Q1 2025 NIO Inc Earnings Call
Hello, Ladies and gentlemen, thank you for standing by for Neo Incorporated's first quarter 'twenty 25 earnings conference call.
At this time, all participants are in listen only mode.
Today's conference call is being recorded.
I will now turn Nicole I bet, you'll Hurst, Mr. Wright Chin head of Investor Relations of the company. Please go ahead right.
Speaker Change: Good morning, and good evening, everyone. Welcome to Neal's first quarter 2025 earnings conference call the company's financial and operating results were published in the press release earlier today and posted on the company's IR website.
William Li: On today's call we have Mr. William Li founder Chairman of the board and CEO and Ms.
Danny Chu: Mr. Danny Chu.
Danny Chu: Chief Financial Officer.
Before we continue please be kind of be reminded that today's discussion will contain forward looking statements made under the safe Harbor provisions of the U S. Private security litigation Legal Act of 1995.
Forward looking statements involve inherent risks and uncertainties as such the company's actual results may be materially different from the views expressed today further information regarding risks and uncertainties is included in certain filings of the company with the U S Securities and Exchange Commission.
Danny Chu: At the stock exchange of Hong Kong Limited and the Singapore Exchange Securities trading limited.
Danny Chu: The company does not assume any obligation to update any forward looking statements, except as required under applicable law.
Danny Chu: Please also note that <unk> earnings press release, and this conference call include discussions.
Danny Chu: Audited GAAP financial information as well as audited non-GAAP financial measures.
Neil: Please refer to Neil's press release, which can things a reconsideration of the unaudited non-GAAP measures to comparable GAAP measures.
Danny Chu: With that I will now turn the call over to our CEO Mr. William Li William Please go ahead.
Hello, everyone. Thank you for joining plenty trying to.
Danny Chu: Q1 earnings call.
In Q1, the company delivered for the 2094 Smart E D.
Danny Chu: 41% year over year.
These include <unk>.
<unk> 7200, and the search in deliveries from Neil.
Danny Chu: And the 14700 and H one deliveries from Anvil.
Danny Chu: Since Q2.
Danny Chu: Company's deliveries have a pick up pace month over month.
Danny Chu: But he had a solid start of the delivery and the Firefly.
And the growing demand for 60.
In April and May that Copa deliberate well.
Danny Chu: <unk> 3900, and the trend is to you saw then.
Danny Chu: 100, and so to lap in late May.
Danny Chu: We successfully launched and delivered the new USD <unk> 85, and 85 P M.
Danny Chu: We expect total deliveries in Q2 to be hidden.
Danny Chu: 72070 5000.
Danny Chu: 10, 25, 5% to 37% growth year over year.
Danny Chu: On the financial side. The company continued of course, that's an absolutely awesome.
Danny Chu: Cheeping year over year goes in both vehicle gross margin and overall gross margin.
Danny Chu: Now I'd like to share some updates on our product and the adult patients.
Danny Chu: Colonial brand.
Deliberate, albeit nine nears exact two flagships than the pet BMW seven series and the Audi a eight eight L. In China in the first of four delivery model.
Speaker Change: This marks the fourth time that to a Chinese brand has made a breakthrough in our opinion because that can effect and long led by D. B E.
<unk> Sig.
Danny Chu: Lungs, millennials seeks and there you see six.
Danny Chu: And that's a deliberate on May 20 <unk>.
Danny Chu: 25.
Danny Chu: When you eat your five and each fab T what lunched and the deliberate that on May 27.
Danny Chu: This upgraded model enable greater perceived the value and the product's done.
Along with major improvements in cost.
Danny Chu: Yeah.
Danny Chu: So the new brand.
Danny Chu: So the Umpqua brand since April.
Danny Chu: No doubt sadly its operation.
Danny Chu: The nice explanation, though.
Danny Chu: Testaments.
Danny Chu: The need for any improvement in the productivity and the operation efficiency uplift set forth.
The change also shifted I'm about to walk.
Danny Chu: If I called the brand awareness and the product reputation.
Danny Chu: Is that bounces all those have been licensed since late April.
Danny Chu: And the second to pull that 90 or so.
Danny Chu: <unk> largest space flagship SUV made it debuted on Shanghai Auto show.
Danny Chu: The class B space.
Danny Chu: Low energy consumption.
Danny Chu: Since ive charge in the sports network.
Danny Chu: Encore 90, as Jordan strong increase of from three row SUV by us.
Danny Chu: There is a model where it belongs and deliberate in Q3.
Danny Chu: Smart electric and smart more copper and Firefly.
Danny Chu: The study to pull that delivery in late April.
Danny Chu: Engineered fall, a five star safety in China, and Europe, and then with the sword for space.
Danny Chu: Teach those again and the babies Gladden dynamics Firefly stands out even if it's the settlement.
Danny Chu: In terms of the Tech innovation Nielsen somatostatin cheap unless ninety's such a ladder has been deployed in the flagship models each name.
Danny Chu: The new E. S seeks ECC ETE and ETP fab T and that will be rolled out a new more new models of Aneel.
Danny Chu: There's no models are also equate it to Neil to food to Maine be called plating system Skywest.
Danny Chu: And below you intelligently chassis system.
Danny Chu: Innovations not only enhance the pulled out some pest business and also in pool that they called caused the structure.
Danny Chu: As for Smart life, and therefore, the Neal what motivates the bushing has been rolled out to because on the Bang young platform since late May.
Danny Chu: Neal what model or a tablet and Tobias for upgrades in active safety.
Danny Chu: And the highway driving as well as popkin, especially in key areas of active safety.
Danny Chu: And Brent enhancements in handling type of emergency mitigation and prevention via collisions and they're recognized in general object based on in tablet and comprehensive understanding and the reasoning math model information in real time.
Danny Chu: Medicaid pile.
Danny Chu: Pilot class.
Danny Chu: Plus.
Danny Chu: And guide costs, so colgate's across China.
Danny Chu: Automatic.
Danny Chu: Medication co pay couldn't Apache sports as well as some major players and then non memory based waste handing in patent law.
Danny Chu: Plus also do you need both.
Danny Chu: Stainless upon.
Danny Chu: My experience nears what model, we have continued to integrate intuit Caribbean Sable and the Samantha driving caused all scenarios.
Danny Chu: Bob.
Danny Chu: Neil I'll place 184, new houses and the 450 and 400 in the six T Y near spaces.
Speaker Change: Anvil has 400 and the 45 stores in China.
Danny Chu: So despite the.
Danny Chu: Company operates 300 and the men to one service centers and 66 deliveries centers, where.
Danny Chu: We will continue to improve efficiency and resource allocation, so bad to operations and the performance evaluation across the network.
Danny Chu: As of now the company has the 3408 pulse swap stations worldwide, including 918.
Danny Chu: 18, nine stations on highway in China, and that has provided over a 75 million swabs to use us. Besides near has installed over 26 fold in Nepal is tied to us and the destination charge offs.
Danny Chu: To date, New York post to work and that work has achieved a country level coverage in Beijing Shanghai Chengdu.
Danny Chu: And the Tianjin next we've got continue to use patent coverage assumed partnerships.
Danny Chu: We've cycled patients great companies and the cat in desktop.
Danny Chu: International expansion.
Danny Chu: Part of it though is more than two more than 10 local partners in over 18 call, Mike or the wide and it's on boarding more partners in Q3, five flywheel rollout in bed with my kids delivering global Youll say goodness beyond the expectations.
Danny Chu: On April seven New York completed her shopping in Hong Kong.
Danny Chu: Based in over 4 billion Hong Kong dollars.
Danny Chu: Please finish it lumped with Oba Santa Cruz Subscript Matchboard patents.
Danny Chu: And that has brought in a number of global long term investors.
Danny Chu: [noise] Chinese kindness, but is hardly see it full pro Doc.
Danny Chu: Much Paul.
Danny Chu: Car models to be launched in the second half the companys deliberate.
Danny Chu: Set to accelerate from Q3, which was stronger steps lower supply chain costs and the bad Hubbell efficiency from Neil products and the technologies, both vehicle and the overall gross margin will keep improving.
Danny Chu: In improving operation operational efficiency similar to what they've been implemented strict investment and the return of the Appeals court.
Danny Chu: On the supply chain says and the service defense shoes onto Lasalle business, you'll need that covenant.
Danny Chu: We have a set of clear it goes to full operation and the highway Bill.
Danny Chu: But their organization and consolidates kittens, but all your ties to higher value projects and introduce the plans to improve that.
Danny Chu: Activity in the course of your efficiency.
Danny Chu: These.
Danny Chu: Mirza has taken hold in Q2, and we are continuously yet.
Danny Chu: Let's go in says improve matching and the batch of caused the control we have a competent.
Danny Chu: I am confident in improving the company's financial position starts in Q2, and then meeting our full year business pocket.
Stephanie: Thank you for support is that I would now turn the call over to Stephanie for kilowatt financial theaters open to Stephanie Thank you with that.
Stephanie: Let's now review our key financial results for the first quarter of 20th century Fox.
Stephanie: However, total revenues reached its how busy I'm be increased to 21, 5% year over year.
Stephanie: Decreased to 38, 9% quarter over quarter vehicle sales were $9 9 billion RMB.
Stephanie: Up 18, 6% year over year, and down 43, 1% quarter over quarter.
Stephanie: Over your growth was mainly due to higher deliveries.
Stephanie: Partly offset by a lower average selling price from product mix changes.
