Q1 2026 Pony.ai Inc Earnings Call

May 26, 2026

Operator: Ladies and gentlemen, thank you for standing by, and welcome to Pony.ai Inc.'s Q1 2026 Earnings Conference Call. At this time, all participants are in a listen-only mode. After the management's prepared remarks, there will be a question and answer session. As a reminder, today's conference call is being recorded, and a webcast replay will be available on the company's investor relations website at ir.pony.ai. I would now turn the call over to your host, George Shao, Head of Capital Markets and Investor Relations at Pony.ai. Please go ahead, George.

Speaker #1: After the management's prepared remarks, there will be a question-and-answer session. As a reminder, today's conference call is being recorded, and a webcast replay will be available on the company's investor relations website at ir.pony.ai.

Speaker #1: I would now turn the call over to your host, George Chow, Head of Capital Markets and Investor Relations at Pony.ai. Please go ahead, George.

Speaker #2: Thank you, Operator. Hello, everyone. We appreciate you joining us today for Pony AI's first quarter 2026 earnings call. Earlier today, we issued a press release with our financial and operating results.

George Shao: Thank you, operator. Hello, everyone. We appreciate you joining us today for Pony.ai's Q1 2026 earnings call. Earlier today, we issued a press release with our financial and operating results, which is available on our investor relations website. An earnings presentation, which we will refer to during the conference call, can also be accessed and downloaded on our investor relations website. Joining on the call are Dr. James Peng, Chairman of the Board and CEO, Dr. Tiancheng Lou, CTO, and Dr. Haojun Wang, CFO of the company. They will provide prepared remarks, followed by a Q&A session. Before we begin, please refer to the safe harbor statement in our earnings release, which applies to this call as we'll be making forward-looking statements.

George Shao: Thank you, operator. Hello, everyone. We appreciate you joining us today for Pony.ai's Q1 2026 earnings call. Earlier today, we issued a press release with our financial and operating results, which is available on our investor relations website. An earnings presentation, which we will refer to during the conference call, can also be accessed and downloaded on our investor relations website. Joining on the call are Dr. James Peng, Chairman of the Board and CEO, Dr. Tiancheng Lou, CTO, and Dr. Leo Wang, CFO of the company. They will provide prepared remarks, followed by a Q&A session. Before we begin, please refer to the safe harbor statement in our earnings release, which applies to this call as we'll be making forward-looking statements.

Speaker #2: Which is available on our investor relations website. The earnings presentation, which we will refer to during the conference call, can also be accessed and downloaded on our investor relations website.

Speaker #2: Joining on the call are Dr. James Peng, Chairman of the Board and CEO; Dr. Tianchun Lu, CTO; and Dr. Liu Wang, CFO of the company.

Speaker #2: They will provide prepared remarks, followed by a Q&A session. Before we begin, please refer to the Safe Harbor statement and our earnings release, which apply to this call, as we'll be making forward-looking statements.

Speaker #2: Please also note that we will discuss non-GAAP measures today, which are more thoroughly explained and reconciled to the most comparable measures reported under GAAP in our earnings release, available on the investor relations website and in our filings with the SEC and the Hong Kong Stock Exchange.

George Shao: Please also note that we will discuss non-GAAP measures today, which are more thoroughly explained and reconciled to the most comparable measures reported under GAAP in our earnings release available on the investor relation website and filings with SEC, and Hong Kong Stock Exchange. I will now hand over to our Chairman and CEO, Dr. James Peng. Please go ahead.

Speaker #2: I will now hand it over to our Chairman and CEO, Dr. James Peng. Please go ahead.

Speaker #3: Thank you, George. Hello, everyone. Thank you for joining our earnings call. We kicked off 2026 with an amazing first quarter. This strong start defines our growth momentum for the whole year.

James Peng: Thank you, George. Hello, everyone. Thank you for joining our earnings call. We kicked off 2026 with an amazing Q1. This strong start defines our growth momentum for the whole year. Let me start with the highlights. I'm proud to report that in Q1 2026, our total revenue grew by 145% year-over-year. We also achieved record high quarterly robotaxi revenue. Specifically, our robotaxi revenues grew nearly 400%, powered by a more than 450% surge in fare-charging revenues. Our operational momentum is accelerating across the board. We have scaled our robotaxi fleet to exceed 1,700 vehicles. Amplified this expansion through a massive surge in user adoption. Now, our registered users grew more than 200% year-over-year in China. In fact, our weekly average paid orders so far in May grew more than 100% compared to the beginning of the year.

Speaker #3: Let me start with the highlights. I'm proud to report that in Q1 2026, our total revenue grew by 145% year over year, and we also achieved record-high quarterly robotaxi revenue.

Speaker #3: Specifically, our robotaxi revenues grew nearly 400%, powered by our more than 400%—a 50% surge in fare charging revenues. Our operational momentum is accelerating across the board.

Speaker #3: We have scaled our robotaxi fleet to exceed 1,700 vehicles and amplified this expansion through a massive surge in user adoption. Now, our registered users grew more than 200% year over year in China.

Speaker #3: In fact, our weekly average paid orders so far in May grew more than 100% compared to the beginning of the year. Lastly, we continue to expand our operating area, currently broadening our service footprint into downtown Guangzhou.

James Peng: Lastly, we continue to expand our operating area, currently broadening our service footprint into downtown Guangzhou. Globally, we have been advancing our operations in the capital of Croatia, realizing Europe's first commercial robotaxi service. Looking at our overall Q1 results, I'm thrilled that our strategic and execution moats translated directly into our exponential growth in robotaxi and fare-charging revenues. By scaling our fleet, user base, and paid order volume, we have achieved consistent month-over-month growth this year. This is a remarkable achievement, as spring typically is a low season for ride-hailing. Our dual-engine strategy that is focusing on both China and global markets, and the joint deployment model started unlocking new and diversified revenue streams. China market remains our primary growth engine, where we have secured a dominant lead.

Speaker #3: Globally, we have been advancing our operations in the capital of Croatia, realizing Europe’s first commercial robotaxi service. Looking at our overall Q1 results, I’m thrilled that our strategic and execution modes translated directly into our exponential growth in robotaxi and fare-charging revenues.

Speaker #3: By scaling our fleet, user base, and paid order volume, we have achieved consistent month-over-month growth this year. This is a remarkable achievement, as spring typically is a low season for ride-hailing.

Speaker #3: Our dual-engine strategy, which focuses on both China and global markets, and the joint deployment model have started unlocking new and diversified revenue streams. The China market remains our primary growth engine.

Speaker #3: Where we have secured a dominant lead, we are steadily ramping up our domestic fleet while simultaneously broadening our operational footprint. We expanded our operation in Guangzhou from Nansha and Panyu districts into Haijou district.

James Peng: We are steadily ramping up our domestic fleet while simultaneously broadening our operational footprint. We expanded our operation in Guangzhou from Nansha and Panyu Districts into Haizhu District, which is the heart of Guangzhou that covers high-demand areas like Canton Tower, the Pazhou CBD, and the Canton Fair Complex. In Shenzhen, we have been continuously increasing the size and the density of our fleet in Nansha and Bao'an Districts, the city's two busiest areas. For key transportation hubs, we are now providing comprehensive airport transfer services across Beijing, Shenzhen, and Guangzhou. Our international expansion is also gaining traction. We have now established a presence in nine countries and started services to the public in four overseas markets, including Croatia, Qatar, Singapore, and South Korea. In the capital of Croatia, Zagreb, we realized the first robotaxi commercialization in Europe.

Speaker #3: This is the heart of Guangzhou that covers high-demand areas like Canton Tower, the Pazhou CBD, and the Canton Fair Complex. In Shenzhen, we have been continuously increasing the size and the density of our fleet in Nansha and Bao'an districts.

Speaker #3: The city's two busiest areas for key transportation hubs—we are now providing comprehensive airport transfer services across Beijing, Shenzhen, and Guangzhou. Our international expansion is also gaining traction.

Speaker #3: We have now established a presence in nine countries and started services to the public in four overseas markets, including Croatia, Qatar, Singapore, and South Korea.

Speaker #3: In the capital of Croatia, Zagreb, we realized the first robotaxi commercialization in Europe. In the Middle East, our footprint in Dubai and Qatar continues to expand.

James Peng: In the Middle East, our footprint in Dubai and Qatar continues to expand, currently initiating driverless deployment in Dubai. These achievements serve as proof that our model can be applied smoothly across multiple regulatory and operational environments, ultimately creating solid revenue streams. As for the joint deployment model, we consistently make significant strides. Because of our technology leadership, our operational success, and our commercial maturity, partners increasingly recognize us as their preferred collaborator. We have seen more partners from both domestic and international markets join forces with us, starting to contribute sizable revenue in Q1. Our robotaxi success is continuously driven by our innovation and execution, which helps us to achieve a large-scale fleet, excellent technology and operation, and a superior user experience. Moving forward, we will focus on reinforcing these areas to expand market share and cement our industry leadership.

Speaker #3: Currently, initiating driverless deployment in Dubai. This achievement serves as proof that our model can be applied smoothly across multiple regulatory and operational environments. Ultimately, creating solid revenue streams.

Speaker #3: As for the joint deployment model, we consistently make significant strides. Because of our technology leadership, our operational success, and our commercial maturity, partners increasingly recognize us as their preferred collaborator.

Speaker #3: We have seen more partners from both domestic and international markets join forces with us, starting to contribute sizable revenue in Q1. Our robotaxi success is continuously driven by our innovation and execution.

Speaker #3: Which helps us to achieve a large-scale fleet. Excellent technology and operation, and superior user experience. Moving forward, we will focus on reinforcing these areas to expand market share and cement our industry leadership.

Speaker #3: Operating a scaled fleet with consistent stability is a powerful testament to our technology and operational maturity. As we scale, we are supercharging our growth engine.

