Q1 2025 XPeng Inc Earnings Call

Hello, Ladies and gentlemen, thank you for standing by for the first quarter of 2025 earnings conference call back spending.

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.

Mr. Aleksey: I will now turn the call over to your host Mr. Aleksey <unk> head of Investor Relations and capital markets and the company. Please go ahead Alex.

Yeah.

Mr. Aleksey: Thank you Hello, everyone and welcome to excellent first quarter of 2025 earnings Conference call, our financial and operating results were issued via Newswire services earlier today and available online you can also viewed earnings press release by visiting the IR section of our website at IR at <unk> Dot com.

Speaker Change: But it depends on today's call from <unk> management will include our co founder Chairman and CEO, Mr. Hersh I'll call them.

Speaker Change: The Vice Chairman and President Dr. Bryan Koop.

Speaker Change: This president of corporate finance and the type of projects with a child Chung Vice President of Finance and accounting, Mr. James Hu and myself management 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 our website.

Speaker Change: Am I off before we continue.

Speaker Change: 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 Act like a nice five forward looking statements involve inherent risks and uncertainties.

Speaker Change: As such the company's results may be materially different from views expressed today. So I think it's an issue regarding these and other risks and uncertainties.

Speaker Change: Included in the relevant public filings of the company as filed with the U S Securities and Exchange Commission.

Speaker Change: Company does not assume any obligation to update any forward looking statements, except as required under applicable law. Please also note that ex post earnings press release and this conference call will include a discussion of.

Speaker Change: GAAP financial measures as well as audited non-GAAP financial measures excellent earnings press release contains a reconciliation of non.

Speaker Change: non-GAAP measures Tuesday August it's got some measures I would now turn the call over to our co founder Chairman and CEO go ahead.

Speaker Change: Okay.

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Speaker Change: Hi, Chris.

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Speaker Change: Hello, everyone. The first quarter of 2025 March a promising sorry, Frac site as the company has successfully navigated the traditional off season in the automotive market.

Speaker Change: Q1 deliveries totaled 94008 unit, marking a 331% year it'll be our increase and establishing a new historical record quarterly delivery, we secured the top position itself among emerging E V brands, both domestically and internationally.

Speaker Change: During this quarter all vehicle gross margin has improved for seven consecutive quarters propelling the company's overall gross margin to a record high of 15, 6% in Q1, 2025 net loss narrowing significantly compared to the previous quarter free cash flow exceeded 3 billion RMB in Q1.

Speaker Change: Yeah.

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Speaker Change: Each of those airports, where it used to be able to ship what I was looking at the woman central to champion Michelle and she said she shouldn't change since you bought them.

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Speaker Change: She went to that so what I'm gonna towards Angel.

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Speaker Change: And we'll watch as you followed I know what you don't want to see it shortly.

Speaker Change: Sure Yeah, Jeff will talk about you know what.

Speaker Change: So that was it wasn't a good idea Joe Pesci, Sharon D. C pulse is that somewhat.

Speaker Change: Many are curious about our impressive performance in Q1, I believe it stems from Max thanks to stomach.

Speaker Change: And across all the liabilities in organization product development marketing technology and operations, along with a consistent commitment to AI, driven tech innovation and steady and long term sustainable growth.

Speaker Change: Zero three introduced eight months ago has surpassed 100000 deliveries occurring its place as the best selling eight class pure electric sedan. The P. Seven plus achieved its 50000 its unit production just five months after its launch.

Speaker Change: And the 2025 E N G. Nine models delivered over 7500 units in total in their April debut.

Speaker Change: Our monthly deliveries have exceeded 30000 units for six consecutive months.

Speaker Change: Oh, Hey, guys.

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Speaker Change: Okay. That's helpful.

Tony: Hi, Tony.

Tony: So it's a gesture she that credentials how 20th Shymkent She says.

Tony: So to answer today.

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Tony: When a country totally they actually don't judge us as much.

Tony: Some of the attrition in the deal.

Tony: Well I'm kind of dual coding don't treat up to Washington.

Tony: So it all with Shaanxi shelf whole chengguan slingshot, eight either chimere trenching person she doesn't towards him.

Tony: No more children.

Tony: Pete.

Tony: Yes, well, Michelle Sheehan with pneumonia.

Tony: She says that should've been chin.

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Tony: Shovel cheese chocolate Fudge young women don't Santal Cingal Tricia.

Tony: Tongue in cheek, let's say to go ahead.

Tony: I'm most excited by the fact that our growth potential is just starting to emerge where spearheading integrated innovations powered by AI in various fields, including AI Chelsea are doing AI assisted driving smart cabin drink chip touch it and bodies intelligent robots and enterprise productivity tools.

Tony: In Q2, we achieved significant progress in several areas reinforcing our conviction that ex banks comprehensive transformation toward AI, that's begun to achieve initial success across the full technology stack.

Tony: Some of our key AI capabilities are poised to create generational leadership within the industry in 2026, I'm confident that through the extensive application of all physical World Foundation model entering chips N vehicles, the global deployment of AI powered vehicles and related policies, along with the innovative advancement of <unk>.

Speaker Change: Irobot ex Tac will be sweet girls cramps, and attain sustainable long term high growth.

Speaker Change: So Michelle I'll not wishing for a chance to ask yourself.

Speaker Change: Hi, This is actually a bunch of these are just a cogent pinch on italia towards function.

These changes with them okay.

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Speaker Change: Well Shawn this is unborn child that pulls you actually do that.

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Speaker Change: Richie tangential creep towards your jungle shelter, there's not a whole lot for young children.

Speaker Change: I'm sure you'll be all told.

Josh: This is Josh.

Speaker Change: It still wasn't she's.

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Speaker Change: Hello, a cultural champion suggests a good chat suggest that CIT silhouettes, such as that what is that you and the children.

Speaker Change: I spent has actively embraced a strategy often monetizing technology aimed at reducing barriers to advanced technology through innovative R&D and crossing products that have resonated with users.

Speaker Change: That makes a premium technology accessible to all on May 20, we will launch the Mona MCU, mostly Max the full performance edition will debut during AI assisted driving it'd be 150000, RMB price sector for the first time.

Speaker Change: Innovation enables tech savvy young consumers to experience top your intelligence features once exclusive to luxury vehicles without compromise.

Speaker Change: Safe and moved to AI assisted driving this launch represents a pivotal moment for AI marketing station with the automotive sector shaking up the current landscape, whereas smart urban driving in highway driving he is limited to high end models at premium price points, and Jokey thing Chinese automakers groundbreaking innovations in physical world AI.

Speaker Change: Yeah, well I mean, it's G G, hi, gentlemen, Jamie well chassis.

Speaker Change: <unk> was up to one GB SUV.

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Speaker Change: Essentially the woman I jumped visual sense once you've made a whole walking those jumbo is it changing your doesn't change that.

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Speaker Change: Harsh yet you've shown us well show Jamie Clement Holmes told you in the faithful quite volatile shovel.

Speaker Change: Hello, Hi, Washington, Chewed Austin.

Speaker Change: Coaching you Wonder woman.

Speaker Change: Well the short answer.

Speaker Change: In June did <unk> seven will make its debut to the public and I'm confident that he will stand out as a highly competitive new product in that.

