Bin Wang

Bin Wang inquired about the outlook for fare charging revenues, given the significant growth observed in Q2 and Q3 2025, as Pony AI deploys more vehicles.

Answer

CFO Leo Wang reported that Q3 fare charging revenue surged 233% year-over-year, even before the commercial rollout of Gen7 vehicles. This growth was attributed to both demand-side improvements, such as enhanced riding experience and robust user demand (registered users more than doubled year-over-year in Q3), and operational optimizations, including improved fleet dispatching and a 50% reduction in wait times compared to Q3 2024. He expects sustained strong growth momentum through continuous fleet expansion, leading to better network effects, higher vehicle utilization, and increased average order value per trip.

Bin Wang from Deutsche Bank asked for the key drivers behind the strong robotaxi revenue growth and the fleet size at the start and end of Q2.

Answer

CFO Haojun Wang attributed the 158% year-over-year growth in robotaxi service revenue to expanding user adoption in Tier 1 cities and an increased deployed fleet. He emphasized that fare-charging revenue grew over 300% YoY, driven by optimized pricing and operational strategies that led to high user engagement and a satisfaction rate above 4.8 out of 5. Wang stated that increasing vehicle density in their 2,000 sq km operational area is a top priority to enhance user experience and stimulate further demand.

Bin Wang from Deutsche Bank asked about the key drivers behind the strong robotaxi revenue growth and requested details on the fleet size changes during Q2.

Answer

CFO Haojun Wang attributed the 158% year-over-year growth in robotaxi service revenue to a more than 300% increase in fare-charging revenue. He cited expanding user adoption in Tier 1 Chinese cities, an increased deployed fleet, and optimized pricing strategies as key drivers. Wang noted the user satisfaction rate remains high at over 4.8 out of 5 and that the top priority is increasing vehicle density within their 2,000 square kilometer operational area.

Bin Wang from Deutsche Bank asked for details on NIO's R&D and SG&A expenses for Q3 and Q4, specifically if the non-GAAP R&D guidance of ¥2 billion for Q4 remains. He also sought clarification on whether the break-even target refers to operating loss or net profit, and if it's on a GAAP or non-GAAP basis.

Answer

Stanley Qu, CFO, and a translator confirmed that the quarterly break-even target is on a non-GAAP basis. They stated that the non-GAAP R&D expense target for both Q3 and Q4 would be ¥2 billion per quarter, emphasizing improved R&D efficiency without compromising core activities. For SG&A, the Q4 non-GAAP target is to be within 10% of sales revenue, driven by increased sales volume and organizational optimization.

Bin Wang from Deutsche Bank asked if new higher-priced models and in-house semiconductors could lead to vehicle margin expansion in Q2, pushing overall gross margin to double digits. He also sought clarification on the assumptions underlying the Q4 breakeven target.

Answer

Management confirmed the target for Q2 overall gross margin to return to double digits, driven by the NIO brand's vehicle gross margin improving to around 15% due to new models and in-house chip savings. They affirmed that the Q4 breakeven assumptions—monthly sales over 50,000 units, combined vehicle gross margin of 17-18%, and controlled OpEx—are aligned with internal operational targets.

Bin Wang from Deutsche Bank inquired about the new product pipeline for the second half of 2025 across the NIO, ONVO, and Firefly brands. He also asked for an explanation of the recent improvement in service margin and guidance for its future trend.

Answer

CEO Bin Li detailed a robust 2025 pipeline, including platform upgrades for existing NIO models, two new family SUVs for the ONVO brand, and the first product from the Firefly brand. He confidently projected that these launches would help double the company's total sales volume in 2025. CFO Stanley Qu attributed the Q3 vehicle margin improvement to lower component costs and better manufacturing amortization, guiding for the NIO brand to reach 15% in Q4 and targeting 20% in 2025.

Bin Wang from Deutsche Bank asked about NIO's product pipeline for the second half of 2025, including potential refreshes for existing models. He also sought an explanation for the improved 'other sales' margin in Q3 and guidance for this metric going forward.