James Peng: Operating a scaled fleet with consistent stability is a powerful testament to our technology and operational maturity. As we scale, we are supercharging our growth engine. We continue to build competitive barriers and trust from policymakers, and fortify our brand position at the forefront of user mindshare. Currently, we are accelerating the rollout of Gen 7 vehicles across Toyota, Beijing Auto, and Guangzhou Auto, exceeding 1,700 robotaxi vehicles. At the Beijing Auto Show last month, we debuted our 2027 version of the robotaxi for domestic markets. This upgraded version will achieve further BOM cost optimization to less than RMB 230,000. This competitive pricing facilitates rapid scaling of the robotaxi fleet for the years to follow. Safety has always been the foundation of our company, which is ensured by our technological and operational advantages. Our industry-leading L4 technology, vehicle-level intelligence, and resilient fleet management help us to maintain uncompromised safety.

Speaker #3: We continue to build competitive barriers and trust from policymakers, and fortify our brand position at the forefront of user mindshare. Currently, we are accelerating the rollout of Gen 7 vehicles across Toyota, Beijing Auto, and Guangzhou Auto.

Speaker #3: Exceeding 1,700 robotaxi vehicles. At the Beijing Auto Show last month, we debuted our 2027 version of the robotaxi for domestic markets. This upgraded version will achieve further BOM cost optimization to less than ¥230,000.

Speaker #3: This competitive pricing facilitates rapid scaling of the robotaxi fleet for the years to follow. Safety has always been the foundation of our company, which is ensured by our technological and operational advantages.

Speaker #3: Our industry-leading L4 technology, vehicle-level intelligence, and resilient fleet management help us to maintain uncompromised safety. This proven mastery of highly complex scenarios enables our robotaxis to navigate peak rush hours, dense urban areas, and bad weather conditions.

James Peng: This proven mastery of highly complex scenarios enables our robotaxis to navigate peak rush hours, dense urban areas, and bad weather conditions, satisfying surging user demand. We have moved beyond a novel experience into a go-to daily transportation choice. The results speak for themselves. Our robotaxi fares maintain a premium over the entry-level ride-hailing services. Despite this premium pricing, demand remains exceptionally robust, particularly during peak hours. Notably, our weekly average paid orders so far in May increased by more than 100% compared to the beginning of the year, significantly outpacing industry-wide growth. Beyond that, we are continuously optimizing ground operations from charging efficiency to dispatching algorithms. This, in turn, boosts our fleet utilization and reduces operational costs. Now let me move to our robotruck business.

Speaker #3: Satisfying surging user demand, we have moved beyond a novel experience into a go-to daily transportation choice. The results speak for themselves. Our robotaxi fares maintain a premium over the entry-level ride-hailing services.

Speaker #3: Despite this premium pricing, demand remains exceptionally robust, particularly during peak hours. Notably, our weekly average paid orders so far in May increased by more than 100% compared to the beginning of the year.

Speaker #3: Significantly, outpacing industry-wide growth. Beyond that, we are continuously optimizing ground operations, from charging efficiency to dispatching algorithms. This, in turn, boosts our fleet utilization and reduces operational cost.

Speaker #3: Now, let me move to our robo-truck business. Our Gen 4 robo-truck is slated for mass production in the second half of the year. With pre-production vehicles currently rolling off the production line, I'm also pleased to share that in Q1, robo-truck revenues were up 31% year over year.

James Peng: Our Gen 4 robotruck is slated for mass production in the H2 of the year, with pre-production vehicles currently rolling off the production line. I'm also pleased to share that in Q1, robotruck revenues were up 31% year over year. This was driven by scaling up long-haul operations. We also strive to expand our addressable market across multiple fronts, particularly in intra-city urban logistics. To this end, we launched our L4 autonomous light truck in April, leveraging our fully automotive-grade and fully redundant Level 4 robotaxi architecture. In terms of Intelligent solutions, a business we recently renamed from licensing and applications to better reflect our expanding business in this segment. Q1, the ADC, essentially the autonomous domain controller shipments in this segment surged by over 500% year over year. This was mainly driven by domain controller deployments in low-speed delivery applications.

Speaker #3: This was driven by scaling up long-haul operations. We also strive to expand our addressable market across multiple fronts, particularly in intra-city urban logistics. To this end, we launched our L4 autonomous light truck in April, leveraging our fully automotive-grade and fully redundant Level 4 robotaxi architecture.

Speaker #3: In terms of intelligent solutions, a business we recently renamed from Licensing and Applications to better reflect our expanding business in this segment. Q1, the ADC—essentially the autonomous domain controller—shipments in this segment surged by over 500% year over year.

Speaker #3: This was mainly driven by domain controller deployments in low-speed delivery applications. 2026 is off to a strong start for Pony. We have achieved supercharged revenue growth in all three business lines without any compromise in safety.

James Peng: 2026 is off to a strong start for Pony.ai. We have achieved supercharged revenue growth in all three business lines without any compromise in safety. Since the first day of our founding, we have been committed to provide safe and reliable autonomous driving services. It is our deepest moat, and it's now the perfect stage for Pony.ai to demonstrate what a decade of rigorous engineering looks like. Our fourfold robotaxi revenue growth is fueled by accelerated user adoption in domestic Tier 1 cities and revenue contributions from our joint deployment model, both domestically and globally. Reflecting this powerful commercial momentum, I am now raising our 2026 annual targets that we forecasted earlier this year. First, upgraded fleet target. We are now on a clear path to surpass a fleet size of 3,500 vehicles, which is an upward revision from our initial 3,000 target. Second, accelerated revenue growth.

Speaker #3: Since the first day of our founding, we have been committed to providing safe and reliable autonomous driving services. It is our deepest moat, and it's now the perfect stage for Pony to demonstrate what a decade of rigorous engineering looks like.

Speaker #3: Our four-fold robotaxi revenue growth is fueled by accelerated user adoption in domestic Tier 1 cities, and revenue contributions from our joint deployment model both domestically and globally.

Speaker #3: Reflecting this powerful commercial momentum, I am now raising our 2026 annual targets that we forecasted earlier this year. First, an upgraded fleet target: we are now on a clear path to surpass a fleet size of 3,500 vehicles.

Speaker #3: Which is an upward revision from our initial 3,000 target. Second, accelerated revenue growth. We are now lifting our robotaxi revenue target higher to more than 3.5 times.

James Peng: We are now lifting our robotaxi revenue target higher to more than 3.5 times from a previous target of tripling. Third, scaling our domestic and overseas presence. As we continue to accelerate the scaling up in our existing markets, we are firmly confident to expand our footprint to over 20 cities, both domestically and globally. As an industry leader, our mission goes beyond our own growth. We are here to lead the development of autonomous driving that has sustainable societal benefits. By providing a safe driverless technology that is safe and profitable at scale, we are building the future of mobility that the world can trust. With that, I will hand it over to our CTO, Tiancheng Lou, to go over the technology that is powering our leadership. Tiancheng, please go ahead.

Speaker #3: From a previous target of tripling. Third, scaling our domestic and overseas presence. As we continue to accelerate the scaling up in our existing markets, we are firmly confident to expand our footprint to over 20 cities both domestically and globally.

Speaker #3: As an industry leader, our mission goes beyond our own growth. We are here to lead the development of autonomous driving that has sustainable societal benefits.

Speaker #3: By providing a safe, driverless technology that is safe and profitable at scale, we are building the future of mobility that the world can trust.

Speaker #3: With that, I'll hand it over to CTO, Tianchen Lau, to go over the technology that's powering our leadership. Tianchen, please go ahead.

Speaker #2: Thank you, James. Hello, everyone. This is Tianchen. Our strong start in 2026 fully proves our solid technology foundation. Looking at our scale, our robotaxi fleet now surpasses 1,700 vehicles, and Q1 robotaxi revenue skyrocketed by nearly 400% year over year, hitting an all-time high.

Tiancheng Lou: Thank you, James. Hello, everyone. This is Tiancheng. Our strong start in 2026 fully proves our solid technology foundation. Looking at our scale, our robotaxi fleet now surpasses 1,700 vehicles, and the Q1 robotaxi revenue skyrocketed by nearly 400% year-over-year, hitting an all-time high. Building on this robust growth momentum, we are raising our full-year target to over 3,500 vehicles and revenue growth to three and a half times from the level of last year. This scaling up is driven by our proven capability to expand rapidly in high-value markets. By successfully entering the downtown core of Guangzhou Haizhu District and launching Europe's first commercial robotaxi service, we demonstrated our true technology leadership. Only a tech leader can deploy fleets so quickly into these high-value, ultra-complex urban areas.

Speaker #2: Building on this robust growth momentum, we are raising our full-year target to over 3,500 vehicles and revenue growth to 3.5 times the level of last year.

Speaker #2: This scaling up is driven by our proven capability to expand rapidly in high-value markets. By successfully entering the downtown core of Guangzhou's Haizhu District, and launching Europe's first commercial robotaxi service, we demonstrated our true technology leadership.

Speaker #2: Only a tech leader can deploy fleets so quickly into these high-value, ultra-complex urban areas. Because our technology navigates this environment safely, more users choose to call our robotaxis.

Tiancheng Lou: Our technology navigates this environment safely, more users choose to call our robotaxis, and more partners want to collaborate with us. It is this demonstrated capability that gives us the confidence to upsize our scale. Another clear testament was our performance during a series of concerts held in Guangzhou early this month. This event attracts tens of thousand attendees around the stadium. I'm very proud that Pony's robotaxi officially become a government-recommended transportation choice for the peak post-concert crowds. We pulled this off because we can master this level of extreme localized demand seamlessly. Being integrated into official local trans traffic plan proves that authorities highly trust our safety and operational capabilities. Ultimately, mastering this dense, high-traffic environment demands a leap in top-tier engineering by orders of magnitudes.

Speaker #2: And more partners want to collaborate with us. This demonstrates the capability that gives us the confidence to upsize our scale. Another clear testament was our performance during a series of concerts held in Guangzhou early this month.