Speaker Change: Oh, well call. The decrease was mainly attributable to a fever deliveries.
Stephanie: Active buyers seasonality.
Stephanie: Sales were two pounds of 1 billion RMB grew by 37, 2% year over year and decreased five 9% quarter over quarter. The annual growth was from increased sales of parts off the sales vehicle services and the provision of power solutions along with.
Stephanie: A rise in sales of used cars and technical R&D services.
Stephanie: The decrease quarter over quarter was due to the decrease of sales in technical R&D services and auto financing services looking at margins.
Stephanie: Core margin was 10, 2% compared to nine 2% in Q1 last year and a 13, 1% last quarter.
Stephanie: The year over year increase was mainly due to lower material cost per unit, partially offset by changes in per Doctor makes.
Stephanie: Quarter over quarter decline was mainly due to the increased manufacturing cost per units from lower production volume.
Stephanie: Overall gross margin was seven 6% compared with four 9% in Q1 last year.
Stephanie: One 7% last quarter.
Stephanie: Year over year increase was mainly driven by first higher sales of parts accessories. After sales vehicle services and technical services, which carry relatively higher margins.
Stephanie: Higher vehicle margin at first they reduce the cost of the loss rates from power solutions as our user base school.
Stephanie: Decreased quarter over quarter was mainly attributable to lower vehicle margin.
Stephanie: Turning to Opex R&D expenses were $3 2 billion RMB increased 11 points of 1% year over year and decreased 12, 5% quarter over quarter or year over year increase was mainly due to the incremental design and development costs for the new paradox.
Stephanie: <unk> technologies as well as the increased personnel costs and R&D functions.
Stephanie: The quarter over quarter decrease was mainly driven by decrease the design and development of course, resulting from different stages of development, partially offset by increased personnel costs SG&A expenses were four points for the M. B.
Stephanie: I'm 46, plus 8% year over year or down nine 8% quarter over quarter. The year over year increase was mainly driven by the increase in personnel costs related to sales functions and the increase in sales and marketing activities for quarter.
Stephanie: Over quarter decrease was mainly due to the decrease in sales and marketing activities and professional services, partially offset by the incremental personnel costs.
Stephanie: Loss from operations were six points for the RMB.
Stephanie: 19% year over year, and six 4% quarter over quarter net loss was $6 8 billion RMB showing a increase of 30.
Stephanie: 32% year over year, and a decrease of five point to 1% quarter over quarter.
Stephanie: That's wraps up our prepared remarks for more information on the details of our Oh the teach.
Speaker Change: First quarter <unk> financial results. Please refer to our earnings press release, now I will turn the call over to the operator to start our Q&A session. Thank you.
Stephanie: Thank you.
Speaker Change: If you wish to ask a question. Please press star one on your telephone and wait for your name to be announced if you wish to cancel your request. Please press star two if you're wrong.
Stephanie: So you can find a place to pick up the handset to ask your question.
Stephanie: The benefit of all participants on today's call. Please limit yourself to two questions and if you have additional questions. You can then reenter the queue.
Speaker Change: Your first question comes from Tim <unk> with Morgan Stanley. Please go ahead.
Tim: Hi, I'm willing to stallion, Tim Thanks for taking my question and I think that probably just getting them I I actually have two questions. The first one is about the problem itself because he's leucadia announcement, not and he was a second quarter loss guidance of 72 to 70.
Speaker Change: 5000 vehicles.
Speaker Change: I think that implies a more moderate sales increase despite aggressive launches of 40 new modules.
Speaker Change: So looking forward how can you get the Salesmen's days, how you define C. P was an extra push and then how many months to achieve.
Stephanie: Our previous talked it outside 30000 monkey cells for their newest named Green by year end. That's my first question. Thank you.
Stephanie: Okay.
Stephanie: Do you see as your team no and then take a nuclear and saw good Charlotte Shuang with its leading on a woman that I'd say I'd do it enough on the to go to some to your tablets a day along with all my bad forget.
Stephanie: But I think Oh, I see what you mean neared up on to the mid twos I'll Cushing.
Stephanie: Well they will do it shouldn't the issue if you cheat because she didn't have yet to use a deal.
Stephanie: It's a weird because the telephone might do it can cause a junior adult PKU enzyme itself, yet not that one minute. So it sounds like that's a good sign that you should see I'm going to kind of show you got me on that.
Stephanie: Thankful in this system. It sounded like you mentioned EMEA cool because then it gets who sell us nothing that's out there that add it all up.
Stephanie: Oh, well that she shops.
Stephanie: I see a woman to shoot a honeywell has a shrimp boats with chat, but it would be.
Stephanie: Downloaded them all you need to use them the way, yes, it's hard to keep all of that in the sleep huh.
Stephanie: So you will normally from Virginia somebody standing up on that actually you can see the call. It didnt dig a multi it's similar you had some good that's the chimney and we'll go to 100 something to the tune the P&L itself could you Sue in people with Valeant, excluding the could be the Chilean market balance sheets than you would typically see its honeymoon periods or the lead time on the.
Stephanie: To the New York and my team, but no hands it couldnt be done.
Stephanie: And the $100 to do behind the well they shouldn't have changed and this is it yet to go.
Stephanie: We sell food now underway has officially it seems to me that you quote.
Stephanie: Someone will ask Philadelphia minimally opinion, that's what you do well the Neal Brad and the highest so you'll cheaply so without a doubt 110th Chattanooga shapes. So men didn't make it yeah, maybe any idea why we shouldn't paygo shaping.
Stephanie: The appeal of mature union to be dealt with.
Stephanie: London single Young man, but you've got that nice little Hill downtown.
Stephanie: Mulder loot a minimum wage will you go about it.
Stephanie: You shouldn't see well hesitantly trip all that cool pool for pneumonia. He owns a 20 person Neil on lingo totaled 20%.
Speaker Change: Thank you for the question as we have stated our quarterly guidance for that.
Stephanie: 72 to 75000 units in that case, we expect to deliver around the time you five to 28 Southern U S. In June and in terms of the core a volume driver for the new plant as we have just recently upgraded and launched our all.
Stephanie: All new five five out of six six that's our our noon eastern six yes, 685 and <unk> in late May and we have tried to start to delivery of California models, then they're going to experience their first in food delivery mouth enjoy them as you can tell from there MSRP Theres actually no major change I guess with the selling price.
Stephanie: This form out of yet considering that before the launch of the score models to clean up the inventories we have provided some promotions on this the four models in the previous generation well that the actual price increases of around 10% from lots of generation to this generation. So for the Lexus that we're going to stabilize on the prices of this for new models and it's okay.
Stephanie: I thought the vehicle gross margin actually the improvement is more than 10% from lots of generation to the model year 'twenty five and also the bigger principle for US is to realize a good gross profit that is simply looking at the vehicle volume as we also look at our overall performance from the P&L perspective in that case.
Stephanie: We need to strike a balance between the sales volume and also the selling prices of our products and also in the meantime, we will keep improving our operational efficiency and a system and go into the fourth quarter, we're going to introduce our own there yesterday to the next generation yesterday, which is a highly competitive product that we believe that in Q4.
Stephanie: The new brand to the market in a way well be around 25000 units Oh, that's around 20% year over year growth from last year's Q4, which was around 20000 units a mouse a in that case well improving the south ballroom, we're also going to improving our vehicle gross margin significantly with the new plants.
Stephanie: About 20% in Q4.
Stephanie: Okay.
Stephanie: And then thank you very much really.
Speaker Change: Yeah. My second question is about to cost reduction because we know what you're stuck on unit has implemented a series of cost cutting major so with past six months.
Speaker Change: So we're not going to see more meaningful contribution.
Speaker Change: And as such cost reduction that's here and could you. Please quantify his first language categories, how we could probably seen more improvement into second half. That's my second question. Thank you.
Stephanie: Yeah.
Stephanie: Uh huh.
Stephanie: Especially that puts U S homes I have a question or a constant sort of trigger you see there that you got somebody to take a computer for the.
Stephanie: Torture, such as yourself, either Soc, but we all know or switches from Eli Jon you talked about you can issue alone.
Speaker Change: How should queue tells a woman she the sure sure. John did you hear you say it is you can go down to your three junior meal Jake towards if we bought the John These yeah shifting some herb alcohol. So drew I'm just it's all a.
Speaker Change: Ginger these intelligent that's your himself who's on the call.
Speaker Change: To go with them the Talladega.
Speaker Change: Jay did go down quite a me too since you're gonna Formula of choice, especially you're gonna say youre in fashion and fashion man or woman wants to me, we should even as they go crazy and champion gender John that you could sort of dual ammonia Jim Butler.
Speaker Change: I live adult so you know what's embedded in your own father as you could see that Oh, let's issue that should show a minimum good are you in fact home do the jewelry Saudi.
Stephanie: Say quit what Tricia borglum inches all.
Stephanie: Oh.
Stephanie: Uh huh.
Speaker Change: Thank you for that question as you've mentioned since March we have conducted a series of cost control and efficiency improvements in national and here I would like to further elaborate on that from the following aspects. The first news regarding our short term work basically when we view and that's worked out all of the key matter is project and Ocwen.
Speaker Change: Foundations and to look at is the things that are not going to generate a positive return on investment within the year and we have made to determine actions and COVID-19 more postponing them for their short term return and Lasalle County regarding the efficiency improvement. This as also mentioned by William in his prepared remarks in terms of improving efficiency.