Speaker Change: 250000, RMB class SUV market in Q3, well launch the new generation P. Seven eight luxury sports Coupe in the 300000 RMB segment in Q4, our Quinn hung Super Electric models will gradually begin mass production will I think be one vehicles you added your options approach like one Paul.

Speaker Change: Serious aimed to expand our reach to a wider consumer base, both domestically and internationally unlocking substantial sales growth potential.

Speaker Change: Total war.

Speaker Change: Angelus Vishal Shah when she's in a nutshell.

Speaker Change: And then D. G Hi, where are you with it with US I mean as Joe what's typically called fourth quarter. So wonder woman that's shown here.

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Speaker Change: The audio and digital well know how I showed up and told me agenda total of them. So much. She had told what phone calls on China as well got you.

Speaker Change: Egypt, all machines and this holds true for Jeff Hi, why doesn't get caseload of sugar.

Speaker Change: Although the diabetes Ingo you blah blah blah Yadda tradeoffs.

Speaker Change: Well she got shelf also Georgia Gulf Coachable Gino essentially.

Speaker Change: Poetry over kind of a young adult <unk> Johnston.

Jonathan: Jonathan Tilda, Linda watchful waiting.

Jonathan: I know you said you wanted to could you type of a phone call the change with him.

Jonathan: Excellent global expansion represents our second growth curve, we anticipate that our overseas business will experience rapid growth over the next few years, becoming a significant contributor to our sales and profit increases in Q1, 2025 overseas deliveries sort by more than 370700 year over year.

Jonathan: But if I was that is that China's leading expert or a mid to high and new energy vehicles. During Q1, we opened over 40, new stores abroad entering key markets such as the U K and Europe, and Indonesia Southeast Asia is a global technology company, we strive to enhance localized R&D manufacturing and <unk>.

Jonathan: Services globally, except machine a unique mid to high end brand rooted in technological innovation.

Jonathan: So about what she is always yes, yes, okay.

Jonathan: You get a pool for those changes.

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Speaker Change: The agenda for unit train shipments.

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Speaker Change: Just in beta Xiaomi woman John Quinn.

Speaker Change: Our job the whole foods yesterday info cause a chunk and go Gee Oh, sorry also she gets little Jonathan Shaw sweetheart, partially the father, which should help with long time thought gene chip.

Speaker Change: Let me now give you an update on Xbox AI development 2025 suicides the launch of <unk> full scale implementation of the physical World Foundation model in AI powered vehicles.

Speaker Change: Further extending our generational advantage, we have developed the most comprehensive and sophisticated foods that in house R&D system with the highest potential industry, which includes the hook I pure vision Adas solution self developed high performance towards chips Ultra large scale cloud based foundation model fully localized really model.

Speaker Change: Vehicle E architecture, and physical simulation system.

Speaker Change: This strengthens our strategy for advanced autonomous driving establishing formidable competitive barrier moving forward well expedite R&D efforts from L plus assisted driving to L. Three and L for autonomous driving technologies, what do you mean, our generational lead.

Speaker Change: Well, that's all what you the highest pressure, especially on the life she going on any of the other country incidental to Jeff.

Speaker Change: So michele on the India trends that you find that you haven't fallen so that's the part that I didn't check in Chinas Sanchez.

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Speaker Change: I think he is a pioneer in China's automotive sector for implementing urban smart driving without depending on lighter Oh, Hawkeye pure vision Adas solution, although difficult to develop that greatly enhances the upper limit of safety and user experience, we improved the capacity grandmothers and influence frequency up Bob.

Speaker Change: Is your perception models significantly with using it Joanne latency for quicker and safer assisted driving our enhanced 360 degree environmental perception performs exceptionally well in intricate urban environment, including turns you turned them in under adverse bladder conditions, such as rain snow Osaka enhancing both safety.

Speaker Change: And driving experience. Furthermore, exane Hawkeye pure fishing.

Speaker Change: Our solution is ideally position the global rollout of high an autonomous driving and the shift from cars to advanced intelligent robots.

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Speaker Change: In my view the Crown all physical World AI license chips models data and infrastructure with chips has the dual I think has been committed to in house chip development since 2021 and 'twenty 'twenty for our self developed chip succeeded in its first tape out the two inkjet delivers three to seven times do you expect.

Just confused power of mainstream automotive chips to a full set of in house development and close loop integration of hardware software compilers and model architecture, we maximize synergies between chips and AI models.

Speaker Change: Our dedication to chip R&D will not only deliver industry, leading in vehicle computing power and models, but also elevate the efficiency and overall experience of <unk> X sight, yeah models.

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Speaker Change: In the Eagle system off the Cisco well do I model the benefits of the skull law I'd be coming clear Exxon is working on a larger scale cloud based foundation models and edge by models of physical World Foundation model is the cloud that are in the cloud has achieved 72 billion kilometers two facilities training week.

Speaker Change: I wish the first 10000, GPU AI computing clusters in the Chinese automotive industry, maintaining and operational efficiency of over 90% throughout the year by the end of the year, our high quality training data will expand to 200 million video clips that depicts various driving scenarios across the country powered by large computing.

Speaker Change: Resources and extensive data our foundation, while ago can understand the real world and execute complex weakening similar to human capabilities. It will evolve through reinforcement learning to outperform season human drivers laying the groundwork for LDL for autonomy and autonomous driving and eventually acting as a universal model, where all expensed.

Speaker Change: Physical AI terminals, we create as models to be acknowledged distillation and pruning to aligned with India could computing power leveraging the foundation models capabilities as much as possible to enable industry, leading inference on devices.

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Speaker Change: No more questions on the shelf and she thought shouldn't students will Johnson, the euro VI chip, but the bushel debt 20 ashamed hits on that.

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Speaker Change: Yeah, Joe Hogan told me she is going to cause you well I should hopefully that would roll off.

Speaker Change: The old town donation.

Speaker Change: She calls I'm fishing, EG Coagency torrential Bush, which as you saw horse drove all show good few big shrimp, but he's on the.

Speaker Change: Do you get a jump on her new husband D. We are neither for top dollar.

Speaker Change: And what with Jonas shuffle, so involved in either partial finish portion at all.

Speaker Change: She truly outperformed traditional vehicles and power cost must pause that's true intelligence integrating three call. It a core capabilities after brain.

Speaker Change: So we'd be on and spinal cord for X smart cockpit. We're currently developing a multi model and large model that entirely functions locally onshore and chips is advancement facility smarter voice interactions and a more personalized user experience and ensure smooth operation even in office conditions significantly.

Speaker Change: Hunting safety and global scalability. This will be China's first large model capable of fully localized a multilingual interaction envy alley features in the cockpit paving the way for a rapid improvement in the vehicles intelligence.

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Speaker Change: Michelle Ebola Fortyish joint forces that women to deal with that you shouldn't tell me how it's possible. She got you tender, but he is on the shuttle almost shovel once you shouldn't the Washington Chichi, Yeah Joan.

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Speaker Change: I hope that all is she's always you know really Joe Pichler told her four year old woman isn't done.

Speaker Change: Sure Joe.

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Speaker Change: Yeah.

