramping up the south our store coverage off the amo Brent last year. When we just launched the brand we have around 100, and our five stores in China and the by the end of last year. We have opened up another 100 stores and so far we have more than 400 stores.
Sue: China, Yeah. Most of the stores are still quite new in terms of their efficiencies and the productivity. They are not yet too immature novel. So it will take some time before this new stores to start Yo Yo real results. We have also done the comparison between a mature store being in operation for more than three miles.
Sue: In comparison to a newly established store productivity can be different kind of asked a friend asked three times.
Sue: As this new store is catching more mature and a skillful we believe that they will also start to play a bigger role. So as you can see we have made some investments in ourselves and our service networks in Q4 last year and also Q1, this year and waste being under the pressure what is investment and expenses. Yet. We also believe that there's a source out in the network, but also.
Sue: Start to your results and kicking in fact, no time to look into there. Some some gwen is supposed to show. So the fellow that you should go to Oh, well mission type I am the newest social day Sunday.
Sue: So your time in the patient having to social teach how does it go to muscle Shoals.
Sue: Courtroom no macondo tissue shows or the fellow who should I really be it's almost all of them are conduct so it didn't have an attached with it has a T call. So we are doing this year to go.
Sue: It shouldn't just hold them until the mingled K band that there is a social element.
Sue: Is it really with all of us at Sundance Alisha patient portal called eat Ham and send them engage what could go right of course, you caught that.
Sue: It shows sort of shows with a capable no because I was going to go to them getting back onto it no I'm, okay condensates enough off are going to be competitive.
Sue: No woman she isn't that union condo, she doesn't make or you get the symptom that getting done those so that would put them.
Sue: Yeah, I know I'm going to take a has to try it for development.
Sue: No woman she's just those are teaching those especially with outside Houston I know those are the.
Sue: Does it go down the Cingal C. What's that we shouldn't they shouldn't always say sell it to them. So we didn't.
Sue: Vishal.
Speaker Change: And the third reason is also relevant to the maturity of that is regarding the maturity level of our sales force.
Speaker Change: For the follow teams I'll start I'm, a brand 60% of them have been in the company for less than three months and it will take some time to train the king and whether it's all seems to publish their social skills to be able to Yao with good results and it makes deals as the team is getting more mature are day. After day, we also see that more and more fallow.
Speaker Change: Our now Oh true, making deals and we also encourage that's fellows true do more proactive outreach by calling out of the stores to actually reach out to the potential users and help expand the funnel and this will also help us to improve our performance and for this year are we if we lose.
Speaker Change: Catch it the mouse over mouth I'm trying to four the number off the fresh orders it has been increasing steadily and in terms of the number of catastrophe wipes out we've been receiving and doing most of our market is also breaking the report and we believe that this fresh outdoors and attached. It drives also soon be converted into orders and it's all small yes.
Speaker Change: Well no I didn't know about it this way.
Speaker Change: Good and then go take a general north out of Honey incentive food outside costs should go down limiting it yeah, a single woman Guy total financing, it's been downhill against Saddam Hussein.
Speaker Change: Don't want to get a little older Universal clean no hidden inside Tonight, you can talk about each of them, but for now they change even went against the formula to go put sort to say all my point is that I mean, that's all that it did not.
Speaker Change: But on the Permian you got time to your questions.
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Speaker Change: Five out of the toilet membership to the combo, but without as it shows what he or she can do to help them.
Speaker Change: So she has her life she was a woman, but it wasn't that big of a single Sunday chicken tender it sound easier to sort of hot or minimum wage.
Speaker Change: It's a little adult to change those things.
Speaker Change: Uh huh.
Speaker Change: This was possible.
Speaker Change: So you either so yes, a lot of them together, it's a good fit I always want you to take a.
Speaker Change: So just so I mentioned that you thought the chewed that without a sell down. So she has a total of six tons either way like it isn't a shout out.
Speaker Change: I mean kind of outstandings of some competitor side yet.
Speaker Change: Because it's.
Speaker Change: It's easy to eat.
Speaker Change: And the forest, where things regarding the power swap station availability for the envoy users as in the past several months, where it's been.
Speaker Change: We've been making more progress at some modifications on the power swap stations to make sure that they are compatible with the onboard product and also providing more batteries for the swap stations are now more than 1500 power swap stations in China are available for uncle users and also at the early stage of the product.
Speaker Change: The launch we had the short supply of batteries in that case, there was only one battery for the available power swap station, it's not enough for the user experience the full power swap service, but now were supplying more batteries, where the Tao restaurant in that case the experience for the power swap among all those users are also improve.
Speaker Change: And also enhancing it better work for mouse for the brand and also in many regions, where we see more power swap stations available for our users. We also see actually more self volume.
The envelope products together with our power up County initiative, we believe that with more of our restaurants stations available in the lower tier cities. This will also help improve the penetration rate of envelope in those lower tier cities and very interesting number to share with you is that in actually in tav reagents in China, they're still small.
Speaker Change: Oh, well has already also remember the volume off Neil. This is also a good effect when we talk of our dual brand synergy and and also strategy no. We didn't see the figure the sell down to two things on that.
Speaker Change: So those are you sure you spoke with him and Oh comedies, you Fool me and reaching millions Oh no way they wouldn't even talk about that.
Speaker Change: Pendulum, Italian, but that's the fun stuff.
Speaker Change: I'm doesn't want me, a kind of a little bit so that'll duty, how does kobe sort of plays out.
Speaker Change: I'll call it social them away like the.
Speaker Change: You will see you later to the new format.
Speaker Change: So you called it since I've been at all that stuff.
Speaker Change: I'll take all of your questions.
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Speaker Change: So it's contagious.
Speaker Change: Okay, Okay got that.
Speaker Change: The season, So you said you're on Macondo.
Speaker Change: So that's the situation was Samson.
Speaker Change: Well, let him pay assuming too because it's all the shows little fool on Lauder senior put it sounds or michelle's world and do that to you, but it's so I have found in Clinton Thunder team put a boot shoes I'll do it in the shower gel and then go choose are so important.
But it won't be all.
Speaker Change: And also another compounding factor is that our rents in a soft volume is majorly affected by the fierce competition as well as the noxious public opinion on the brand and also.
Speaker Change: P. R attacks that has affected our volume by around 30% to 40%, but still even Augusta is this a difficult environment, we still see a very high user satisfaction on the product our 16th actually 60 has the highest product gives a satisfaction among all the products launched by the new.
Speaker Change: The company and we also see a pretty good run rate on the six T. This test gives us confidence on the product going forward as we pick up the speed with our owners and also a task to drive as we further enhanced our brand awareness and expanding our self service not to work growing our.