Speaker #2: This event attracts tens of thousands of attendees around the stadium. I'm very proud that Pony's robotaxi officially became a government-recommended transportation choice for the peak post-concert crowds.

Speaker #2: We pulled this off because we can master this level of extreme, localized demand seamlessly. Being integrated into our official local traffic plan proves that the authorities highly trust our cities and operational capabilities.

Speaker #2: So ultimately, mastering this dance—high-traffic environment—demands a leap in top-tier engineering by orders of magnitude. It comes down to three core technical pillars: an exceptional training program, robust fail-operational redundancy, as well as safe and efficient fleet management.

Tiancheng Lou: It comes down to three core technical pillars. An exceptional training paradigm, robust fail-operational redundancy, as well as safe and efficient fleet management. Many years ago, we realized a critical truth. The public demands a much higher safety standard for L4 driverless robotaxis than for human drivers. This means when human drivers make mistakes, society accepts it as a normal part of daily life. If an AI driver makes a mistake, the public trust will be negatively impacted. This understanding shaped our tech stack years ago. We knew we could not achieve true L4 by simply learning from human driving data. More importantly, we knew we could not solve L4 through a simple scaling law like that of large language models, meaning just increasing parameter size and data volume. Learning from human driving data and scaling up parameters can give you a decent L2 driving system.

Speaker #2: Many years ago, we realized a critical truth: the public demands a much higher safety standard for L4 driverless robotaxis than for human drivers. This means when human drivers make mistakes, society accepts it as a normal part of daily life.

Speaker #2: But if an AI driver makes a mistake, public trust will be negatively impacted. This understanding shaped our tech stack years ago. We knew we could not achieve true L4 by simply learning from human driving data.

Speaker #2: More importantly, we knew we could not solve L4 through a simple scaling law like that of large language models—meaning, just increasing parameter size and data volume.

Speaker #2: Learning from human driving data and scaling up parameters can give you a decent L2 driving system. But that level of AI is only good enough for L2 assistant driving.

Tiancheng Lou: That level of AI is only good enough for L2 assistant driving when a human acts as a backup. It can never work for large-scale L4 robotaxis because it cannot significantly beat human safety levels. Driving is very different from AI coding. In coding, the AI does not need to make decisions with ultra-low latency, and the first output does not need to be perfect. The AI can try, fail, and fix errors multiple times using an agent framework, compilers, and test environments. Humans expect to see a final result except multiple rounds of trial and error. For AI driver, the model output must be instant and correct on the first try. Therefore, we started using reinforcement learning and world model years ago. Today, this approach allows our robotaxi to drive much safer than humans, especially in complex areas.

Speaker #2: When a human acts as a backup, it can never work for large-scale L4 robotaxis because it cannot significantly beat human safety levels. Driving is very different from AI coding.

Speaker #2: In coding, the AI does not need to make decisions with ultra-low latency, and the first output does not need to be perfect. The AI can try, fail, and fix errors multiple times using an agent framework, competitors, and test environments.

Speaker #2: Humans expect to see a final result, except through multiple runs of trial and error. But for an AI driver, the model output must be instant and correct on the first try.

Speaker #2: Therefore, we started using reinforcement learning and world model years ago. Today, this approach allows our robotaxi to drive much safer than humans, especially in complex areas.

Speaker #2: This early bet gave us a massive first-move advantage, allowing us to rapidly deploy our robotaxi in high-value markets globally. However, for true L4 vehicles, achieving safety just at an algorithmic level is not enough.

Tiancheng Lou: This early bet gave us a massive first-mover advantage, allowing us to rapidly deploy our robotaxi in high-value markets globally. However, for a true L4 vehicle, achieving safety just at the algorithmic level is not enough. If a system downgrades and causes an accident or simply stops dead on a high-speed road to wait for rescue, the public will not accept it. That is why every single Pony.ai's robotaxi features a full-stack, multi-layer redundancy architecture for both software and hardware. This gives us fail-operational capability. If any component fails during a trip, the system stays fully functional. The car will continue to drive safely to the secure spot and pull over, avoiding traffic congestion and rear-end crashes. Furthermore, our car can drive normally even when there's no network or GPS signal, both of which can easily drop in urban environments. We also do not rely on high-definition maps.

Speaker #2: If a system downgrades and causes an accident, or simply stops dead on a high-speed road to wait for rescue, the public will not accept it.

Speaker #2: That is why every single Pony's robotaxi features a full-stack, multi-layer redundancy architecture for both software and hardware. This gives us full operational capability. If any component fails during a trip, the system stays fully functional.

Speaker #2: The car will continue to drive safely, choose a secure spot, and pull over, avoiding traffic congestion and rear-end crashes. Furthermore, our car can drive normally even when there is no network or GPS signal.

Speaker #2: Both of which can easily drop in urban environments. We also do not rely on high-definition maps. For example, even when road layouts have limited markings, change significantly, or even if we need to drive in the opposite lane, our system adapts and navigates safely based on real-time road detection.

Tiancheng Lou: For example, even when road layouts or lane markings change significantly, or even if we need to drive in the opposite lane, our system adapts and navigates safely based on real-time road detection. We also detect any event instantly. Our cars are equipped with impact sensors, so the system knows immediately if a collision occurs or stops the vehicle right away. We also detect hardware faults, software failures, and network instability instantly to ensure driving safety. We even have specialized water-wading sensors to make sure our cars do not enter deep puddles that could cause damage. As our operation expands, keeping the entire fleet safe becomes just as critical as a single robotaxi's safety. To achieve this, we scale our intelligence into a city-wide safety net, protecting our large-scale operation through three strong lines of defense. The first line is prevention.

Speaker #2: We also detect any event instantly. Our cars are equipped with impact sensors, so the system knows immediately if a collision occurs or stops the vehicle right away.

Speaker #2: We also detect hardware faults, software failures, and network instability instantly to ensure driving safety. We even have specialized water-wading sensors to make sure our cars do not enter deep puddles that could cause damage.

Speaker #2: As our operation expands, keeping the entire fleet safe becomes just as critical as single robotaxi safety. To achieve this, we scale our intelligence into a city-wide safety net, protecting our large-scale operation through three strong lines of defense.

Speaker #2: The first line is prevention. We have a dedicated safety team to systematically eliminate risks from the very beginning. We use technical design to stop safety issues before they happen.

Tiancheng Lou: We have a dedicated safety team to systematically eliminate risks from the very beginning. We use technical design to stop safety issues before they happen, including risks from human errors or cyber attacks. For example, our remote assistants only provide high-level guidance. They do not control the car. The onboard module on the vehicle is responsible for any collision or accident avoidance. This ensures our remote assistant cannot cause an accident through wrong input or network delay. The second line is detection. If demand spikes and our vehicles end up heading in the same direction, our smart dispatching system ensures they don't arrive at the same intersection all at once, but rather arrive one after another. If a road is blocked or congested, our system will also detect it instantly and notify the whole fleet to avoid making the traffic worse. The third line is response.

Speaker #2: Including risks from human errors or cyberattacks. For example, our remote assistant only provides high-level guidance; they do not control the car. The onboard module on the vehicle is responsible for any collision or accident avoidance.

Speaker #2: This ensures our remote assistant cannot cause an accident through wrong input or network delay. The second line is detection. If demand spikes and our vehicles end up heading in the same direction, our smart dispatching system ensures they don't arrive at the same section all at once, but rather arrive one after another.

Speaker #2: If a road is blocked or congested, our system will also detect it instantly and notify the whole fleet to avoid making the traffic worse.

Speaker #2: The third line is response. We establish dedicated ground support teams. If a vehicle encounters any issue on the road, our rescue personnel will arrive at the scene within minutes to handle the situation immediately.

Tiancheng Lou: We establish dedicated ground support teams. If a vehicle encounters any issue on the road, our rescue personnel will arrive at the scene within minutes to handle the situation immediately. In short, our technology makes our operations safe, and this large-scale operation builds our ultimate moat. We choose the right foundation from day one, and we now have the unique capability and first-mover advantage to rapidly expand in high-value markets. By the end of this year, we target to expand our fleet to over 3,500 vehicles across more than 20 cities. This massive scale will allow us to unblock even greater commercial value while continuing to deliver the first, most trusted L4 robotaxi service, both domestically and then globally. This concludes my prepared remarks. I will now pass the call to our CFO, Dr. Haojun Wang. Haojun, please go ahead.

Speaker #2: In short, our technology makes our operations safe. And this large-scale operation builds our ultimate mode. Because we chose the right foundation from day one, we now have the unique capability and first-move advantage to rapidly expand in high-value markets.

Speaker #2: By the end of this year, we target to expand our fleet to over 3,500 vehicles across more than 20 cities. This massive scale will allow us to unblock even greater commercial value.

Speaker #2: While continuing to deliver the first, most trusted L4 robotaxi service, both domestically and globally. This concludes my prepared remarks. I will now pass the call to our CFO, Dr. Liu Wang. Liu, please go ahead.

Speaker #1: Thank you, Tianchen. Hello, everyone. This is Liu. I will focus on year-over-year comparisons for the first quarter of 2026, unless otherwise noted. For detailed financials, please refer to our earnings release.

Haojun Wang: Thank you, Tianchen. Hello, everyone. This is Leo. I will focus on year-over-year comparisons for Q1 2026, unless otherwise noted. For detailed financials, please refer to our earnings release. 2026 is the year where our commercialization strategy translates into remarkable financial performance. This quarter, total revenues reached a record of $34.3 million, representing a 145% increase from $14 million in the same quarter last year. The triple-digit top-line growth was driven by robotaxi revenue growth of 395% and the Intelligent solutions growth of 246%. We are also capturing compounding benefits as we extend our autonomous driving technology from robotaxi into robotruck and other partners along the value chain. Diving deeper into robotaxi, this segment continues to serve as our core growth engine.