Speaker Change: Our investments in AI vehicles also provide distinct advantages and humanoid robots R&D in China's robotics industry.

We are in our fourth generation robots and celebrated at the Shanghai Auto show will soon be followed by a fifth generation model powered by join chips significantly enhancing on device computing capabilities ex thanks robot models lives the past traditional industry technological approaches such as small reinforcement learning models and Portland It systems.

Speaker Change: By utilizing D. B L E architecture of all physical World Foundation model and taking advantage of our existing cloud AI infrastructure to improve robotic intelligence as a type of hobby bodies intelligence humanoid robots will represent X banks start growth of course, we aim to launch industry, leading humanoid robots for industrial and commercial applications in 'twenty two.

Speaker Change: Six and evolved rapidly through data from mass production scenario.

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Speaker Change: Our transient sort of pushing cars Joseph portfolio or Gee argued all told jokes gateway what yeah sure sure sure budget, Yes, Tobey it's awesome.

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Joseph: Hi, Joseph.

Speaker Change: Okay.

Speaker Change: So good tenure go anymore that you're looking to do.

Speaker Change: A good chunk of it so we're talking I mean, that's just one way.

Speaker Change: Boiler <unk> usual, Kentucky, everybody got a total interval.

Speaker Change: I'm optimistic that the road the robust growth momentum will carry on into 2025 in the second quarter, we will finalize the annual upgrades or consideration of improvement four five models with two brand new major models set to begin deliveries in the third quarter with the second quarter, we estimate total vehicle deliveries to range from <unk>.

Speaker Change: 102000, 208000 units, reflecting a year over year increase of 237.7% to 257, 5% revenue is expected to be between $17 5 billion RMB $218 7 billion RMB, representing a year over year growth of $115 seven.

Speaker Change: <unk> to 135% I believe will not only meet our goal of more than doubling sales club. This year, but will also achieve profitability in Q4 and generate substantial free cash flow for the entire year with enhanced self sustaining capabilities will drive ongoing breakthroughs in AI technology and product development.

Speaker Change: Sure Josh I mean, that's how we'd be jumps where does it yourself well only O N E.

Speaker Change: Thank you everyone.

Speaker Change: I'll now turn the call over to our VP of finance, Mr. James who will discuss our financial performance for the first quarter of 2025.

Thank you it's helpful.

Speaker Change: Let me provide a brief overview of our financial results for the first quarter of 2025.

Speaker Change: I will reference RMB only in my discussion today, unless otherwise stated.

Speaker Change: Our total revenues were up 15.81 billion for the first quarter of 2025, an increase of 141, 5% year over year, and a decrease of one 8% quarter over quarter.

Speaker Change: Revenues from vehicle sales were 14.37 billion for the first quarter of 2025 and.

Speaker Change: An increase of 159, 2% year over year, and a decrease of two 1% quarter over quarter.

Speaker Change: Year over year increase was mainly attributable to higher deliveries.

Speaker Change: Revenues from services and others were 1.44 billion for the first quarter of 2025.

Speaker Change: Representing an increase of 43, 6% year over year, and an increase of 0.5% quarter over quarter.

Speaker Change: The year over year increase was mainly attributable to the increased revenues from technical R&D services related to the Volkswagen group.

Speaker Change: And maintenance services and auto financing services.

Speaker Change: Gross margin was 15, 6% for the first quarter of 2025, compared with 12, 9% for the same period of 'twenty 'twenty, four and 14, 4% for the fourth quarter of 2024.

Speaker Change: Equal margin was 10, 5% for the first quarter of 2025.

Speaker Change: Compared with five 5% for the same period of 2024 and 10% for the fourth quarter of 2024.

Speaker Change: The year over year and quarter over quarter increases were primarily attributable to the ongoing cost reduction and economies of scale driven by the increase in sales volume, partially offset by the inventory provision and losses on purchase commitment related to the upgrade of certain vehicle models.

Speaker Change: R&D expenses were 1.98 billion for the first quarter of 2025, representing an increase of 46, 7% year over year and a decrease of one 3% quarter over quarter.

Speaker Change: The year over year increase was mainly due to higher expenses related to the development of new vehicle models and technologies as the company expanded its product portfolio to support future growth.

Speaker Change: SG&A expenses were 1.95 billion for the first quarter of 2025.

Speaker Change: Presenting an increase of 40% to 42% year over year, and a decrease of 14, 5% quarter over quarter.

Speaker Change: The year over year increase was primarily attributable to the higher commissions paid to the franchise stores driven by higher sales volume.

Speaker Change: The quarter over quarter decrease was mainly due to lower marketing and advertising expenses.

Speaker Change: As a result of the foregoing loss from operations was 1.04 billion for the first quarter of 2025, compared with 1.65 billion year over year, and 1.56 billion quarter over quarter.

Speaker Change: That loss was a 0.6 6 billion for the first quarter of 2025, compared with 1.37 billion year over year, and 1.33 billion quarter over quarter.

Speaker Change: As of March 31st 2025, our company had cash and cash equivalents restricted cash and short term investments and time deposits in total of 45.28 billion.

Speaker Change: 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 first quarter 2025 financial results.

Speaker Change: This concludes our prepared remarks, we'll now open the call to questions.

Speaker Change: Operator, Please go ahead.

Speaker Change: Thanks.

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: 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 and management will respond then feel free to follow up with your next question.

Speaker Change: Your first question comes from Tim Zhao with Morgan Stanley.

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Speaker Change: Given the strong pipeline since the C O just mentioned.

Speaker Change: Should we expect more so you can have Ken jump in the following quarters.

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Speaker Change: She she shows some getting Anita charger.

Speaker Change: Thank you so much for your question first of all I think it's a it is.

Speaker Change: Our performance in the past quarter definitely aligns with our overall strategy long term and steady development and we are doing everything we can to make good sound decisions, they're comprehensively for our future long term development them for Q2, we expect to actually have five upgraded versions of our improvement are faced with versions, which may cause some changes in the market.

Speaker Change: In the midterm or short term, but it will be very beneficial for the long term development after the country, but for the company, but I would like to actually highlight three things first of all starting from Q3, you're going to see a momentum of launching your models are even more aggressively going into 2026, and it's going to generate a more deliveries.

Speaker Change: Aspect is our AI capability and our R&D efforts being translated into AI performance on our costs and also all robots, which will allow us to maintain.

Speaker Change: A leader in the industry and really why didn't our generational difference between ourselves and our competitors are the last aspect is something that I want everyone to pay attention to is our Queensland Electric drive system, which also will go into them is going to power our future lineup. Thank you.

Speaker Change: Yeah, Tim It's Brian Let me just add to what shovel mentioned first of all the study our performance because we signed up previous Ah.

Speaker Change: Many months actually also reflects improved operation a quality for example in the first quarter usually are the low seasons for Chinese auto sales then we maintain still steady growth and also the second quarter. Despite many transitions so we need to handle four hour refreshment.

Speaker Change: So product, we still see a very stable and steady delivery numbers. So there was actually I would say representative the operation quality that we have looking forward, we actually have very strong confidence that was now.