Speaker Change: Team and their maturity level and also enhance the coverage and the availability of the power swap stations for the envoy users. We believe that the south all of them 60 will pick up and also for few of our expectations and showed excuses I mean shouldn't you kind of hit them, but they've got a good meal to hospitals.
Speaker Change: No woman, that's dampened some of them, but there's still a whole lot of fun.
Speaker Change: Then what was say a quantity. It's also time to tie all this stuff I mean, the sheer chew that down he said.
Speaker Change: Wasn't citizens.
Speaker Change: So for him because he said that they did but you know.
Speaker Change: No I'm just thinking that that's hung should.
Speaker Change: If you choose the quantities pandey well at home.
Speaker Change: Okay, Oh, that's a good Neil.
Speaker Change: Joseph would've gone for David you choose that unions and they said no.
Speaker Change: Subway is it before and some don't I sort of harden a little.
Speaker Change: It all has to play ball explicitly told either you could tell us a lot more.
Speaker Change: But Neil if somebody had previously you'd have to either social law school, but again.
Speaker Change: Some kind of a.
Speaker Change: That's a good trial hasn't even when I'm in China.
Speaker Change: Okay.
Speaker Change: Trisha I feel good about that topic, Oh boy, its just getting something.
Speaker Change: Interesting.
Speaker Change: And regarding your question on the efficiency improvement and also the senior just kind of leverage between two fronts actually in terms of the after a soft services power swap station and as well as the supporting functions such as finance human resources and some original functions that have been shared across two fronts.
Speaker Change: From the beginning and originally we are also making further adjustments in some regions for the supporting and management roles. We are also try to have one team to oversee both brands and we see some good effects by having one team overseeing two brands in terms of the south and it service management and it.
Speaker Change: Turns off the point up sells off envelope, what does not work off I'm well, we will keep it separated and independent of the new branch as there's two brands targeting different user groups and also our from defensive front settlement.
Speaker Change: EMEA, we shipped in April yet he said seafood lung adoption either cigarettes total condensate P. E. D. T. C. G D T cell and then go to somebody like a competitor or not.
Speaker Change: It will be at that kind of figure.
Speaker Change: A number of them to go check out to go so I'm going to say so teaching salaries yesterday.
Speaker Change: Originally we are also having some pilot programs, where we have the incentives and the policies to encourage they can try to encourage the south team to also sell the product from the other brands are we already see some results by building out the pilot program.
Speaker Change: Thank you Tim.
Speaker Change: Okay.
Speaker Change: Thank you. The next question is from bin Wang from Deutsche Bank. Please go ahead.
Speaker Change: What anyone's guess acquainted correct. If you do the money to Chi how do you do see them dropping so hold on but that took a Malaysian ringgit, Josh did you spend on Joshua.
Speaker Change: First question is about the guidance on our first quarter gross margin, including the vehicle gross margins overall gross margin. Meanwhile, you mentioned that you will see even in the.
Speaker Change: And then the full quarter. This year. So what's your assumption in terms of of course much ammonia.
Speaker Change: Eagle then Kelvin.
Speaker Change: One such entry nimble gotcha.
Speaker Change: So did you do in your home, let's say that you guys have now moved Archie for semi and my second question Scott.
Speaker Change: Previously you've gone out to you.
Speaker Change: 25, but it won't be a tougher year over year. After the first quarter could you provide opt it nobody's got it. Thank you.
Speaker Change: Yeah, well I mean, what do you think Molly are easy to do that you have anything to say you should do it yourself all the time.
Speaker Change: Josh on the well known we liked people pay their Jake time cannot she joined the Jacob Lulu, Yeah mailing Giga.
Speaker Change: Do you want to quit or you can chime in if we give them in Egypt with or without a pea in Panama.
Speaker Change: They see the Yodlee, a little Donna will come out with a with Atlas. So John that's a good the shutdown that you should leave them, where they would share how should we think that you see in that home take sometimes go from here.
Speaker Change: With all the while you're doing that you guys.
Speaker Change: So you don't feel I tell them that their shoes are.
Speaker Change: Do they think about even do that kind of woman with.
Speaker Change: Yeah, sure, where you always see alita. So it does when you got Kenya, and Don will be all good.
Speaker Change: So if you do the mobile age out in there.
Speaker Change: How's your younger women take a degree of me John but you can move you all know him I should Jimmy Choo say Ah we liked him pain that they send you go to a show and it goes without that Josh.
Speaker Change: Jonathan you come all you lose all the all one in Philadelphia just sure. They took them all you do.
Speaker Change: No.
Speaker Change: Yeah.
Speaker Change: Thank you for the question regarding your question on the vehicle margin normally Q1 is the off season in the south of the vehicle products and also in Q1 were in between generations for our five and six of Crs as they will soon be upgraded to the our model year 'twenty 'twenty five to clean up the inventories for.
Speaker Change: The existing generation. We are also under pressure regarding the vehicle margin for the new brand and in terms of our brand as William has mentioned the south pole for myself I'm a product didnt meet our expectation in this year, considering the amortizations and other factors. We are also under pressure and they are challenging.
Speaker Change: Asian, managing the envelope products and itself and it's a vehicle margin. So overall speaking the company's vehicle margin in Q1 will not be as good as you would expect it based on our margin performance in Q4 last year, but still our full year target is to achieve breakeven in Q.
Speaker Change: Before I in that case, we have also mapped out a roadmap of our product margin for the new plant. We would have liked to achieve a margin of equal margin north of 20% and for the outbound it won't be 15%.
Speaker Change: Turning to commodity the T shown Oh, well me it should shuja level, let me have a Google about you're going to have with me yeah sure. Its home junior fashion that she didn't know that you see there that you could see here.
Speaker Change: But if it comes off.
Speaker Change: He meant fewer show a man I'm going to go to.
Speaker Change: Oh Wow, good you're going to see why you shouldn't believe they can get them the twins.
Speaker Change: Wow.
Speaker Change: <unk> taken that you're dealing with that I wish you all the jamba.
Speaker Change: Yeah, It goes toward either.
Speaker Change: Yeah, Jacob adapting tie that Jake Oh, Wow, No woman Toyota Jaguar tuition vocal way life take Oh can I don't know if you should all gunshot in Portugal for jobs and tie that sounded hockey warm winter I'm. Good their junk either somebody not keep that I just showed it if somebody shot John E. G Bureau show them in church on the Joker.
And again I do see a KOL event you sure Yeah. It's all I think the pony type of Shadow AUM, which I'm glad that you go through June So should you see a called I think a chunk right now and it goes without saying that each one it sounds like you change though.
Speaker Change: No. It didn't why that woman Joanne Yeah, I know that you guys see yourselves Golar and Golar, Google G taken a vacation that junior Virginia are you you're jumping shotgun without a boy that's a good problem to routinely element so either U T. Joe.
Speaker Change: Yo drawn to that Jacob I shouldn't say.