Speaker Change: We also conducted that the actions in the fall.
Speaker Change: Blowing aspects. The first is from the R&D perspective, we have established a new mechanism called the co product line, where that we have literally marched the R&D resources off the new brand our brand and if our flight plans to further improve the overall efficiency of our R&D activities.
Speaker Change: Uh huh.
John: The team with John So I'll, let him know considering all the old so they're all going in the genome.
John: Jimmy with J&J on their time did agree more let's say social hofuf on me and Oh, and then that trouble you shouldn't that sometime either at home as you know a month you shouldn't take a joint call with hanging on the take or pay the congratulate Jim sorry, Julien Gong weights, you shouldn't draw with either took a T shirt that quiet.
John: Which you showed some good social food I need to leave yourself.
John: Just get your sort of findings that woman the jig. So you see them in Townsville OPEC to shop tome, yeah in phosphate.
John: Donna took a chunk of your favorite child, and it's hard to do Kashi and gasoline agenda. She can though the bug out of China.
John: And that will go out she fujioka you'd seen a union shop Foreman argued location a well manage it goes even beyond that there's the shelters and I don't know who you are.
John: Yeah.
Speaker Change: And the second is regarding the improvements in the industrialization cluster, we have optimized and the restructure of the logistics functions quality functions and also supply chain songs sections by streamlining the team and also merging the patents involved and certainly we have also made improvements in the south and the service side.
Speaker Change: For the.
Speaker Change: For the non frontline teams and we have also made a major improvements and also consolidations on the teams including in their roles and also position us to better improve the efficiency and the productivity of the teams, especially at the back end teams, where that's a we are going to witness the savings from the operating spending perspective, and there's such a thing.
Speaker Change: It will be reflected in our Q2's earnings and also the corresponding results.
John: Teach the Danville fields Huh, yeah, possibly on the Q2 the movie all should they need to do some beach, where you're pushing the Michelle Michelle She's younger, but I'm just sure the Saudi that Houston, Although Qs the Joker woman chooses the al Shaheen groups you have them will be all well know has just shown by Jake are carefully and thoughtfully I'm conscious that.
John: Thank you do that you are sure sure Yeah My gun woman. The kill you go Junior and accuses me somebody in that juncture and you got to where you are sure DARPA, where they showed me that Houston.
Speaker Change: The social hook, well I didn't say it was on the diode jewel in the wage issue the monetary Jade or Mike you made tushar ghansham, but I didn't you just Shanghai Shanghai found on behalf with me and you should Huntington funds yet.
John: The truth came home to your total her time, who the challenge even Charlotte, that's where you're going.
John: So I don't know what May have shrunk home argued though pressure dos and you do without Citigroup, who would you tisha challenging Hugo Chavez will assume that they go for yourself. So I'm Gonna movie Elena should also do their shareholder meeting with you on our mobile messaging to see him the knock on pool, the English on them and I was feeling like I'm trying to understand where the BD or the movie.
John: Let me just use what you.
John: Yeah.
John: And then more specifically on the tighter control over their spendings regarding the R&D spending in Q2, our target is.
John: Excluding the one off impact we would have liked to achieve a 15% improvements were actually R&D expense reduction and in Q4 as we also have the break even targets. We aim to control our R&D expenses to be within two to $2 5 billion RMB per quarter that represents a 20 to 25.
John: Percent year over year due quake from last a year and regarding the SG&A expenses.
John: This is also relevant to the marketing activities and also the tightened it.
John: Tricia in the market as well as our sales performance. So we will also manage the SG&A expenses, and then I have a careful and prudent way.
John: Carefully balancing the return and also the investments Oh, that's campaigns and activities. The target is to reduce the SG&A expenses quarter over quarter from Q2 of this year and by Q4, considering the breakeven target as well our target is to control our non-GAAP SG&A expenses to be within 10% off the self driving.
John: Yeah.
John: Frankly too.
John: Thank you thanks a lot.
Speaker Change: Your next question comes from Meng Zhang Li with Bank of America. Please go ahead.
Speaker Change: Okay. Thank who measurement. This is me I also have two questions.
Speaker Change: My first question is related to you a new would've modeled so after your lunch.
Speaker Change:
Speaker Change: New Award motto, you may face the feedback from your users and also compared to your original rule based autonomous driving solution.
Speaker Change: How more E <unk>.
Speaker Change: The until you launch your water model and a full year of cheap because right now are in the certain models you are you've seen in Europe.
Speaker Change: Decided trip so you already see some kosta do you also Oh Oh Oh.
Speaker Change: Oh those are a benefit of two to <unk>.
Speaker Change: Users are in the future a wheel.
Speaker Change: I'm going to also use the disc.
Speaker Change: Same chips. Thank you. This is my first question.
Speaker Change: Yeah.
Speaker Change: Oh, I see I mean, no women say weird Dino Hunter just to sell them and Bang on.
Speaker Change: To sue them and try.
Speaker Change: So good times, and bad sushi, and who to pay someone and tableau and then because of the way that city unless you're in the deep abandoned that's when we would tend to say.
Speaker Change: Cool.
Speaker Change: As it plays out and put them in.
Speaker Change: Thank you for the question in late May we have started to released and then rolled out to all of our first smart driving version based on that and you know what model and apply them to the payer and users. Those are the users who are running on our second generation platform products, Massachusetts, I know women say eh.
Speaker Change: To some degree by minimum team Fabulous to to Oh, and then pick up say two dimension from in the share donor done that down the Eagle Fone gun will meet in kind of a T V qinghaosu come in she got unchanged.
Speaker Change: You shouldn't read at Houston.
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Speaker Change: They have to do just that you don't lose touch with Honeywell Museum way, it's a good chance I'll signal so stay tuned you'll need a childhood pet's if I'm in a woman's usually you do that you need to know how either to the fans.
Speaker Change: And actually in the previous versions. So we have already released a series of active safety features based on our end to end architecture and solution where that we also see significant decrease in the accident and also the weight of the accident and about her gliding safety with our active safety features.
Speaker Change: N Ho off where the you know what model. We have also released the emergency safety pull over this also is why not steadfast in the industry. Overall speaking our vision for smart driving is to reduce that traffic accidents and in that case, our active safety and our smart driving feature in general has been leading in the industry, but they're not two months to do that.
Speaker Change: They didn't like our include jobs continue.
Speaker Change: Continue to come in and says isn't that bad in the source of that churn comes into the de la fitness, yet until they get Houston not I'd say.
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Speaker Change: Turning to go you know D&O diffuse those who needed to know kind of plugging away to tender timing does that even though they're not depending upon them in Nashville community and put it on a gala.
Speaker Change: And so it's in the short term, let's say.
Speaker Change: I'd say, it's like the hunting you. This is a standard two others Huntington knowing how you wouldn't go through the phase I mean, usually the picture.
Speaker Change: And does that kind of conversion of our smart driving to release of driving pressure and stress in that case and others and based version has also provided better experience across all scenarios. I'm. For example, we have we are also one of the first two of at least a point to point, a smart driving and also parking all of our experiences.
Speaker Change: It's better than our peers in the industry with under armour, we have achieved better experiments in highways and also are being expressed waste our original experience based on a preventive action was already good and right now we have made it the overall driving experience even more seamless for example, automatic pass through of the toll gates on highways and in terms of.
Speaker Change: Smart driving urban roads, we have also achieved very good points to point to smart driving that's basically as much driving pharma parking lots to a parking lot to be at the height usability and good experience. So basically we have achieved a good smart driving experience across three key scenarios. That's all you say Oh I'm sorry.
Speaker Change: On the yes, I mean, there's little bother you could be useful that you said Timna times, then you find them you then to fit into that.
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Speaker Change: So Josh so that's hitting because it's a good economy. So you wouldn't be Atlanta did a cheat sheet, Oh I'm not sure that I see.
Speaker Change: It's a good timberlands afraid something on about downloading, Italy, so should I care about who should abandon.
Speaker Change: Change can do to get a little mystery in coupon clay to take a choose to gingerbread season tickets in good and bad in either condition.
Speaker Change: For example, we have released this oh tore my takeaway from what you're finding in the parking lots, where our users can provide natural language comment to ask of the car to navigate to a parking space across different floors or even region waiting in the parking lot and this is just one of the many new fits.
Speaker Change: With that we are going to release based on the anti bot and enabled smart driving a feature I spend way that we also see the possibilities are improving the experience with the N type a and so while speaking this is a version that we have restructured the entire smart driving with our data close loop and also feature a closer to for the next the fact that we will keep improving and eat.
Speaker Change: Writing the speech or based on the feedback provided by our users to make the overall experience more seamless and also more useful.
Speaker Change: So you can take Oh, and then full Yang Sin, Chen Julian, saying, Oh, the so you're in Dublin and abandoned yeah juices that eating them to see those Uh Huh Schinder, we'll do let's say the us as well.
Speaker Change: Well, maybe she'll quite a tail from the Hunter I should say to go a little bit.
Speaker Change: Oh, Yeah, just the appeal and then Panyard yaobang caveats or Youll remember a downtick of ICR.
Speaker Change: Congo, they understand they shouldn't that come from there.
Speaker Change: You can find it isn't that much answered for me.
Speaker Change: So that's the basic as much driving version released it to the banking system and in the meantime, as our search generation platforms, SEDAR and instead of us aren't Eli and also the new five five and six products. They are running on our in house developed much driving chip and Max 91 and.