Leo Wang: Thank you, Tianchen. Hello, everyone. This is Leo. I will focus on year-over-year comparisons for Q1 2026, unless otherwise noted. For detailed financials, please refer to our earnings release. 2026 is the year where our commercialization strategy translates into remarkable financial performance. This quarter, total revenues reached a record of $34.3 million, representing a 145% increase from $14 million in the same quarter last year. The triple-digit top-line growth was driven by robotaxi revenue growth of 395% and the Intelligent solutions growth of 246%. We are also capturing compounding benefits as we extend our autonomous driving technology from robotaxi into robotruck and other partners along the value chain. Diving deeper into robotaxi, this segment continues to serve as our core growth engine.

Speaker #1: 2026 is the year where our commercialization strategy translates into remarkable financial performance. This quarter, total revenues reached a record of $34.3 million, representing a 145% increase from $14 million in the same quarter last year.

Speaker #1: The triple-digit top-line growth was driven by robotaxi revenue growth of 395% and intelligence solution growth of 246%. We are also capturing compounding benefits as we extend our autonomous driving technology from robotaxi.

Speaker #1: Into robo-truck and other partners along the value chain. Diving deeper into robotaxi, this segment continues to serve as our core growth engine. This quarter, we reached a record high robotaxi revenue of $8.6 million, which grew by nearly 400% compared with $1.7 million in the first quarter of 2025.

Haojun Wang: This quarter, we reached a record-high robotaxi revenue of $8.6 million, grew by nearly 400%, compared with $1.7 million in Q1 2025. As James mentioned, three key elements have helped Pony to achieve a leadership mode in robotaxi operation. These are scaled fleet, excellent technology and operation, as well as superior user experience. Pony's robotaxi has become a popular service that has captured user mind share. This is now reflected in our financial numbers. Specifically, our fare-charging revenues delivered a exceptional growth of 456%. This impressive increase was driven by several compounding factors. We continue to add more vehicles and expanding into more regions, especially to core downtown areas with higher economic values. Operating metrics reflect our growing capacity and the strong user demands.

Leo Wang: This quarter, we reached a record-high robotaxi revenue of $8.6 million, grew by nearly 400%, compared with $1.7 million in Q1 2025. As James mentioned, three key elements have helped Pony to achieve a leadership mode in robotaxi operation. These are scaled fleet, excellent technology and operation, as well as superior user experience. Pony's robotaxi has become a popular service that has captured user mind share. This is now reflected in our financial numbers. Specifically, our fare-charging revenues delivered a exceptional growth of 456%. This impressive increase was driven by several compounding factors. We continue to add more vehicles and expanding into more regions, especially to core downtown areas with higher economic values. Operating metrics reflect our growing capacity and the strong user demands.

Speaker #1: As James mentioned, three key elements have helped Pony to achieve a leadership mode in robotaxi operation. These are: a scaled fleet, excellent technology and operation, as well as superior user experience.

Speaker #1: Pony's robotaxi has become a popular service that has captured user mind share, and this is now reflected in our financial numbers. Specifically, our fare-charging revenues delivered exceptional growth of 456%.

Speaker #1: This impressive increase was driven by several compounding factors. We continue to add more vehicles and expand into more regions, especially into core downtown areas with higher economic values.

Speaker #1: Operating metrics reflect our growing capacity and the strong user demands. For example, our weekly average paid orders so far in May grew more than 100% compared to January.

Haojun Wang: For example, our weekly average paid orders so far in May grew more than 100% compared to January. Registered user increased more than 200% year-over-year. Our daily order growth rate continued to outpace the industry average. What makes this strong growth trajectory even more remarkable is our pricing power. Even after discounts, our effective fare rate per kilometer remains above entry-level pricing on ride-hailing platforms and is on par with the standard express tier. Our demand remains robust and is growing at a very fast speed. We believe this is a clear reflection of the superior ride experience and the robust technology we deliver, especially during peak hours and in traffic-heavy downtown areas. On the cost side, we continue to make good progress on both operating costs and the BOM cost fronts.

Leo Wang: For example, our weekly average paid orders so far in May grew more than 100% compared to January. Registered user increased more than 200% year-over-year. Our daily order growth rate continued to outpace the industry average. What makes this strong growth trajectory even more remarkable is our pricing power. Even after discounts, our effective fare rate per kilometer remains above entry-level pricing on ride-hailing platforms and is on par with the standard express tier. Our demand remains robust and is growing at a very fast speed. We believe this is a clear reflection of the superior ride experience and the robust technology we deliver, especially during peak hours and in traffic-heavy downtown areas. On the cost side, we continue to make good progress on both operating costs and the BOM cost fronts.

Speaker #1: Registered users increased to more than 200% year over year, and our daily order growth rate continued to outpace the industry average. What makes this strong growth trajectory even more remarkable is our pricing power.

Speaker #1: Even after discounts, our effective fare rate per kilometer remains above entry-level pricing on ride-hailing platforms, and it's on par with the standard express tier.

Speaker #1: Our demand remains robust and is growing at a very fast speed. We believe this is a clear reflection of the superior ride experience and the robust technology we deliver.

Speaker #1: Especially during peak hours and in traffic-heavy downtown areas. On the cost side, we continue to make good progress on both operating costs and the bond cost fronts.

Speaker #1: Pony's combined depreciation and operating costs per vehicle are already among the most competitive globally. And this is achieved while operating in the busiest downtown area during the morning and the evening peak hours.

Haojun Wang: Pony.ai's combined depreciation and operating costs per vehicle are already among the most competitive globally. This is achieved while operating in the busiest downtown area during the morning and the evening peak hours, and under most demanding traffic conditions. By leveraging operational efficiency, we continue to drive operating costs even lower and are also on track to bring robotaxi BOM costs below RMB 230,000 by mid-2027 in the domestic market. Together, these two levers, declining operating costs and the lowering BOM costs, will further enhance our robotaxi margins as we scale the fleet. Aside from fare-charging revenues, our joint deployment model has started to contribute meaningful revenues with both domestic and overseas partners. Such a model will enable more efficient use of capital in fleet deployment.

Leo Wang: Pony.ai's combined depreciation and operating costs per vehicle are already among the most competitive globally. This is achieved while operating in the busiest downtown area during the morning and the evening peak hours, and under most demanding traffic conditions. By leveraging operational efficiency, we continue to drive operating costs even lower and are also on track to bring robotaxi BOM costs below RMB 230,000 by mid-2027 in the domestic market. Together, these two levers, declining operating costs and the lowering BOM costs, will further enhance our robotaxi margins as we scale the fleet. Aside from fare-charging revenues, our joint deployment model has started to contribute meaningful revenues with both domestic and overseas partners. Such a model will enable more efficient use of capital in fleet deployment.

Speaker #1: And under most demanding traffic conditions. By leveraging operational efficiency, we continue to drive operating costs even lower, and are also on track to bring robotaxi bond costs below ¥230,000 RMB by mid-2027 in the domestic market.

Speaker #1: Together, these two levers—declining operating costs and the lowering of bond costs—will further enhance our robotaxi margins as we scale the fleet. Aside from fare-charging revenues, our joint deployment model has started to contribute meaningful revenues with both domestic and overseas partners.

Speaker #1: Such a model will enable more efficient use of capital in fleet deployment, specifically as a global technology enabler. We successfully launched the first commercial robotaxi service in the city center of Zagreb, Croatia, together with our local partners.

Haojun Wang: Specifically, as a global technology enabler, we successfully launched the first commercial robotaxi service in the city center of Zagreb for Asia, together with our local partners. Combined with our expanding operations in China, this is a strong testament to the execution of our dual-engine strategy. Turning to robotruck. Robotruck services revenue grew 31% to $10.2 million this quarter, up from $7.8 million in Q1 2025. This growth was driven by the addition of more trucks and the expansion of our diversified client base, reflecting increasing demand from downstream logistic clients in the long-haul business. We continue to see our industry-leading autonomous driving technology expanding into wider use cases. For example, long-haul trucking and intracity logistics.

Leo Wang: Specifically, as a global technology enabler, we successfully launched the first commercial robotaxi service in the city center of Zagreb for Asia, together with our local partners. Combined with our expanding operations in China, this is a strong testament to the execution of our dual-engine strategy. Turning to robotruck. Robotruck services revenue grew 31% to $10.2 million this quarter, up from $7.8 million in Q1 2025. This growth was driven by the addition of more trucks and the expansion of our diversified client base, reflecting increasing demand from downstream logistic clients in the long-haul business. We continue to see our industry-leading autonomous driving technology expanding into wider use cases. For example, long-haul trucking and intracity logistics.

Speaker #1: Combined with our expanding operations in China, this is a strong testament to the execution of our dual-engine strategy. Turning to robo-truck, robo-truck service revenue grew 31% to $10.2 million this quarter.

Speaker #1: Up from $7.8 million in the first quarter of 2025. This growth was driven by the addition of more trucks and the expansion of our diversified client base.

Speaker #1: Reflecting increasing demand from downstream logistics clients in the long-haul business, we continue to see our industry-leading autonomous driving technology expanding into wider use cases.

Speaker #1: For example, long-haul trucking and intercity logistics. Looking ahead, with the launch of the Level 4 autonomous light truck and the Gen4 robo-truck, we are firmly on track to deliver even better autonomous driving trucks with lower costs.

Haojun Wang: Looking ahead, with the launch of Level 4 autonomous light truck and the Gen4 robotruck, we are firmly on track to deliver even better autonomous driving trucks with lower cost, superior driving performance, and wider use cases, expanding into a wider addressable market. Our Intelligent solutions segment, formerly the licensing and application segment, delivered a remarkable growth of 246%, reaching $15.5 million in Q1 2026, up from $4.5 million in Q1 last year. This exceptional performance was mainly fueled by strong sales of autonomous domain controllers. Such strong growth is yet another testament to the opportunities of our autonomous driving technology as we empower other customers along the value chain. Moving to costs and margin, total cost of revenue was $28.7 million, translating to a gross margin of 16.2%. Total operating expenses were $63.9 million, a modest increase of 9.5%.