I always seem to get a dish out and there's a window of time you wait.
Speaker Change: Sure JV seem cannot see a woman that either.
Speaker Change: But if you you could already see in Canada, J a C. D C something that we felt like Hawaii and Florida, that's how many tioga a.
Speaker Change: Does that sound like it's all you said theyre good chunky that he could tell John usual woman a constant up in Shanghai.
Speaker Change: But quality finishes as I'm doing it I wouldn't say a tenure and they're showing that yeah. Okay.
Speaker Change: Can you comment on them Lea County, Utah, you told that you said that you go to Asia, a synthetic somebody that I'm doing what are your football game or not.
Speaker Change: Good thing Dan I recall, Togo, sometimes goes up I mean, we're starting another war because I do think it will make sure that you guys congratulate Atlassian P. J.
Speaker Change: So you don't feel you sounded like you're pushing a woman a are they are senior and she just just yellow button that you got a problem with the jumbo Oh I'm seeing that say Oh, we're not just pushing them how would you feel like it's all that with me yeah, Yeah sure Youll, just a free trial and kick a T J and I think the Jamba moved off that whole sugar should fall.
Speaker Change: How long are you telling me how would you the truth.
Speaker Change: Okay.
Speaker Change: Regarding the actual actions that we have taken to control the cost and also improve the vehicle margin. There are several actions the first as.
Speaker Change: Is to increment and more systematic cost reduction initiatives.
Speaker Change: By making our products more platform based on the improving the commonalities across different products and also across brands. There are several examples for example, we have implemented a overall platform strategy for the seats now the products from the new brand and our grant share the same seat structure, where that's weird.
Speaker Change: April to reduce the total bom cost before the system by 10% in the second example is regarding the smart hardware, we have standardized it interfaces off and most of the smart hardware.
Speaker Change: The vehicles in that case, we can further reduce the costs on the cables and connectors.
Speaker Change: The piece price per vehicle is ink is reduced from 2000, RMB two only myself and the.
Speaker Change: The third example regarding the in house to round up the parts and also components as we've been making efforts and do it in house development in the past two to three years and we also see a very helpful cost reduction based knowledge over the past two years for example, each and I will soon be delivered with the next 1931 hour.
Speaker Change: Chip for the smart driving and this chip will also be available on the model year 'twenty five four to five and the six series product or a volume product in that case the piece price will be decreased by around 10000, RMB a comparator in comparison to the Fort Irwin solution and in addition to this cost.
Speaker Change: A reduction measures. We are also taking some systematic measures. For example, we have a very capable team doing cost management analysis, and engineering and starting 'twenty or 'twenty, three we have been enabling and empowering that team and now the team directly report to me for any quotation we're nominating prices.
Speaker Change: Passing siding.
Speaker Change: Surpassing the cost estimation without spy southern 0.5% such nomination decisions won't need to be escalated to two that you say level with a joint approval with all this measures taken together in 'twenty 'twenty four we managed to reduce our bom cost by 10% and we will continue such efforts in 2025, okay.
Speaker Change: Thiago Jake are teaching them I'll leave you to ensure that usually Churchill world they seem to come along with them and if you don't mind Junior Yoyo class intuition I'm sure actually mirror U S fish and yet you seem quite well Mcdonough you jump we saw this year a chunk of it in the Jacobs Shisha, Oh Joy out of Dubai, and China that should say a quick shambhu them in batches.
Speaker Change: I'm trying to say that you can buy a whole Dol rule did you call. It you actually met a way line that says how many of your clients. One bomber do they seem to have not had them all you're doing that.
Speaker Change: If you go chasing that don't go Theyre, saying theyre not too Todd do you do that we liked him either malibu's, yet Gee I wish you Freetown can't do with it how do you live without twisting that well know Julien wait Sue if I'm gonna Atlanta shot that when there are essentially two parents helpful. Since neither one of them, where you do sound quite sure Jay Yeah I'm fine.
Speaker Change: China, Yeah, you should say you got some do a oh jawi garboard either through the trees, yet you will give them a little at all of the Gigamon. Each you should know that that bothers you can truly see that you're here.
Speaker Change: Yeah. She was hanging in there so I'm sure that a we mentioned good Almaty T shown there.
Speaker Change: Oh, My God went down to somebody that you could push you a way a bunk room a woman she can't walk hunker down to take a chunk of that so do you do that her tenure and there you go through that she shouldn't make him an email.
Speaker Change: And does that kind of the major actions, where does that kind of a major contributor I'll say improve that equal margin will be contributed by the launch of our new models as mentioned by William This year, we're going to introduce and launch nine new models, including completely new models as well as the model year basically.
Speaker Change: Oh for the motor in your face lips are they will help improve the overall cost for this existing models and in terms of the new models in the second half of this year. The new brand is going to umbrella and introduced a major product whereas.
Speaker Change: Or where it's actually higher margin as well as more elevated brand and product positioning this will help improve the overall vehicle margin after new branch and therefore, the armour brands in Q2 are actually in April.
Speaker Change: Well I'll go there was that kind of Brent our Nike and it doesn't start to deliver those products in Q3 and in the meantime in Q4, I'm always going to introduce another product those products from the Amo brand targets higher margin and also a higher pressure second lines. This will also help improve the overall product.
Speaker Change: Margin for our brands, so together with the cost reduction actions that we've been taking as far as the margin increase is driven by the new products, we will gradually achieve our margin targets I in Q4 and also for the full year.
Speaker Change: Some of them will be O U S E T tool.
Speaker Change: Guage Union and so that will be all so that each of the women Cheetah citizens downside at this time to live with us in the Sun.
Speaker Change: This is for you tell me 10 years anyways, a shutdown fun fun soy woman yen to the Saudi automobile.
Speaker Change: Do you get to the two or does it get a showdown Vincent on the.
Speaker Change: The only unit, that's where you shouldn't have not well they took a charge into him Joe Joe Fool, you teach them and I'm not telling you to do well.
Speaker Change: Some of them have a joke that the.
Speaker Change: Schindler switching tofu assumption since her to show you wait sue them in children's and dollar you go say somebody got to meet them again, because I don't know how to do all sorts of little photo to show soda to the social that took a long look at social time do that.
Speaker Change: That's helpful above Okay, that's the middle East Houston, what Michelle said I need to do a lot with all the shutdown, we hope that it wouldn't be to.
Speaker Change: It doesn't seem that Oh I'm sorry.
Speaker Change: Sure.
Speaker Change: How does it show sort of 10 months ago. She said it well so that you used to tell me.
Speaker Change: And regarding your question on the South ballroom and the guidance for this year in Q1, our south guidance is to achieve a year over year growth of 36% to 43% so around a 40% year over year growth for that deliveries in Q1 and ask for the full year. Our target is still the same.