Speaker Change: And that will embrace the version one and next 90 31 will be released in late Q1, that's our expected release dates but that is around one month later than it is to buy your own platform and the specifics when he states will also be dependent on the actual approving process and that the big portion of the R&D process is actually ingo.
Speaker Change: [noise] progressed.
Speaker Change: Actual uncles Danielle Williamsville yeah, yeah.
Speaker Change: And for the long term our products will also switch to the in house developed smart languages.
Speaker Change: Okay.
Speaker Change: Okay.
Speaker Change: Yeah. So our next question is related to I'm old brand. So after you have some measurement change what he's done a strategy to enhance the voting. So 60 and also what is your expectation of a M E T.
Speaker Change: L a 19.
Speaker Change: Yeah.
Speaker Change: No and then a condo them insight system and told them to go on.
Speaker Change: Florida to the us.
Speaker Change: So Hudson go to losing money on labor.
Speaker Change: And then tied to that Trulia teaching the without a good telephone.
Speaker Change: As I laid out on the on the to go until you do you eat out and they've got a telephone has the effect of the non Thunder. That's all EMEA, that's only England childhood since you're kind of on the Townsend familial 60 or does it go showdown Cindy you'd say.
Speaker Change: It's almost said Sachin tests that are home to kind of take a cut of the dividend wouldn't put equation no women site to go get them to joke with you I'm gonna be citizens. It's another patent system.
Speaker Change: Mrs.
Speaker Change: So you had some delays for the Hunter when we come out to go to school, if I'm going to take them to send them in.
Speaker Change: Thank you for the question. The April we have made some major organizational and operational adjustments to anvil, including the adjustments to the core management team South team as well as the original teams as we were making major investments there. Good findings that we didn't see major impact or negative impact on the south.
Speaker Change: Call them off our 60 actually in late April we witnessed a growing order momentum off that's a product and in may that mostly delivery of al 60 is more than 40% higher than in April and there's other positive changes that we've seen.
Speaker Change: Oh, let me take a.
Speaker Change: I wanted to go to a suite of like kind of how me and condo and the onward in good times and it seems to me a good faith on tongue, but it's still challenging in the email system know how on the women side are still out in both Pennsylvania, Minnesota.
Speaker Change: As Sig Peter on the part of the two.
Speaker Change: Keep in mind that since I mean, the thing to wait for that no assumption shall I take Oh, we have to do it and put a tick up I mean that ugly second Bali.
Speaker Change: So it's I'm the last one on Macondo.
Speaker Change: And I guess at how that extends into the I would think I mean to me.
Speaker Change: And you can do as it sits on top of that.
Speaker Change: And if we look at the actual product performance and competitiveness in the market regarding <unk> 16 in the first four months of this year among the battery electric vehicles twice to between 202 with their hunger I saw them almost half being our ethics. All 50 has been the top three fastest all of them.
Speaker Change: Product in that segment and we also expect its performance to continue to pick up in May and Detroit and this has also demonstrated the strong product performance and strength in the market.
Speaker Change: I mean, it seems to me as if it's useful myself Hello, Michelle so full on law.
Speaker Change: It really is all I can really say that alert, though they are saying that you just listed I spoke with them and did a mom and dad in terms of the tenge rates in Quebec.
Speaker Change: Canada, India in terms of bulk or maybe we shouldn't you shouldn't have furlough somebody I think that's what's really who they sell down unless you get them you send them go kind of attendees that paid them. That's all good.
Speaker Change: Just that I don't want no one miles away thinking too cheap out there, but you shouldn't fellow that's true.
Speaker Change: However, the product competitiveness and performance is just a one off the foundations in the meantime, we also see the maturity with our cell phone service network, Although now has more than 440 stores and.
Speaker Change: Many of the stores, including the frontline and a fellow teams are also getting more mature and adopt pets to the drop in that case for the next stop we will also as they are making a major contribution of our contribution to the south fault them for the next this topic. We will also keep improving the operating efficiency and also productivity of the teams in stores.
Speaker Change: Now there's some good things on Italy.
Speaker Change: I thought I'd do them in Tampa, and they don't want a law that took a user.
Speaker Change: Look I'll call them, the onions, and a slowdown that you said to button down the agenda. That's what you've been told what we tend to feel that its all tied to them than to say it's done. It. Unfortunately does it go.
Speaker Change: And then little dollar income I'm going to turn to the bolus slowdown yet so June unions, who about you shouldn't really good future.
Speaker Change: <unk> taken the digital foundation Didnt, who he didn't that'd be didn't sound like it doesn't suit. So it doesn't guangxu Mackenzie even pushes him to go one doing one Lauder Tom Yeah.
Speaker Change: Yeah, so it Didnt ship all my secrets.
Speaker Change: To get something to the frequency and don't forget they live with all of the to go sell down in Houston, So youll.
Speaker Change: So you can do that either.
Speaker Change: Oh.
Speaker Change: And the third key driver is regarding our battery swap and also had been charging and swapping network, mainly as a battery swapping network right now are in China more than 1900 power swap stations are available for all users with more a lot more batteries are available where circulating in the pea.
Speaker Change: Our swap systems, whether our users and in the meantime, we are rolling out this country's cloud where we're increasing the content level coverage of our Polish network. So far are in Beijing, Shanghai, Jiangsu, Zhejiang, and Guangdong and Tianjin, we already see the country level coverage of our powerful network and for the next the stack will be will continue to.
Speaker Change: Such coverage across more provinces and countries, which will be actually even more important for the almost users and product no woman didn't yet they see them censorship Iot ship getting shots in listening to you guys or do you intend to change the needle either deep with them.
Speaker Change: So sort of beating the moisture.
Speaker Change: So merchants, who the source of the Delta Downs, So I haven't seen them before you do.
Speaker Change: Are you sure you quite intent of Chin to me then so you said it is.
Speaker Change: Oh, I'm Kimberly showcase them in that immediate or your opinion done so where you could come in time for I O T and then he could pencil.
Speaker Change: What I'd tell you that she has done theater tell me who's here. It shows all the time and date of course Oh.
Speaker Change: Really it's only the phone on the suite. So you need to go to the wheel.
Speaker Change: The way like a Philadelphia at the wheel, so sort of tweaking the function.
Speaker Change: Well continue we are biased to the.
Speaker Change: And this is.
Speaker Change: Excuse me sell downs against fixed income had been saying they don't see somebody who really.
Speaker Change: Related to that is that I do need some good live without it so down in Houston, because physically or what kind of shape to that you could comment too.
Speaker Change: And in the meantime in lower tier cities like third or fourth tier cities. We are also trying to use the power swap station as well.
Speaker Change: A window of opportunities, where I appoint of astellas for themselves in operations, but also lower fixed cost that physical stores. So to put it simple basically in some countries and also prefecture level cities. We told me to open up the actual stores, where showrooms in fact, we can't use the collar swap station as I point out.
Speaker Change: Herself to present, our product provide experience and it's tough to five sessions for our users supported and facilitated by the local sales team. This is actually a unique advantage often of Neal asked the entire company, especially to post to the south in the lower tier cities and this will be very important and also it's just magical.
Speaker Change: Coach triples, the south of uncle, So there's some delays so no no wait.
Speaker Change: Six to eight O U N pay your song.
Speaker Change: So nico so long as they can or minimum wage Uh huh.
Speaker Change: As you Ashish.
Speaker Change: I'm, a 90 year, we'd say, it's time to do.
Speaker Change: So it sounds adult food.
Speaker Change: Too much N woman.
Speaker Change: So that would have been selling your home it's Asia.
Speaker Change: So it's sort of you shipped to a sort of Asia to go take a time dinnertime suit immune quota CIT I should say something called a good deal of them and cut some good due to the 10 day time about some gains and good chance you'll have some tied to advise you of either that you say you don't go to India, now hail Buffalo Chicken consumables, yes.
Speaker Change:
Speaker Change: Oh, I'm in Michigan encoder shapes, and yeah. So I don't even know who sits on my either Tanger shaping a C. N 92, though was really quick I again.
Speaker Change: Good time to do that.
Speaker Change: A question she didn't have to worry about.
Speaker Change: So absolutely. It is I can just sit on our good to touch because.
Speaker Change: I think that's that can beat them.
Speaker Change: Who should have.
Speaker Change: A T to the ALP, adding digital please it sounds with Dell food. So your junior in the Honolulu, though where your son crime.
Speaker Change: I mean, the first in Canada to the Oh, there's a trend to chat here on a go can sort of tell me at the time.
Speaker Change: Our accretion so you could be the hardest she has when they use about so your son, Glenn I Didnt Chancellor of Omega. So she wants to do a single solution, maybe I'm getting one pair temeka showdown mobile.
Speaker Change: Well that we are confident that the sellers are mostly softball them off on the 60 will be passing back to more than 10000 units and in the meantime, that's that kind of claw back of envelope or Nike will be released and they delivered in Q3. This year. It seems its debut at Applebee's.
Speaker Change: Auto show, we have also brought the product to several cities before they're showcasing and our users are actually looking forward to this product as al said, our Nike comes with a huge fun. Because this has also saw one of the biggest pinpoints also spyro I'll say road SUV without enough space for storage and the languages.
Speaker Change: And also in the Reagan information when he used to buy that M. I T. Almost all 90 also both in process energy consumption and energy efficiency within its class. So basically we believe that our 19 won't be a game changer in the large space as it would be worth three row SUV segment and in Q4, we were.