Leo Wang: Looking ahead, with the launch of Level 4 autonomous light truck and the Gen4 robotruck, we are firmly on track to deliver even better autonomous driving trucks with lower cost, superior driving performance, and wider use cases, expanding into a wider addressable market. Our Intelligent solutions segment, formerly the licensing and application segment, delivered a remarkable growth of 246%, reaching $15.5 million in Q1 2026, up from $4.5 million in Q1 last year. This exceptional performance was mainly fueled by strong sales of autonomous domain controllers. Such strong growth is yet another testament to the opportunities of our autonomous driving technology as we empower other customers along the value chain. Moving to costs and margin, total cost of revenue was $28.7 million, translating to a gross margin of 16.2%. Total operating expenses were $63.9 million, a modest increase of 9.5%.

Speaker #1: Superior driving performance and wider use cases are expanding into a broader addressable market. Our Intelligence Solution segment, formerly the Licensing and Application segment, delivered remarkable growth of 246%, reaching $15.5 million in the first quarter of 2026.

Speaker #1: Up from $4.5 million in the first quarter last year. This exceptional performance was mainly fueled by strong sales of autonomous domain controllers. Such strong growth is yet another testament to the opportunities of our autonomous driving technology.

Speaker #1: As we empower other customers along the value chain. Moving to costs and margin, total cost of revenue was $28.7 million, translating to a gross margin of 16.2%.

Speaker #1: Total operating expenses were $63.9 million, a modest increase of 9.5%. On a non-GAAP basis, operating expense was $59.3 million, representing a 20.2% increase. Such commitments, especially in R&D, have helped us maintain our technology leadership and will effectively drive down our bond cost.

Haojun Wang: On a non-GAAP basis, operating expense were $59.3 million, representing a 20.2% increase. Such commitments, especially in R&D, have helped us to maintain our technology leadership and will effectively drive down our BOM cost. Loss from operation was $58.3 million, remaining relatively flat compared to $56 million in Q1 last year. Net loss was $53.5 million compared to $37.4 million in Q1 last year. The increase was mainly attributable to the realization of investment income that occurred in Q1 2025, coupled with a modest increase in operating expenses. Excluding the impact from this investment realization, the underlying loss amount remained broadly stable. It's worth noting that the loss from operation margin narrowed drastically from -401% in Q1 2025 to -170% this quarter.

Leo Wang: On a non-GAAP basis, operating expense were $59.3 million, representing a 20.2% increase. Such commitments, especially in R&D, have helped us to maintain our technology leadership and will effectively drive down our BOM cost. Loss from operation was $58.3 million, remaining relatively flat compared to $56 million in Q1 last year. Net loss was $53.5 million compared to $37.4 million in Q1 last year. The increase was mainly attributable to the realization of investment income that occurred in Q1 2025, coupled with a modest increase in operating expenses. Excluding the impact from this investment realization, the underlying loss amount remained broadly stable. It's worth noting that the loss from operation margin narrowed drastically from -401% in Q1 2025 to -170% this quarter.

Speaker #1: Loss from operations was $58.3 million, remaining relatively flat compared to $56 million in the first quarter last year. Net loss was $53.5 million, compared to $37.4 million in the first quarter last year.

Speaker #1: The increase was mainly attributable to the realization of investment income that occurred in Q1 2025. Coupled with a modest increase in operating expenses, excluding the impact from this investment realization, the underlying loss amount remained broadly stable.

Speaker #1: It's worth noting that the loss from operations margin narrowed drastically, from -401% in the first quarter of 2025 to -170% this quarter. Similarly, our net loss margin narrowed from -267% to -156% year over year.

Haojun Wang: Similarly, our net loss margin narrowed from -267% to -156% year-over-year. The narrowing loss margin trend demonstrate our operating leverage driven by the rapid revenue growth and the gradual realization of commercial-scale benefits. Turning to our balance sheet. Cash and cash equivalents, short-term investments, restricted cash and long-term debts, and debt instruments for wealth management stood at $1.4 billion as of 31 March 2026. This compares to $1.5 billion as of 31 December 2025. We continue to maintain a exceptionally robust financial position with ample dry powder to execute our strategy. Net cash used in operating activities was $74.2 million this quarter, compared to $54.2 million in Q1 2025.

Leo Wang: Similarly, our net loss margin narrowed from -267% to -156% year-over-year. The narrowing loss margin trend demonstrate our operating leverage driven by the rapid revenue growth and the gradual realization of commercial-scale benefits. Turning to our balance sheet. Cash and cash equivalents, short-term investments, restricted cash and long-term debts, and debt instruments for wealth management stood at $1.4 billion as of 31 March 2026. This compares to $1.5 billion as of 31 December 2025. We continue to maintain a exceptionally robust financial position with ample dry powder to execute our strategy. Net cash used in operating activities was $74.2 million this quarter, compared to $54.2 million in Q1 2025.

Speaker #1: The narrowing loss margin trend demonstrated our operating leverage, driven by the rapid revenue growth and the gradual realization of commercial-scale benefits. Turning to our balance sheet, cash and cash equivalents, short-term investments, restricted cash, and long-term debt instruments for wealth management stood at $1.4 billion as of March 31, 2026.

Speaker #1: This compares to $1.5 billion as of December 31, 2025. We continue to maintain an exceptionally robust financial position, with ample dry powder to execute our strategy.

Speaker #1: Net cash used in operating activities was $74.2 million this quarter, compared to $54.2 million in the first quarter of 2025. The increase was primarily due to an increase in accounts receivable resulting from substantial sales revenue increases of autonomous driving domain controllers.

Haojun Wang: The increase was primarily due to an increase in the accounts receivable resulting from substantial sales revenue increase of autonomous driving domain controller, along with an increase of non-GAAP loss from operation. Capital expenditures were $12.5 million this quarter compared to $4.9 million in Q1 last year. The increase was primarily due to Gen7 vehicle production for the quarter and the procurement of vehicle components for future manufacture and investments in data center and servers. We believe 2026 will prove to be a defining year for the industry. We are confident in our ability to outperform the industry in operational and financial execution. With our solid robotaxi operational excellence, continuous BOM cost optimization, increasing partner interest, and a strong cash reserve, we are highly confident in accelerating our path towards sustainable, profitable growth for our shareholders.

Leo Wang: The increase was primarily due to an increase in the accounts receivable resulting from substantial sales revenue increase of autonomous driving domain controller, along with an increase of non-GAAP loss from operation. Capital expenditures were $12.5 million this quarter compared to $4.9 million in Q1 last year. The increase was primarily due to Gen7 vehicle production for the quarter and the procurement of vehicle components for future manufacture and investments in data center and servers. We believe 2026 will prove to be a defining year for the industry. We are confident in our ability to outperform the industry in operational and financial execution. With our solid robotaxi operational excellence, continuous BOM cost optimization, increasing partner interest, and a strong cash reserve, we are highly confident in accelerating our path towards sustainable, profitable growth for our shareholders.

Speaker #1: Along with an increase in non-GAAP loss from operations, capital expenditures were $12.5 million this quarter, compared to $4.9 million in the first quarter last year.

Speaker #1: The increase was primarily due to Gen7 vehicle production for the quarter, procurement of vehicle components for future manufacture, and investments in data center and servers.

Speaker #1: We believe 2026 will prove to be a defining year for the industry, and we are confident in our ability to outperform the industry in operational and financial execution.

Speaker #1: With our solid robotaxi operational excellence, continuous bond cost optimization, increasing partner interests, and a strong cash reserve, we are highly confident in accelerating our path towards sustainable, profitable growth for our shareholders.

Speaker #1: I will now turn the call over to the operator to begin our Q&A session. Thank you. We will now begin the question-and-answer session.

Haojun Wang: I will now turn the call over to the operator to begin our Q&A session. Thank you.

Leo Wang: I will now turn the call over to the operator to begin our Q&A session. Thank you.

Operator: We will now begin the question and answer session. To ask a question, you may press star then one on your touch tone phone. If you are using a speakerphone, please pick up your handset before pressing the keys. If at any time your question has been addressed and you would like to withdraw your question, please press star then two. For the benefit of all participants on today's call, please limit yourself to one question. If you have more questions, please re-enter the question queue. If you ask a question in Chinese, please repeat them in English. The first question today comes from Xiaoyi Li with Jefferies. Please go ahead.

Speaker #1: To ask a question, you may press star, then one on your touch-tone phone. If you are using a speakerphone, please pick up your handset before pressing the keys.

Speaker #1: If at any time your question has been addressed and you would like to withdraw your question, please press star, then two. For the benefit of all participants on today's call, please limit yourself to one question.

Speaker #1: If you have more questions, please re-enter the question queue. If you ask a question in Chinese, please repeat it in English. The first question today comes from Zhao Yili, with Jefferies.

Speaker #1: Please go ahead.

Xiaoyi Li: Hi. Thanks for taking my question, congrats on the strong quarter. Just one from me. I'd like to ask about the regulatory environment. We've seen quite a bit of movement on the policy side for the robotaxi sector, both in China and overseas. I was hoping you could share your perspective on how this evolving regulatory landscape is shaping up, and more importantly, how you see it impacting Pony.ai's business or your competitive positioning going forward. Thank you.

Xiaoyi Lei: Hi. Thanks for taking my question, congrats on the strong quarter. Just one from me. I'd like to ask about the regulatory environment. We've seen quite a bit of movement on the policy side for the robotaxi sector, both in China and overseas. I was hoping you could share your perspective on how this evolving regulatory landscape is shaping up, and more importantly, how you see it impacting Pony.ai's business or your competitive positioning going forward. Thank you.

Speaker #2: Hi, thanks for taking my question, and congrats on the strong quarter. Just one from me—I'd like to ask about the regulatory environment. We've seen quite a bit of movement on the policy side for the robotaxi sector, both in China and overseas.