Speaker Change: Many are new launches for example, the Mona Max AR at the end of this month and also the next couple of months with a G. Six and seven in P. Seven launches all of them. We think it won't be catalysts for further growth. So we believe that in the third quarter I will see continued.

Speaker Change: Growth in our delivery numbers and hitting historical highs again.

Speaker Change: And then the other thing I think I wanted to also a highlight as Oh. So you can look at the new models that we are introducing those all will represent our products in the higher priced categories as well as with better profit gross profit margins. So the social introduced by our I would say favorable mix toward.

Overall product mix.

Speaker Change: And I'll let.

Speaker Change: James comment on B.

Speaker Change: Okay.

Speaker Change: Yeah.

Speaker Change: Okay next question then.

Speaker Change: Yeah.

Speaker Change: Your next question comes from Ming Li with Bank of America.

Speaker Change: Oh go ahead.

Speaker Change: Oh no no no.

Joe Paul: Does it mean you sit in the onesie <unk> nursing Joe good to go so I'm glad no okay.

Speaker Change: Okay. She can do that.

Joe Paul: They tend to be you'll mineralization is it good to go there you go.

Speaker Change: The each you'll know Tobey Oh go ahead.

Speaker Change: She does really well.

Susan: Susan Susan G O K sits at about Oh, you shouldn't just south of us.

Speaker Change: Yeah.

Speaker Change: Oh no she is sitting.

Speaker Change: But that sounds a good omen Hudson genius and Jonathan John Gordon answer the question see no physical <unk>.

Speaker Change: <unk> it sounds like it was a month ago I told you know by each Oh, so where.

Speaker Change: For your export business could you give us the latest guidance for growth in 2025, and among all the different regions.

Speaker Change: Area do you see a higher growth.

Speaker Change: Florida.

Speaker Change: You use them.

Speaker Change: Because of the increase of tariff for the E. B met in China last year, Oh, So right now our bodies.

Speaker Change: Our current strategy in this market. Thank you.

Speaker Change: Yeah.

Speaker Change: Hey, Manny its Brian let me address your question.

Speaker Change: Yes, Indeed, we have seen a very strong international growth and also a contribution to our results both on the top line as well as on the bottom line. It is actually an area, we actually are increasing our efforts.

Speaker Change: Investments as well as our team our focus is I would say that this year. Our continued focus will be on the European Middle East and Southeast Asia. Those three core regions and also some of the reasons. We also have launched recently for example, the U K, Indonesia as well.

Speaker Change: Thank God continue the growth.

Speaker Change: Growth, we are seeing across a number of the markets that we entered a later last year. So I would say the east actually are showing pretty balanced overall growth or reaching triple digit growth I would say in the last quarter our year over year.

Speaker Change: Going forward I think our we are continue to expand to additional markets. We're looking at Oh. So some of the other regions. So that we could he doesn't have a focused yet for example, Latin America as well as some other countries are in in the Asian region.

Speaker Change: The.

Speaker Change: The issue on the tariff I think it's something that we are very very focused on clearly, it's having an impact on the profitability of our business. For example in Europe. However, I think we are committed to build for the longer term. We are also looking at ways to reduce.

Speaker Change: The impact of these tariffs through more collaboration with our partners a change of product mix on the ground as well as potentially local investments that gave us the ability to navigate some of these tariff hits. So these are all things that we are focusing on the moment and and I think you know if there's any further.

Speaker Change: This would be definitely sharing with you as well as the community.

Speaker Change: Sure So Brian I know, it's been a good win T O. She she Xiang Guan.

Speaker Change: Two things you can do.

Speaker Change: Daiichi announced she was a suicide of GT actually I do have some pseudo huh.

Speaker Change: Convinces took a decline does that took our policing kit navigation, though that you just laid out.

Speaker Change: My CFO shelf Olympian pilot Toshi.

Speaker Change: The downside to leasing Vietnam.

Speaker Change: And it's equal to the team here at Goldman to teach an empty and does it go alright sounds good.

Speaker Change: This is a patient Oh supersede tortorici began jumbo, hoping to just do that though to Gabon and call me Peter Joe Glenn do.

Speaker Change: Do you want to jump in Ohio, superhuman, who called who does it.

Speaker Change: <unk> told US you can jump in and take a benefit Templeton zee.

Speaker Change: Just as done in southeast Asia. So it sounds that you picked up Oh, no oh, thank each of them to go win T.

Speaker Change: Second question is related to you Oh touring cheap so is well she said that would be the first model to use the oh touring cheap your your product portfolio into our going forward well all of Europe ex pump branded EV models use our tools.

Speaker Change: <unk> chips and Oh by using these chips I believe you can reduce your costs will you share the closer reduction benefit.

Speaker Change: Our customers are.

Speaker Change: Yeah. So that's my question. Thank you.

Speaker Change: Okay.

Speaker Change: Sure sure that's helpful.

Speaker Change: So there's a woman.

Speaker Change: The J code 20 shouldn't be able to handle the qingdao to sit on it shouldn't say she took them yet.

Speaker Change: Well, Jeff This is Don suggests on me.

Joey: And so a town called me and said she didn't want make sure I'm looking at those as gene that shouldn't eat well aren't you do you encourage deal fulfilled and so it has a junior doesn't kind of once you almost essentially to Twentyish I'm gonna switching Joey.

Speaker Change: But somebody that has some yeah.

Speaker Change: The more traditionally been at your shoulder Hey, Ashwin.

Speaker Change: That shouldn't be don't you hired her children truly order to it unless you can surely a woman she can answer that.

Speaker Change: Shifting to the Eagle Ford, how chunky and available mostly 20 and she's been pay for women to what do you see that you got that machine homeless M D.

Speaker Change: Change in abortion has a fit on the Shan Shan Shan.

Speaker Change: Good for suggested on the knee.

Speaker Change: Once you want to wait out a surgeon.

Thomas: Well Thomas as you all know what she does that sort of new channels, you don't they're not so well since they'll be by going to J J.

Speaker Change: Oh, Yeah, yeah, yeah, okay.

Speaker Change: Full back when he says it wont you wont use he has well just attrition.

Speaker Change: Well, it's still a little way, you'll show that Switzerland, Olson GBA the gist of it.

Speaker Change: General Joseph So don't forget the law generally sure she's hugging AIG honey mentally.

Speaker Change: For the truth.

Speaker Change: Oh, Chongqing doesn't pencil for you right now.

Speaker Change: And on your annuity I'm, a virgin in the country, 20, Shymkent, which equaled Oh call. It just sort of suggested or the heat cool and Linda Jojo credentials hunger that co Gen shrimp.

So it's a wash out sure Michel wishes that Easter moved out of the.

Speaker Change: Go Kochi, so no one knows what apps in China took him continue have taught us that that's what EMEA Shaanxi.

Speaker Change: Shouldn't they shouldn't be application that it couldn't go to how your heart J T. Yet that's it it's almost like a good holiday to you.

Speaker Change: Thank you. This is shoveling. Thank you for the question not when it comes to inkjet. The development of it has been going really really well not only when it comes to the application on all cars, but also in upgrading our autonomous driving capability in all cockpit and across a lot of our models R&D everything's going really well we have.