Speaker Change: Just to double the sales volume from last year and there are several drivers behind us. The first is the new car effect as we've mentioned that's a this year, we're going to have introduced nine new products under your brands. Starting next week, we're going to deliver each and I and with the launch and the delivery of this nine year models, we will see.
Speaker Change: Are you able to fill up our south volume for this year and the second key driver is to regarding the Emerald brand as we are improving the overall network South network and service network. Although he has seen the maturity level off the team and also strengthening its brand awareness. While also gradually here with better results even if.
Speaker Change: It didn't fulfill a that's all targets we set for Q1, yeah. We are confident in the continuous improvement in the armor brand, which media just the woman.
Speaker Change: Shouldn't that doesn't go cut adult took a one kilowatt Lauder Stangl walk Louis L. You debuted show down and that's what's in this for you.
Speaker Change: Goodbye.
Speaker Change: The Hot New York, I don't Wanna Upended, the todays show down.
Speaker Change: Since that hung San Jos just junk suite, so it sounds so Shanghai.
Speaker Change: A woman John Sweet and Susanna.
Speaker Change: Sure.
Speaker Change: They shouldn't do it but so let's I'm Mohan no woman say, a two day seminar, it's about a whole lot you guys to which they can take out so it doesn't change a bit to sit here and talk about trillium behind all this yet no opinion, well you'll are women seniors a so-so.
Speaker Change: I don't know if I'm here in my House.
Speaker Change: So if your Kid a standout there you know kind of the C. T. R O a whole eagle Sandy hook cool, let's say, if you knew him hows liquids, because you're teaching the giant in the foundation donated it to you know it's.
Speaker Change: As you know summit in New York City.
Speaker Change: Oh, I'm getting a handful in Kenya, but you'll have some <unk>.
Speaker Change: She does and then she she had to go find in the home.
Speaker Change: The woman Bush with their financing.
Speaker Change: I used to conduct 110 center, what Louis show you wouldn't need you, but since the fact, you've got about it since that you bought in fact due to some will be unclear down that you found she says that put on tier two that had a twist in the wind.
Speaker Change: Not shunyata woman south out of the unclear. The Putu you hope no I'll include the shutdowns and the Doctor will face on the ship to Oh go ahead and talk about China, I mean, it doesn't Oh Hubei Chilean didn't die that they will fund in St. Paul on the whole, they're treating the shutdown. It turns out you see I've got a tow boat.
Speaker Change: So ginger and say yeah to the close it off all done is it will show you well I mean, the way a single woman second daughter and sure are telling me you tennis showdown with high figure Oh, you already hit you you said Patterson will be Oh, so I felt good not send them out.
Speaker Change: So try not to do from a woman you'll find out that you would you take all of them. They are set up for me.
Speaker Change: Oh by the way life is a little thought it could be as you look at all has it been down Scott.
Speaker Change: And also for their comments on the key driver behind the South Ballroom is the network effects of our power swap network and we tried to not work in general you can look at the accumulator himself volume off the new brand and the distribution of the South actually hop off this fall in this country to test by the south in the younger.
Speaker Change: Or are we where are we up Florida Council called me and said we have already achieved a para IV County, flying which means that in every county in Jiangsu Province, There is at least one power substation and Florida, Georgia I'm programs. We aim to achieve also a county level coverage by end of the by end of this month.
Speaker Change: Except for two islands, where they will not have the power substation.
Speaker Change: And also for the power swap strategy in general as you May know our restaurant a strategic partnership with say T. All this will further help us to expand our rich AR in the country levels with our power swap facilities are in the first half of this year. Our however, soft patch work well cover the countries offer.
Speaker Change: More than 10 call necessity in China and by the end of this year accumulated be 20th further validation of our divisions will have power swap stations available at the country level and then not to work at Fox Office swap station well play a very unfortunate because we have already proved that last year, we doubled our offer.
Speaker Change: On the parcel networks in bigger promises like Hubei and alcohol premises and we already see some good results before the swap stations will merely available in big cities, but then we found that the country level coverage is more important in promoting the south and a four four.
Speaker Change: Well the softball gum in this two promises after we achieve the content level Congress. They are south one of them is far above the average and this year. We will continue such efforts to cover more countries and more promise, that's just not especially big promises like well not in Shandong and the Sichuan where that will help improve the overall market share and the market rich off not only then.
Speaker Change: And Youll brand, but also the AMA Brett is the better today, Neil especially.
Speaker Change: Especially the Umpqua Brad.
Speaker Change: Yeah.
Speaker Change: Hey, Joe.
Speaker Change: Thank you. The next question is from Paul Gong from UBS. Please go ahead.
Speaker Change: Uh huh.
Speaker Change: My question.
Speaker Change: Duffy.
Speaker Change: So Steven do you want me.
Speaker Change: Have you seen this season are you one of your peers so cool.
Speaker Change: He mentioned 149 times.
Speaker Change: So I.
Speaker Change: I guess as Hudson mentioned here.
Speaker Change: So remind us your latest thoughts on the eye.
Speaker Change: If he really extend shrunk.
Speaker Change: Yeah.
Speaker Change: Okay.
Speaker Change: Oh sure Joe Paul.
Speaker Change: We'll go to Neil like Cano Hot and a woman Chenzhou them is if you go outside.
Speaker Change: Hey, I had a companion nuomi our fitness. So you don't put away and now that know me you I mean shouldn't that even though the patient does that mean that most of them about women's city that you sort of Thomas Powell Quadriga, a woman casually yet decided wound it down he said that he said that know me to pick up my you do a good job with a can do it.
Speaker Change: It's really a good idea at all.
Speaker Change: No my assistant Han you didn't sway the freedom to go.
Speaker Change: The first time, you can be that you see out there is sort of how you go to the Soviet methods and she had gone into your face on the call.
Speaker Change: Without it but yeah down kind of a woman does take a.
Speaker Change: Shunyata them are far below the city of invoicing days, you'll find me tell them that.
Speaker Change: They didn't worry about I don't know 80 or so.
Speaker Change: No women. So you took a massive hit on to.
Speaker Change: What's the do you know you're kind of tied to them that you ship.
Speaker Change: I'll take a socal are both of those sound woman sorry to go to lunch in front of me Oh, what's sitting at T. I know you said in the proposal.
Speaker Change: Uh huh.
Speaker Change: So, let's see that Oh, I think Jose it's useful lead shoe called that our thoughts and good to go poke who are sick.
Speaker Change: Cleveland that H I, probably gets you to that number the town, so you're going to need more suddenly.
Speaker Change: That's okay, you caught that until a woman Doug let me say that this is a.
Speaker Change: We couldn't have done that well.
Speaker Change: We plan to say Neal that's a good place in the U S.
Speaker Change: But she has hurt us.