Speaker #2: So, I was hoping you could share your perspective on how this evolving regulatory landscape is shaping up, and more importantly, how you see it impacting Pony AI's business or your competitive positioning going forward.

Speaker #2: Thank you.

Speaker #3: This is James, and I'll take this question. So, as far as I know, most of the policy discussions, both domestically and globally, are actually centered on the safe operation of robotaxi.

James Peng: This is James, and I'll take this question. As far as I know, most of the policy discussions, both domestically and globally, are actually centered on the safety operation of robotaxi. As you all know, safety is the cornerstone of the autonomous driving industry. Therefore, I would consider the safety discussion and the result of standardized safety or even higher safety measures are beneficial for the long-term stable development of the industry. At Pony, we have had many years of experience of successfully operating a large fleet and have experience working with regulators to have a healthy, more transparent environment. Especially in China, we have built a deep trust with regulatory authorities, and we consider that we will continue to work hand-in-hand with the regulators to safely bring autonomous driving to the public. Back to the safety itself.

Speaker #3: As you all know, safety is the cornerstone of the autonomous driving industry. Therefore, I would consider the safety discussion, and the results of standardized safety—or even higher safety measures—beneficial for the long-term, stable development of the industry.

Speaker #3: As Pony, we have had many years of experience successfully operating a large fleet and have the experience working with regulators to create a healthy, more transparent environment.

Speaker #3: Especially in China, we have built a deep trust with regulatory authorities, and we consider that we will continue to work hand in hand with the regulators to safely bring autonomous driving to the public.

Speaker #3: Back to the safety itself. As Tianxin mentioned, we have established a full lifecycle safety management system for both the autonomous driving vehicle itself and also the fleet.

James Peng: As Tiancheng Lou mentioned, we have established a full lifecycle safety management for both autonomous driving vehicle itself and also the fleet operation. Every vehicle features a fully redundant architecture with fail-operational capability. That is, our vehicles actually will always safely pull over even during an extreme case of system failure. Additionally, our fleet management has the capability to detect and respond to any unforeseen issues on the road. The whole system actually serves as a citywide safety net to prevent traffic jams and handle real-time road changes. This is actually how we ensure safety at scale. This highly sophisticated and robust safety system, and also the safety track record, have given us confidence to scale our business quickly. The current policy discussions and policy updates do not have any direct impact on our business.

James Peng: As Tiancheng mentioned, we have established a full lifecycle safety management for both autonomous driving vehicle itself and also the fleet operation. Every vehicle features a fully redundant architecture with fail-operational capability. That is, our vehicles actually will always safely pull over even during an extreme case of system failure. Additionally, our fleet management has the capability to detect and respond to any unforeseen issues on the road. The whole system actually serves as a citywide safety net to prevent traffic jams and handle real-time road changes. This is actually how we ensure safety at scale. This highly sophisticated and robust safety system, and also the safety track record, have given us confidence to scale our business quickly. The current policy discussions and policy updates do not have any direct impact on our business.

Speaker #3: Operation. Every vehicle features a fully redundant architecture with fail-operational capability. That is, our vehicles will actually always safely pull over, even during an extreme case of system failure.

Speaker #3: Additionally, our fleet management has the capability to detect and respond to any unforeseen issues on the road. The whole system actually serves as a citywide safety net to prevent traffic jams and handle real-time road changes.

Speaker #3: This is actually how we ensure safety at scale. This highly sophisticated and robust safety system, and also the safety track record, have given us confidence to scale our business quickly.

Speaker #3: The current policy discussions and the policy updates do not have any direct impact on our business. On the contrary, as you see during the prepared remarks, I have actually raised our business targets for the whole year of 2026.

James Peng: In contrary, we are, as you said during the prepared remarks, I have actually raised our business targets for the whole year of 2026. We are continuing to push forward with our Gen7 deployment, and we are making smooth progress towards our target in fleet size, revenue, and operational area expansion. As I mentioned, there's no immediate impact, and I believe that in the mid to long term, actually, the current standardized regulatory environment will play directly to our advantage as we already established as the industry leader. It highlights once again that the complexity of operating robotaxis at scale in dense urban environment, which is exactly we have proven our capability. I think ultimately, these high standards will consolidate the market, filter out the unqualified players, and further raise the entry barrier for the new players.

Speaker #3: We are continuing to push forward with our Gen7 deployment, and we are making smooth progress towards our targets in fleet size, revenue, and operational area expansion.

Speaker #3: So, as I mentioned, there's no immediate impact, and I believe that in the mid- to long-term, actually, the current standardized regulatory environment will play directly to our advantage, as we are already established as the industry leader.

Speaker #3: It highlights once again the complexity of operating robotaxis at scale in a dense urban environment, which is exactly what we have proven our capability.

Speaker #3: I think ultimately, this high standard will consolidate the markets, filter out the unqualified players, and further raise the entry barrier for new players.

Speaker #3: And as a result, it will help the long-term growth of the industry. With this, I'll hand over to the operator.

James Peng: As a result, it will help the long-term growth of the industry. With this, I'll hand over to the operator.

Speaker #1: The next question comes from Ming Sunli with Bank of America. Please go ahead.

Operator: The next question comes from Ming-Hsun Lee with Bank of America. Please go ahead.

Speaker #4: Hi, James, Tianxin, and Liu, congrats on the good results. So, given you raised your robotaxi fleet size to 3,500 by the end of the year and also increased the revenue, could you elaborate more on the key drivers behind your upward revision for these two numbers?

Ming-Hsun Lee: Hi, James, Tiancheng, and Haojun. Congrats for the good results. Given you raised your robotaxi fleet size to 3,500 by the end of the year, and also you raised the revenue, could you elaborate more on the key drivers behind your upward revision for these two numbers? Thank you.

Speaker #4: Thank you.

Speaker #3: Yeah, thank you, Ming, for asking this question. This is Liu. I'll take this one. So the upward revision is definitely showing that we are encouraged by our strong commercial momentum, especially the result of Q1.

Haojun Wang: Yeah. Thank you, Ming, for asking this question. This is Leo. I'll take this one. The upward revision is definitely showing that we are encouraged by our strong commercial momentum, especially the result of Q1. To be honest, this is actually moving faster than we expected, and it's reflecting many core areas in our robotaxi business. For example, we are seeing our domestic operations are accelerating. We are seeing the pickup in revenue in paid order volume and also in the user bases in all Tier 1 cities in China. This is really a reflection that we are providing a qualified service non-stop in Shenzhen and in Guangzhou. We are attracting more and more repeated user, because we can provide a service even during peak hours with consistency, even during complex scenarios. That eventually translates into more revenues.

Leo Wang: Yeah. Thank you, Ming, for asking this question. This is Leo. I'll take this one. The upward revision is definitely showing that we are encouraged by our strong commercial momentum, especially the result of Q1. To be honest, this is actually moving faster than we expected, and it's reflecting many core areas in our robotaxi business. For example, we are seeing our domestic operations are accelerating. We are seeing the pickup in revenue in paid order volume and also in the user bases in all Tier 1 cities in China. This is really a reflection that we are providing a qualified service non-stop in Shenzhen and in Guangzhou. We are attracting more and more repeated user, because we can provide a service even during peak hours with consistency, even during complex scenarios. That eventually translates into more revenues.

Speaker #3: To be honest, this is actually moving faster than we expected. And it's reflecting in many core areas of our robotaxi business. For example, we are seeing our domestic operations are accelerating.

Speaker #3: We are seeing the pickup in revenue in paid order volume and also in the user base in all Tier 1 cities in China. We think this is really a reflection that we are providing a qualified service nonstop in Shenzhen and in Guangzhou.

Speaker #3: And we are attracting more and more repeated users because we can provide a service even during peak hours with consistency, even during complex scenarios.

Speaker #3: And that eventually translates into more revenues. And the other point is how we make the UE breakeven milestone in Guangzhou and Shenzhen. This also serves as a proven case for future possibility.

James Peng: The other point is how we make the UE breakeven milestone in Guangzhou and Shenzhen. This also serves as a proven case for future possibility. That's why we're seeing many of the potential partners now they have the real interest, domestically and internationally, to really participate in our joint deployment business model. This could be more efficient use of our capital, but also means we could deploy more vehicles in different markets. Given all these facts and encouragement, that's why we have the confidence to push our robotaxi revenue growth target even higher to be 3.5x of 2025. Also our fleet size to be 3,500 vehicles by this year end. Now I've got to get back to the operator.

Leo Wang: The other point is how we make the UE breakeven milestone in Guangzhou and Shenzhen. This also serves as a proven case for future possibility. That's why we're seeing many of the potential partners now they have the real interest, domestically and internationally, to really participate in our joint deployment business model. This could be more efficient use of our capital, but also means we could deploy more vehicles in different markets. Given all these facts and encouragement, that's why we have the confidence to push our robotaxi revenue growth target even higher to be 3.5x of 2025. Also our fleet size to be 3,500 vehicles by this year end. Now I've got to get back to the operator.

Speaker #3: And that's why we are seeing many of the potential partners now—they have the real interest, both domestically and internationally, to really participate in our joint deployment business model.

Speaker #3: This could be a more efficient use of our capital, but it also means we could deploy more vehicles in different markets. So given all these facts and encouragement, that's why we have the confidence to push our robotaxi revenue growth target even higher, to be 3.5 times that of 2025.

Speaker #3: And also, our fleet size will be 3,500 vehicles by the end of this year. And now I get back to the operator.

Speaker #1: The next question comes from Wei Huang with Deutsche Bank. Please go ahead.

Operator: The next question comes from Wei Huang with Deutsche Bank. Please go ahead.

Speaker #5: Hi, this is Wei from EB. Thanks for answering my question. So I have a question on robotaxi operations. Recently launched the L4 Electra at the Beijing Auto Show.

Wei Huang: Hi, this is Wei from DB. Thanks for taking my question. I have a question on robotruck operations. You recently launched the L4 electric at the Beijing Auto Show. Can you explain the strategic considerations for launching this platform? Can you comment on the expansion plans? Thank you.