Speaker Change: Already we have already begun our production in second quarter, just yet and we expect to mass produce some more models supported or with the terrain ship in the third quarter of the year now when it comes to the mass production in a wider scale. We believe that it's going to happen very very soon because with the development of our cheaper.

Speaker Change: Not only will be able to have a stronger and more competitive autonomous driving capability, but also stronger capabilities to support all of other products. When it comes to the touring chip itself. It's AI computing power right now the effect of computing power. It is we are leading the industry because it's about 327 times the chip computing power in Maine.

Speaker Change: Exercise, Yeah, I chips, which is very very competitive and is a huge step up the game. So when it comes to the touring chip and how it would help us to go into the next level of next stage of the AI world, especially the physical AI World, we are going to leverage our physical World Foundation model and also our.

Speaker Change: X sight AI well in vehicle AI model, which will be very very capable and powerful to allow us to go into higher level or more advanced level of autonomous driving we believe that in a very very near future, we will be able to really showcase our generational.

Speaker Change: In this regard I'm by that time, we're not on the top you're talking about yeah human interference with the current you know how many miles were going to enter the next stage of autonomous driving them and that's when I belief, we can really generate benefits and optimal optimized I'll use experience for our consumers because.

Speaker Change: By that time, not only will launch a new models with higher and events in autonomous driving capability, but also leveraging our smart cockpits and also localized of Yahweh capability X tank cars will definitely bring to you a completely new experience because I would check it off the company has always been democratizing high end.

Speaker Change: Technology, we will bring benefits to all of the people and hope to I hope that everyone can get access to disc ops NCR technology, one day and as soon as possible and we believe that's due to Egypt can help us do that thank you.

Speaker Change: Thank you that's all my question.

Speaker Change: Your next question comes from <unk> with <unk> Securities.

Speaker Change: Hey, Greg going to haul going to argue with you that.

Speaker Change: Oh, what's you don't even though yeah and wholesaling teams together oven a vehicle guangxi ammonia in a well take them one of them actually I always asked about hope Abu what's you should dig among IMAX for sure if they come to that Oh, I see what you got on tissue sounds at all.

Absolutely you Cook when those should all Shaw was that'd be the albumin CVA does give us a good idea. So it won't be quite sure pneumonia studios and I'm sorry, what do you think this helps so much as it took much antibody against all you got to go beyond that you could probably.

Speaker Change: You see yes I'm one of you go then you should you need to tell pump and you know that you wouldn't have done do you think that can get that you're chasing chagall painting at Max and I'm knocking on wood mats that you've got a P. D demo how did you got to get it must be the attendee Diablo shall show woman moved out Oh. Thank you for taking my question and my first question.

Speaker Change: It's about a mono a mono and I'm looking forward to the radius of them on my next and Oh, what is the rule Oh, Oh no serious it you know our strategy and what percentage share of alcohol and the Max is a target.

Speaker Change: So to me its Eagle Ford you talked a little when she was asking.

So what <unk> done in the Illinois.

Speaker Change: Children in San Antonio during the time with us and they don't know who the solo total well that helps.

Speaker Change: A stumble Janet Florida, what she'd rather to the central Colorado South Dakota.

Speaker Change: Well it doesn't appear as achieve Jeff well no way top thoughtlessness might shape up for you.

Speaker Change: My issue by the <unk>.

Speaker Change: So it does it also suggests it duffy.

Speaker Change: It should be it will go toward either here would be D well, maybe it penciled in Shanghai.

Speaker Change: Quite honestly the stuck without having them credo agenda that wasn't you Wanna. So shouldn't you be there hasn't been shook out.

Speaker Change:

Speaker Change: So that's why didn't you may you often do the ownership for the suite that has allowed us to Jim Thomas to ease off.

Speaker Change: Ginger and I'm not sure about it from Jessica BT doesn't show up also in golf, let's say, that's because even though it will go.

Speaker Change: I'm, the Chief Oh, I don't know what you all see Johnny initially just with Ddos.

Speaker Change: Yeah.

Speaker Change: Thank you for the question no. This is definitely a question that we're going to explore where also curious about that as well because when you look at the current market. When it comes to the market segment of 150000, RMB others, No real implementation of end to end launch models or a competing for all five central tops out about so these are available.

Speaker Change: Cars are not be so called full performance models. So we are very excited about Mona and we are very curious about your penetration rate in the market I definitely have very high hopes for it because of our capability and when you look at B, a little across the industry even for cars between 150000 to 200000 currently they're there.

Speaker Change: So call full performance version available in the market. So what is the penetration rate going to be 50%, 70%, we don't know and but we are curious and we'll try our best to achieve the maximum amount. Thank you.

Speaker Change: Oh, My God only went up by even more as she did reshuffled what would you do it.

Speaker Change: Well, if you don't you're not necessarily getting into the fall.

Speaker Change: Morning.

Speaker Change: So the shelf Armada she did a differential.

Speaker Change: So I mean, our pneumonia and you were kind of what does she did she is hot cook couldn't do that.

Speaker Change: Squishy one of unless she gives it didn't you couldn't get achievable.

That's what a cool.

Speaker Change: Oh, yes.

Speaker Change: It's been good a pseudo hall, friedhelm ponds isn't going to change jobs.

Speaker Change: Or would you just say, yes, again shelf home the Chinchillas ore has he or she is happy to or changing so I mean, yeah, such a hole you know what kind of well know more as she needs. It also sends a fifth a yo Yo Yo Yo Jahanian, Illinois, Xiaomi pendulum swings you needed you to change your vote.

Speaker Change: Oh geez.

Speaker Change: And also regarding the part of your question that is about L. A M zero three and the mono serious obviously M. Zero three was our first model of the whole mono series and Ah in 2026, how we can expect to see more models awesome. This serious and monetize that AR is a serious and really caters for a young People's Chi.

Speaker Change: It looks from a cool and beautiful I'll provide just emotional veldman connections with younger consumers. So we definitely can cater to that your belief that I often make next year, you'll be able to see the full potential of this theory is that it's going to be very impactful across the industry. Thank you.

Speaker Change: Yeah.

Speaker Change: Oh, Yeah, Oh, yeah. The ones you should probably yes, although total doesn't pick up just about one minute alima Union. They yes, I totally yeah, who didn't shift Oh, and yes, I told you that it wasn't the only Jacob moved down sharply uphold Oh, yes, I'm glad for them yet.

Speaker Change: And my second question is about the research and development.

Speaker Change: Investment and for 2025 to two what percent did it take off the R&D spend will be allocated to Ah yeah related areas or ER to ER, what or how much a two day increase after R&D experience.

Speaker Change: Will it be allocated to AI related trade area. Thank you.

Speaker Change: Okay.

Speaker Change: Thank you. This is James So I'll answer your question regarding the overall R&D expenses for this year. So if you look at our total R&D expenses in 2024, it's around $6 5 billion.

Speaker Change: And in 2025, we have guided around $8 5 billion of our full year R&D expense and this remains unchanged I would say the increased R&D expenses are well a good amount of that will be spend on AI related activities and that would primarily help us to improve our computational.

Speaker Change: Capability on a call basis.

Speaker Change: That will both as a cellphone mentioned earlier.

Speaker Change: Applied AI vehicle autonomous driving training as well as humanoid robot line as well obviously there are other areas that we will continue to invest a include smart cockpit.