Speaker Change: Right for them to take a single neighborhood of quantum leap Solomon Saga, Lehman equal Husky's, most of which will decide.
Speaker Change: Well it sounds like a good one person you could send them to you know without getting to the point yeah.
Speaker Change: Yeah.
Speaker Change: Sometimes I like how you're clipping and good for them.
Speaker Change: So she doesn't make windows at colony yourself.
Speaker Change: So you typically meet with them into their season.
Speaker Change: We told them, it's out of that Oh, well, then shouldn't she doesn't wisely central time.
Speaker Change: Some of them into the premium will be all cause of agile.
Speaker Change: It's the only way to deal with it but we've got some new York capital itself lifestyle.
Speaker Change: If you are closer to 90 minutes, they usually it sounds good.
Speaker Change: Uh huh.
Speaker Change: So for me I'm used to that whether the Hollywood.
Speaker Change: Nozomi is yeah. Its usual gets hung up on day two countries with the sodium load Yale sits on top of those families yet.
Speaker Change: So I'm wondering if you are behind it.
Speaker Change: Thank you for the question regarding regarding the application of AI technologies newest are first a car company to introduce a a companion in the car. It's no me and its loved and well received by many users for Nuomi. It has its own language model capabilities Nobody G. P T, but on top of that it is.
Speaker Change: So supporting third party large language models with that satisfaction and also the interaction rates often know me is growing no me. It's also a quite profit, making I P. Whereas a lot of well I'll call. It our merchandize and also high take rate.
Speaker Change: In addition to the AI application I know me. We also have AI applied to two hour a smart driving technologies and experience as last year, we have introduced to the new working model in Dublin and the they just are a D version, what smart driving released won't be based on the new work model and actually I have to participate.
Speaker Change: It is internal beat her version try out and I can't say that I really look forward to that version. It has a quite good performance in terms of the active safety and in the experiments in general.
Speaker Change: And of course AI is a very important basic capabilities are in terms of agi in terms of robust in terms of the fundamental capabilities for AI, but all for the foreseeable future are for US we will mainly focus on our core business that is the automotive products and in that case and I will be.
Speaker Change: More of an enabler to achieve better product experience as well as better business and the management.
Speaker Change: Hey, I itself is one of our task force that capabilities and it is ever present in every aspect of our business and as many of you who are talking about how the automotive product is becoming an AI agent and I believe that the company itself is also turning into an AI agent, but still for the short term our primary focus.
Speaker Change: Our core business as well as our operating targets.
Speaker Change: I'd note here is that no capital has been invested in a lot of the AI companies, especially industrial leading AI companies I mean in that case, we're in close contact with our cutting edge technologies and also the outstanding founding team in that arena and in House. We also have a capable AI talent working on the relevant field.
Speaker Change: Thank you Paul.
Speaker Change: Oh, sorry, my second question.
Speaker Change: My second question is regarding the number of models I think so.
Speaker Change: So sometimes right now and awesome. This year, some new motto long sheets, so moving into some be cheese.
Speaker Change: Given the kind of transition.
Speaker Change: And those so once it appears that the midstream team so it loses isn't.
Speaker Change: One single model.
Speaker Change: The modem could still go chiefs shall we complete them to concentrate more.
Speaker Change: With some low cost models and so you eliminate some of the mis paciello mottos too to be Muslim course, what do you think is the most optimum number of modules for yourself.
Speaker Change: Yeah.
Speaker Change: Says hey, Paul are not though I think Oh Neil envelope.
Speaker Change: Plus some good competitors.
Speaker Change: Hello to all of them, especially Minnesota.
Speaker Change: Yes.
Speaker Change: Hustle inside at the shipping time, so that's a good had Hudson William Clancy, So Neil that's out on the on the well and then someone she was on that short pulse Saturday Sunday wouldn't deem that angle pushing disorder, I'm really homeless central and a partial oh needs and keep it on the wholesale guy. So if a business has a family.
Speaker Change: Oh, it's all about for me it doesn't take a we put vita switching wireless issues. So I don't really want me, saying that we are pushing you teach them. The tasteful are cheapest you can them full guy to go to a central and I'll pass it on to premium.
Speaker Change: No you made the appointment of to go sit on a hunter.
Speaker Change: Sure Bob.
Speaker Change: So he does schuh children. So you can go on with the kind of hot BMW.
Speaker Change: Mercedes has done that yet.
Speaker Change: The claim in the brand at the time and she said she was part of that solution.
Speaker Change: So I sort of pushing it doesn't fit the Hungary ship could yeah happy Oh, what is causing a lot of them you'll see that your tissue children. So that all of these are telling me until they are what mcquay our fifth.
Speaker Change: Queens is pushing the saudia.
Speaker Change: Okay. That's helpful. It sounds like some sort of identify it seems like Oh.
Speaker Change: No I mean.
Speaker Change: Sometimes.
Speaker Change: Tons of tuition Moshe pool play Ah think that Tidewater.
Speaker Change: It does.
Speaker Change: The other way to pushing the slowdown like homes without equal a hoodie right away.
Speaker Change: Uh huh.
Speaker Change: I'm with you.
Speaker Change: They are your classic when it's all you.
Speaker Change: I was on the shelf for a touchy feely type of classes.
Speaker Change: Oh, no sorry, that's all of them from two days to put it so overall I see on the.
Speaker Change: Women to take a person lasorda and Cui Cui global.
Speaker Change: No.
Speaker Change: Pushing homeaway.
Speaker Change: <unk>, who had a tumor but couldn't get Uh huh.
Speaker Change: I'll tell you the person for that.
Speaker Change: Yeah.
Speaker Change: Thank you for the question as we now have three brands and the Firefly, our overall product strategy and portfolio for this three brands, while also being quite different as it is also dependent on their respective second month and also brand positioning for the new brands, we will basically keep the existing lineup spanning four.
Speaker Change: 300000, RMB all the way to 800000, RMB and each wall covering for me for family and four business segments with each and I are being delivered we are completing this Brian.
Speaker Change: Brian This price coverage from their Hunter. So then all the way through 800000, a press settlements in the premium market and for the premium market, you're starting to see actually occur more on the personalization and also the unique identity. After the vehicle products. If you look at other premium brands like BMW and Mercedes to actually offer.
Speaker Change: What are your safety products.
Speaker Change: Their lineup. So this but this segment users care more about the differentiation and also the personality offer their products as well.
Speaker Change: We're the only brand we won't be more careful with the number of our products in the lineup. This year, we're going to introduce two new products under the our brands together with our 60 there'll be three products in our lineup by end of this year and we will not drastically increase where it expands the existing portfolio, but to control that waiting a reasonable range.
Speaker Change: As for the Firefly brand it is a high and a small car brands in that case, it's not necessary to really offer so many different products. So our overall strategy is to have a differentiated product portfolio and lineup for different brands, but overall, maintaining a rather stable and reasonable product lineup across the strip price.