Speaker #5: Can you explain the strategic considerations for launching this platform? And can you comment on the expansion plan? Thank you.

Speaker #4: Thanks, Wei. This is James, and I'll take this question. As you consider, the company vision since our founding has always been autonomous mobility everywhere.

James Peng: Thanks, Wei. This is James, and I'll take this question. As you consider the company vision, since our founding, has always been autonomous mobility everywhere. To us, the word everywhere actually has two implications. One, expanding our presence across both domestic and overseas markets. The other is scaling our technology, across different vehicle platforms for both the passengers and the freight transportation. The launch of our L4 autonomous light truck actually aligns perfectly with our vision and our ambition. In the logistics sector, the value chain actually spans long-haul trucking, urban logistics, and the last-mile delivery. We already established a robotruck division that working on the long-haul logistics. For the last mile delivery, we are not directly working on it, but we actually have already becoming the leading ADC provider.

Speaker #4: And to us, the word 'everywhere' actually has two implications. One is expanding our presence across both domestic and overseas markets. And the other is scaling our technology across different vehicle platforms for both the passengers and the freight transportation.

Speaker #4: So, the launch of our L4 autonomous light truck actually aligns perfectly with our vision and our ambition. In the logistics sector, the value chain actually spans long-haul trucking, urban logistics, and the last-mile delivery.

Speaker #4: We already established a robotaxi division that is working on long-haul logistics, and for last-mile delivery, we are not directly working on it, but we actually have already become the leading ADC provider.

Speaker #4: So the current recent launch of our Level 4 light truck actually serves the purpose of completing one key segment in our full logistics portfolio.

James Peng: The recent launch of L4 light truck actually serves the purpose of completing one key segment in our full logistics portfolio. The platform for the L4 light truck also shares a nearly identical software stack as our robotaxi. It can also fully utilize our existing operational infrastructure, such as remote assistance, the ground support networks, and even the cleaning charging facilities. This unified architecture creates a powerful synergy. It can actually further slash out our light truck operating cost by half, compared with the human-driven light truck fleet. Also, we can actually lower the operational overhead of our robotaxi service because we can share a lot of the background support. In terms of the current status, we are developing the L4 light trucks, and it's already well underway.

Speaker #4: The platform for the Level 4 light truck also shares a nearly identical software stack as our robotaxi. It can also fully utilize our existing operational infrastructure, such as remote assistance, the ground support networks, and even the cleaning and charging facilities.

Speaker #4: This unified architecture creates a powerful synergy. It can actually further slash our light truck operating cost by half compared with the human-driven light truck fleet.

Speaker #4: Also, we can actually lower the operational overhead of our robotaxi service because we can share a lot of the background support. In terms of the current status, we are developing the Level 4 light trucks, and it's already well underway.

Speaker #4: For example, we co-developed this Level 4 electric light truck with CATL, and we are establishing a solid pipeline with some of the leading logistics companies for the future application of those trucks.

James Peng: For example, we co-developed this level 4 electric light truck with CATL. We are establishing a solid pipeline with some of the leading logistic companies for the future application of those trucks. In addition, we also started discussing with the regulators on the licensing front and also on the fleet management. We expect the autonomous light truck to begin scaled operation early next year. With this, I'll get back to the operator.

Speaker #4: In addition, we also started discussing with the regulators on the licensing front and also on the fleet management. So we expect the autonomous light truck to begin scaled operation early next year.

Speaker #4: With this, I'll get back to the operator.

Speaker #1: The next question comes from Ting Song with Goldman Sachs. Please go ahead.

Operator: The next question comes from Ting Song with Goldman Sachs. Please go ahead.

Speaker #6: Thanks for taking my question. Congratulations on the result. My question is on the technology part. So, regarding the VLA—visual language action—model in autonomous driving, could you please share more on Pony's strategy and your future expected technology path?

Ting Song: Thanks for taking my question. Congratulations on the result. My question is on the technology part. Regarding the VLA, Visual Language Action model in autonomous driving, could you please share more on Pony.ai's strategy and your future expected technology path? Do you think the language part is still necessary, as we recently noticed some supply chain players start to remove the language from their models? Thank you.

Speaker #6: Do you think the language part is still necessary, as we recently noticed some supply chain players start to remove the language from their models?

Speaker #6: Thank you.

Speaker #5: Well, this is Tianchen. I will take this one. Let me start by saying that the core of driving is understanding the intention of other road users and responding appropriately.

Tiancheng Lou: This is Tiancheng. I will take this one. Let me start from saying that the core of driving is understanding of intention of other road users, and respond appropriately. By putting an intention layer into our onboard model training, we generate different intention combinations and we evaluate the possibility of all other traffic participants. This design ensures our onboard module always selects the safest route and has a plan ready for any event, even for low possibility edge cases. We believe language is not the essence of driving. Also, language models take too much computer power for a car. Instead, we believe intention is the real core for driving. When humans drive, they think about the intention of other cars, not natural language. Crucially, this intention data is hard to get from simple road testing. We must generate it by world model.

Speaker #5: By putting an intention layer into our onboard model training, we generate different intention combinations, and we evaluate the possibility of all other traffic participants.

Speaker #5: This design ensures our onboard module always selects the safest route and has a plan ready for any event. Even for low-probability edge cases, we believe language is not a sense of driving.

Speaker #5: Also, language models take too much computer power for a car. Instead, we believe intention is the real core for driving. When humans drive, they think about the intention of other cars, not natural language.

Speaker #5: Crucially, this intention data is hard to get from simple road testing. We must generate it by one model. We believe large language models or language layers do not help on the car's inference side.

Tiancheng Lou: We believe large language models or language layers do not help on the car's inference side. While world model and the generative data are essential for training. In fact, autonomous driving and large language models do very different tasks. A large language model agent, like a coding tool, does not need to have very low latency. It does not need to be perfect on the first try. It works in a low-cost environment where it can try, fail, and fix mistakes inside the testing box. Driving has zero room for mistakes. If you make a mistake, it is an accident. Therefore, our tolerance for error hallucination is zero. To solve this, we built a virtual driving environment in our world model. This allows the system to try and fail during the training stage, not on the real road.

Speaker #5: While one model and generative data are essential for training, in fact, autonomous driving and large language models do very different tasks. A large language model agent like a coding tool does not need to have very low latency.

Speaker #5: It does not need to be perfect on the first try. It works in a low-cost environment where it can try, fail, and fix mistakes inside the testing box.

Speaker #5: But driving has zero room for mistakes. If you make a mistake, it is an accident. Therefore, our tolerance for AI hallucination is zero. To solve this, we build a virtual driving environment in our model that allows the system to try and fail during the training stage.

Speaker #5: Not on real roads. During the real-world inference stage on the car, our model does not pick the single highest possibility path. Instead, it chooses the action that ensures safety under any probability.

Tiancheng Lou: During the real-world inference stage on the car, our model does not pick the single highest possibility path. Instead, it chooses the action that ensures safety under any probability. With this, back to the operator.

Speaker #5: With this, back to the operator.

Speaker #1: The next question comes from Jeff Chung with Citi. Please go ahead.

Operator: The next question comes from Jeff Chung with Citi. Please go ahead.

Jeff Chung: Hey. Hello, James, Tiancheng, Leo. Thank you, and congratulations with your record-breaking Q1 results. How should we think about the balance between sustaining this high-growth trajectory and your increasing strategic investments, especially when you are revising of the full-year targets? Thank you.

Speaker #5: Hello James, Tianchen, Leo, thank you and congratulations on your record-breaking first-quarter results. How should we think about the balance between sustaining these high-growth trajectories and investments?

Speaker #5: Especially when you are revising the full-year targets. Thank you.

Speaker #3: Thank you, Jeff. This is Leo. I'll take this question. Yes, we have a very good Q1 result, which proves that our robotaxi commercialization strategy, due to engine strategy, is translating into accelerated top-line growth.

Haojun Wang: Thank you, Jeff. This is Haojun Wang. I'll take this question. Yes, we have a very good Q1 result, which proves that our robotaxi commercialization strategy, dual-engine strategy, is translating into accelerated top-line growth. As you can see, that our top-line growth is actually outpacing our expenditure, which resulted in our operating loss margin narrowed quite a lot this quarter. Given all this momentum, we are confident to raise our full-year business target so that we can achieve an even higher growth trajectory, which I think is really important for any growth company. Meanwhile, we need to make strategic increased investments in certain areas, hence to keep our advantages in the industry.

Leo Wang: Thank you, Jeff. This is Leo. I'll take this question. Yes, we have a very good Q1 result, which proves that our robotaxi commercialization strategy, dual-engine strategy, is translating into accelerated top-line growth. As you can see, that our top-line growth is actually outpacing our expenditure, which resulted in our operating loss margin narrowed quite a lot this quarter. Given all this momentum, we are confident to raise our full-year business target so that we can achieve an even higher growth trajectory, which I think is really important for any growth company. Meanwhile, we need to make strategic increased investments in certain areas, hence to keep our advantages in the industry.

Speaker #3: And as you can see, our top-line growth is actually outpacing our expenditure, which resulted in our operating loss margin narrowing quite a lot this quarter.

Speaker #3: Given all this momentum, we are confident to raise our full-year business target, so that we can achieve an even higher growth trajectory, which I think is really important for any growth company.

Speaker #3: In the meanwhile, we need to make strategic increased investment in certain areas, hence, to keep our advantages in the industry. Using example is we are actually on track to decrease our total bound cost to be less than ¥230,000 in the domestic market by mid-next year.

Haojun Wang: Using an example is, we are actually on track to decrease our total BOM cost to be less than RMB 230,000 in the domestic market by mid-next year, through our R&D works and the deepened collaboration with our OEMs. We think this definitely will be payback for our future deployment, and will attract more joint deployment business model partners. I think that this is a balancing regarding, again, the expenditure and also investment versus the trajectory of our growth. We are definitely putting the growth trajectory as our highest top priority. We will always follow a value-driven and a disciplined approach for these front-loaded expenditures. Thank you. I'll get back to the operators.