Speaker Change: Equipped with local reality features are that it will allow us to you know increase our capability, our multi language voice come out and interaction.

Speaker Change: Function as well and we should be able to also personalize our customer experience with small enhanced our.

Speaker Change: Capability.

Other than obviously, we will continue to invest on the vehicle basis. As you know we will have additional vehicle models that will be launched this year and into 2026 as well to enhance our product portfolio.

Speaker Change: That will help us to complete our portfolio in the long term.

Speaker Change: Okay.

Speaker Change: Oh, Hello granted Juanita.

Speaker Change: Your next question comes from bin Wang with Deutsche Bank.

Bin Wang: My sister named <unk>.

Speaker Change: So plenty of women.

Speaker Change: To remind you that some with leukemia and lymphoma.

Speaker Change: Yeah.

Speaker Change: So I hate to even out.

Speaker Change: Uh huh.

Speaker Change: I hope I answered the question the first one so tayo.

Speaker Change: Your carbon something at this quarter, what's the.

Speaker Change: Java is such a big carbon intensity I mean, while you actually.

Kim: Thanks Kim.

Speaker Change: Okay.

Speaker Change: What probably is FX impact thank you.

Speaker Change: Yeah.

James: Hey, Ben this is James So, let let me clarify it so in the first quarter.

Speaker Change: We did receive some level, let's say regulatory subsidies.

Speaker Change: As well as tax rebates are tax handling fees refunds or things like that.

Speaker Change: The recognition of those revenues is based on the actual receipt of the cash proceeds which occurred in the first quarter.

Speaker Change: Now this is and the nature of our I would say our cash collections are into the next couple of quarters I'm not sure. We will continue to be benefited from this type of revenue recognitions.

Speaker Change: So that is a on the other income side.

Speaker Change: You also asked a question about the ethics movement in the first quarter. This is primarily driven by our business in Europe, we have a pretty sizable Oh, I'd say deliveries, we actually delivered more than 10000 units in Europe over the course of last year and we are exposed to euro from a revenue perspective.

Speaker Change: The strength and euro in the first quarter resulted in a portion of our FX gain in the first quarter.

Speaker Change: But we've seen that to circle back a little bit into in the recent months in April and May, but we'll continue to monitor that exposure and be able to control our exposure to euro and not to ensure that FX impact through our exposure is.

Speaker Change: Not a surprise going forward.

Speaker Change: Or what what theyre willing to answer I'm going to articulate.

Speaker Change: And I have to do that.

Speaker Change: I'm sure you guys kind of control that embodies uncontrolled I've seen some people don't quote chiquita. Thanks Shneur.

Speaker Change: No no no no I mean, it's a hydrogel will not compete in so Jos Molly do you don't wait on be easy to accumulate.

Speaker Change: Sure.

Speaker Change: Just a quick question with my boss.

Speaker Change: Our margin guidance. It seems that you have a better product mix with the concordance between SAP instrument of propulsion.

Speaker Change: There were three can you provide guidance for second quarter.

Speaker Change: Gross margin. Thank you.

Speaker Change: Sure. This is James again from a gross margin perspective.

Speaker Change: So first of all I think we've observed we have achieved a seven consecutive months our vehicle margin improvement.

Speaker Change: This was primarily due to cost reduction efforts as well as our achievement of certain levels of economies of scale.

Speaker Change: And then looking into Q2 and beyond but what.

Speaker Change: What I would say is there are still several areas, we see that can help us further improve our vehicle margin.

Speaker Change: The first is continuing to product mix as you mentioned.

Speaker Change: We introduced new models are even the wisdom motor your changes on <unk> and G. Nine we've seen healthier margin compared to the old models and this in line will also help us to further higher our average sales price what I would say is to S. P. You've seen in first quarter is.

Speaker Change: Probably the lowest throughout the year, we will continue to you know sell.

Speaker Change: So better product mix to help us increase average sales price in the following quarters are into 2025.

Speaker Change: The other thing that we continue to see is the material cost reduction through our supply chain optimization.

Speaker Change: And lastly, you know based on our volume projections and a higher volume potentials in the third and fourth quarter. You know, we should be able to achieve higher scale, which will help us to lower allocations and improved vehicle margins as well so with all of that are we.

Speaker Change: We are pretty confident at this point that are going into our second half and into Q4, we believe that our total company gross margin should be able to get close to the high teens level to support us eventually achieve profitability in Q4 as we communicated.

Earlier, thank you.

Speaker Change: Thank you very much just yet.

Speaker Change: Your next question comes from value May with Jefferies.

Oh, Thank you Wellington, you want or would you be enjoyable and tissue Guangzhou and that woman pathologists that that's all household names on that island and so we're going to do a few time ago now it sounds from what you saw Glenn anytime woman. So I just yeah.

Speaker Change: Well it sounds as if they do they stay at home from your we when I say Ocean. He teaches you just Oh I'm.

Speaker Change: Longtime they'd rather tell me I'm really glad to see them move out.

Speaker Change: My question is regarding the humanoid robots are we noticed that that Ireland has received a lot of attention at the Shanghai Auto show how are we going to leverage our existing knowhow from autonomous driving to robotics are what are the advantages of our products Oh and.

Speaker Change: Oh, so do we have a specific goal for the mass production, Oh, Oh Oh.

Speaker Change: Knowing a lot about products. Thank you.

Speaker Change: But she is here with as you point to the show.

So the teacher. So these aren't that wasn't able to see you go why don't you and are eager to lead the Chongqing to even talk to each other.

Speaker Change: Hum Shuffle knutsen sheet underneath those he would tell you that.

Speaker Change: Angel window to wins in needle Coke.

Speaker Change: Typically the EHR go C.

Speaker Change: So you will not cause a T shirt that you guys are going to see what she did a huge I will schedule it.

Speaker Change: I think that your children Jacob why don't you.

Speaker Change: All of them sort of with a shovel in the Sun deal.

Speaker Change: For the.

Speaker Change: I'm, a shareholder and I shouldn't that above what our G suite shallow well.

Speaker Change: So neither of these shuttle.

Speaker Change: So don't get filled it hums along with it is Sean.

Speaker Change: Sure, Okay, Yes, and that do you have a shovel in the theater.

Very good Chuck.

Speaker Change: So even for the crowd.

So she's on Trimble.

Speaker Change: Oh, well no way he or she didn't she said yes.

Speaker Change: So not sure I'm going to tell you where it.

Speaker Change: She says it's almost well young adults are you putting them in either to the tight so he's not here.

In the Cushing hub.

Fainted Ashish.

Speaker Change: Thank you so basically robots, Oh robotics up Milwaukee development Ah They are operating as an independent center within the company, but they didn't languish. Our overall in house full stack R&D capability. For example, the EPA about robots are being developed by a team of autonomous driving.

Speaker Change: Oh, a al Carte departments and also the joins a humanoid robots are being developed by our powertrain team at Exane Motors and also the other parts for example, the spinal cord of human Doi robots. The Isabela, the cerebellum, which is a larger brain off the humanoid robots I mean, everything combined is being developed by both with the robot.

Speaker Change: But and also our autonomous driving you're.