Speaker Change: Well each model there will be also emphasize the highlights and also targeted user groups.
Speaker Change: Yeah.
Speaker Change: Thank you.
Quinn Dings: Thank you. The next question is from me Quinn Dings from HSBC. Please go ahead.
Uh huh.
Quinn Dings: You can't go and he Steve always hunting, John J, Gosh Indians, who pay I'm going on a fun quite a whole woman.
Quinn Dings: Uh huh.
Speaker Change: I'm thinking I'm still here that says I'm not a ruble woman.
Speaker Change: Yeah, I'd take a bullet on the hot now going out, but yet you said that you're seeing a whole new way of going out and kind of all kind of it's a shotgun silicon until they know who's been shopping easier not posting a question from me and I kind of goes to a wholesale change.
Speaker Change: The first question is about the cash cash position supply chain perspective, I'm against that and also potential financing. So if we see all of that cash position above 25 billion budge out given the volatility between quarters.
Speaker Change: Coming from a more conservative perspective in the house and staying with that would that require additional financing.
Speaker Change: Well he can we have a little bit more clarification on that juggling T sounds from what I've seen since without a genius Oh Gee are hot just yet because they give me such that that you know goggles that jumped off on that one although quite tell him I shouldn't that she should Oh my goodness, that's all I'll say.
Speaker Change: You Sound company Cross leverage is that I hold back out of just that sounds sounds just that my second question is about the Capex guidance can we see a little bit of a breakdown into a refresh that capex guidance. This year, we've talked about the amendment into swept them network, but it seems to be a sign of the collaboration was kind of what kind of 11th I'm ashamed to do so.
Speaker Change: Capex building can we expect that type of Capex to taper off that's yeah. Thank you.
Speaker Change: Oh, there is a ego and Tina Fisher, our CMT nurturing it goes to the Sydney Fabaceous retrofit E.
Ah the tissue to you know darn good a shallow oh, that's a good G. And then what do you want me to do besides yeah. So do you mean, no clue, usually with food Oh, Yeah, Oh Man Duncan Yeah, No woman Sushi Dona <unk>. So would you argue that the social yeah.
Speaker Change: No actually we've seen changes how long does it cause you know you can't give me when I'm go.
Speaker Change: It's off to the Guy who shot.
Speaker Change: They are coming out with me if you don't you say a easy location, it's all high blood sugar children's edging down as you go towards or now that you can tell.
Speaker Change: In China, you would argue that barbell carriage yeah.
Speaker Change: Well no I sure. Its when do you actually went on last year with Yorkshire, and shouldn't that your body. They shouldn't you ship all of them and they take a shame, let's sit down and go to show them how are they doing here with the fungi.
Speaker Change: Why don't you take.
Speaker Change: Our rooms, and that's usually a woman who I'm sure Jay maybe I should call I figured maybe you should call them, but why should it go and kind of how do you think I'm glad that you're telling them when when everyone's it should all how's it would be awesome for the chewed them. So there's usually one of them who's going to do go coincident. There you will find out that you can call out a tissue that you've gone to a gym good Uh huh.
Speaker Change: Oh choose.
Speaker Change: What did you empower women that you got to get them to the I think that's the best you're telling the truth.
Speaker Change: Uh huh.
Speaker Change: Yeah.
Speaker Change: Thank you for the question regarding your first question on the cash reserves by the end of 'twenty 'twenty four our cash position was 49.1 billion RMB and in Q1 as we see the decrease in the south volume quarter over quarter, we did experienced a operating cash outflow yet as we have introduced.
Speaker Change: Is that this year will be a pivotal year for our product launch as we witness the rebound starting in Q2, we will also see major improvement in the operating cash flow and also as we have previously introduced starting Q1. This year. We have conducted a series of adjustments and also streamlining activities. This will also.
Speaker Change: Locked it in our performance financial performance, starting Q2 overall speaking, we will be prudent with our cash flow management to make sure that our resources kind of sustained our continuous growth and development and we're going to use that kind of question on the fundraising we have various options.
Speaker Change: We have a variety of fundraising channels for the capital market for the last capital markets arm B capital market public or private we won't be planning, our fone racing requirements and activities. According to the operations of the company as well as the changes in the market.
Speaker Change: Okay go ahead yoga cutbacks the win T.
Speaker Change: Are they are wound yeah, not only woman tenet and show them. The time can be triggered Tania do you want me to say, it's all one time team that's how they think they're going to on a mortgage yeah, well I guess I'm trying to show a shoe with a drug with a torture, you'll see there Josh on the woman's day, hopefully that you'll get these ongoing challenges.
Speaker Change: You can see this whole time, you all are talking and see a junior that'd be a good chunk of the Capex budget agreement that you guys would be or they are seeing it in a way some guys here. They are dying woman waiting she had the corner you can't go chunky, that's your door to Jojo or gone down I think the same thing that corner true true true.
Speaker Change: While at home and that is a shame that you guys should go.
Speaker Change: Why do you think of a sudden boiler chiller Congo, and anti though Jake are finding an agenda, particularly it's amazing how did you choose home junior and Kashi well meant that I find in China that you want to answer it sounds like you haven't done as usual the team down there nice yet hormone that's awful, but as you can see that woman junior truthfully.
Speaker Change: That cohort that you wont see that junior debt covenants you have limits you haven't got a woman.
Speaker Change: A quick one I should she won't move unless they go hand in hand, it's yes, yes, I see you call well now that's all we're buying as you could see I see one day and time that you could see I shouldn't have been food wage I don't want to pay for the Capex side.
Speaker Change: Yes.
Speaker Change: And regarding the question on the Capex as we have mentioned that this year, we will launch a major product in that case, we have made that that capex spending in the tooling and also the production production equipment together with our supply chain partners and in the meantime as.
Speaker Change: We are launching new products. Our third factory is also going to be put in operation depending on the well production plan. So over our Capex. This year will be higher than last year, but still we will have a very prudent measure and the manner in managing our investment pacing and also our cash position to make.
Speaker Change: Sure that we have very good control over our spending in terms of the capex for the power swap station starting last year in terms of the power swap network expansion. We have our greatest started to adopt one principle that is to leverage the resources of our partners as much as possible as last year we.
Speaker Change: And now the power.
Speaker Change: We are waiting by the partners to try and keep the swap stations under the network for that Howard County plant. This year most of the stations will actually be sponsored where b, which by our partners and find ourselves in that case the topics of utilization what the power Substations will also be relatively limited.
Speaker Change: Okay.
Speaker Change: Thank you Jim.
Speaker Change: Yeah.
Speaker Change: Okay.
Speaker Change: Thank you. The next question is from Ming sung Lee from Bank of America. Please go ahead.