Speaker Change: Also released a L. A P product than by end of this year and it won't be three products under armour brand and there's three products will all be targeting family segments, whereas the highest qualities and experiences and this lineup well also at her.
Speaker Change: Well also provide better synergies and in that case, our target is to real life and most of it in a way off the 25000 units of this is very products in Q4.
Speaker Change: And what I mean.
William Li: Thank you William.
Speaker Change: Yeah.
Speaker Change: Your next question comes from bin Wang with Deutsche Bank. Please go ahead.
Speaker Change: Yeah, well take them in the last call.
Speaker Change: Our day to day.
Danny Chu: Claims Oceanologic automotive Chi.
Danny Chu: The idea that we should assume from Kmart continuing to shape the future. She Michelle How're you doing.
Speaker Change: Ladies Nonetheless, chimbote call function suddenly monitoring with al Salomi suite.
Speaker Change: My first question is about second quarter, because we are kind of new.
Speaker Change: Okay.
Speaker Change: Higher priced <unk>.
Speaker Change: In house semiconductor cause any chance you can kind of fun not just mentioned he Mr concluded <unk> margin once you ramp up the overall gross much impact to the competition.
Speaker Change: Yes.
Speaker Change:
Speaker Change: Or are you doing a figure take Oh I'm sure there are a lot more.
Speaker Change: <unk> seen that yesterday, we used to do in Q2 so.
Speaker Change: Im sure that well most of them you want how much of the time he I'm sure that's what you're selling them at some good Oh God go you put yourself solution. They charged on a woman or Sharon Yeah, Kentucky I'll go on go on let's see Ensign Kim sung China, who gave them a bunch of other jaeger a chunk of it sounds like you aren't quite soon.
Speaker Change: Oh, there you go to something in the U S.
Speaker Change: So her job is to install by the art can you do with them on the European power that who lives in parallel.
Speaker Change: A bunch of other legal malina English away without but I've been just shows what you all want to argue with them on what changes you Jill I know I'm, giving you I'm sure I would do.
Speaker Change: And I'm not sure that some people were sound sure Ah Yeah. What are your thoughts about doing shortly on the SEDAR I agree with you that you show Cui gave women but.
Speaker Change: Take a bunch who are the two searches at Kumba Tyler you say you want that.
Speaker Change: Our imagery tiny franchising in China, So what's your lifestyle.
Speaker Change: Although the Jacob I'll, let you do the kind of way of teaching the Purdue Cui said that's it.
Speaker Change: Question number two daughters took a Toyota.
Speaker Change: It took a T shirt.
Speaker Change: But there's something having a balance sheet. So it's all good so that I don't know just argued to the champion that particular model it won't come all.
Speaker Change: Simultaneously dates you know English if we'd be doing that you also teach them I don't know if without Jake are they always food safety.
Speaker Change: Well remember that you got mobile.
Speaker Change: It's anti money Cross company so good luck.
Speaker Change: Yeah, its ranking them arguably.
Speaker Change: Thank you for the question as in Q2, we have completed the product transition for the new brands, we have successfully launched and started to deliver our.
Speaker Change: New issue 585 T. He says he can't.
Speaker Change: Yes.
Speaker Change: That's all we also witnessed the increase in the average selling price off the new models and also as the new models like Pepsi with their in house developed the trip. This can also contribute around 10000, RMB saving and cost reduction per unit, where that in Q2. The vehicle gross margin after neurocrine will be improved to around 15.
Speaker Change: Perfect and for the almost brands as in the second quarter. It was still only have a one product 60.
Speaker Change: 19 won't be released in Q3, then well as we expect to that growing volume where they all 16. We also expect to start to improvements regarding the manufacturing costs driven by the volume increase that as it is only contributed to by one model the improvement from the manufacturing cost perspective, both the limited and the <unk>.
Speaker Change: Major gross margin driver for the armor brand will still be happening in Q3, driven by the launch of the new model, whereas that are we believe that the overall gross margin in Q2 will be coming back to a double digit that's our target.
Speaker Change: Ah well Mitsui show times, and what they'll do to sit down with and do that change into the channel but.
Speaker Change: So you'd say it took us a quantum change cuda on the Canadian they used to have them with pneumonia as he was Higgins.
Speaker Change: I kind of alluded to know how many selling me, yes, Neal the Molina told me about nausea than we used to do that who can call me too he too cheap and that might be tougher to dollar pseudo deal I spoke about in D. C.
Speaker Change: So you see some delays for the New York and how does it go.
Speaker Change: Molly lets have led top of mind.
Speaker Change: Equally there's some of that slip at all either choose to them.
Speaker Change: And a little bit more information ours, and Neil products, our core volume products at 5566, we're having the vertical product transition during the April and May were that to clean up the <unk>.
Speaker Change: Inventory for the previous generations, we offered the promotional spend that's the actual core margin for that generation was relatively low, but starting to and as we are rolling out and delivering new products way I'll also witness better improve the margin on this product for E. S. Six the vehicle gross margin will be around 20% each.
Speaker Change: This is slightly higher than the Asics and also for the 85 and 85 touring we also expect to improve to well the gross margin.
Speaker Change: So overall speaking for the new brands. It is equal margin improvement is on the right.
Speaker Change: Okay.
Speaker Change: Hum.
Speaker Change: Conversely, the woman.
Speaker Change: Maybe you could Joshua well I'm going to conquer.
Speaker Change: Now without the.
Speaker Change: So don't know Joshua mosquito and until now some of them I E run pneumonia to somehow wuxi to shuttle.
Speaker Change: Promoting the spot.
Speaker Change: Marty.
Speaker Change: Shooting in country Usher leader, that's all for me.
Speaker Change: Essentially they go.
Speaker Change: So I don't think so.
Speaker Change: And then just your thoughts about kind of watch them going in Iraq.
Josh Nichols: I think Josh Nichols.
Shannon: Alright, Thanks Shannon.
Josh Nichols: Succeeding.
Josh Nichols: We could immediately.
Speaker Change: Todays Joshua.
Speaker Change: My question is about the number of full quota breakeven assumptions.
Speaker Change: The new plant, we are rich and if I can remember.
Speaker Change: Yep.
Speaker Change: Oh no problem. We also have Tony if I can go to them they can save $100 number full quota.
Speaker Change: 250 start doesn't mean P. S. T coffee, we can reach 35 billion and Hawkeye. So it until we got 80% gross margin recondition roughly 6 billion.
Speaker Change: Perfect.
Speaker Change: Mentioned you prefer.
Speaker Change: You kind of R&D expense declined to two to pull tweak to play you've got opinion you also actually.
Speaker Change: So we will be around 10%. So overall, the total opex won't be alone.
Speaker Change: And I assume this is roughly the assumption to reach a breakeven and then a full quarter. Thank you.
Speaker Change: Yeah.
Speaker Change: Oh, I mean think of it we don't need that to something bigger to the.
Speaker Change: I mean, do you need to see a tablet to a.
Speaker Change: A woman Sei Jin <unk> Bao got equal to each other.
Speaker Change: Neighborhood.
Speaker Change: And your Amiga moved Alba said.
Speaker Change: So you had some delays so no minimum wage maybe it wasn't tied to show them a standard merchandise I cannot be one bleed yep.
Speaker Change: Oh <expletive>.
Speaker Change: She does so by them all you do take a young buffet, even Cleveland say.
Speaker Change: It shows about anything conductivity until you get them up in Queensland, there without sugar games, but you know most of the police because MLD that she's a one linda.
Speaker Change: You put out some hum.
Speaker Change: Comma pavlovian, saying agree most within the Mi.
Speaker Change: Digital with medallion Lee.
Speaker Change: So you take the changes that you mean that you could achieve that.
Speaker Change: Yeah.
Speaker Change: Thank you for the question actually that you Christian you have mentioned is more or less our operational targets internal as well regarding the monthly sales volume slightly over 15000 units.
Speaker Change: <unk> gross margin of 17% to 18% combined margin on SG&A expenses, I think 10% after south revenues end up for the R&D expenses also achieving that.
Speaker Change: That level of management and the control where that we are able or we have the confidence of achieving them at the break even as we see also our peers, who achieved the profitability I run on a similar scale and also the similar numbers.
Speaker Change: And you're in there so no woman the Maldives, So that'll go to tell what that not sure that so you.
Speaker Change: I'm sure I'm, making with the Sanger P. Bad things are go to towards the third she will come to you and buy somebody a gun on K C.
Speaker Change: So the woman to eat through that May go kill the quizzing, yes acre cocooned the family it's Nate.
Speaker Change: I would call a true the genius, you'll need to go through a bunch.
Speaker Change: So that you and pay for them in Cushing, if I'm in a bow called and it's useful so Sudan for the Genco sugar pool, Oh man that.
Speaker Change: Julien on the so the cheapest Samsung Cook has because it does seem like a sausage elements, who kill citadel that sounds I know women. It's in good times and she and the time it shouldn't have been based in the time between true though.
Speaker Change: So I'm going to jump in and show a cool if I'm in the junior and Glenn needed them to.
Speaker Change: We're here to take a double eagle or should I get what I'm really.
Speaker Change: You can pay and you should have done a good job. So she was a little bit of a genuine will be all so union leaves sure you'll see it show up and then have you.
Speaker Change: She is interested as yet.
Speaker Change: Vaccine kind of tend to widen when we just had our when we just to have one new brand. We also managed to achieve a vehicle gross margin enough over time to prevent that back then we haven't started the major investments in the R&D or the multi brand strategy.