Speaker Change: Driving team, although I would say well in addition to that also all chips.

Speaker Change: Rich the twin ship capability when it comes to developing our island or humanoid robots. So I would say 70% of the development among our humanoid robots are coming from the same source it as autonomous driving our cars are now obviously overall. These are two different products are they have different matrix and so they do have different.

Speaker Change: When it comes to their capabilities and features and form factors. So there are differences.

Speaker Change: But yourself Hogan should actually that will seal.

Speaker Change: And talk <expletive> huh.

Speaker Change: That's how you need to want to see should you weight those sure Chi.

Changing.

Speaker Change: Co Gen tissue into juggled tissue.

Speaker Change: It also means that you can get.

Jim Thomas: Jim So decent Ohio, she chimpanzee watershed.

Jim Thomas: The childhood illnesses toll town do Oh wait till its sachin.

Jim Thomas: And so she had always.

Jim Thomas: Shell quantities younger hung yes, your initial kind of attrition or you have thought of and watch it.

Jim Thomas: Well, then she thought that Oh no pneumonia.

Jim Thomas: She knows it all.

Jim Thomas: Often times you know.

Jim Thomas: <expletive> lingo parcel with a okay do that.

Jim Thomas: We did see that woman nitrogen.

Jim Thomas: Ginger so it has a kind of a solution does he will sit on top of Italian.

Jim Thomas: Tissue.

Speaker Change: I think ex Pang is a very different from other humanoid robots robotics company first of all we are data driven we redefine how we should build a humanoid robots also we have chips that we are developing in house. The operating system weekend developed in house and we also have full Jack sounds philemon capable.

Speaker Change: If you have a hardware and software that point of view, we are really guided by a super strong coupling capability to do things, especially when it comes to developing new products such as hot humanoid robots. So we expect to actually buy 2026 going into a certain percentage of mass production capacity and can quickly going into a can.

Speaker Change: Quickly interests H O T. A you know agent. We also expect to actually bring a plane for some very surprising and bring new innovative products to the market, which will look very different from what we can see right now are available in the market. Thank you.

Speaker Change: Thank you that's very helpful.

Speaker Change: Your next question comes from Louisiana, with B O C I.

Speaker Change: Hey, Glenn it's Oh, Oh, what's you're doing with your larger well would you be I don't want them.

Speaker Change: Are you guys hows it got ways, how would you kind of I'm sure are each at all just a woman the gen. Two of them I'll do the JP out how should we should always yellow tricky, though.

Speaker Change: Quick ones, you Chi I always yes, gonium food companies Somebody's, Oh, Gee, how you'll notice you'll know what I'm sure Keith will do polymer within the central moderately itchy Ultrashape P. Nobody that's required he saw how sometimes that.

Speaker Change: My first question is regarding the vehicle margin in Q1 and Q1.

Speaker Change: As we see that Oh, they commodities not to be impacted by some inventory provision in the law purchase commitments related to some older models why do we even excluding these with our call vehicle margin pumping in future, if this impact or what else needs to.

Speaker Change: Oh, well, yeah, when he should I'm. So glad you women just out of that Oh, gosh, Albania much about woman, though.

Speaker Change: It seems like you have the whole thing goes so goes out to them.

Speaker Change: So we will answer your first question. Thank you okay.

Speaker Change: This is James so, yes, we do recognize some level of purchase commitments as we.

Speaker Change: Change some of our models are one of the things you probably have seen from the media is that we have reviewed.

Speaker Change: The very next generation of <unk> seven which.

Speaker Change: The the outlook design has received a very well a feedback on the market.

Speaker Change: So that's part of the a recognition that we have done in the first quarter around the current generation of <unk> seven.

Speaker Change: We also have recently launched a variety of changes and gene I. These have been included in the purchase commitments as well overall I would say the impact of these are in the scheme of things is a relatively small.

Speaker Change: Small it doesn't change the overall trend of our margin improvement for the past seven conservatism consecutive months.

Speaker Change: What I would say is looking into the next couple of quarters in 2025, I wouldn't expect the purchase commitments related to our more more.

Speaker Change: Motto changes is going to be significant so you can take that as a.

Speaker Change: Consideration.

Speaker Change: You know what I would focus is as mentioned earlier, our vehicle margin given our continued cost reduction continued climbing of higher economy of scale as well as the product mix improvement, we forecasted vehicle margin to steady growth.

Speaker Change: The following quarters in 2025.

Speaker Change: Thank you.

Speaker Change: I think you all know weather, yeah, when tissue Guangzhou woman Siobhan is interesting it's about those towards Avalanche I'll actually taunting so sound called Aqua them. So you don't watch with Zalviso Granito enjoyed what my way 20 sounds sounds, though so long as you have to make sure when they go how you'll see change with that.

Speaker Change: Goes out way the D C. A chocolate onshore too that's all true sell women's I should I also want to listen on the mono where P. GAAP end up by the bolt on Tempe.

Speaker Change: So my second question is that so looking forward to second half the year. We will go upscale again by launching more high priced models home Benjamin to get prepared uphold our prime Yes Asia. Thank you.

Speaker Change:

Michelle Sheehan: She is here with Michelle Hello.

Michelle Sheehan: First of all I'm glad I took the.

Speaker Change: She shouldn't even on a woman Hello I'm not.

Michelle Sheehan: Sure.

Speaker Change: Susan do you want to Jamul and Toyota tuition the children to Glu.

Speaker Change: So unless you don't want to shut in and so that should also understood yet.

Speaker Change: Right.

Speaker Change: Okay Sabawi adult children was once again as you'll find those doses that shuffle integrity shouldn't even our friends.

Speaker Change: And then switching in a sense at all.

Speaker Change: Are there any one area or cut at all.

Paul: Paul welcome aboard at Ohio will tighten the ocean Patriot teaching them as well.

Paul: A couple of minutes hold you to finish what else you could talk about what you're doing.

Paul: Well I'm not sure how to answer.

Paul: Although today with us.

Paul: Great hurdle that you have what kind of woman essentially without changing the P cheat sheet Dupont.

Paul: Well he is fit Shensi J&J shovel.

Paul: N T sure don't need this is Jeff George Hong Kong.

Paul: Any man would you say that's a.

Paul: Chevron, that's reaching the son any memorable weight cattle feed her daughter is huh.

Paul: C J, a plumbing job co man Xing that.

Paul: But for now you know who they are.

Paul: Could it have.

Speaker Change: She is a woman to cope with it kind of all over or do you want to come over to cheer them on more of a normal change well hasn't finished she sharon.

Speaker Change: Shinhan inform and teach would've chilled about treating and chevron in the pizza.

Speaker Change: The junior side and touching intrusive she didn't attempt here, what's the finishing and what that May you book.

Speaker Change: So I'm waiting there wasn't a lot of <unk>.

Speaker Change: Since our company either Gilenya Ginnie Mae Shannon that switching over on the highway bill somewhat easier for sure you can get.

Speaker Change: How do you handle the tool, but what do you see just the Watson and gender neutral, which I was joking shoveling.

Speaker Change: Shoveling, the cigarettes, and good attrition ducks and agenda.

Speaker Change: What else did you want to book well.