Answer

CEO Bin Li confirmed that NIO brand products will be upgraded to the next-generation platform starting with the ET9, with existing models receiving facelifts in 2025 and 2026. For the ONVO brand, two new family SUVs are planned for next year. The Firefly brand's first product will be unveiled on NIO Day and delivered in H1 2025. Li projected that total sales volume would double in 2025. CFO Stanley Qu attributed the Q3 vehicle margin improvement to lower component costs and better manufacturing amortization, reiterating the 15% Q4 margin target for the NIO brand and a 20% target for 2025.

Bin Wang from Deutsche Bank asked for clarification on the ONVO L60's delivery volume targets for the remainder of the year, questioning if the 20,000 unit goal was still in place given strong orders. He also requested guidance on the expected quarterly SG&A expense for the second half of the year.

Answer

CEO William Li clarified that ONVO L60 deliveries will begin in late September and ramp up through Q4, with a target of around 10,000 units for the month of December. CFO Stanley Qu explained that quarterly R&D expenses will remain around RMB 3 billion (non-GAAP), while SG&A expenses will increase in Q3 with L60 deliveries but will be optimized as a percentage of revenue as sales volume grows.

Bin Wang of Deutsche Bank asked for clarification on a perceived issue with the G7's infotainment chip and its normalized sales volume. He also sought guidance on whether the vehicle gross margin could reach the high teens in Q3, given the strong Q2 performance.

Answer

Charles Zhang, VP of Corporate Finance, clarified there is no issue with the G7 and that the Turing SoC for infotainment will be deployed in October. Jiaming Wu, VP of Finance & Accounting, did not provide specific Q3 margin guidance but reiterated the company's unchanged target to achieve overall profitability and high-teens gross margin in Q4 2025.

Bin Wang from Deutsche Bank asked for clarification on the large government subsidy and FX gains in Q1. He also requested guidance on the average selling price (ASP) and gross margin for Q2, considering the evolving product mix.

Answer

VP of Finance James Wu explained the Q1 'other income' was from non-recurring tax rebates and subsidies, while FX gains were driven by a stronger Euro. He expressed confidence in continued margin improvement in Q2 and beyond, driven by better product mix, cost reductions, and scale, stating Q1 ASP was likely the year's low point and targeting high-teens gross margin by Q4.

Bin Wang requested financial guidance, asking for the first quarter gross margin forecast. He also sought clarification on financial line items, including long-term investment revaluations and a fair value gain potentially linked to the DiDi acquisition.

Answer

VP of Finance and Accounting Jiaming Wu confirmed that Q4 vehicle margin improved due to cost reductions and scale, and he expects the margin to remain in the double digits. He clarified the fair value gain was from releasing a liability related to a DiDi earn-out mechanism, as the MONA model will now target consumers (2C) instead of ride-hailing (2B), making the milestone unlikely to be met. He added that long-term investment revaluations were not significant in Q4.

Bin Wang requested a quantification of the factors driving the Q3 vehicle gross margin expansion and asked if the margin could reach double digits in Q4. He also questioned the potential impact of reported Taiwanese foundry restrictions on XPeng's future chip development.

Answer

VP James Wu attributed the Q3 margin improvement primarily to continued engineering cost reductions (VAVE), lower battery costs, and a reduced end-of-production (EOP) impact compared to Q2. He stated that the new P7 plus, with its double-digit gross margin, will help further improve the overall vehicle margin in Q4. VP Charles Zhang confirmed that the mass production of their 'touring' SoC is progressing well and has not been impacted by any foundry issues.

Bin Wang asked for details on the Q1 gross margin expansion, the outlook for Q2 margin, and a timeline for when the company expects to see meaningful export volumes, such as exceeding 1,000 units per month.

Answer

CFO Tie Li projected the vehicle margin for Q2 to remain around 19%. CEO Xiang Li explained that overseas expansion is a long-term strategy and will only commence once the company can provide strong hardware, aftersales support, and smart software services in a new market, with a long-term goal of 30% of sales coming from overseas.