Speaker Change: Starting with an ear, we have witnessed a quarter over quarter and losses, mainly because of our intensive investment into the R&D, often new products and technologies multi brand strategy and also the networks actually infrastructure and networks.
Speaker Change: In Q2. This year. We are also still nothing a year off of harvest or a peer at Asa harvests to where we are going to see the tangible without starting Q2 and then towards Q4. This year. It brings out from our brand development product development network and also our network development.
Speaker Change: As the cost reductions and efficiency improvements, where that's I think to your question. What are your assumption is kind of also a guidance for us to achieve our operational target and also profitability in Q4. This year and we are confident in that.
Speaker Change: Thank you okay. Thank you very much.
Speaker Change: Yeah.
Speaker Change: Your next question comes from Paul Gong with UBS. Please go ahead.
Paul Gong: Hi, Thanks.
Paul Gong: Thanks for taking my question. My first question is regarding the market feedback after the delivery of the five series six series I have seen some positive comments, but also have seen some disappointment among some of the cop I always thought.
Paul Gong: It is still using like 400 volt battery instead of like car.
Paul Gong: My home to focus on like I say you can night.
Paul Gong: Do you have when you're trying to suites to adopt my hungry votes factory system upfront component.
Paul Gong: And so what other office coffee will receive a photocopier.
Paul Gong: That's my first question. Thank you.
Paul Gong: Yeah.
Paul Gong: Okay.
Paul Gong: It's usually a part no.
Paul Gong: And then take a ali what kind of deals.
Speaker Change: So a machine the yes, Lou you said you eat your fab two fab T. No recession, obviously, you had some business at home so I'm clear.
Speaker Change: P Delta men onto 20 minutes time, indeed should see a pause on that.
Speaker Change: You should teach them that.
Speaker Change: Shifting to the shovel them inside each named Richard Chefoo, Shelley Simpson Skywest is related to your food and you're in Queensland.
Speaker Change: The combination of tissue.
Speaker Change: I shouldn't have to chew on Silicon Kombucha centrella.
Speaker Change: Okay.
William Li: Thank you for the question since the launch of our New E. S. Six inches X 85, and 85 two in late May we have received quite a lot market feedback and mostly positive as people do see significant improvement in the product competitiveness.
William Li: Especially for that chip technologies by OSB called printing system and also active safety features we have debuted on the E. T. Nine are also now available on the five and six Crs models no woman.
Speaker Change: Well I would say, it's a female bought the call you up and I know that you took in 70. So that's a big Oh, and then suddenly they said that they could get on the gigolo wasn't didn't want law.
William Li: Susan I guess in the impulse someday, we go how did she yet.
Speaker Change: Do you Wanna Chesnut take Oh, the element that I think are Michel for me as it changed enough in Dallas, Houston Tell me T cell and physically put it to good Shuang, let me answer.
William Li: Now that you didn't see the teach them the oh so.
William Li: So you had some delay as Sean said tough I mean, I'll take the feedback from that that's all I have.
Speaker Change: I mean, instead of choosy as Aneel to go Coca Cola cushion you Talladega use.
Speaker Change: Ah well I'd say, it's a yeti, though who you <expletive> shown a NIM question that you're trying until you buy food or your Baidu dangled English ones either to the ton yeah. Both of them create even a question do you think they use a bingo salvage line.
Speaker Change: You know who he or she Aloha Amelia Belle was booed yet cause you Paul you tend to see some delay in sort of on the cigarettes, if I'm in the to the to the feedback of hassle.
Speaker Change: Oh, well, then but she named middle parts of Japan, So summed it up buybacks with United.
William Li: And regarding the high voltage platform on four of the five five and the six six they are still running on a 400 votes.
William Li: Feedback is also okay. As we not only have improved the energy efficiency of this four models for extended range than the previous generation. We also have our power swap network that can ensure a good experience for our users, especially we have this charge both swap.
William Li: And Upgradable network enabled by the power swap. We also provided the flexible battery upgrades vouchers to our you search for the new 5566 models in that case, they have the flexibility to operate to 100 kilowatt hour battery for longer range and yesterday I would like to have it even longer.
William Li: Arrange they can also choose to upgrade to 150 kilowatt hour battery with more than 1000 kilometer driving range. So while speaking with improved energy efficiency and also try to swap a whole network. The feedback on the high voltage system is fine and for the short term. We don't have plan to upgrade this form out of the night.
Speaker Change: Hunter about architecture and platform.
William Li: Paul.
Paul Gong: Yeah. Thank you My second question is regarding the channel network right now you'll have fun on deal and songs two networks and our Firefly is so we've seen them do you'll see some and just now you have mentioned that.
Paul Gong: There is some you know way to find new exclusive solutions.
Paul Gong: Recently, we saw battery swap stations and so to do the Oh put out there more and show up.
Paul Gong: Do you foresee some components, that's how you could further reform the channel and finally accretion with the synergies between the two networks and so perhaps some cross sell or Tom might cost.
Paul Gong: Yeah.
Paul Gong: Non network, how do you think about the channel management.
Neil: Neil I'll.
Paul Gong: I would say showroom in them from in house that we're about to take a lead.
Paul Gong: A woman the tune cotai that she she ought to come in.
Paul Gong: The change in that that the bulk of that is oh, what's that choose them Oh, well me Yale you should shoot on the to go away life with a low though.
Paul Gong: True true doesn't do need legal and then I'd tell you should you choose to change in a town they ship tons through <unk>. So you can do to our troops come into the show do you have to go out and look at the time that you could calculate it didn't didn't tell me you could either she had one.
Paul Gong: So there is some delay sort of on a probably haven't played out yet in terms of poorly slipping to the bathroom.
Speaker Change: Thank you for the questions are regarding the point of sale for the envoy and the new brands, we will still keep them separated but in the mid and the back half we are leveraging the synergies and also better integration between the two brands both in the headquarters and also in the region as actually in many regions the general managers.
Paul Gong: So those weekends are taking a concurrent rose to manage to sell some stuff from you and the other brands. So overall speaking, we will better integrate desk to brands from the meat and if I kind of perspective for better efficiency and synergies, but in the meantime, we will also need to strike a balance between efficiency ended the brands, especially in Asia and so on.
Paul Gong: Longer term as well they integrate and leverage the synergies that we are not being combining appoint itself no.
Speaker Change: But funding Thunder trigger you put your funding done she might sort of them in a woman shows a day you choose that it's easy to use yet to go to town shoes.
Speaker Change: On the Dundee a woman who choose to go okay. So it's gonna defensive to.
Paul Gong: The adult shouldn't take a take a fellow number.
Paul Gong: No.
Paul Gong: We didn't push also to punish the density.
Paul Gong: What about Bunions done until we go straight on to me, although you could see the.
Paul Gong: Women's handling of food tea and need attached to that.
Paul Gong: You went to this wasn't something we clearly you can see in the news now near to a unbelievable hoonah to go I mean, it's really the Delta you can coordinate Todd the door you timed a little swizzle, you'll quit a body English no one did.
Paul Gong: Tens of vehicle, Matt that's a good she has had a dead to me a couple of onions, and do you see the envelope to social to either sit on about it then.
Paul Gong: She will continue to be there you go so that's yet another let down the woman.
Paul Gong: Send them say you got to.
Paul Gong: No. That's a good thing that you the email and then yield to the social digital minded, there's little meal onion back and know that they've been on.
Paul Gong: That's a good thing.
Paul Gong: So it shouldn't with them.
Paul Gong: The other thing the Hunter, you'll tell what you turn it shouldn't go away.
Paul Gong: No me a kind of a pick up on your intent to use them.
Paul Gong: Isn't that Tony eager to.
Speaker Change: Good show down in the case of material. So you mentioned that Jeff amendments shall father, Tony Good I'm sure.
Paul Gong: Yeah.
Paul Gong: Regarding using power swap stations as I pointed up sells are we are doing some on some demonstrations and the pilot rounds in search of agents, where we will not open the stores, but to use the power swap stations as a window to get the to reach out to our users and that demonstrate our products and services in that case, we will have that.
Paul Gong: South team and violence outside they will promote the product without having our stores. This is actually a unique selling point, where a unique advantage of the new company by leveraging the power swap stations and especially for the almost user in our survey we have found that around 60% of our users actually think power swap station right.
Paul Gong: That capability all screen para swap is the top of purchasing basically for them to buy the envelope products. This is also another demonstration of the significant value I somehow by swap for the envelope products and almost self and the same actually happens to the Neurocrine as Oh, there is a small country in Shandong cord cutting for county and in that play.
Paul Gong: Tongue, but actually it's a time theres a ton in Shandong publishing for time and in that place we have no stores showrooms, but only serve a power swap station yeah in that place, where we have more than 1000, new users. This is also as I V case, showing how power swap station can contribute to the south volume in that case, we are doing.
Paul Gong: [noise] myself systematic measures and also device centering on using power bi swap as a point of cells.
Paul Gong: Central PA.
Paul Gong: Thank you very much.
Paul Gong: Uh huh.
Paul Gong: Right.
Speaker Change: Your next question comes from you can Deng with U S base, Alright, H S. B Shane Please go ahead.
Speaker Change: Yeah. Thank you thing I got two question. The first thing continues.
Speaker Change: All of my model. So the two are two new motto is actually at the high end pricing point, what what's the key selling points against the current backdrop that seems to be a little bit consumption downgrade this year and roughly what's the mix between 60, 80, and 90 expectation, especially into them by the end of the fourth quarter.
