Laura Lee

Laura Lee from Deutsche Bank asked for more details on the key highlights of Lotus Technology's upcoming PHEV models and the strategic rationale behind their introduction.

Answer

CEO Qingfeng Feng detailed the PHEV models' "three firsts" (best energy-efficient engine, best performance hybrid systems, highest power motor) and explained the strategic rationale, citing the rapidly growing premium plug-in/extended range segment in China and accelerating NEV adoption, particularly PHEV sales, in Europe, where Lotus aims to be a first mover in the premium hybrid segment.

Laura Lee inquired about the key features of Lotus Technology's upcoming PHEV models and the strategic market rationale driving their introduction.

Answer

CEO Qingfeng Feng highlighted the PHEV's 'three firsts' in engine efficiency, hybrid system performance, and motor power, emphasizing its alignment with Lotus's DNA. He detailed the strategic rationale, citing high plug-in hybrid and extended-range penetration in China's premium segment and the rapid growth of hybrid models in Europe, where Lotus aims to be a first-mover in the premium hybrid SUV market.

Laura Lee inquired about the sustainability of strong European revenue growth following the restructuring and asked about the company's capital allocation priorities for its $120 million cash balance.

Answer

CFO William Heyburn attributed the European top-line growth to improved service for travel agents and concierges post-restructuring, which he views as sustainable, and stated Europe contributed about $6 million in Q1 revenue. CEO Robert Wiesenthal detailed the capital allocation strategy, prioritizing accretive M&A in the medical services space and highlighting the 'withhold to cover' program, which effectively retires shares similarly to a buyback.

Laura Lee asked for clarification on the 2025 passenger segment revenue guidance, questioning if factors beyond the Canada exit were impacting the outlook. She also inquired about the economic and strategic rationale for positioning Blade's medical fleet closer to its hospital clients.

Answer

CFO Will Heyburn clarified the 2025 passenger guidance primarily reflects the strategic exit from the unprofitable Western Canada market, with the core business still expecting single-digit growth. CEO Rob Wiesenthal added that the company is focused on profitable growth, having achieved passenger segment profitability a year ahead of schedule. Regarding the medical fleet, Wiesenthal explained that basing aircraft near clients is economically superior, as it increases flight profit dollars per trip while reducing repositioning costs. He also stressed the strategic benefits of faster response times and a stronger competitive position.

Laura Lee from Deutsche Bank questioned if there have been any recent improvements in supply chain challenges and constraints, and also asked about the potential to expand the scope of the eCTOL test flights in Norway.

Answer

President and CEO Chris Bradshaw confirmed there have been some incremental improvements, particularly from Sikorsky regarding the S-92 fleet, but noted that broad challenges persist across the aviation industry. Regarding the Norway project, he expressed optimism that positive results from the initial real-world test flights with BETA Technologies could lead to an expansion of similar operations in Norway and globally.

Laura Lee of Deutsche Bank inquired about the timeline for commercial air taxi operations and any significant milestones expected along the way, noting the increasing announcements about UAM experience centers and digital infrastructure.

Answer

COO Zhao Wang clarified that air taxi services are a long-term vision and the immediate focus for the next few years is on establishing operations in domestic tourism to accumulate safety data. He stressed that full implementation depends on the build-out of ground and digital infrastructure, highlighting that EHang is actively contributing to this ecosystem development through partnerships with firms like CCCC and CSCEC.

Laura Lee of Deutsche Bank asked about the planned 1,000-unit annual production capacity increase, questioning if it includes third-party manufacturing, and requested an update on CapEx for the upcoming year. She also followed up on whether Q4 factory upgrades would cause production downtime.

Answer

CEO Huazhi Hu provided CapEx guidance of approximately $15 million for the current year and $20 million for the next. He confirmed that capacity expansion involves upgrading the Yunfu factory and building new facilities, potentially as joint ventures. He expects minimal production disruption from the upgrades, as the impact has been planned for and will be offset by future efficiency gains.