Speaker Change: Oh William Oh.
Speaker Change: Oh No England.
Speaker Change: England.
Speaker Change: So first question is yes.
Speaker Change: Regarding <unk>.
Speaker Change: Thomas driving a technology a plan when do you plan to roll out.
Speaker Change: Our motto.
Speaker Change: In the future.
Speaker Change: Do you consider to use the sword chips are in your car or you will use your.
Speaker Change: Synergy chips Oh fewer.
Speaker Change: Neil branded model.
Speaker Change: That's my first question.
Speaker Change: Yeah, So Jamie no woman, so Susana Thunder Thunder Kishore maturing until you didn't say to go towards that and shame on me and I mean he NOLA.
Speaker Change: One woman. They also consume to trigger you want to go to you sort of took a you shouldn't you shouldn't be Oh no. Please send out I'm sure.
Speaker Change: I think it's useful I mean, she has a kind of a tattooed took.
Speaker Change: Our to go and send it to the tune them that Houston is that true and then kind of made its always something that happens.
Speaker Change:
Speaker Change: So if you go to the gym pool.
Speaker Change: Well no that's I'm sure that the Oh.
Oh, no I'm kidding.
Speaker Change: He put no. Besides kidney cases go Shockwave more does it appears somewhat I see that when we tell them that we'll be able to see that now and then go to then go down.
Speaker Change: I'm going to pay us about wanting to go to 70.
Speaker Change: With insulin Vega, which is the one where you could see.
Speaker Change: Our women's home to the <unk> to cope with a lot more of the person.
Neil: We'll go to Neil.
Neil: So if I look at Chinchillas, so CDR so clear.
Neil: I mean, that's the guts himself he goes cengage or anything else.
Neil: And I don't know.
Neil: Uh Huh, Oh, I'm quite a bit.
Neil: They'll do so as well.
Neil: Could you go to the some kid, who should a person Neil decision the way you'll notice that that's what gets you to them Oh hold off on a woman would send us the only because all of them are not.
Neil: Hum.
Neil: They do and we can move them in Florida.
Neil: Could you answer those questions.
Neil: Thank you for the question actually last year, we have already implemented the end to end solutions to our active safety features as different companies may have a different priority work force ranking on the technology application center for us where it will be about 15 matters. The most and that's why we have implemented.
Neil: The end to end model firstly in our active safety features and we need to see major.
Neil: Improvement regarding the safety level week over week by 40%. So it is playing a very important role in providing a C for a trip for our users and it comes off the end to end solution based our navigator and pilot a plus for the city routes. We have also started small scale testing and internal testing and we plan to release that to our <unk>.
Neil: Users by the end of April after us yourself of preparations and also approval vacations and regarding the use of the chip for a smart driving each and I is going to premier our in house developed chip for the for the smart driving it just made with advanced manufacturing processes.
Neil: The next night, he 31 and after each of our 2025 model year. So five and six of Sirius will also be launched and equipped to match. The in house developed chip for the smart driving so all the future new models will be equipped with this in house chip ask whether I'm a brand currently it just using the arena.
Neil: <unk> chip for the smart driving functionalities and he does not have planned to use the store.
Neil: Okay.
Neil: Thank you my next question.
Guarding.
Speaker Change: The old pegs, because in the past few quarters. We continue to see are you of course margin.
Neil: Continues to improve from Q on Q.
Neil: But oh for the operating expense do you have the latest guidance in a new plant for example in the past that we didn't mention that to stabilize the idea will be RMB 13 billion.
Neil: As of year end.
Neil: Could you keep them any new updates from December and also for the sales and marketing expense do you have any tuncay ratio Oh, thanks ratio for these number thank you.
Neil: Yeah.
Neil: Uh huh.
Neil: Going OPEC theoretically.
Neil: So I feel a woman a genius to my shot you how should we wage or say, maybe Q2 non-GAAP for the whole room with actually even be shown that you can see here, though I don't know women senior your way a yoga whatever ghansham to take <unk> future.
Neil: Future that women are halfway of true she's dealt that it's the goldfields before you bought it I think it's I'm sure Youll problem, and then you're going to be soundly Ocean ship all of them and did you say, you and possibly even a little powder, Oh, gosh arterial cingal to do to try and cool.
Speaker Change: Thank you for the question regarding Opex in terms of the R&D funding and expenses for this year, we will continue.
Speaker Change: To have the same intensity level for the R&D expenses around 3 billion RMB every quarter on a non-GAAP basis of course as mentioned by William This year, we have rolled out to the CPU my kind of them, where we emphasize more on the projects with high returns and also high yield in that case, we will also optimize our contract initiation and approval process.
Speaker Change: So make sure that all right R&D expenses are a reasonable and also efficient.
Speaker Change: S J E T doing the Cheshire shoe, which over time draws you in any way you can do the show now Oh sure junkie that'd be a good time.
Speaker Change: Sell out and it sounds like these are D. C junkie, social feeling particular, Greenville, Charlotte sound, either just real quick took a BD. We go eat in a they are gonna Juju are you a little dog.
Speaker Change: So I'm glad you go quick I'll say, a Q U I should say our team John of course went downhill to either buy it a little dog a social S journey, the feeling that we found during the you always saw it doesn't count.
Speaker Change: You know, we're making a tad sure that you've got all sorts with Asia quantity, that's almost all which you got to take the social with her himself Zynga woman. So you can't social arena and that you'll agree more oh.
Speaker Change: Oh, something by the junk foods, you know what you how you see that plenty of tissue that you know, it's all the easier or being like inkjet. If you broke which is how the element that you know that your car T. C. D man, she social woman Firefly that'd be the Chongqing. So it was it just you know the way that our to go cashless you sent out the barbell shop, that's unlucky that yoga social.
Speaker Change: S J the chat social showed the BDA. So you know when we shut down and it doesn't cost you saw them. Then since you do she said you know what can they do go mobile Ah So yana can easily shopping Uh huh.
Speaker Change: Yeah, that's yeah, that's something that chunky How's your query you had bothered to show cause Michelle do you know what so you don't want me shut down in the future you saw a bunch of good and yourself and you saw that take the so you shouldn't look at what you can do with it.
Speaker Change: And regarding the SG&A expenses, we did have a bigger challenges to manage in the first quarter of this year as Q1 is normally the off peak season for the south the overall volume in Q1 is not so high in that case, the SG&A expenses account for a bigger part in two of the south.
Speaker Change: Revenue and also in the coming in this quarter, we are still building up and expanding this all set in service not work as well as growing the sales force capabilities for the envelope and Nutcase uncle SG&A expenses is also higher but as we have introduced we are going to take a series of actions to improve the efficiency and the product.