Leo Wang: Using an example is, we are actually on track to decrease our total BOM cost to be less than RMB 230,000 in the domestic market by mid-next year, through our R&D works and the deepened collaboration with our OEMs. We think this definitely will be payback for our future deployment, and will attract more joint deployment business model partners. I think that this is a balancing regarding, again, the expenditure and also investment versus the trajectory of our growth. We are definitely putting the growth trajectory as our highest top priority. We will always follow a value-driven and a disciplined approach for these front-loaded expenditures. Thank you. I'll get back to the operators.

Speaker #3: Through our R&D works and the deepened collaboration with our OEMs, we think this definitely will be paid back for our future deployment and will attract more joint deployment business model partners.

Speaker #3: So I think this is a balancing regarding, again, the expenditure and also investment versus the trajectory of our growth. We are definitely putting the growth trajectory as our highest, top priority.

Speaker #3: But we will always follow a value-driven and disciplined approach for these front-loaded expenditures. Thank you. I'll get back to the operators.

Operator: The next question comes from Purdy Ho with Huatai Securities. Please go ahead.

Speaker #1: The next question comes from Purdy Ho with Hoi Tai Securities. Please go ahead.

Purdy Ho: Sure. Thank you. Management, congratulations on the solid results, and thank you for taking my question. I'd like to focus on your international expansion strategy, given the recent commercial traction we're seeing overseas. Could you provide more colors on your roadmap for global fleet expansion? Specifically, as you are evaluating different markets such as the Middle East, Europe, and China, what dictates your prioritization across these regions? Thank you.

Speaker #4: Yeah, thank you. Management, congratulations on the solid results, and thank you for taking my question. I'd like to focus on your international expansion strategy.

Speaker #4: Given the recent commercial traction we're seeing overseas, could you provide more color on your roadmap for global fleet expansion? Specifically, as you are evaluating different markets such as the Middle East, Europe, and Asia, what dictates your prioritization across these regions?

Speaker #4: Thank you.

James Peng: Hey, Purdy. Thank you. This is James. Let me take this one. As my answer to the last question, our company vision is autonomous mobility everywhere. You can see that global expansion has always been part of our strategic efforts. Our dual-engine strategy is rapidly accelerating our global expansion. As more international countries introduce regulations in supporting autonomous driving, and also there's many more partners who want to work with us. Because of these two factors, we're seeing actually tremendous growth opportunities abroad. In fact, several international markets have already started contributing sizable revenues to us in Q1. Essentially, we're capitalizing on this window because-

Speaker #3: Hey, Purdy, thank you. This is James. Let me take this one. As my answer to the last question, our company vision is autonomous mobility everywhere.

Speaker #3: And you can see that global expansion has always been part of our strategic efforts. Our dual-engine strategy is rapidly accelerating our global expansion. As more international countries introduce regulations in support of autonomous driving, and also, there are many more partners who want to work with us, because of these two factors, we are actually seeing tremendous growth opportunities abroad.

Speaker #3: In fact, several international markets have already started contributing sizable revenues to us in Q1. So essentially, we're capitalizing on this window because our technology and commercial operations in China's Tier 1 cities have already given us extensive experience in handling the most complex urban environments, and also we have already achieved UE break-even in Shenzhen and Guangzhou.

James Peng: Our technology and commercial operations in China's tier 1 cities have already given us extensive experience in handling the most complex urban environments. Also, we have already achieved yearly breakeven in Shenzhen and Guangzhou. This proven technical capability and cost advantage, also because of the overseas policy opening, this is actually the underlying driving force for our accelerated global efforts. In terms of our international footprint, we are actually, as you mentioned, scaling quickly across all these key regions. We have now established a presence in nine countries and started robotaxi services to the public in four overseas markets, including Croatia, Qatar, Singapore, and South Korea. In Europe, we are partnering with Uber and Verne to launch the region's first commercial robotaxi in Zagreb. In the Middle East, we are advancing fare-charging services in Doha and initiating fully driverless operations in Dubai.

Speaker #3: So, this proven technical capability and cost advantage, also because of the overseas policy opening, this is actually the underlying driving force for our accelerated global efforts.

Speaker #3: In terms of our international footprint, we are actually, as you mentioned, scaling quickly across all these key regions. We have now established a presence in nine countries and started robotaxi services to the public in four overseas markets.

Speaker #3: Including Croatia, Qatar, Singapore, and South Korea. In Europe, we're partnering with Uber and Vern to launch the region's first commercial robotaxi in Zagreb. In the Middle East, we're advancing fare-charging services in Doha and initiating fully driverless operations in Dubai.

James Peng: In China, we have deployed public robotaxi services in Singapore and are currently conducting robust testing in Seoul, South Korea. Certainly, moving forward, we will continue to collaborate closely with all the local regulators and our trusted partners to accelerate our commercialization. We will certainly double down on our investment and are fully committed to expand our footprint to over 20 cities worldwide by this year. With this, get back to the operator.

Speaker #3: In Asia, we have deployed public robotaxi services in Singapore and are currently conducting robust testing in Seoul, South Korea. So, certainly, moving forward, we'll continue to collaborate closely with all the local regulators and our trusted partners to accelerate our commercialization.

Speaker #3: We'll certainly double down on our investment and are fully committed to expanding our footprint to over 20 cities worldwide by this year. With this, I'll get back to the operator.

Operator: The next question comes from Eugene Chiu with Macquarie Capital. Please go ahead.

Speaker #1: The next question comes from Eugene Chio with Macquarie Capital. Please go ahead.

Eugene Chiu: Great. Thank you for taking my question. In the earnings release, some of the CapEx in Q1 was for stock building of ADKs. I'm wondering if you could please update us on if there's any material input cost impacts for rising component costs. I think Leo mentioned earlier that we're still on track for the BOM cost reduction to reach RMB 230,000 by next year. What areas are we targeting to reach this target? Thank you.

Speaker #5: Great, thank you for taking my question. In the earnings release, some of the CapEx in Q1 was for stock building of 80Ks. I'm wondering if you could please update us on if there's any material input cost impacts.

Speaker #5: For rising component costs, and I think Leo mentioned earlier that we're still on track for the BOM cost reduction, to reach $230K by next year.

Speaker #5: So, what areas are we targeting to reach this target? Thank you.

Haojun Wang: Yeah. I'll take this question. This is Leo. Thank you for asking this question. In terms of BOM cost reduction, we have always been using a holistic approach, meaning we are looking into all aspects regarding the base vehicle, regarding the autonomous driving hardware kit, to get the overall BOM costs down along the road. I think several factors will drive down our future BOM cost. First of all, we are deploying more and more vehicles. Our vehicle total fleet size will increase. With a larger volume, especially with more and more joint deployment partnership coming in, we could give more quantity order to our suppliers. Definitely, they'll help us to negotiate with the pricing from our supplier.

Leo Wang: Yeah. I'll take this question. This is Leo. Thank you for asking this question. In terms of BOM cost reduction, we have always been using a holistic approach, meaning we are looking into all aspects regarding the base vehicle, regarding the autonomous driving hardware kit, to get the overall BOM costs down along the road. I think several factors will drive down our future BOM cost. First of all, we are deploying more and more vehicles. Our vehicle total fleet size will increase. With a larger volume, especially with more and more joint deployment partnership coming in, we could give more quantity order to our suppliers. Definitely, they'll help us to negotiate with the pricing from our supplier.

Speaker #3: Yeah, I'll take this question. This is Leo. Thank you for asking this question. In terms of bound cost reduction, we have always been using a holistic approach, meaning we are looking into all aspects regarding the base vehicle and the autonomous driving hardware kit.

Speaker #3: To get the overall bound cost down along the road. So I think several factors will drive down our future bound cost. First of all, we are deploying more and more vehicles.

Speaker #3: Our vehicle total fleet size will increase. With a larger volume, especially with more and more joint deployment partnerships coming in, we could give more quantity orders to our suppliers.

Speaker #3: Definitely, they'll help us to negotiate with the pricing from our supplier. Second is, now we already have our Gen 7 vehicle on the street and accumulating millions of kilometers, giving us real data showing where we can refine our system, where we can simplify our system, where we can optimize our system.

James Peng: Second is now we already have our Gen7 vehicle on the street and accumulating millions of kilometers, giving us real data, showing where we can refine our system, where we can simplify our system, where we can optimize our system. Based on these real data, definitely, we can do our R&D work to further cut down our BOM cost. Of course, the supply chain itself has certain uncertainty. However, Pony has been dealing these uncertainty along the years. For this year, for example, the memory, of course, there is certain shortage. However, we act quickly last year to secure the supply for memories. Again, this showing our capability on handling these shortages. That's why we're very confident to hit that BOM cost target by mid-next year. Thank you.

Speaker #3: Based on these real data, definitely we can do our R&D work to further cut down our bound cost. Of course, the supply chain itself has a certain uncertainty.

Speaker #3: However, Pony has been dealing with these uncertainties along the years. So for this year, for example, the memory—of course, there's certain shortage. However, we acted quickly last year to secure the supply for memories.

Speaker #3: So again, this is showing our capability in handling these shortages. That's why we're very confident that we'll hit that bound cost target by mid next year.

Speaker #3: Thank you.

Operator: As there are no further questions, I'd like to turn the call back over to the host for closing remarks.

Speaker #1: As there are no further questions, I'd like to turn the call back over to the host for closing remarks.

George Shao: Thank you once again for joining us today. If you have any further questions, please feel free to contact our investor relations team. We look forward to speaking with you in the next quarter.

Speaker #5: Thank you once again for joining us today. If you have any further questions, please feel free to contact our investor relations team. We look forward to speaking with you in the next quarter.

Operator: This concludes today's conference call. You may now disconnect your lines. Thank you.