Speaker Change: Yeah.
Speaker Change: Okay.
Speaker Change: It's not the 19 did a C check our filings in the U S.
Speaker Change: So that to the to the to the SUV a L.
Speaker Change: Oh 80 that nobody in the Hunter should trigger a downward sort of too good to be tons of downtime to load those who.
Speaker Change: Maybe some to go down in Sudan.
Speaker Change: Yeah.
Speaker Change: Thank you for the question almost all of my T is a smart largest states flagship SUV. Its a three row SUV and the L. A tea is a large five seater SUV and those models are all for mainly for the family users.
Speaker Change: Turning to our two looked though competitor a dome in Atlanta.
Speaker Change: You put you in the near the seafood Tommy shouldn't Cindy Jasmin, Susana Union, who teach with anger coaching to the tanker patents.
Speaker Change: Almost they came for the almost products. It is based out on neal's technology and innovation with targeted and targeted the design for the family users.
Speaker Change: Good to chat even could a damn good job of going through that so it's a woman physically two things. She doesn't go to two other than she had sat here until the tenancy and tons and.
Speaker Change: Thank goodness.
Speaker Change: Telling the Hitachi in Laguna I'm sure once you're in the town that you could okay. You can put a dollar turns out it sounds you're choosing kind of items.
Speaker Change: And where that we actually studied the mainstream family users in the Chinese market and we have developed a value equation for the product you can find definitions and also development of the armor brand, whether that's our our design and also functionalities of the well.
Speaker Change: It's mainly started for value creation for the family users No woman third southern Sudan. There. So you didn't sign similar well then.
Speaker Change: N T D go coons in there it would seem to me to go into the chamber is hung up.
Speaker Change: The number of Candela women side, so a little bit and that's a long shot and then John This is a good chunk of my thing is I shouldn't say that they're doing whether it's the meringue Ocean suitor, telling me. He got some penciled out a survey to sort of let down on a similar sort of adult cereals.
Speaker Change: He is a seasonable seafood cognizant talented angle Queen gender equal attention then to meet.
Speaker Change: And as we have to do with the L. 90, after the Shanghai Auto show, we have demonstrated how large the space is when this model, especially where it's big Franck, whereas six also comes on board the car still enough to accommodate 10 suitcases.
Speaker Change: Actually this is an unprecedented functionality for a three row SUV eat Ronnie on batteries, where ice where a range extender Oh. This is actually a product innovation driven by our tech innovation in this space in Malaysia, but they didn't know how to do.
Speaker Change: We didn't put a gun call timing going on there yes.
Speaker Change: Take a number that kind of alone in saying they couldn't himself on me.
Speaker Change: Either Chifundo NEVA, Oh, and then pass it we'll do it in 2019 <unk> done something about equal I totally agree Paul do that somebody can shoot Hong.
Speaker Change: So the deal on the tongue Yo usual Buda.
Speaker Change: Who actually has the freedom to me all students have been until now cause Sheila Huntington.
Speaker Change: Yeah.
Speaker Change: And in the Wisdom information released by the M. I N T. If you call. It I was impressed by the low energy consumption and the energy efficiency of the Al My T. Because it's such.
Speaker Change: Such a peak of three row, SUV and running on 85 kilowatt hour battery with a car still managed to achieve 6600 kilometer trying to arrange it is actually impressive without achieved on this model and also an important advantage for the family users considering the overall driving range and also the cost out.
Speaker Change: Their ownership well minimally in the G Couponing, Sheila Boku foods Jagoda took a dip down now to pass and you sometimes it will be to sit down and you know sort of juniors and light and then the town nicos since would've waited.
Speaker Change: Google I'm, just kind of wanted to Virginia.
Speaker Change: Right.
Speaker Change: So the balance would decide that they go to match and dispatch and Suvs to talk to them it tends to be the tweets and down a bit but it was the same.
Speaker Change: So it didn't in the Colombian citizens on the baton to eat.
Speaker Change: P. A T V isn't downward push out you told about evolution.
Speaker Change:
Speaker Change: Oh 90.
Speaker Change: 90 O a T in guys food Lingo Guy then to go home yeah, good to the U K.
Speaker Change: Home as if they don't even seasoned that'd be who dwell has achieved who comes in parallel.
Speaker Change: The.
Speaker Change: So the thing that you.
Speaker Change: You do them in to the two one they don't want to forget I'm glad that somebody a while ago.
Speaker Change: Tangela Cuda to the Chute, then Jody Jody.
Speaker Change: I told you see them really opinion, a suitable without the need of idea.
Speaker Change: And actually driven by the type of innovation and also the lower ring lithium price or in general battery costs. We are seeing a turning point for the growth often need and a large SUV.
Speaker Change: Electric SUV.
Speaker Change: Look at the first four months of this year regarding the growth rate in the mid to large and also large SUV segments. The growth rates for the past models is actually 63% year over year for the range extender adverse change to only one per cent for P. High is also roughly 60%, whereas this as a backdrop.
Speaker Change: We believe that our a T N our nitrogen won't be true game changer. In this segment and we have confidence that we are creating better experience and also more user value through our innovation and product innovation plus we have our nationwide available power swap network to help relieve the rain jacket.
Speaker Change: All of our users without we believe that this year will also witnessed a turning point for the growth of meat and a large battery electric SUV segment.
Speaker Change: It would be chip.
William Li: Oh, Thank you William.
William Li: But on mobile.
Speaker Change: Go ahead please.
Speaker Change: Yeah, well the company is heading towards the fourth quarter breakeven target. We also conscious that gearing ratio is also running high.
Speaker Change: Can you share a little bit more about the cash flow improvement and the cash management.
Speaker Change: Uh huh.
Speaker Change: Egypt, and Russia, and Colombia, with a shotgun shipyard daughter, she meat you just you know, particularly with Anglo when we give you. The short answer is sure Kimberly Alginate flange I go ahead sorry.
Speaker Change: Our working capital, which went on to do it you bet.
Speaker Change: Hey, John kind of them that you can do or are you always have capex of Peru, you fishing, though me all one client a J C b to take a drink and I thought your the thought she does he could put options you'd be the change should.
Speaker Change: It should be so it won't be that I saw that John but you need to do their thing and they wish out. Unfortunately, we got out of the shower gel.
Speaker Change: So here at home.
Speaker Change: We do think of them once you've told me in what I'm trying to if it comes with a particular emphasis about your commercial fishing and saying you can be GBP 10 minutes, you should see a true thought about when did you could touch on maybe what you would you eat you do that you got a barbell that.
Speaker Change:
Speaker Change: I saw that when we shut down there. So we have a yeah, kashi, which together we thought it was kind of a great dog Baffin Shankle now shut down that's usually that's usually where you Jacob that I shouldn't G&A would've been changing the way that you go gotcha.
Speaker Change: Right.
Speaker Change: Thank you for the question in Q1 this year with the C. The lower range of our cash position. This is partially due to the seasonality of the car cells as in Q4 of last year, our South volume was 72000 units while in Q1 to 42000 units that that has actually caused the outflow.
Speaker Change: After working capital after more than 10 billion RMB and in the meantime, we also have some capital expenses as well as the one off expenses for example, the put option for our convertible bonds, which is around $2 7 billion RMB, but in the meantime, we are also raising funds in late March we have completed the.
Speaker Change: Our in Hong Kong stock exchange and raising around 4.0, Saratoga and Hong Kong dollar yet this part of the fundraising was not recognized until early April. So it was actually not recognized in our Q1 financial results, but as we have a shared starting April we are seeing our software all of them.
Speaker Change: To pick up the pace with that this will also help to bring our operating cash flow to the to the normal track.
Speaker Change: Do you a month or two you do the shutdown geeing sure that tend to have a child, who can't either a particular food Sundar a woman that Jacobs sends email whenever you're where you're using email you hooked off with with a gunshot to book without Jungly truth. After Q Saddam do we shut down that you took in gala to go mobile.
Speaker Change: Come out with them and you just see the T.
Speaker Change: Thank you, so basically shut down and all of them and they've been using e-mail halfway that shows you that you should know that homework and the tenure of our mobile App a chunk of the two we can email omega and negotiating to shutting down the <unk> route.
Speaker Change: Yeah.
Speaker Change: And as we have mentioned our volume guidance for Q2, it's between 72 to 75000 units. This will help improve further improve our operating cash flow and in Q3, and Q4, we had higher expectations and targets for the softball them, which will help our operating cash flow to continue to grow and improve in Q4.
Speaker Change: This year and for the full year, we also see the possibility of achieving positive free cash flow.
Speaker Change: So darn telco in the Congo. For example, this year jumping from each other's horse <expletive> out well, maybe it was Jim Countrywoman does take a field that's events in the country on a trip all women the turbo tandem Quad O. There sure you wanted to go deeper.
Speaker Change: In the meantime, we will continue our cost reduction and efficiency improvement efforts to have a tighter control over our opex and the capex to make sure that our expensive unnecessary.
Speaker Change: Oh I see.
Speaker Change: Thank you.
Speaker Change: Yeah.
Speaker Change: Your next question comes from John Chang with C. I stay safe. Please go ahead.
John Chang: Oh. Thank you for taking my question I only have one question about the overseas market strategy.
John Chang: Turkey, especially with all the kind of slight Firefly global.
John Chang: Expunction, so they're not having to the overseas market.