Speaker Change: Okay.

Shelton: Thank you for the question. This is shelton when it comes to our targeted market segment I would say our current lineup are basically feature around a 100000, RMB two 400000, RMB and which Mona is around 100000 to 200000.

Shelton: I wanted to ask him to 200000, RMB, but are basically across 180000 to 500000, a or B you will all be on a target market segment. So starting from Q3 going into 'twenty. So I can see you can expect to actually see a lot of our new product launch that actually has a brand new capabilities. Okay.

Shelton: ALLETE exterior design of the the car, but also the smart cockpits and overall autonomous driving capability and people will be surprised and I think a lot of people are going to are really our most of our new lunches and so for example, as you can see from our brand new.

Shelton: P seven and also going you know, which.

Shelton: We'll be launching in Q3.

Shelton: Going to actually integrate them new capabilities when it comes to the whole vehicle at the powertrain of the architecture of the smart cockpit and also the Kaufmann chip I think all of these areas are something that we're going to focus on in the coming two years and we believe such an improvement an overhaul of outwear and capability.

Shelton: Are being reflected in our lineup will showcase how great a company X spine really is also you know from our past performance and in recent months and quarters. You can also see that the east improvement has been well accepted by the market and we believe that no matter, what a market price segments out there.

Shelton: Targeting and we are very confident of going into a at least the top three if not the top one oh about selling our models in the future. We also are going to launch not only BV models, but also explore electric energy vehicles as well. So we're very confident are going to a premium market segment. Thank you.

Shelton: Yeah.

Speaker Change: Your next question comes from Nick <unk> with J P. Morgan.

Shelton: Yeah.

Shelton: Hum.

Shelton: Hum.

Shelton: And I wouldn't want to get this done.

Shelton: Somebody said that the team has only been seen by some.

Shelton: I'm thinking things.

Shelton: But what we see is in China for China.

Shelton: But it didn't sound like you keep them.

Shelton: So it's easy to get going from Camden team, because I'm going to Hum.

Shelton: D C. A T H pumping fleets, who might not be something that it sounds like it does at some point.

Shelton: Do you see them at some point.

Shelton: And it wouldn't be my first question pretty simple.

Shelton: And so quite a few things in particular.

Shelton: He's calling from behind on the stand alone what are called <unk>.

Shelton: And also in China with local banks to supply the local codes and very complex.

Shelton: And we spoke to some time talking about pumps and.

Shelton: And they indicate that.

Shelton: Somebody must be good at lunch.

Shelton: So Chicago, so I'm curious to understand.

Shelton: Standpoint, how should we see the competition may be from here.

Shelton: Okay.

Shelton: Sure.

Speaker Change: Well me a condo, Tim Young Oh Gee that she was the Chilean peso the tone from open D gene without change or do you have a feel for what you're supposed to compete on the trees at all.

Shelton: You know Jim do you know Norway.

Shelton: And she's open should the trickiest rooting for you there you go.

Shelton: Don't be Toby just two doses.

Shelton: <unk> P D play catch up.

Shelton: So he should eventually you do what you need to she said she is huh.

Shelton: Oh, Ghansham the transaction and see it.

Shelton: But we'll show the normal as you can see at the quote.

Shelton: So I think one should in childhood a door shows us at a little hot chilli suddenly all Kaiser timeshare for the cool pool.

Shelton: Felicia on the sheet, you'll see Oh gosh, if you take a kind of on the ones that are below the nation commentary should come the yoga what can you tell me it's Sean.

Shelton: Well, the Oakland Sidoti Association elimination.

Shelton: Could you just Eagle Ford doesn't know how to vote in person.

Shelton: Well how's the Chancellor shovel things that Trent Bush Eldridge changing to digitally transform junior without treatment of overhead.

Shelton: Shoveling the cookie that's neat target.

Speaker Change: Good idea and it took us a hole you won't you think any of us to see talk we're not letting go of that strong constant change and there wasn't a lot of trouble.

Shelton: Yeah.

Shelton: Yeah.

Shelton: Yes, we also observed the same trend of the market I think competition are getting more and more.

Shelton: Aggressive from not only domestically, but also internationally as well I think this is something that we will continue to see and it's something that is destined to happen, but we're very from an opposition, which is that technology company sorry, a car a car makers will need to have near and technological capability in order to win in such a.

Shelton: Titian and they will.

Shelton: <unk> be more and more our impact on the market. When you have a more powerful technological element, whereas you want manufacturing capability or capacity will matter less and less and also another trend that I want to highlight here is that automakers are going to sort of converts from an integrated R&D.

Shelton: Formats, you a model off maybe a single direction full stack R&D.

Shelton: All resources to multi aspect fusion integrated R&D capability and I think it will take time to happen, but we have a pretty I'm not sure that it's going to take place. So ultimately no matter how good your sales and marketing teams are doing a you need to be able to deliver that.

Shelton: That popular and that resonates with the customers and fulfill our user demands. So we're very happy to see a lot of companies are changing their traditional way of doing things. We are learning from them. We believe that they are learning something from us as well and I think during this process. We also are able to change ourselves.

Speaker Change: Into you know from the full stack them R&D I'm kind of way of doing our research and development to a suite of integrated R&D. Our ecosystem are entering a matrix of all different R&D aspect do you believe that it will allow us to become even stronger technologically and by that time our integrated.

Speaker Change: As you know companies with only integrated R&D capability are going to struggle, especially in the mid to long term competition. Thank you.

Speaker Change: Okay. That's helpful.

Speaker Change: Okay.

Speaker Change: So that kind of thinking about.

Speaker Change: Hum.

Speaker Change: No that's a good thing.

Speaker Change: And then D C D C.

Speaker Change: You got it.

Speaker Change: Okay.

Uh huh.

Speaker Change: Thank you.

Speaker Change: If it does some others.

Speaker Change: So my second question is really quick update.

Speaker Change: Okay.

Speaker Change: Oh, VW and we've told me to a module B W.

Speaker Change: Sure.

Speaker Change: I think I'll use the milestone that you mentioned.

Speaker Change: Yeah.

Speaker Change: Hi, Nick as Charles I think the collaboration with Volkswagen has progressing at a very fast speed and so far we meet every milestone and we are currently probably less than a one year or two S. O P of our some of our products.

Speaker Change: And yeah, you as you rightly pointed out I think that Oh partner Volkswagen unveiling. Some other models for example, one model based on our Jeannine platform and also there are multiple models that will be based on the E architecture that the wheat, we are jointly developing.

Speaker Change: So I think that all of these small dose well started to come to market starting from early next year.

Speaker Change: So so far I think that I think with all the we're meeting all the milestones and are looking forward I think that we continue will work with our partner <unk> to jointly develop more of our products and also we are also exploring a potential new opportunities.

Speaker Change: That oh that can bring a win win value a two hour punish it.

Speaker Change: Thank you that does conclude our question and answer session.

I'd like to turn over the call to the company for closing remarks.

Speaker Change: Thank you once again for joining US today. If you have further questions. Please feel free to contact <unk> Investor relations through the contact information provided on our website order pizza and financial communications.

Speaker Change: This concludes today's conference call you May now disconnect. Your line. Thank you.

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