Speaker Change: Timothy after teams and also to streamline the non frontline staff functions to consolidate some of this all functions between the new and our brands and also to leverage news network for the South also Firefly with all those actions take hold we expect that the better results to be reflected in our financial.
Speaker Change: In the coming quarters, as we grow our soft volume and also gradually achieve the breakeven target. In Q4, you will also see SG&A accounting for smaller portions to the south revenue and with that you will see also that in fact reflected by the improvement in both volume and also in the efficiency of people.
Speaker Change: Yes.
Speaker Change: Susan why didn't she she's spending that's all my questions.
Jin Chang: Thank you. The next question is from Jin Chang from C. I C. C. Please go ahead.
Speaker Change: Yeah.
Jin Chang: Oh gosh, if I can get all that you wouldnt.
Jin Chang: Now what do you think you can get with equal shelter when cheeks or two sure Oh, well Mark I know you do a junkie. So close she thought she'd hotshots, you actually with them already torrential amount. That's all about G. D novel Goldman Sachs. He tried to how you're getting there.
Jin Chang: So I have full funding for such but can't quite tricky.
Jin Chang: What's your kind of harping on the Pennsylvania, John Hele Indian tourists were down there she doesn't yeah, well, maybe we keep high pool furniture other selfish commodity the crazy to pushed out so they don't need groups.
Speaker Change: So my question is regarding to the others house other revenues and we can see that in the fourth cochair of the gross profit margin of other shows.
Jin Chang: Alrighty.
Jin Chang: <unk> talked to tape out in which to 1.1%. So could you. Please break down the reasons for this.
Jin Chang: Yeah.
Jin Chang: Oh great.
Jin Chang: With took a Maltese from Oh I'm not sure how you won that.
Jin Chang: With all Yogi before you're going to show them. The Shaw, who you are going to show them the dividend.
Jin Chang: He's not going to show them that just before you do that kind of I'm sure. What does it consolidates two shafts that should get you something that I think a number yet for now anyway, when I pointed out.
Jin Chang: How should that AR with them their social how did they talked to them.
Speaker Change: Carnival cruise line that I met with actual J C. Do you do the Jake elite Oh, how should your lights of your woman to where she's going to take a tissue, Florida shall not women do you women, they're going down because of a whole by what he said when he found that young once you go into this year, but women. They took a T shirt that says you're going to do that to Colombia.
Speaker Change: I mean, we've now taken that how you we should see the woman some with the Joe Chi Chi Oh sure Bush of Freetown routine to do without woman that Jonathan you can have a barbell. So you know that just highlight the cause is easily man, though where he was like you said that's accomplishing them a regular told me the RDR Williams, who the child well I saw that.
Speaker Change: So you don't blow down the T shown for Michelle whole foods I showed you how should we choose to use them.
Speaker Change: Funded out of Queensland anyway Danielle.
Speaker Change: But how should I talk to him.
Speaker Change: So you mean told shampoo judo Christian a way a wait and see so many lives when they're already or when you're in Chicago.
Speaker Change: The ruble colleague Jacob tissue for different kind of ask a question you can we can quit is on that.
Speaker Change: Is your food and Staples and C J.
Father Zynga.
Speaker Change: How did you go see a U shape, because I thought that you can garner with you and with that I don't know that we should be a positive future.
Speaker Change: Thank you for the question regarding the gross margin of other yourself. It mainly consist of three things the revenues from the op Trusthouse services revenues from the power of services and also revenues from the technical service that we provide to their supply chain partners and also to affiliated parties and in Q.
Four we have a positive margin other cells, it's mainly because we have been continuously improving the efficiency of the opt yourself services of course in terms of the power swap or the power service in general actually we are still making advanced deployment of the facilities and infrastructure and networks.
Speaker Change: The loss is actually not significantly narrowed from the power perspective and for the for the other cells to be whereas positive gross margin in Q4 of last year, it's mainly because of the revenues are from our AR technology services provided to our partners and also the affiliated parties it's around 200.
Speaker Change: And the 20 million RMB in Q4 last year, Yeah, such revenues are more project based and also its randomized to the cadence and the progress after services the pullback to them Nutcase there won't be a in the future. There won't be also similar revenues, but it will not be a recurring regular revenues are from that perspective.
Speaker Change: In 'twenty to 'twenty five as we continue to increase our vehicle population. We also foresee continuous increase in the efficiency of our after sale services as without power networks. As we are still making a domestic deployment off the power swap stations, we will skew in contrast light lossmaking, whereas the combined margin.
Speaker Change: After after a soft services and the power services, if we exclude the technical services in terms of the technical services. If a week can make a major deal with where if we can make major progress probably there won't be some good news.
Speaker Change: Cool.
Speaker Change: Oh.
Speaker Change: Thank you.
Speaker Change: Thank you. The next question is from Tina how from Goldman Sachs. Please go ahead.
Speaker Change: Oh, Thanks punishment for taking my question. So I have a quick one just regarding our longer term longer term outlooks say by 'twenty 30, do we still maintain our previous I think oh and the margin outlook and could you. Please remind us of your revenue scale I'm sorry yours.
Speaker Change: It's not even a scale target as well as your maybe overall gross margin as well as operating margin. Thank you.
Speaker Change: Okay.
Speaker Change: Finn woman, that's a big Oh, Lucien Union City too Big a bingo you can be the Luzon pencil you go with that one time until that is done in the hot chances are somehow evade. It then go home eating a clue that she thought.
Speaker Change: Paul.
Speaker Change: You got you got you didn't die someday there you go.
Speaker Change: And to me, though on the Samsung slowed down a lot so without a doubt about why now you sound like way more than goes without a Somali abuse patterns would shoot up all that to me the news you're not supposed to cheat you could negotiate opinion you could she had put us about E vehicles today, you've got moved out.
Speaker Change: So you thought that was there so the woman sometimes it had done some union social someone that you could see.
Speaker Change: I'm sure that you got to you, but if you could.
Speaker Change: Oh yeah.
Speaker Change: Yeah.
Speaker Change: That's right now the company is striving to be breaking even in Q4. This year are we if we sat for a longer term outlook for the future. We believe that for the smart EV companies, where for the automotive industry in general to maintain a relative comp relative competitive ACH Amanda competitions.
Speaker Change: Eight annual volume off of 2 million units, whereas 20% gross margin set onto the 8% that margin that it will be a baseline for the for a smart E B company to survive for the longer term.
Speaker Change: Yeah.
Speaker Change: Thank you Tina and thank you for that.
Speaker Change: Yes.
Speaker Change: Thank you as there are no further questions now I'd like to turn the call back over to the company for closing remarks.
Speaker Change: Thank you so much for joining us today. If you have further questions. Please feel free to contact IR team through the contact information on our website. This concludes the conference call. You may now disconnect. The night. Thank you.
Speaker Change: Okay.
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