John Chang: Ah I think that in the last year, we have already achieved it sounds probably amongst our housing units, especially in the European market. So Ah Ah in this year.
John Chang: From the beginning we see in our Sop row, our brands are in European market expand a lot on the call got cut rates.
John Chang: And also considering the potential adjustments after the tariff policy.
John Chang: Well you can market on overseas expansion.
John Chang: From a strategic priority for 2025 Watts, our Oh Mercy sounds target for this year and also we see that I mentioned in the first five scrubber expansion, so clear short Oh gatehouse, including the tiny Oh also region powered pain and also the constant strategy.
John Chang: Yeah.
John Chang:
John Chang: Oh, no and then Oh someday I saw the Hunter woman Sei Jin Young woman chooses to trigger you didn't guide you know what I'm seeing tenders. So kind of you got 10 of them well then you'd said no hunter Joe the Macondo, so you'll see them throughout the cold season upon us.
John Chang: And here you can see our team had some weight figured though make a good that's all I got.
John Chang: I mean go function.
John Chang: Well then you can see I know it sounds a little need to been sued a public robot Oh gosh, that's a mouthful.
John Chang: No but I.
John Chang: I would think that is.
John Chang: But they tend to sometimes in that I saw them at the point of time teachers.
John Chang: The junior F y E.
John Chang: It seems as though.
John Chang: You had good job although centralization.
John Chang: Or just how that EMEA hangbo upsides here Tonight to go to Oakland, Neil This isn't that great.
John Chang: We can choose to go sit on a shelf and without putting the Guadalajara.
John Chang: Sent them delight, Virginia, when do you tie that there wont be able to pay it out it will take all that equal you'd see Oh I see the teachings and he gets the call.
John Chang: Uh huh.
John Chang: He was a termination that you can put your.
John Chang: Yeah.
Speaker Change: As mentioned starting this year, we haven't started to change our global expansion strategy before in Europe, We mooney rely on our own selves and our service network via the direct sales model. Starting this year, we started to switch to look for a local partner for each country and as I've mentioned that we have already partners.
John Chang: With more than 10 partners in more than 15 markets and we are bringing more partners on board for more often.
John Chang: For broader market entry and regarding the overall, our global expansion and the strategy, we actually have a pretty long term view for our international development, where the Firefly brand it will be rolled out to several European countries as well as several other countries. This year and then regarding the product from the Amo and.
John Chang: The new plants are depending on the demands of the markets. We will also see if there are good products for some countries and regions worldwide, but overall speaking we don't have a very aggressive volume.
John Chang: Assumption or target for the global market because a we mainly look at this.
John Chang: A long term perspective.
John Chang: Yeah.
John Chang: Sandeep Sandeep.
Speaker Change: Our next question comes from Tina how with Goldman Sachs. Please go ahead.
Tina How: Thanks management for taking my questions I have two questions. The first one is as we are targeting to reach them.
Speaker Change: <unk> a more than 50000 amongst the volume at the four Q of this year, how are we planning our production capacity and what kind of production capacity do we have now and then what level well really well we reached five four Q and then are we adding a new lines or adding double shift.
Speaker Change: To achieve that.
Speaker Change:
Speaker Change: A woman center 10 am I supposed to take a nickel manto, Mississippi, though the.
Speaker Change: See a lot of women's and say when the Sun comes out.
Speaker Change: It's to say to go to it when it comes to the total time see a some delays for you Lisa timeshare industry ought to be a strong balance impact in overall I would tell them and I'll do them in bushey there wouldn't be.
Speaker Change: Thank you for the question our current production capacity will be enough to support our delivery assumptions for Q4. This year, we are preparing our sort of factory and it will be put in operation starting in September this year and of course that time production lines in some factories. We also have the flexibility to adapt to.
Speaker Change: Arrange double shifts in that case production capacity it won't be a problem for us.
Speaker Change: Yeah.
Speaker Change: Thank you and then my second question is regarding our working capital our cash conversion cycle, because a we have observed that both our if we look at full year 2024 versus 2023.
Speaker Change: The our account payable days, our accounts receivable as well as inventory days have actually gotten longer and if we look at <unk> 25 versus <unk> 24. These days also got longer on the year over year basis. So going forward I think for the full year of 2025 and maybe longer term.
Speaker Change: How should we think about these cash conversion cycle, what is the optimal days for Oh working capitals. Thanks.
Speaker Change: Yeah.
Speaker Change: But they're not.
Speaker Change: It's the only thing I found a woman Oh, Jacob I'm good to go GA and I wouldn't draw your issue.
Speaker Change: You guys sure Jake you've done quite well shall we cannot assure you that I think of course I'm not in that attrition in a seizure jenglish chanting human T V and I say, well then tissue can go to.
Speaker Change: It's also the more shouldn't you at home take Oh, I didn't hear the OTT Moshe So again, that's why and I'll take it and you shouldn't show equal the OTT with the John even more sure Jason.
Speaker Change: So where does she antenna Chicago itself each other there's a huge hole.
Speaker Change: So again you saw that in the whole class of him I don't sure. So you know.
Speaker Change: Okay.
Speaker Change: Those are in China, Yeah me too.
Speaker Change: From what Youre, saying, so what kind of a degree of cushion that could be Jake Oh T V. More Chicago of course, Oh, Yes, Hello, which I'm trying to do is here. So he took that they'll do that shockwave.
Speaker Change: Rooney, So again, just really worried there were many shutdowns.
Speaker Change: She's trying to do there, but how should we wish to change your Moshe so you're quite a way you'll she'll do that sometimes that's a woman say Ah course, when their cooling economy, who did a joke with my country. My Hershey are younger that to reality superstar Cheyenne gel magazine, Pat yourself out of that.
Speaker Change: Sure you sat down and did you go south Angie the orphans, either Johnny English into life, well any woman the telcos right.
Speaker Change: Yeah.
Speaker Change: Thank you for the question as you have mentioned the two key parameters inventory level and also the accounts payable regarding the inventory level as we see growing intensity in terms of the market competition. We are also switching ourselves model from OTT that order to delivery model to more inventory based.
Speaker Change: In that case Oh. This is also a better practice to cater to the demands of the consumers. We are many of them would like to pick up their car if that as long as possible. So that's how we are switching to the inventory based on our model. We also are seeing higher inventory levels required in the vehicles as well as the production materials in comparison to the OTT smoked.
Speaker Change: It's the way we'd like to continue to keep up this Australian aghast at that growing in.
Speaker Change: Fear competition, then we will also see the growing level of the inventory back we will have a very strict and tight control over inventories offset both vehicles and the materials basically are they reasonable inventory level of our vehicles won't be around one third to half of the monthly sales volume of each brand.
Speaker Change: So even for them to show them, what do you call in Shanghai, and that's a good chunk Tina eat juice your email type of it think of Panmure.
Speaker Change: I can kind of do with John Tony the Borgata trying to drive either on a quarter over quarter here he's here.
Speaker Change: Blocks no Josh in anyway.
Speaker Change: And because like I'm sure that she owns about you that you don't want them.
Speaker Change: Well I'm, not saying that you're going to have a builder in timeshare shoots or she can you buy the same game that you plan to take our Impella darn since you put the goings on there Jake Ah Ah Ah goes home, but I'm, having a job or you could do yoga and Oh yeah.
Speaker Change: Yeah, you know, they're going to find out who does show or buy a bunch about it I'm sure they're going to I'm not I'm not sure. If you can think about the changing their dependents atlantica, a wound out acreage and he'll do going down even king Kong, saying somewhat shall I saw a woman the Newport Shanghai. She may have been a diverse suite of women.
Speaker Change: Gel fill out my son understanding that well Amanda it's huge on you can see on the a P. D. U N. Okay, and then real quick news, we're talking something like anyway, I don't think a chunk between you want me to tackle now I'd keep it sounds you're way Oh boy that they've taken some ghastly tushar, if a junk telling me it could be all right.
Speaker Change: And regarding your second question on where the second parameter on the account payable actually the payment duration, we set for our suppliers I has always been the same that's around the 90 days past due to the accounting AR and also financial release as part of our partner there are certain fluctuations that is also mainly.
Speaker Change: Related to the use of the Tac for the payment.
Speaker Change: Within the 90 day payment duration, we normally will ask well normally they will pay half in cash to our suppliers and another half are in check, but depending on the supply of the goods and also the urgency of the supplier or the types of suppliers. They will also have a variety of terms and conditions for the payment started to receive.
Speaker Change: 100% payment only 100% payment in check and start talking about only receive or allow for 100% dependent in cash waiting 60 days. So the payments terms and conditions also sorry, if I'm a supplier to supplier, but the overall duration is consistent as we seek growing south volume in that case, we will.
Speaker Change: Also see growth in the purchasing value office commodities and goods from our suppliers are multiply it by the volume and also the duration. We will also see the rising level with our account payable, but overall speaking that's actually normal as it's relevant to the volume the south log them off the product.
Regina: Thank you Regina.
Danny Chu: Thank you that's very clear thanks for them it's Danny.
Regina: Okay.
Speaker Change: As there are no further questions now I'd like to turn the call back over to the company for closing remarks.
Regina: Thank you again for joining us today, if you have further questions. Please feel free to contact our IR team through the contact information on the website. This concludes the conference call. You may now disconnect. The line. Thank you.
Regina: Okay.
Regina: Okay.
Regina: [noise].
Regina: Yeah.
Regina: [noise].