Asked for details on the Q1 gross margin expansion and the outlook for Q2 margin. Also inquired about the timeline for achieving meaningful export volumes.

Answer

The company expects the vehicle margin to remain stable at around 19% for Q2, considering the product transition phase. For exports, it's a long-term strategy focused on Asian and European markets, contingent on meeting prerequisites for hardware, service, and software. The long-term goal is for exports to be 30% of total sales, but no specific short-term volume timeline was provided.

Bin Wang of Deutsche Bank questioned the drivers behind the Q1 gross margin expansion and the outlook for Q2 margins. He also asked for a timeline on when Li Auto's export business might achieve meaningful volume, suggesting a benchmark of over 1,000 units per month.

Answer

CFO Tie Li projected the Q2 vehicle margin to remain around 19%, factoring in the model year transition and the production ramp-up of the new Li Mega Home. On exports, management described it as a long-term strategy focused on Asian and European markets, with a goal of reaching 30% of total sales from overseas, but did not provide a specific volume timeline.

Bin Wang from Deutsche Bank asked for guidance on the first-quarter gross margin, considering component pricing and discounts. He also sought clarification on reports about the Chairman shifting focus to AI and the resulting changes in management responsibilities.

Answer

CFO Tie Li provided guidance for the Q1 vehicle gross margin to be around 19%, citing the seasonal slowdown for Chinese New Year and sales promotions. An unnamed executive clarified that CEO Xiang Li's role remains unchanged, and he continues to oversee the core auto business, including vehicle lines, product, and branding, while the company focuses on efficient collaboration for long-term success.

Inquired about the full-year and Q3 gross margin guidance, and whether the design of the postponed pure EV models has been changed, particularly in response to customer feedback on the MEGA's design.

Answer

The company expects the Q3 vehicle margin to recover to over 19% and the total gross margin to be above 20%. For the upcoming BEV SUVs, the focus is on solving styling and ensuring adequate charging infrastructure. They are confident in the product's competitiveness and aim to become a Tier 1 player in the premium BEV market within two years.

Bin Wang asked if Li Auto maintains its full-year 20% gross margin guidance and what the vehicle gross margin outlook is for Q3, considering the rising proportion of AD Max versions. He also questioned if the delayed pure EV models would undergo design changes to differentiate them from the MEGA.

Answer

CFO Johnny Tie Li addressed the margin question, stating that Q2 vehicle margin was 18.7%. He guided for Q3 vehicle margin to recover to over 19% and the total gross margin to be above 20%. CEO Xiang Li handled the EV question, explaining that the key challenges for the new BEV SUVs are styling and charging network expansion, not core technology. He expressed confidence in becoming a Tier 1 player in the premium BEV market within two years.

Bin Wang from Deutsche Bank asked for an update on new business for the SPV centralized computing platform and questioned the potential impact of U.S. tariffs on ECARX's supply chain, particularly for Volvo vehicles and chip supply.

Answer

CEO Ziyu Shen highlighted the partnership with Volkswagen Group, which uses the Antora platform, as a key new business win for its centralized computing solutions. He also confirmed that the Geely Galaxy E5 already uses the SPB platform. Regarding tariffs, Mr. Shen stated the impact is minimal because ECARX uses a contract manufacturing model, allowing them to select partners in regions like Mexico or Canada to avoid supply chain disruptions.

Bin Wang sought clarification on the 15% gross margin target for Q1 2025, asking if it was for vehicle margin or overall margin and requesting details on any one-off positive impacts. He also asked for the reason behind the sharp decline in the battery and component sales business in Q4 2024.

Answer

Executive Jing Yuan confirmed the 15% target is for the consolidated vehicle business gross margin for Q1 2025, an improvement from the ~12% pro forma margin in 2024. This gain is expected from synergies in the supply chain, manufacturing efficiencies, and consolidated R&D. Regarding the battery business, he explained that sales fluctuate based on purchasing decisions within the broader Geely Group, but noted that supplying battery packs for Volvo's EX-30 model was a positive contributor in Q4.